Microsoft and Compaq are to invest a combined $425 million in cable based Internet access provider Road Runner, acquiring a 10 per cent share each.
Meanwhile, Microsoft is also in talks with Australian telco Telstra about a possible joint venture using the carrier's cable network.
Road Runner is a joint venture between Time Warner Cable and Time. As part of the new deal, Compaq will develop cable ready PCs, and Microsoft will offer its expertise in Internet, client/server and application software.
The company also announced plans to launch an online news and entertainment service in Hawaii using technology from Microsoft and Digital Equipment. Hawaiian cable company Oceanic Cable will customise Microsoft's Internet Explorer and Commercial Internet System, a set of Internet server software for service providers. Digital will be the system integrator.
In Australia, Telstra chief executive Frank Blout said Microsoft is interested in "some kind of equity arrangement". Microsoft is keen to take advantage of Telstra's cable network which passes 2.5 million homes.
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