SAN FRANCISCO (Dow Jones)--Microsoft Corp. (MSFT) would consider purchasing
an Internet service provider if it could strike a deal for the right price,
Chief Financial Officer John Connors said Tuesday.
In response to questions from investors at the Robertson Stephens Technology
Conference here, Connors said the company had shied away in the past from
making acquisitions to boost the subscriber base of its MSN Web access
service, mostly because valuations of other ISPs were too high. But the
Internet shakeout has reduced valuations, he noted.
"If there were an opportunity to grow our subscriber base at reasonable
values, our balance sheet would allow us to do that," Connors said.
On the other hand, Connors also said that history has shown that large
acquisitions often don't work. Companies often have trouble integrating large
acquisitions, he said.
Speculation has mounted in the past week that Microsoft is considering a
strategic alliance or outright purchase of EarthLink Inc. (ELNK), which is the
second-largest ISP behind AOL Time Warner Inc. (AOL).
Last week, EarthLink scaled back its relationship with Sprint Corp. (FON),
including the termination of Sprint's right to acquire EarthLink beginning in
September. Sprint retains a 27% stake in EarthLink. The move, coupled with
MSN's decision to end its costly $400 PC rebates, led Jefferies & Co. analyst
Fred Moran to say last week he believes a Microsoft-EarthLink deal is
imminent.
Connors didn't mention EarthLink in his presentation or in talks with
investors afterward. Representatives of both companies have declined to
comment on the speculation. |
