Deals a SnapTV for ValueVision

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ValueVision International Inc., the Minneapolis-based home
shopping network, will rebrand itself as a result of a new alliance with NBC, XOOM.com
and Snap, boosting its presence in
cable households and increasing cross-branding opportunities.

NBC said it will create its own Internet division, NBC
Internet (NBCi), which will include ValueVision, Snap and San Francisco-based Internet
portal XOOM.com.

The company added that ValueVision, which it bought a 19.9
percent stake of earlier this year, will be renamed SnapTV, and its Internet site will be
rebranded SnapTV.com. However,
ValueVision, Snap and XOOM.com will remain separate entities.

The companies said the rebranding will be phased in over
the next six to nine months, and the TV network will continue to be owned and operated by
ValueVision.

The new SnapTV.com Internet portal will include
electronic-commerce opportunities, as well as streaming video of SnapTV's cable channel,
short-form video representations of products and auctions.

"The goal here was not to encroach on either of our
core businesses, but rather, to expand the business to make both of us more money,"
XOOM.com chairman Chris Kitze said in a conference call with reporters. Kitze is slated to
become CEO of NBCi after the agreement is closed.

NBC Cable president Tom Rogers said during the conference
call that the alliance is in line with NBC's Internet strategy. "What we're trying to
do, as we build a broad-based new-media world for ourselves, is to make sure as much [as
possible] of what we have is integrated," he said.

The alliance should bode well for ValueVision, which will
likely be able to take advantage of NBC's expertise in winning new households. NBC has had
great success in expanding its CNBC cable service (which is now in about 68 million cable
homes) and its newer MSNBC channel (48 million).

ValueVision currently has about 32 million households,
although not all of them are full-time equivalents.

According to its previous deal with ValueVision, NBC
guaranteed to bring a minimum of 10 million additional homes to the shopping network, 5
million of which it has already delivered.

ValueVision stock had gained nearly $2 per share since
Sept. 8, but it was down $2.88 to $25 after the deal was announced last Wednesday. The
stock rebounded slightly in early trading last Thursday to $25.25.

Janco Partners analyst Ted Henderson said that while the
deal will probably not bring ValueVision any closer to the No. 1 and No. 2 home shopping
networks -- QVC and Home Shopping Network, respectively -- it will allow the company to
take risks that its competitors can't.

"With HSN and QVC, every hour, they are doing tons of
business," Henderson said. "It's hard for them to justify to their shareholders
or owners why you would do something that is either evolutionary or revolutionary because
they've been so wildly successful. Being in that third-horse position, ValueVision can
take some chances. They can do something that is unique."

Henderson added that the creation of NBCi also raises the
possibility that the division could be spun off as a separate, publicly traded company.

"They formed NBCi as a division, and they've marshaled
all of their Internet assets underneath there," Henderson said. "In the
environment we're in, would it make sense to get a separate currency underneath that
umbrella? Probably yes. It would not surprise me to see them spin that thing off from the
core NBC business."

NBC invested in Snap with CNET Inc. in an effort to obtain
an Internet-portal presence. Prior to that deal, the network had looked at several
different Internet companies, including Lycos Inc., but it was unable to reach an
agreement.

Speculation in the industry has been that although NBC and
Snap have a good relationship, NBC clearly wanted more.

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