NBC Internet, ValueVision Unveil SnapTV

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NBC and ValueVision International Inc., a shopping channel based in Minneapolis, said they would combine their marketing resources to build a strong electronic commerce brand called SnapTV.

ValueVision would not only rename its shopping channel SnapTV, but it also would launch an accompanying Web site, SnapTV.com, that would allow consumers to buy direct online.

The alliance among the companies would combine the promotional reach of the NBC television network with the back-end product fulfillment of ValueVision and the ecommerce abilities of Xoom.com, San Francisco, an online community site that is being merged into a proposed new entity called NBC Internet, NBCi.

ValueVision reaches about 32 million cable households, but sources say that reach may be extended if NBC consummates an acquisition deal with Paxson Communications Corp., the station group based in West Palm Beach, FL.

"We're going to expand the Snap brand into 32 million households for people who may not have heard of us," said Chris Kitze, the CEO of Xoom.com who is planned to become CEO of NBCi. "We're [Xoom] focused on the Web business model and extending ValueVision onto the Web."

ValueVision sees an opportunity to reach Xoom.com's membership of 10 million people who tend to be younger and hipper than its TV shopping audience.

"It was obvious to us when we looked at the home shopping industry that ValueVision's future was not going to be in world of the more mature businesses like HSN and QVC," said Gene McCaffrey, CEO of ValueVision. "We needed commerce partners to accomplish what we really needed to accomplish and contemporizing ValueVision."

ValueVision now reaches about 32 million cable households and posted income of about $4.6 million last year on $203.7 million in sales. The channel ranks a distant third in sales behind market leader QVC, at about $2.1 billion a year, and Home Shopping Network, at about $1.2 billion a year.

The planned NBC Internet company is subject to approval from Xoom.com shareholders, which is expected later this year. The new company would combine Xoom.com with NBC's ownership interest in other online entities. NBC and CNet Corp., San Francisco, jointly own Snap.com, a portal site with a strong online brand identity. NBC also has its own online properties, including NBC.com, NBC Neighborhood, Videoseeker and 10 percent of CNBC.com. Under the agreement with NBC, ValueVision will remain a separate publicly traded company, although NBC and its parent company, General Electric Corp., own about 40 percent of its outstanding shares.

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