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WEB PORTAL WARS HEAT UP

NBC has a Net gateway, so others may soon want one, too

Broadcast networks have viewed the Internet mostly as a promotional tool for their brands. But NBC, which is joint owner of the MSNBC cable station/Web site, has a new idea. On June 9 it announced plans to take a stake in Snap!, an Internet ''portal,'' and invest in its parent CNET Inc. (CNWK). In additoion to snagging cybersurfers to watch TV shows, NBC will use its shows to drive traffic to recently founded Snap!, a search site that online enthusiasts visit daily. The question is: Does this make sense?

Excite Inc. (XCIT) Executive Vice-President Brett Bullington isn't so sure. ''It hasn't been clear that having a presence on TV and the Web correlates to having a dominant role,'' says Bullington. Still, the NBC deal may only be the first of this type. ''Watch this space,'' says new-media expert Mary G. Meeker at Morgan Stanley Dean Witter & Co. ''The big moves have just begun.''

Indeed, NBC had numerous discussions with bigger portal sites before choosing Snap!, including talks with Excite. Harry M. Motro, chief executive of Infoseek Corp., agrees with NBC that media companies need to partner with portals, and says Infoseek is ''pursuing those kinds of relationships.'' If he finds a suitable deal, he adds, he'll be able to finagle better terms than CNET, since ''we have as much traffic in our Japanese subsidiary as all of Snap! does.''

NBC did get the alliance for a modest investment. For $32 million, NBC will get just under 5% of CNET and a 19% stake in Snap! and control of the portal's board. It has options that would allow it to control 60%. For CNET, which spent $25 million on Snap! but can't afford to continue promoting the service, the deal could help it reach its goal of turning profitable this year. Now the question is whether the network that hawks ''Must See TV'' can make Snap! a ''Must Surf'' gateway to the Web.

By Richard Siklos in New York and Linda Himelstein in San Mateo


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Updated June 11, 1998 by bwwebmaster
Copyright 1998, Bloomberg L.P.
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