Microsoft Corp. (Nasdaq: MSFT) is investing megamillions in Barnes & Noble Inc.'s (NYSE: BKS) Nook Division, expanding the battle with Amazon.com Inc. (Nasdaq: AMZN) and Apple Inc. (Nasdaq: AAPL) for dominance in the electronic publishing field. Barnes & Noble stockholders are dancing in the bookstore aisles.
As much as I favor competition, I hope it works out for the Windows
people. I still remember the last time they threw their weight around in
an emerging media technology field.
MSNBC was a
new, interactive 24-hour news talk and information network, a joint
venture announced in December 1995 by NBC News, then owned solely by General Electric Co. (NYSE: GE),
and Microsoft, owned by Bill Gates, who Forbes magazine had fingered at
the time as the richest man in the known world (net worth $18 billion
The way the collaboration was supposed to work: Each partner would
invest $250 million. Via the Internet, MSNBC linked Microsoft
Interactive’s technological wizards in Redmond, Wash., with MSNBC
Cable’s inactives at the time in Fort Lee, N.J.
The initiative, according to the ads, was the start of the golden
age of media news information culture. It would revolutionize the future
of cable news.
As I gathered, the idea was that people would start watching the
news on their TV screens, and then turn their backs on their sets and
start fiddling with their computers. Every 15 minutes or so, in the
original Bill Gates business plan, there would be an announcement on the
screen reminding viewers to go to their computers for more news.
It sounded like a bad marriage, in the sense that you had a passive
sport, which was watching TV, and an active sport, which was playing
with the computer. They were trying to merge two cultures into one,
which was a risky business plan back in 1996.
The so-called interactive network of the future had a lot of promise
when it began in the summer of 1996. After six months of intense
promotion and furious hype, most people still might have believed MSNBC
was something you put in Chinese food. If you sprinkle MSNBC on your
food, you get a headache.
I didn’t understand what all the excitement was about. What I saw on
the screen was a couple of lower echelon CNBC–type anchors sitting
behind tacky little desks like bridge tables and chairs rented from a Route 22
used furniture warehouse, doing the cheesiest network news show ever
seen. I was more excited about Windows 95, even though I didn’t own a
computer at the time.
By 2002, when the experiment was relaunched with the usual Second
Coming enthusiasm, people were still yawning over the future of cable
news. It remained a solid third place in the ratings (behind Time Warner Inc. (NYSE: TWX)'s
CNN and News Corp. (NYSE: NWS)'s
The revolutionary news information creature was actually NBC’s way
of redoing America’s Talking, its successful cable network that was TV’s
first news talk infotainment network, predating Fox News. It was
folding America’s Talking and making it vanish into MSNBC, with $250
million of Bill Gates's money.
NBC should have left America's Talking on, explained Roger Ailes,
who had created it before quitting and going to work for Rupert Murdoch
to invent Fox News. As he says, "I did America’s Talking for $35
million a year. The second I left, they turned it over to MSNBC, and
added $350 million. And it was still a failure. If they had just left me
alone, and given me another $50 million, I would have created a new
channel for them and there wouldn’t be Fox News today. And they would
own 100 percent of it."
No, they preferred taking Microsoft’s money, Ailes explained,
adding, “It was hard to resist taking advantage of a guy from Seattle
who shows up in New York with a wallet bigger than his head.”
The network that was created not for the audience so much as for the
needs of Jack Welch, the GE CEO who engineered the deal to lift $250
million out of the pockets of Bill Gates, is now -- after 16 years --
sometimes finishing second in the cable network news race. And at least
people no longer think MSNBC is something that you find in Chinese food
and gives you a headache.