NBCi the day after: Strategy unclear

NBC's Internet play, NBCi, shows the company's aggressive attitude towards cyberspace. Still unclear, however, is whether combining lower-tier Internet hub Snap.com with community site Xoom and other NBC properties will add up to anything.

"They've thrown a lot of ingredients into NBCi, but I'm not sure what they're making," said analyst Chris Charron of Forrester Research. "Is it a holding company or something more than that, with a single unifying strategy?"

Snap provides directory and information services, while Xoom offers free home pages and e-commerce opportunities. Together with a few other pieces, such as a stake in ValueVision, an online and TV shopping channel, NBC plans to integrate content, community and commerce services.

"This is all about how to take television viewers and make them Internet users..., then connecting the community-interest sites Xoom specializes in ... to drive members from those user (groups) ... into buyers,''

said Tom Rodgers, NBC executive vice president, who will be chairman of the new company.

Clearly, analysts say, NBC is trying to build a first-rate Internet hub to compete with Yahoo! Inc. (Nasdaq:YHOO), Go Network and the like.

But so far observers say NBC is using second-tier components. Snap.com, for example, was a low-profile startup site when NBC bought its stake, and Charron questioned the choice of Xoom, noting that NBC "could have held out for a better commerce partner over time."

A difficult mix
Meanwhile, left out of the mix is one first-rate component, MSNBC, which analysts say was probably left out because it is half-owned by Microsoft Corp.

"That's unfortunate, because it's also a major asset," commented analyst Barry Parr of International Data Corp. "Presumably, the one thing it would bring to the table would be a source of news, and if you're building a network of sites you'd want to be able to leverage that asset."

Integrating all the components will present some major questions, which analysts say haven't yet been addressed. For one, NBC will have to decide whether the new site will fold all of its components seamlessly under a single brand, a la Yahoo! and Disney's Go Network, or maintain separate brands, a more unusual route taken by America Online Inc. (NYSE:AOL) and Lycos Inc. (Nasdaq:LCOS).

Either way, observers say the TV network will have its work cut out for it in turning Snap.com, Xoom and the other pieces into NBCi.

"It's an aggressive push when you look at everything they've done," said analyst Jae Kim of Paul Kagan Associates, a media research firm. "The hurdle now is the integration that has to be done."

If NBCi comes together successfully, however, it would mean an increased audience base for advertisers, combating the problem of audience fragmentation online. Home-grown portal
The company still has a ways to go before it can challenge the likes of Yahoo!, AOL or Go Network. But then, NBC has had to build its Internet presence from the ground up, unlike Disney (NYSE:DIS), which already owned such successful Internet sites as ABCNews.com, ESPN SportsZone and Disney's Daily Blast, or CBS, which owns stakes in SportsLine.com and finance news site MarketWatch.

"The approach NBC has taken is consistent with the hand they were dealt," said analyst Parr.

Reuters contributed to this report.