BUSINESS
Microsoft reaches for the Sky
31-10-2000
by Aoidin Scully
Microsoft and Rupert Murdoch's News Corporation are at an advanced stage of talks that could see the US software giant take a 3.5 percent stake in Sky Global, the Asian Wall Street Journal reported on Monday.
Citing "people familiar with the situation", the newspaper said if a definitive deal is reached, Microsoft could invest as much as USD1 billion in the new digital subsidiary of Murdochs media empire, which consolidates all of News Corp's global satellite-TV assets and investments.
The appeal to Microsoft of investing in Sky Global is understood to be access to the millions of digital TV users who subscribe to Murdoch's services. Microsoft has been developing software for TV set-top boxes and the development of interactive television.
Both Microsoft representatives in Ireland and News Corp spokespeople refused to comment on the speculation, but it is understood that the companies have held discussions on and off throughout the year.
The transaction would be an important boost for Sky Global, which has a 37.5 percent stake in British Sky Broadcasting, as it prepares for its imminent initial public offering. The IPO has been held up by the volatility of the markets and negotiations between Murdoch and strategic partners. The float is now expected early next year.
According to the Financial Times, News Corp is also pursuing discussions with Vivendi about the French media and communications group folding its 22.7 percent stake in BSkyB into Sky Global for a stake of about 10 percent. Murdoch has previously talked about Yahoo, the Internet company, and Nokia, the Finnish mobile phone group, as possible investors. He is said to be keen to bring on investors who would add a strategic dimension to Sky Global as well as shore up its USD40 billion valuation.
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