3.From Beefing.com The word is spreading. 10:56 ET Spyglass Inc (SPYG) 19 7/16 +1 1/8 (+6%): Shares benefitting from news AT&T (T) will use Microsoft (MSFT) software in set-top boxes. SPYG recently signed strategic Internet solutions agreement with MSFT. SPYG also has agreement with set-top box maker General Instrument (GIC) to build services and applications for General Instrument's digital cable platform. Volume 469K; intraday range 18 11/16 to 19 3/4.
4.Microsoft may get cozy with Ma Bell
Effort to boost Windows CE may pressure Sun
By Brenon Daly, CBS MarketWatch
Last Update: 4:21 PM ET May 5, 1999 Tech Report
NEW YORK (CBS.MW) -- Microsoft reportedly may look to convert the currency it got as kingmaker in the tug-of-war over MediaOne into a stake in AT&T, in an effort to shore up its position in a new area of software.
5/9/99 11:49:24 AM ET
The goal: Make sure Ma Bell (T: news, msgs) uses Microsoft's Windows CE in cable-television set-top boxes, which allows Web surfing over television. If AT&T's mega-acquisition of MediaOne (UMG: news, msgs) goes ahead, AT&T will emerge as the nation's largest operator of cable systems. See related story.
A cozy relationship between Microsoft (MSFT: news, msgs) and AT&T might be bad news for Sun Microsystems (SUNW: news, msgs), which offers a Java-flavored version of a set-top box operating system.
Sun representatives didn't immediately return phone calls.
Shares of Sun edged up 5/8 to 57 13/16, while Microsoft's stock rose 1 1/16 to 79 1/8.
<<"That's why the possible deal with AT&T is so important -- so Microsoft will be able to deal directly with AT&T and have them choose (Windows CE)," said Sharon Corbitt, spokeswoman for General Instrument (GIC: news, msgs), the largest maker of set-top boxes. Since these gadgets were introduced in late 1996, General Instrument has shipped more than 3.5 million of them.
General Instrument along with its chief rival Scientific-Atlanta (SFA: news, msgs) make the boxes, and then cable operators choose which software they want to power them.>>
The New York Times reported that Microsoft may spend as much as $5 billion for up to 3 percent of AT&T.
Windows CE, with about half as many lines of code as the better-known Windows 95 system, runs electronic gizmos such as set-top boxes, personal organizers and even small computers in cars. The operating system is viewed as crucial to the fortunes of Microsoft, as the sales rate for the gadgets is expected to vastly outstrip the 15 percent projected for PCs.
Microsoft has put an increasing emphasis on CE, but its effort hasn't been a universal success. For instance, 3Com's Palm product -- the best-known personal organizer -- uses an internally developed operating system.
Further, not all analysts are convinced that Microsoft can extend its monopoly in the PC market to the notorious difficult consumer electronic market. The move would also bring a new scale of economics, as CE generates only about one-tenth the revenue that its other operating systems produce, according to Forrester Research.
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