After a 16-year partnership, Microsoft (News - Alert) and NBC have decided to part ways with Microsoft pulling out of the joint venture, MSNBC.com. This move stems from the desire of both partners to have greater control over their digital content as the Internet becomes increasingly important in their business endeavors. The dissolution of MSNBC.com may have started back in 2005, when Microsoft sold its MSNBC’s Cable TV channel stake to NBC. NBC will be buying the remaining 50 percent interest from Microsoft for an undisclosed amount, effectively ending MSNBC and rebranding it to NBCNews.com.

The move will also see the website headquarters move from the Microsoft corporate campus in Redmond, Washington, to NBC News’ home in New York. The move is a welcome one since contract terms required that Microsoft exclusively feature MSNBC.com content on its websites which had obviously started to become frustrating. It had also become difficult to have MSNBC cable channel develop a programming strategy with a liberal viewpoint that would counter Fox News Channel’s appeal to conservative viewers, hence the perception that MSNBC’s website material was politically slanted.

According to the general manager of MSN.com, Bob Visse, the limitations imposed by the MSNBC.com’s contract restricted the kind of multiple news sources and multiple perspectives that users were requesting. Microsoft says that it plans to launch its own news service this fall with the news staff being roughly 100 people, the same number of people who were creating original content for MSNBC. This move will see Microsoft use the same strategy used by Yahoo and AOL (News - Alert).

Microsoft’s massive Internet investments have rarely paid off, with its Bing search engine and MSN portal having seen the company lose over $10 billion in the past seven years. As Microsoft sets out to compete with NBC news, the terms of the split demand that Microsoft continue to highlight the top stories of its former partner for two more years.

NBC on the other hand says that the split will allow more flexibility in decision making and that the competition will make them better. MSNBC.com had been ranked as the fourth most popular site for general news in the U.S. after Yahoo, AOL/Huffington Post (News - Alert) and CNN. NBC plans to retain a significant staff in the Seattle area with about 170 of its employees being within the Seattle area.

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