To: Jim Lamb who wrote (4626 ) 1/11/1998 8:19:00 PM From: DiViT Respond to of 74651
Guess WebTV was not such a bad purchase after all... Microsoft to Supply Software for Cable Boxes By Martin Wolk SEATTLE (Reuters) - Microsoft Corp. has scored a major victory in its aggressive push to lead the convergence of television and the Internet, winning a contract to supply the core software for at least 5 million advanced set-top boxes for cable giant Tele-Communications Inc. The deal, hammered out in negotiations that lasted until 2:30 a.m. Saturday, came just a day after Microsoft's bitter rival Sun Microsystems Inc. announced TCI would use its Java programming language in the boxes, which will give consumers access to a wide range of services from home shopping and banking to high-speed Internet access. But TCI Chairman John Malone made clear that Microsoft's Windows CE operating system would be included in each of up to 11.9 million boxes it plans to deploy over the next several years, while Sun's technology would be included only if economically viable. "We chose Microsoft because we felt they were the furthest along in terms of convergence between the Internet and the TV set," Malone said in a conference call with analysts and reporters. "This is the horse on which we're going to put our money." Financial terms were not disclosed, but one analyst estimated TCI, the nation's largest cable provider, would pay Microsoft a licensing fee of $25 per box to include a special version of Windows CE, the software giant's growing family of software for consumer electronics. While TCI has committed to a minimum of 5 million units in the non-exclusive deal, Malone said the cable giant plans to include Windows on all the 6.5 million to 11.9 million boxes it expects to buy for itself and affiliates over the next three to five years. Malone said part of what set Microsoft apart was its WebTV technology, some of which will be included in the boxes, which TCI hopes to begin deploying to its customers late this year. WebTV, which Microsoft bought last year for $425 million, supplies Internet service through the television set to about 200,000 subscribers.