Originally created 03/10/99

NBC buying stake in cable home shopping channel ValueVision

NEW YORK -- NBC owner General Electric Co. is buying a minority stake in ValueVision, the third largest home-shopping cable network, with an eye toward boosting the companies' Internet commerce business.

The deal, announced today, brings NBC into televised home shopping for the first time and furthers its online expansion at a time when big media rivals are rapidly increasing their investments in the Internet.

"As the TV and PC converge, access to electronic revenue streams like home shopping through cable and Internet will become extremely valuable," said Tom Rogers, president of NBC's cable division.

ValueVision International Inc. operates the No. 3 cable shopping channel behind QVC and Barry Diller's Home Shopping Network -- peddling fake furs, porcelain dolls and computer desks among its many wares. ValueVision is shown in 21.8 million U.S. homes on either a full- or part-time basis.

The NBC deal employs a similar strategy to Diller's plan to acquire Internet company Lycos Inc., then combine it with his Home Shopping Network and Ticketmaster operations to create a wealth of cross-promotion opportunities. That deal, however, has been plagued by opposition from Lycos' biggest shareholder.

Under today's deal, GE will pay $56 million for a 19.9 percent stake in ValueVision, with an option to raise that stake to 39.9 percent.

News of the deal pushed ValueVision shares up $2, or 20 percent, to $12.12´ in morning trading on the Nasdaq Stock Market. GE shares were down 37´ cents at $104.43Ü on the New York Stock Exchange.

NBC will use its much-greater television experience to try to improve the quality of ValueVision's programming and expand the cable network's distribution. NBC already owns two successful cable networks, the CNBC business news network and the all-news MSNBC co-owned by Microsoft Corp.

ValueVision, an 8-year-old company based in Minneapolis, also sells its goods over the Internet and through print media.

NBC will redesign ValueVision's current Web site and will seek opportunities over the next year to combine the site with a portal, the popular Internet sites such as Yahoo! and Lycos that offer searches, e-mail, news, chat and other services.

An NBC spokeswoman said the company may combine ValueVision's online business with Snap! -- a portal in which NBC acquired a minority stake last year -- or may seek deals with other Internet companies.

ValueVision's sales and profits had been rising steadily for the past few years, but its sales dropped 13 percent to $138 million in the first nine months of 1998. Year-end figures are due out later this month.


Trending this week:


© 2017. All Rights Reserved.    | Contact Us