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Technology Stocks : How high will Microsoft fly? -- Ignore unavailable to you. Want to Upgrade?

To: mozek who wrote (8453)	6/15/1998 10:25:00 PM
From: Ibexx	Read Replies (1) \| Respond to of 74651

mozek and thread, More news on MSFT: _____ Monday June 15, 9:39 pm Eastern Time Microsoft, Compaq join high-speed cable venture By Eric Auchard NEW YORK, June 15 (Reuters) - Computer giants Microsoft and Compaq have agreed to invest in a joint venture between cable TV operators Time Warner and MediaOne to deliver high-speed Internet access to millions of U.S. homes, the companies said. Microsoft Corp. (MSFT - news) and Compaq Computer Corp. (CPQ - news) will each invest $212.5 million in the cable online venture in return for preferred stock that gives each computer company a 10 percent stake in the venture, the companies said. The venture, known as Road Runner, was formed in December when Time Warner Inc. (TWX - news) and MediaOne Group Inc. (UMG - news) agreed to combine their high-speed Internet cable businesses. MediaOne, a cable and wireless phone operator that was spun off from regional U.S. phone company U S West Inc. (USW - news) on Monday, holds about 25 percent in the Road Runner venture. Through a complex ownership structure, Time Warner holds most of the remaining venture, together with a partnership the company has with publisher S.I. Newhouse's Advance/Newhouse. Road Runner promises to enhance significantly the range and depth of Internet services U.S. consumers can receive at home. The system effectively eliminates the wait normally associated with receiving data-intensive graphics via the World Wide Web. Road Runner relies on cable modem technology that allows Internet services to be transmitted via the same coaxial cables used to deliver cable TV services into homes. Customers pay fees starting at $40 to $50 a month to use the service. Compaq's involvement reflects its increasing efforts to link its computer products to the Internet, an executive said. The Houston company is the world's No. 1 maker of personal computers. Rod Schrock, head of Compaq's consumer PC group, said his company will offer made-to-order PCs that are Internet-cable ready by the end of 1998. A standard, cable-ready, off-the-shelf PC will be ready by Christmas 1999, he said. ''By Christmas 1999, it's going to be a high-speed Internet access world,'' Schrock predicted. He said Compaq planned to jointly market the service with its own products. As demand for high-speed Internet access increases, Compaq stands to benefit from expanded sales of the latest high-performance computers required to use such technology, Schrock said. For Microsoft, the deal builds on an existing relationship the software giant has with cable TV operators to supply operating system software for the cable network. Microsoft also stands to benefit by supplying Internet browser and other software for consumers using the Road Runner system. About 90,000 customers have signed up for Road Runner to date, with 150,000 expected to sign up for the service by the end of the year, Road Runner spokeswoman Sandy Colony said. Backers of the venture see the number of subscribers skyrocketing as the services become more widely available to customers, and products and services designed to take advantage of its high-speed Internet capabilities become ready. Ultimately, the venture will be capable of reaching more than 27 million U.S. homes, of which roughly 17 million are cable customers, the companies said. Time Warner and MediaOne plan to complete upgrades to their networks by the year 2000 to allow two-way data delivery. Such networks were originally designed to transmit TV signals one way into consumer homes from cable TV facilities. Once certain bottlenecks are ironed out, Road Runner's service is expected to deliver information at speeds of around 27 millions of bits a second -- 1,000 times faster than devices now used by most consumers to connect to the Internet. A current limitation of the system is the lack of low-cost, standardized modem equipment to allow customers to receive the high-speed data, but such equipment is scheduled to ship by the end of 1998, Road Runner's Colony said. Road Runner is designed to transmit the high-speed graphics and data that make up the bulk of Internet communications. But the network could also be used to deliver phone calls via the Net, should cable operators decide to compete with directly with phone companies. Ibexx