Finally admitting defeat in yet another content battle, Microsoft Corp has sold off the entertainment city guide portion of its MSN Sidewalk to Ticketmaster Online-CitySearch (TMCS). The Redmond software giant will keep the buying guide and business directory portions of Sidewalk. It says it has decided to focus on MSN as a commerce site.
Ever since launching MSN, Microsoft has struggled to make content sites like its Slate web magazine pay for themselves. Longtime Sidewalk rival CitySearch faced similar challenges in selling advertising space on its arts-and-entertainment dominated site, but in August 1998 it was acquired by Ticketmaster for $260m, assuring it continued funding.
With the acquisition of the Sidewalk entertainment content, CitySearch should become the number one city guide ahead of America Online Inc’s Digital Cities, according to Media Metrix Inc. The deal increases CitySearch’s coverage from 33 cities to 77 in a single stroke. Microsoft has promised to continue to deliver the content through a newly created MSN local channel, through the existing MSN Entertainment channel and via WebTV.
In exchange for the Sidewalk entertainment properties, Microsoft will get a 9% stake in TMCS, worth around $240m, with options to increase its holding to 13%. If the transaction is approved, Microsoft will become the second largest shareholder in TMCS after USA Networks Inc. It’s an ironic outcome for companies that have fought bitterly in the past. As recently as February 1999, Ticketmaster and Microsoft settled a two-year legal battle over Microsoft’s linking Sidewalk directly to Ticketmaster’s purchasing section, bypassing pages where Ticketmaster sold advertising.
