When mammoth media companies NBC Universal and News Corp. came together in March to announce the launch of a new internet video site, the news was greeted with a degree of skepticism. The project, launched six months after Google's $1.65 billion (€1.2 billion) acquisition of YouTube, seemed to be an attempt to compete with the wildly popular video-sharing site as well as provide a tool to make money from the internet viewing of NBC and Fox shows. But considering the two networks are major rivals, many doubted that they could work together effectively.

Half a year later, the project still has no website, no clear mission and is still known only by the working title of “New Site”. Yet according to a report in the New York Times, the venture has just received $100 million from Rhode Island-based Providence Equity Partners in exchange for a 10 percent stake in the business.

Providence, which frequently makes venture investments in media companies such as local newspapers and television stations, has declined to comment on the deal. But according to the Times, the transaction is expected to be finalised soon, with Providence claiming a seat on the board. The investment values the company at $1 billion, an astounding number for a business that doesn't have a name yet.

The project has made some strides forward since its launch. It recently leased office space in Los Angeles and hired former executive Jason Kilar as its chief executive. According to reports, around 120 people currently work for the company. The idea behind the site is to provide high-quality video of NBC and Fox shows, for a fee, with copyright protection. The company has also said that it will feature usergenerated content, although that will not be the main purpose of the site.

Both NBC and News Corp. have insisted that the purpose of the site is not to rival YouTube, but considering that the networks have for a year been struggling to get their copyrighted material off YouTube, some have questioned whether the new site reflects an “if you can't beat them, join them” mentality. Clearly, there is high demand for viewing the networks' clips online, so the media giants may have figured out that pulling them without providing an alternative source of viewing may not be the best strategy. Viacom, which is suing YouTube for $1 billion for copyright infringement, reportedly held talks on also joining the venture but in the end declined.

Though its investment appears large for such an embryonic project, Providence is hardly a novice when it comes to the media space. Headed up by Jonathan Nelson, who sits on the boards of Metro-Goldwyn-Mayer and Warner Music Group, the firm has raised $21 billion through seven funds since its founding in 1989. Just this year the firm has made media investments in online shopping comparison site NexTag,, Decision Resources and USIS. It has also sold several media companies including BlueStone TV.

Some observers question whether Providence will be able easily to negotiate an exit route from “New Site” and also point to the fact that past collaborations between media giants – such as NBC's prior MSNBC tieup with Microsoft – haven't exactly gone smoothly. By committing $100 million of cash up front, Providence is clearly not swayed by the doubters.