Yes, MSFT does own a piece of TCI. That is one big incentuous corporate orgy. Good piece in Wired from about a year back on televisionspace laid out the competitive landscape. Excerpted is the first of seven parts. Follow the link for the other parts.
<http://www.wired.com/wired/archive/6.04/mstv.html?pg=1&topic=&topic_set=>
Forget the browser. (Bill Gates has.) Microsoft
wants to be in the box. (And if he has his way,
television and Windows will be as inseparable as
television and football are now.)
Bill Gates and football may not exactly be linked in
the public eye, but judging from his performance at January's Consumer
Electronics Show, this is something Microsoft's CEO would like to correct. It
was there that he announced his landmark deal with Tele-Communications
Inc. - an agreement that will put Windows CE, the lite operating system, on 5
million digital set-top boxes which the cable giant plans to deploy sometime
in 1999. Demonstrating the television of the future in the gizmocentric air of
the Las Vegas Convention Center, Gates - the richest nerd in America, and
certainly the most vocal in his disdain for TV - showed how you could watch a
football game, summon statistics, and even order yourself a jersey at the
same time.
Gates, of course, knows that for millions of people, television and football
are indelibly linked - and if he has his way, television and Windows will be
equally inseparable. Even as he spoke, Microsoft was finalizing a deal with
Gemstar, maker of VCR Plus, to license its interactive program guide for the
forthcoming Windows 98. But Gates's real focus is on the set-top box, the
noisome little gadget that serves as a halfway house for the signals coming
into your television set, and he's not alone in his interest. Less than a week
earlier, Sony had announced a deal that would put its brand - one of the
best known in the world - on many of the CE-equipped boxes General
Instrument Corporation is building for TCI. The previous day, Sun
Microsystems, Microsoft's archrival, had announced an agreement to supply
TCI with a scaled-down version of Java for those same boxes - an
arrangement that was immediately perceived as a blow to Microsoft. So
eager was Microsoft to have something Gates could announce at CES that its
negotiating team, which had been in discussions with TCI since last April,
had worked well into the night to cut the deal. Not since his long-ago talks
with IBM - the ones that made MS-DOS the standard operating system for
the PC and eventually allowed Microsoft to dominate personal computing -
had Gates been so dependent on a potential partner.
"Microsoft desperately wants to be in the box," says Gary Arlen of Arlen
Communications, a research firm based in Bethesda, Maryland. "This was
TCI's way of saying, We still control the real estate. From Microsoft's point of
view, at least they've gotten in. But they don't control the box - yet."
If cable has its way, Microsoft never will. "The industry is very wary about
going down an approach like the PC industry's - a proprietary operating
system coupled with a CPU," says Bruce Ravenel, TCI's Internet services
chief, who was instrumental in the talks with both Microsoft and Sun.
"Because that places control in the hands of the suppliers of those
components." But unlike Netscape and its allies in the computer industry,
TCI has no interest in bashing Microsoft. Far from it: even without the
billion-dollar investment he'd been expected to receive, TCI chair John
Malone gave Microsoft a hearty endorsement at CES, saying "This is the
horse we're going to ride" and declaring it furthest along on the path toward
PC-TV convergence.
What really came through in Vegas, however, was the size of the arena
Microsoft has entered. This is no grudge match with puny Netscape; more
like a tango among titans. With US$11.4 billion in sales last year (up from
$4.6 billion in 1994), Microsoft is facing companies like Sony ($46 billion),
Time Warner ($21 billion), and TCI ($8 billion, not counting its joint ventures
with half the media conglomerates on the planet). At stake is not just the
future of the American living room, but global lifestyles in the 21st century.
As Microsoft's war with the Justice Department over the marriage of its
Internet browser with Windows 95 devolved into a staredown, with
high-powered attorneys trading epithets like 6-year-olds, suddenly it was
possible to think, Browser? What browser? Was the epic
Netscape-Microsoft-Justice Department confrontation just a sideshow, a
loss-leading, brief-spewing, lawyer-saturated warm-up to the main event?
Might the browser wars be a footnote by the end of the century?
Check the arithmetic: PCs are holding steady in fewer than 40 percent of
American homes. Only 20 million homes have PCs with modems. Some 68
million have cable television. For Bill Gates, cyberspace isn't where the action
is. To maintain its phenomenal growth, Microsoft needs to be in the market
its people call "televisionspace." The question is, How big a chunk can it
claim? |
