NBC Trades Ads, Cash for Equity in Space.com

In another example of traditional media companies using their prodigious
advertising inventory to get traction in the Internet business, NBC on Wednesday traded ads and cash for a
minority equity stake in Space.com, the
start-up founded by former CNN Financial News executive Lou Dobbs.
fame.

Financial terms of the deal weren’t disclosed, but it calls for NBC to
contribute cash and ad time across NBC’s television properties. Those
properties include the national television network, the company’s 13 owned
and operated stations, and NBC’s cable properties.

The deal also calls for Space.com to contribute its content to NBC, which
could mean the fledgling content company would get a promotional boost
during news programming.

“Space is the biggest story of our age, and the investment by media
powerhouse and news leader NBC in the promotion of our brand underlines its
universal significance,” said Lou Dobbs, Space.com chairman and chief
executive officer.

Now that NBC has a stake in Space.com’s success, the two companies have
also agreed to explore other strategic ventures related to promotions,
marketing and content distribution.

“Our partnership with Space.com reinforces NBC’s commitment to original
content on the Internet,” said Marty Yudkovitz, president of NBC Interactive.

“Space.com has compiled a huge amount of space-related information, from
business to entertainment and science fiction to education. This is the
type of information we need, and Space.com is the type of entity that we
can add value to.”

NBC Interactive (NBCI), which operates the Snap portal as well as Xoom and AllBusiness.com, has been a pioneer in structuring deals that tap both its online and offline advertising resources. Parent company NBC, itself a division of General Electric (GE), also owns stakes in CNET (CNET), Talk City, iVillage (IVIL), 24/7 Media (TFSM), TiVo, and Wink Communications (WINK). Some of these positions were acquired through the trading of ads for equity.