MSN, ESPN in Content, Marketing Agreement

In a vast new content-sharing arrangement, Microsoft’s MSN Web portal will host online content from ESPN.com — promoting the sports site on MSN — but will exact several significant marketing benefits in return.

Beginning Thursday, New York-based ESPN.com will be the exclusive sports content provider for MSN’s sports channel — dubbed on MSN’s front page as “Sports by ESPN.” The site’s content also will be eventually available on MSN’s Mobile site. And the two properties’ content is expected to be further integrated following a planned revamping and redesign of the MSN site during the coming months.

“Working with an online leader such as MSN to make our content available exclusively to its vast audience is invaluable to our continued growth and leadership with fans, the industry and the advertising community,” said John Skipper, senior vice president and general manager of ESPN.com. “Our experience proves that in addition to audience reach, working with multiple media properties provides a great benefit to advertisers. Adding MSN to the mix will only enhance the opportunities for both sides.”

But the most important aspect of the deal is that MSN will gain greater access to ESPN.com’s users. In addition to logos for the portal that will appear throughout the ESPN.com site, the arrangement will provide links to MSN’s own services — like its Hotmail email — directly from ESPN.com.

Indeed, as a result of the tweaking, ESPN.com now actually appears to be a part of MSN, with the Web portal’s logo, and links to several of its content areas appearing even above the ESPN title. Each ESPN page also suggests that Microsoft owns the copyright to the page’s content. (ESPN, a unit of Disney, maintains, however, that it continues to own all content on the site.)

But Redmond, Wash.-based Microsoft will also gain further access to ESPN.com’s users through another crucial channel: the sports site has agreed to begin accepting members of Passport, to which MSN members must already login to access Hotmail and other features.

This means that MSN and Hotmail users would be able to access ESPN.com and its personalized content — such as fantasy sports games — without having to login separately, and vice versa.

Similar efforts have been rumored to be taking place at other, competing media conglomerates, such as AOL Time Warner — which according to reports is planning a Passport-like feature called “Magic Carpet,” that would require only one login for all affiliated sites.

The deal thus marks MSN’s first success in encouraging other sites to accept Passport. Last month, the company told internetnews.com that it planned to package Passport services in with its Advantage Marketing suite for online advertisers, which includes Web marketing tools and ad inventory with Microsoft software and consulting.

The expansion of Passport’s services comes following a statement by U.S. Department of Justice officials saying that they would not pursue a breakup of Microsoft — despite complaints by privacy groups that the Passport strategy exemplified monopolistic practices. However, antitrust regulators from the European Union are still closely scrutinizing the service’s ramifications, according to reports.

At any rate, in addition to whatever competitive advantages accrue to Microsoft by promoting its Passport services through ESPN.com, the software maker said the sports site would handle its streaming video and audio using its Windows Media Player technology — another big boon for Microsoft. The company is currently entrenched in a war for streaming media dominance on the Web, against RealNetworks’ rival RealMedia format, and to a lesser extent, Apple Computer’s QuickTime format.

Meanwhile, Microsoft said the newly knit ties between the two sites would have benefits for its advertisers, as well. For instance, MSN said it envisions working with ESPN.com to craft advertising deals that would combine inventory on both properties.

“The combination of ESPN.com content and leading MSN services is a home run for all of our customers,” said Yusuf Mehdi, vice president of MSN at Microsoft Corp. “The great brand awareness and popularity of ESPN coupled with MSN technology expertise will provide a platform for marketers to target an incredibly active and valuable segment of Internet customers.”

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