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Technology Stocks : C-Cube -- Ignore unavailable to you. Want to Upgrade?

To: BillyG who wrote (24861)	11/5/1997 12:05:00 PM
From: DiViT	Read Replies (1) \| Respond to of 50808

Microsoft May Invest Up To $1 Billion In U S West Cable Operations ------------------------------ YES!, give US West some spending money. Why this matters to us: divi.com ------------------------------ ÿ 11/05/97 Dow Jones Online News (Copyright (c) 1997, Dow Jones & Company, Inc.) ÿ NEW YORK -(Dow Jones)- Talks between Microsoft Corp. and Tele-Communications Inc. reportedly ended and the software giant is said to be near an agreement to invest as much as $1 billion in the cable-television operations of Baby Bell phone company U S West Inc. The move would advance Microsoft's efforts to turn the nation's cable television infrastructure into the primary high-speed access to Internet, Wednesday's New York Times reported. Microsoft is hoping to control the software that would run the set - top device used for getting on-line. Such a deal would be another boost for the cable industry from the Redmond, Wash., software giant. Microsoft's $1 billion investment in Comcast Corp. in June almost single-handedly reversed perceptions about the cable industry and rekindled Wall Street's interest in the sector. The latest investment would get Microsoft as much as a 6.3% stake in the cable operations of U S West, the Times reported. The Times said the two sides hope to finalize a deal by next month. In the Comcast deal, Microsoft acquired an 11.5% stake. U S West announced late last month that it was spinning off its cable business into a new company, MediaOne, in order to concentrate on telephone service. MediaOne, with more than five million customers in 19 states, would become the nation's third-largest cable company. MediaOne would also own U S West's 25% interest in the Time Warner Entertainment partnership that owns cable systems, the Warner Bros. film studio and the HBO pay-television service. It would also own U S West's international interests and interactive services. As recently as a month ago, Microsoft had been in talks to invest as much as $1 billion in TCI but the Times said Microsoft was concerned about TCI's 39.5% stake in Internet-access firm @Home Networks, which uses the Internet-browser software of Microsoft rival Netscape Communications Corp. An investment by Microsoft would, among other things, provide the financing MediaOne needs to pay for a next generation of digital cable boxes that would provide high-speed Internet access, plus access to hundreds of digital cable channels. Microsoft has been maneuvering furiously to influence the design of the new set - top boxes that will help bring the Internet to the nation's living rooms through cable wires. Microsoft executives have said that they consider success in penetrating the "living room" market for non-personal computer consumer-electronics devices, particularly television, to be a strategic necessity for the company in the long run. The reason goes beyond Microsoft's desire to have another market for its system software; the company is worried that a rival operating system that takes hold in consumer-electronics devices could then encroach on its core Windows business for PCs. But TCI, Comcast and other cable firms have been adamant that the boxes have an open architecture that would not benefit Microsoft at the expense of other software and hardware companies, so it isn't clear how much influence Microsoft will have in the operating system of the new set - top boxes. Using cable wires and television sets as the main link to the World Wide Web is expected to greatly accelerate broad-based consumer use of the Internet for entertainment and commerce. The Microsoft-U S West talks come as the cable industry is debating the technological standards for the next generation of cable boxes. CableLabs, a cable research and development consortium, is soliciting proposals for the new boxes, and has received proposals from a Who's Who of high-tech companies including Microsoft, Intel Corp., Sony Corp. and International Business Machines Corp. Copyright (c) 1997 Dow Jones & Company, Inc. All Rights Reserved.