Microsoft Europe Deals Focus On PC-TV Convergence
By Dick Satran
SAN FRANCISCO (Reuters) - Microsoft Corp. (Nasdaq:MSFT - news) has
done two deals in two days with European companies that it says share
the software giant's ''roadmap and vision'' of digital television's
future.
Microsoft invested $500 million in Britain's NTL Inc. (Nasdaq:NTLI -
news) and completed a technology-sharing agreement Amsterdam-based
United Pan-European Communications NV (UPC), saying it will work with
both companies on interactive television using their cable technology
and systems. The companies did not disclose a dollar value for the UPC
deal.
''There will be new commercial products by midyear 2000 out of these
ventures,'' aimed at the digital television arena, Microsoft's
director of digital television strategy, Alan Yates, said in an
interview.
Cable technology is becoming increasingly attractive with the
emergence of digital television, because the cable wires can carry
two-way multimedia transmissions, Yates said. That allows for the
evolution of a system more sophisticated than the widely used
satellite TV systems in Europe, he said.
''Satellite does provide lots of benefits in terms of providing more
digital channels through a wide footprint (coverage area),'' said
Yates. ''But in areas where cable is laid, is it is a complete two-way
network, as opposed to satellite which just goes downstream and
telephone is needed to carry messages back upstream.''
The vision is to use cable's two-way wiring into homes so television
and personal computers can become two-way devices connected to the
Internet, offering a wide variety of services.
''Consumers are going to really love the synergy between the PC and
the TV that this will bring,'' said Yates. ''They will be able to get
their e-mail from either the PC or the television and go to their
favorite Web sites either on the TV or the PC.''
While Europe has lagged America in the development of the Internet
over telephone lines, it is well-placed to jump ahead in
Internet-connected digital television, which will carry multimedia to
a new level, said Yates.
Microsoft chose UPC and NTL as the companies to work with because they
will be able to work quickly in the highly competitive and
fast-changing digital market.
''With both NTL and UPC, the thing that attracted us was their
aggressive commitment to digital deployment,'' Yates said.
With the new deals, Microsoft appears to be moving ahead of its
U.S. competitors in creating a presence in the growing ''broadband''
market in Europe.
It has been less dominant in the United States, where high-speed
Internet service deals have reached a frenzied pace. In the biggest
deal so far, telephone giant AT&T Corp. (NYSE:T - news) will acquire
cable leader Tele-Communications Inc. (Nasdaq:LBTYA - news), the
majority owner of cable modem technology leader AtHome Corp., which in
turn is acquiring Internet search service Excite Inc. (Nasdaq:XCIT -
news)
America Online Inc. (NYSE:AOL - news), meanwhile, has aligned with
Bell Atlantic Corp (NYSE:BEL - news) to offer high-speed service and
programming to its 14 million customers.
All are betting that the convergence of the Internet and broadband
wiring will be an unbeatable combination for consumer offerings and a
focal point of the growing e-commerce business.
Microsoft's European deals follow the same thinking. Indeed, Yates
noted, UPC even has a cable modem venture, Cello, that follows the
exact same model as AT&T's new affiliate, AtHome. And Microsoft in
1997 invested $1 billion in Comcast Corp. (Nasdaq:CMCSA - news), the
large cable provider that once owned NTL and later sold it off.
Microsoft views the ventures in Europe as a way to promote its
development tools -- such as its Windows NT server software -- and
also its consumer products ranging from Windows CE, the pared down
operating system being used by some cable operators, to the Microsoft
Network, the umbrella for its numerous Internet services, and WebTV, a
set-top box that turns televisions into Internet stations.
''It's quite possible we will partner (with UPC and NTL) around common
services or a set of common services,'' Yates said. ''They could be
services that originate with Microsoft, as well as each having their
own unique set of services, or a mixture.''
dailynews.yahoo.com |
