As Microsoft sold off its money-losing Sidewalk city guide to rival CitySearch, Internet watchers have begun wondering whether Slate magazine could be next to go.
Confirming its retreat from content yesterday, Microsoft sold the Sidewalk name, arts and entertainment archive and right to hire staff to Barry Diller’s Ticketmaster Online-CitySearch.
The 9 percent stake is valued at $225 million and makes Microsoft the second largest investor in CitySearch.
While experts hailed Microsoft’s throwing in the towel as a win-win situation, the question of where the free webzine Slate fits in was raised yet again.
“As goes CitySearch today, so goes Slate tomorrow,” said Lisa Allen, analyst at Forrester Research. “This is a shot across the bows to the folks at MSN.”
Allen said that the belief that Microsoft is toying with the creation of a tracking stock for its Internet operations has placed greater pressure on the software giant to dump money-losing businesses.
“They’re not going to want anything dragging it down,” she said.
A spokesman for Slate said that the webzine’s position was unchanged.
“There are no plans at the moment to get rid of Slate. It’s always been part of Slate’s plan that profitabilty is not expected for at least five years, as with most magazines.”
Slate is a “problem,” according to analyst Barry Parr of IDC. “They can’t really sell it, or close it down. It’s like Si Newhouse losing publishing the New Yorker. It gives him class, but it costs him money.”
Parr was more optimistic about the Sidewalk deal.
“They’re not the first to fail at creating an ad-supported content site,” he said. “The local content market has not emerged as quickly or as large as expected, and there are smaller, more aggressive content companies like CitySearch that are more likely to succeed.”
In the deal Microsoft will hold on to its yellow pages and buyer’s guides, rebranding them under the MSN name. The deal gives Ticketmaster Online-CitySearch and increased presence in 77 cities, up from 33, and a 40 percent increase in traffic, leaving it the clear market leader. Changes are not expected to take effect until the fall.