Published February 14, 2004
Microsoft has a role in Comcast-Disney drama
But it is staying on the sidelines now and not taking sides
MICROSOFT has three options in the Comcast-Disney takeover fight: play the saviour, the banker or stay on the sidelines.
Microsoft, which holds 7.4 per cent of Comcast and has helped the company in deals in the past, is saying nothing about Comcast's unsolicited US$54 billion bid for Disney, or any role that it might play.
And Wall Street investment bankers say they have not yet detected any signs of the Microsoft deal machine rumbling into motion.
Still, Microsoft has options that are intriguing, and potentially decisive. And Microsoft's 'no comment' does not rule out a role in the future.
Analysts say that Comcast will have to sweeten its bid if it is to succeed in acquiring Disney. Well, Comcast chief executive Brian Roberts could not find a larger, more friendly piggy bank than Microsoft.
The company is sitting on more than US$52 billion in cash, and it has helped Comcast in the past. In 1997, Microsoft invested US$1 billion in Comcast. In late 2001, Microsoft sided with Mr Roberts so that Comcast's bid for AT&T's cable business prevailed over an offer from AOL Time Warner, a Microsoft rival.
So, given the friendly history with Comcast, one option for Microsoft is to add some cash to the Comcast war chest.
Yet just this week, Microsoft announced a partnership with Disney. The two agreed to work on anti-piracy technology for delivering Disney movies and television programming on all kinds of digital devices, including a hand-held device Microsoft plans to introduce this year.
Analysts doubt that Microsoft would enter the fray and make a friendly offer for Disney as a so-called white knight bidder, an acquirer that Disney would prefer to Comcast.
But Microsoft, analysts say, also has business reasons to remain on good terms with Comcast rather than siding with Disney. Microsoft's investments in cable television operators have mostly been financial failures, except Comcast.
The strategic rationale for Microsoft was that its investments would help ensure that its software was on set-top boxes used for interactive TV, which would allow video-on-demand, online shopping and a host of other services.
Comcast, analysts say, is experimenting with a newer, trimmed-down version of the Microsoft set-top software. Interactive TV may finally become a commercial reality soon, they say, and Microsoft has not given up.
'It's the dream that refuses to die within Microsoft despite the billions invested,' said Richard Doherty, president of Envisioneering, a technology research company.
So for now, Microsoft's best option may be to remain on the sidelines rather than making an enemy of either partner. - NYT
http://business-times.asia1.com.sg/story/0,4567,108090,00.html
Microsoft has a role in Comcast-Disney drama
But it is staying on the sidelines now and not taking sides
MICROSOFT has three options in the Comcast-Disney takeover fight: play the saviour, the banker or stay on the sidelines.
Microsoft, which holds 7.4 per cent of Comcast and has helped the company in deals in the past, is saying nothing about Comcast's unsolicited US$54 billion bid for Disney, or any role that it might play.
And Wall Street investment bankers say they have not yet detected any signs of the Microsoft deal machine rumbling into motion.
Still, Microsoft has options that are intriguing, and potentially decisive. And Microsoft's 'no comment' does not rule out a role in the future.
Analysts say that Comcast will have to sweeten its bid if it is to succeed in acquiring Disney. Well, Comcast chief executive Brian Roberts could not find a larger, more friendly piggy bank than Microsoft.
The company is sitting on more than US$52 billion in cash, and it has helped Comcast in the past. In 1997, Microsoft invested US$1 billion in Comcast. In late 2001, Microsoft sided with Mr Roberts so that Comcast's bid for AT&T's cable business prevailed over an offer from AOL Time Warner, a Microsoft rival.
So, given the friendly history with Comcast, one option for Microsoft is to add some cash to the Comcast war chest.
Yet just this week, Microsoft announced a partnership with Disney. The two agreed to work on anti-piracy technology for delivering Disney movies and television programming on all kinds of digital devices, including a hand-held device Microsoft plans to introduce this year.
Analysts doubt that Microsoft would enter the fray and make a friendly offer for Disney as a so-called white knight bidder, an acquirer that Disney would prefer to Comcast.
But Microsoft, analysts say, also has business reasons to remain on good terms with Comcast rather than siding with Disney. Microsoft's investments in cable television operators have mostly been financial failures, except Comcast.
The strategic rationale for Microsoft was that its investments would help ensure that its software was on set-top boxes used for interactive TV, which would allow video-on-demand, online shopping and a host of other services.
Comcast, analysts say, is experimenting with a newer, trimmed-down version of the Microsoft set-top software. Interactive TV may finally become a commercial reality soon, they say, and Microsoft has not given up.
'It's the dream that refuses to die within Microsoft despite the billions invested,' said Richard Doherty, president of Envisioneering, a technology research company.
So for now, Microsoft's best option may be to remain on the sidelines rather than making an enemy of either partner. - NYT
http://business-times.asia1.com.sg/story/0,4567,108090,00.html
