GE Buys Stake in ValueVision
The move represents GE's first step toward bringing an influential shopping network presence into NBC's operational domain further raising the stakes by big media companies hoping to increase their prospects for conducting business in the rapidly converging online and cable shopping worlds
In published reports Tom Rogers, president of NBC's cable division said "As the TV and PC converge, access to electronic revenue streams like home shopping through cable and Internet will become extremely valuable,''
Analysts say GE is buying into Valuevision in an effort to make NBC more strategically viable as emerging new competitors such as the proposed merger of USA Networks and Lycos Inc., become more common.
ValueVision which its 8th year of operation, saw sales figures drop last year by 13% despite continuous annual reports of increased profits and revenue. Under the proposed agreement announced last week, GE will invest $56 million in ValueVision giving it a 19.9 percent ownership. The deal also gives GE the opportunity increase its ownership at a later date to as much as 39.9 percent.
The network's influence and likely ability to bring ValueVision to the next level as a force to be reckoned with undoubtedly brings increased competitive pressures to the door steps of the nation's two leading cable shopping networks, QVC and Home Shopping Network.
NBC is expected to help ValueVision develop more quality programming and production standards as well as a redesigned Web e-mail, news, chat and other services - effectively making it an Internet portal.
GE's NBC currently owns two other cable company networks as well including CNBC and through its joint venture with Microsoft Corp, the all-news MSNBC channel.