ValueVision Deal to Put NBC in Home-Shopping Business

NBC is entering the world of fake furs, pasta cookers and porcelain figurines with its first investment in home shopping.

NBC parent General Electric Co. is buying a minority stake in ValueVision International Inc., the third-largest home-shopping cable network, hoping to tie the companies’ TV and Internet businesses into one powerful retailer.

“Home-shopping channel offerings on cable . . . represent a critical link from television to the evolving world of e-commerce and the Internet,” said Tom Rogers, president of NBC’s cable division.

NBC will try to take advantage of its relationships with cable operators to get ValueVision shown in more homes. At the same time, NBC will help ValueVision give its Web site a face lift as the companies seek another Internet player to join the venture.

For NBC, the deal adds a new type of programming to its cable lineup and furthers its online expansion.

ValueVision operates the No. 3 cable home-shopping channel behind QVC and Barry Diller’s Home Shopping Network. ValueVision is shown in 21.8 million U.S. homes.

The NBC deal employs a strategy similar to Diller’s plan to acquire Internet company Lycos Inc. and combine it with his Home Shopping Network and Ticketmaster operations; however, that deal has been plagued by opposition from Lycos’ biggest shareholder.

Under Tuesday’s deal, GE will buy up to 19.9% of Minneapolis-based ValueVision for $56 million, and has an option to raise that stake to 39.9%.

Investors cheered the deal, sending ValueVision shares up $1.38 to close at $11.50 on Nasdaq, while GE shares rose $1.19 to close at $106 on the New York Stock Exchange.