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November 5, 1997updated 03 Sep 2016 5:01pm

MICROSOFT CLOSE TO PUMPING $1BN INTO US WEST

By CBR Staff Writer

Microsoft is close to an agreement to invest $1bn in the cable television operations of US West, according to the New York Times, which cited sources involved in the negotiations. At current prices, that amount would score Redmond about 6.3% of US West’s cable business. The report said that negotiations were moving along swiftly and Microsoft would likely announce the deal ahead of the Western Cable Convention trade show in early December. The US West investment would no doubt be aimed at furthering Bill Gates’ vision of linking PCs and televisions through the construction of a broadband pipe. After Microsoft’s $1bn investment in cable company Comcast in June (CI No 3,178), Gates explained that the money he laid out was simply to accelerate the building of a such a broadband infrastructure, which he believes will be advantageous to the software industry in general. At the time, Gates balked at admitting that such an investment meant that Microsoft was getting into the cable business (and becoming a general media company), but said that Redmond would concentrate on software and the content that will eventually flow over the pipe. News of the US West deal comes to light only a couple of weeks after a similar story in the Wall Street Journal claimed Microsoft was close to announcing a comparable investment in Tele-Communications Inc (CI No 3,269). The Times story says that deal fell through due to concerns by Redmond over TCI’s nearly 40% stake in potential competitor @Home Networks Inc. US West shares didn’t take much notice of the report, edging up $0.625 to close at $41.125.

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