Microsoft's MSN division is partnering with independent media company BermanBraun to launch a celebrity gossip site, called Wonderwall. The website, which goes live this week, will aim to challenge rival entertainment sites, such as AOL's TMZ.com and Yahoo!-owned OMG, with the launch hailed as a bold step by Microsoft into a lucrative and growing market.
BermanBraun first started working with MSN on the site in June last year. While the company was only established in its own right in January 2007, founders Gail Berman and Lloyd Braun bring considerable media experience to the project.
Berman served in the past as president of the Fox TV Network and of Paramount Pictures, while Braun spent two years running the Yahoo! Media Group content division, where he helped to push through and develop OMG.- now one of the most visited celebrity sites on the web.
Wonderwall will bring together material already available through MSN's existing portals, as well as aggregating and programming outside content. This mix of original and third party content will appear on a scrolling horizontal display, heavily centred around photos and designed to be browsed like a magazine.
"We are investing more than ever in content," says MSN's general manager Rob Bennett. "With Wonderwall, we are creating an offering to attract and retain new audiences, using content that is already at the core of MSN."
Last month, AOL established a third business unit to sit alongside its Platform A ad division and its People Networks social network arm. The unit, called MediaGlow, will centralise all of AOL's publishing operations and is designed to expand and monetise its online publishing portfolio, which includes technology site Engadget and country music site TheBoot alongside its celebrity site TMZ.
The Wonderwall launch comes a month after Microsoft said it will cut 5,000 staff over the next 18 months after reporting worse-than-expected quarterly results and an 11% drop in profits.
It also comes amid a slowdown in the online ad market. According to recent predictions by eMarketer, total US Internet ad spend will increase from USD23.6bn in 2008 to USD25.7bn in 2009, an 8.9% growth rate. That will be the lowest ever year-on-year increase for online advertising. In this climate Microsoft seems wise to bet on a celebrity gossip website, which promises low costs and potentially high traffic. According to comScore data, the entertainment and gossip site category grew 14% in the last year, while entertainment is among the most popular content already on MSN along with news and sport.
StrategyEye's related categories: Print Portals - Major Blogs, Print Portals - News Aggregators
StrategyEye's related companies: Microsoft
