Microsoft is close to inking a $1 billion deal for 15 per cent of Comcast, the sixth largest cable television operator in the US. That is likely to increase pressure on Microsoft from the US Department of Justice, which is already investigating the company for its proposed acquisition of Web TV.
According to US press reports, the main attraction is Comcast?s @Home service which could be used to deliver Microsoft Network content.
The @Home Network distributes high-speed interactive services to residences and businesses using the cable industry's hybrid-fibre coaxial infrastructure and its own network architecture.
It was formed in 1995 by a group of investors which included Comcast and Tele-Communications.
According to Chris Champion, Internet and interactive services analyst at researchers the Yankee Group, @Home could absorb the cost of delivering MSN.
He said: ?With the exception of a few online service providers, it is very expensive to run networks, unless you are Deutsche Telekom which not only runs the network, but owns it and charges for its use. Comcast could take the burden of delivering the network.?
Comcast could play a vital role in Microsoft?s push into Web media. In April Microsoft purchased Californian start-up WebTV for $425 million. By owning WebTV and a stake in Comcast, Microsoft could control both the technology than turns the television set into an Internet device and an expanding delivery mechanism.
As well as @Home, Comcast is expanding into cable television and telephone services, wireless telecomms, and content through QVC, it electronic retail operation.
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