NBC management said they plan to close down NBCi’s San Francisco office and buy back its publicly-held stock for $85 million in cash. The network will dish out $2.19 per share, a 46 percent increase over the shares’ $1.50 closing price last Friday.
The peacock network is currently a minority shareholder in NBCi, with nearly 39 percent of the company’s shares. NBCi.com was revamped last fall to include the personal homepage hosting service Xoom.com and the personalized service system Snap.com.
Although NBC has not yet decided which parts of NBCi will be kept and which will be scrapped, Mark Begor, the network’s chief financial officer, said the decision marked a change in the network’s Internet strategy.
“The sharp declines in the Internet advertising market convinced us that it didn’t make sense to pursue a portal strategy,” he told the Associated Press. “We wanted to find a way to maximize shareholder value and wind down the business in the best way possible.”
The action is only the latest in a stream of cutbacks in online media. Last fall, News Corp., the owner of Fox and its sister cable networks, absorbed Fox’s online units into its broadcast operations. And the Walt Disney Co. slashed the staff of its Go.com portal in January, announcing it would buy back its publicly-held Internet stock.