CitySearch set to acquire Microsoft's Sidewalk

Ticketmaster Online-Citysearch is expected to acquire Microsoft's Sidewalk city guides for $240 million in stock, sources said today.

Under the deal, which was previously rumored, CitySearch would increase the number of city sites it runs to 77 from 33. Assuming all the last-minute details can be ironed out, the deal is expected to be announced tomorrow.

Sidewalk and CitySearch compete in the market for offering information about local entertainment, news, and shopping. After divesting Sidewalk, Microsoft would retain its "yellow pages" and buying guide properties.

A source close to the deal, which is also being reported by the New York Times, said Sidewalk would retain its look and feel for a period before being absorbed into CitySearch.

Microsoft is expected to direct MSN users to the online operations of Ticketmaster Online-CitySearch and will create a channel on its network with content provided by CitySearch. Microsoft also will acquire a minority stake in Ticketmaster Online-CitySearch.

The deal represents a significant consolidation in the market for online city guides and highlights Microsoft's shift toward e-commerce and away from content creation.