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Sky Global, MSFT in tie?
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October 30, 2000: 6:46 p.m. ET
Microsoft in discussions to acquire stake from satellite TV parent: Source
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NEW YORK (CNNfn) - Microsoft Corp. has entered discussions with News Corp. about making an investment in the media and entertainment conglomerate's satellite and pay-TV subsidiary, Sky Global Networks Inc., a source close to News Corp. told CNNfn Monday.
It was not immediately clear how serious the discussions were or when, or even if, the two sides might complete a deal. However, any such investment would provide the Bill Gates'-led Microsoft with a sizable platform to distribute the interactive television software it is developing, while giving Sky Global a much needed cash infusion.
The investment being discussed is reportedly in the $1 billion range and would give Microsoft a 3.5 percent stake in Sky Global, according the Wall Street Journal, which first reported the discussions. News Corp. and Microsoft both declined to comment on the report.
News Corp. has been touting a Sky Global initial public offering since early this year, but so far has yet to establish a true timeframe for the offering, leading some to speculate it may not happen anytime soon.
 The Journal said Monday that the company had decided to push the IPO back until next year. However, a source close to News Corp., which is run by media mogul Rupert Murdoch, said Monday that wasn't true.
"They've never said it was going to be pushed back until next year," the source said. "As little as two weeks ago, Rupert said it would happen in 'the near future.' They just didn't know Vivendi was going to buy Seagram and have to get rid of [British pay-TV company] BSkyB."
Still, with the year dwindling away and Wall Street showing a renewed aversion to tech shares in recent weeks, the likelihood of a 2001 IPO seems to be growing.
Those odds increased even more earlier this month when the European Commission required Vivendi and Seagram (VO: Research, Estimates) to sell off their 20 percent stake in BSkyB, which is 40 percent owned by News Corp. (NWS: Research, Estimates), as a condition of their $26 billion union.
That has left News Corp. searching for new investors in Sky Global, particularly among companies like Microsoft that would not only be able to provide cash, but also help provide a boost to Murdoch's media empire, a source close to the company confirmed.
Other interested investors reportedly include Internet portal Yahoo! Inc. (YHOO: Research, Estimates), France's media and water concern Vivendi SA and wireless provider Nokia Inc.
Microsoft has already closed deals to distribute its interactive television software with at least two cable companies as it eyes moving its products beyond the PC.
As little as 12 days ago, the 69-year old Murdoch attempted to soothe investor concerns that the Sky Global IPO might get delayed while revealing News Corp. was in discussions with DirecTV owner Hughes Electronics Corp. and Echostar Communications Corp. about becoming strategic partners in his satellite operations.
Murdoch is widely rumored to be interested in acquiring Hughes in a move to bolster his satellite and pay-TV holdings in the United States.
News Corp. shares gained $1.62 to $42.19 Monday while Microsoft gained $4.62 to $69.06.
-- from staff and wire reports 
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