MCI and News Corporation Unveil Joint Venture for Online Information Service

Strategic Insights -

MCI Communications Corporation and News Corporation, led by Rupert Murdoch, are set to announce a groundbreaking partnership to create a new Internet-based online information service. This strategic alliance, born out of their investment in May, positions the two companies to dominate the competitive online market. The new service, poised to replace News Corporation's struggling Delphi Internet Services, will offer a diverse range of features, including multimedia entertainment, personalized electronic newspapers, communication services, and home shopping, revolutionizing the way users access and interact with online content.

Key Takeaways:

  • The joint venture by MCI and News Corporation aims to replace Delphi Internet Services, which has been struggling to compete with established online market leaders.
  • The new service, entering the market this fall, will offer a comprehensive range of features, including multimedia entertainment, custom electronic newspapers, communication services, and home shopping.
  • Analysts suggest that MCI's investment in News Corporation was a logical step towards creating a robust online information service, combining MCI's technical capabilities with News Corporation's content and brand strength.
  • Scott Kurnit, a former vice president at Prodigy, will lead the new network venture, bringing expertise in developing online strategies.
  • News Corporation's Delphi Internet Services, acquired in 1993, has struggled to capitalize on its early recognition of the Internet's importance, plagued by staff turnovers and technical issues.
  • The proposed joint venture aims to tap into the vast customer base of MCI and News Corporation, with Delphi boasting 160,000 subscribers, while America Online boasts 3 million customers, followed by Compuserve with 2.4 million and Prodigy with 1.9 million customers.

Statistics:

  • MCI invested $2 billion in News Corporation in May.
  • Delphi Internet Services has approximately 160,000 subscribers.
  • America Online maintains an estimated 3 million customers.
  • Compuserve boasts around 2.4 million customers.
  • Prodigy has approximately 1.9 million customers.

Sources:

  • "MCI Invests $2 Billion in News Corporation," article by David Leber Wilson (date not specified)
  • "Proposed Joint Venture to Replace Delphi," article by anonymous (date not specified)
  • Scott Kurnit, Vice President at Prodigy ( quoted in the article but no specific source mentioned )
  • "News Corporation Delphi Expansion Pending," article by Andrew Pollack ( no publication date mentioned )
  • Harvard Business Review and The New York Times