How do you see Microsoft's investment in Nextel impacting VARL?
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May 10, 1999
Tech Center
Microsoft to Take Nextel Stake
As Firms Set Internet Venture
An INTERACTIVE JOURNAL News Roundup
Microsoft Corp. agreed to invest $600 million in Nextel Communications Inc., taking a roughly 5% stake in the company, and agreed to form a joint version of its MSN portal site to offer wireless Internet services.
Nextel, based in Reston, Va., said Monday that it will sell about 16.67 million shares to Microsoft for $36 a share, just below the stock's market price of $36.375 at the close of trading Friday on the Nasdaq Stock Market. The stock jumped $1.25 Friday amid a rally in many technology-related issues.
Microsoft and Nextel plan a wireless portal to work with hand-held communications devices, cellular phones and interactive pagers. Nextel's customers will be able to access e-mail, calendar and address book services, news and financial information and other content from MSN, the companies said.
The agreement with Microsoft comes just days after Nextel and MCI WorldCom Inc. broke off merger talks. The two companies were unable to come to terms on a price for the deal. MCI WorldCom was willing to pay $42.50 a share, but Nextel asked for $44.20 a share, people familiar with the matter said last week.
"The combination of Nextel's integrated data network and Internet-ready phones will provide our customers with the ability to access information and applications that are important to them, wherever they are," Dan Akerson, Nextel's chairman and chief executive officer, said.
Nextel plans to use the $600 million investment to advance deployment of the MSN services, develop additional digital services, expand the Nextel National Network in the U.S., and fund system development and expansion, the company said.
The companies said the wireless portal services are expected to be available later this year.
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