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To: Sleeper who wrote (9105)	5/6/1999 7:28:00 AM
From: Sleeper	Read Replies (1) \| Respond to of 29970

Microsoft Said Close To Big AT&T Stake By Martin Wolk 00:55 05-06-99 SEATTLE (Reuters) - Microsoft Corp. is close to announcing an investment of up to $5 billion in AT&T Corp. that would bolster the software giant's role in high-speed Internet communications, industry analysts and sources said Wednesday. Officials of the two companies declined to comment, although sources familiar with the deal -- expected to give Microsoft a 2 or 3 percent stake in AT&T -- said an announcement was likely Thursday. The investment, which would be Microsoft's biggest ever, would give the world's leading software company a special relationship with the biggest U.S. cable provider and likely a dominant role in media and communications for years to come. ''This is for all the marbles,'' said Scott McAdams, president of Seattle-based brokerage McAdams Wright Ragen. he said. ''If they get AT&T -- and it sounds like they're going to get in there -- then they've won.'' AT&T Chairman C. Michael Armstrong would not comment specifically on widespread reports of a Microsoft deal but said the telecommunications giant would not agree to exclusive relationships in any such deal. ''We will not have a discussion or transaction that would be exclusive,'' he said in a conference call with analysts. ''There will be no exclusivity.'' But analysts said the investment would ensure that Microsoft's struggling Windows CE operating system will be installed on millions of television set-top boxes that will be deployed in coming years. And it would pave the way for more sales of more Microsoft software for personal computers and back-end servers as well as increased distribution of its Internet content. ''While the PC is not going away, we are fast entering a new era in which other delivery vehicles become at least as important if not more important, and Microsoft is at least guaranteeing they're going to be a big player in that game,'' said Richard Shaffer of Technologic Partners. Microsoft gained $1.06 in Nasdaq trading to close at $79.125, while AT&T, which earlier cut a deal to win control of cable operator MediaOne Group Inc., rose $5.25 to close at $56.81 on the New York Stock Exchange. Microsoft, which has a cash hoard of more than $21 billion, has been accelerating its spending on cable television since it invested $1 billion in No. 3 provider Comcast Corp. in 1997, its biggest investment to date. Last week Microsoft emerged as a kingmaker in the battle for control of MediaOne but ultimately came down on the side of AT&T, elbowing aside rival suitor Comcast. Any investment by Microsoft in AT&T automatically would trigger a federal review and likely would attract the attention of regulators who believe Microsoft has abused its monopoly position in the market for personal computer software. But given Microsoft's plan to take a relatively small stake of 2 or 3 percent in AT&T, it was unclear whether the deal would be seriously challenged.