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MSN: Best Buy better do better by us

Microsoft is looking for a new deal...
Written by Troy Wolverton, Contributor

Microsoft is looking for a new deal...

Microsoft has said it wants a new agreement with US store chain Best Buy, with whom it has an advertising and profit-sharing deal. The current deal, which includes the promotion of the MSN internet service in Best Buy stores, expires in March. The companies are in negotiations to continue the agreement, but Microsoft wants better terms than it has under the current pact. MSN spokeswoman Parul Shah said: "It's time for us to re-examine the contract and put something new in place. MSN is very focused on reaching profitability. We want to make sure all of the business arrangements that we have map to that goal and make fiscal sense for our business." Best Buy representatives did not return calls seeking comment. But in its quarterly report filed Tuesday with the Securities and Exchange Commission, Best Buy stressed the importance of the deal. The company said in its filing: "If we are unable to extend our alliance with Microsoft or to replace it with a comparable [deal], future operating results could be affected." The two companies announced an alliance in December 1999. As part the agreement, which was signed in April 2000, Microsoft bought $200m of Best Buy stock and agreed to promote the company's BestBuy.com online store on its MSN properties. In return, Best Buy agreed to promote Microsoft products, specifically MSN, in its stores and through print and broadcast ads. Shah declined to say how much MSN has paid Best Buy under the current agreement. She also declined to say what terms MSN is asking for in the companies' negotiations. Troy Wolverton writes for News.com
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