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Microsoft in cable deal?
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November 5, 1997: 10:41 a.m. ET
Software giant reported to pour $1 billion in US West's cable business
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NEW YORK (CNNfn) - As part of its continuing efforts to accelerate the deployment of high-speed Internet access via set-top boxes, Microsoft Corp. is reportedly set to invest up to $1 billion in the cable television operations of US West.
The New York Times reported Wednesday that the Redmond, Wash., software giant plans to buy up to 6.3 percent of US West's cable business, with the ultimate goal being to get high-speed data access for Microsoft's WebTV line of set-top boxes.
Microsoft inked a similar deal in June when it agreed to pay $1 billion for an 11.5 percent stake in cable company Comcast Corp.
The newspaper said the two sides hope to finish negotiations by early next month. The deal comes after Microsoft was reported to be near a similar agreement with cable company Tele-Communications Inc. which has apparently been tabled, according to the newspaper.
Microsoft was reportedly concerned over TCI's 39.5 percent stake in @Home Networks, which currently provides high-speed cable Internet access.
Executives at both US West and Microsoft refused to comment on the report. People close to the negotiations say the two hope to announce a deal before the Western Cable Convention, a major industry trade show, in December.
The deal gives Microsoft the potential to dominate the set-top box market through its Windows CE operating system just as it does now with personal computers. High-speed data access is essential for building its Internet businesses, including The Microsoft Network.
The alliance comes one month after US West said it would spin its cable operations off into a new corporation, Media One Group. With 5.1 million households, Media One would be the nation's No. 3 cable operator.
The deal would also tie Microsoft to Time Warner Inc.'s growing cable unit since US West is a major Time Warner shareholder. After the current deals are finalized, Time Warner will surpass TCI to become the nation's No. 1 cable company, serving 13 million households. (Time Warner is the parent company of CNN and CNNfn).
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