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Volume 24 No. 157
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     NBC and Microsoft Corp. announced their partnership
yesterday to launch a 24-hour news and information cable channel
and "a companion interactive online service," according to
NEWSDAY.  The channel will be known as MSNBC Cable, and is
expected to be on the air in six months.  NBC will transform its
America's Talking cable channel, "giving the new service an
immediate entree into 20 million homes and eliminating a hurdle
most new cable channels face -- getting on the dial."  Microsoft
will pay NBC $220M over five years for a 50% stake in the
venture.  The two companies will also invest $200M each during
the next five years in other ventures.  Martin Yudkovitz,
President of NBC Interactive Media, called the deal the "first
major example in television of an acknowledgement there's got to
be a fundamental change in the way the TV industry approaches the
future" (Elizabeth Sanger, NEWSDAY, 12/15).  NBC President &  CEO
Robert Wright:  "This is not CNN.  This is a unique service.  If
we just wanted to offer an interactive component we could do this
ourselves. ... Hopefully the two of us together will be more
ambitious" ("NBR," PBS, 12/14).    REAX:  In San Francisco,
Michelle Quinn calls it a "clear indication" Microsoft Chair Bill
Gates "wants to be a media mogul" (S.F. CHRONICLE, 12/14).
Despite the "excitement" yesterday, "plenty of questions remained
about the channel," according to Bill Carter of the N.Y. TIMES.
They include whether the cable industry will "embrace a director
competitor to CNN to whether there is enough audience to support
two all-news networks."  Some cable operators could block
distribution by saying changing the format of America's Talking
means "terms of their contract with NBC has changed" (N.Y. TIMES,
12/15).  John Durie writes it means the end to Ted Turner's news
"monopoly profits" and "underscores the importance of content and
distribution in the new media age" (N.Y. POST, 12/15).
     HOT LINKS:  The online service will be available through The
Microsoft Network, with further possibilities explained yesterday
on how broadcast, cable, and PCs will "mingle."  One example:
NBC News might just touch on the budget battle in Washington.
But interested parties could turn to the cable channel for
interviews and analysis.  Computer users could use their PCs to
type in income and other facts to find out how competing budget
proposals would affect them personally (Elizabeth Sanger,
NEWSDAY, 12/15).
     NOT FOR SALE:  After the announcement, GE Chair Jack Welch
"quashed recent speculation" that GE would sell the network,
although "he did not rule out" bringing in a partner.  Welch said
GE would not have approved NBC's purchase this week of Olympic
rights if it intended to sell. Welch also "expressed regret"
attempts to buy TBS had failed (BLOOMBERG BUSINESS NEWS/ATLANTA