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MTV, TCI Music Launch Internet Music Venture

May 21, 1999| From Bloomberg News

NEW YORK — Viacom Inc.'s MTV Networks and TCI Music Inc., a company that Liberty Media Group's John Malone is using to make Internet investments, said Thursday they're forming a venture to boost MTV's online music business and pursue acquisitions.

MTV will acquire Internet music site SonicNet and the Box music television network from TCI Music in exchange for a 10% stake in its online music business. MTV said no money changed hands. MTV also said it plans to sell stakes in the online music unit and its children's Web sites to the public within the next 15 months.

Malone, chairman of Liberty Media, has $5 billion to spend on entertainment and technology as he builds the programming arm of AT&T Corp. MTV wants to expand on the strength of its popular cable channels and Internet sites.

The venture also will develop an interactive commerce music channel for digital cable set-top boxes and is considering investments or acquisitions in about 10 Web sites or companies.

MTV in February said it would overhaul its online sites and create a new Internet division to manage them. One, code-named the Buggles Project, will consist of its MTV and VH-1 cable music channels and the other, called Project Nozzle, will focus on children's channel Nickelodeon.

SonicNet and the Box will be meshed with Viacom's MTV Web site, which is the most visited entertainment site among 12-to-24-year-olds.

New York-based TCI Music is 86% owned by Liberty Media.

Malone sold Liberty Media's former parent, cable TV company Tele-Communications Inc., to AT&T in March for $59.4 billion.

Shares of New York-based Viacom rose 63 cents to close at $41.75 on the New York Stock Exchange. TCI Music fell $2.06 to close at $46.94 on Nasdaq.

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