Microsoft Corp. is engaged in "secret talks" with GE about
buying up to 49% of NBC, according to a report in DAILY VARIETY.
Although officials refused to comment, a source familiar said the
talks are "advanced." Microsoft already has a deal with NBC for
the use of the network's sports, entertainment and news
programming for its online service, and the two companies are in
discussions on launching a 24-hour all-news cable channel to
compete against CNN (Hofmeister & Helm, L.A. TIMES, 12/11). A
49% stake in NBC "would easily cost" Microsoft $4B (N.Y. POST,
12/11). One Microsoft source "doubts" Chairman Bill Gates would
spend that much to "buy half of NBC as a content play" choosing
instead to "make a series of deals with programmers." Analysts
also doubt Gates will put that much cash into a broadcast network
"when he has ambitious plans to reengineer Microsoft to exploit
the growth of the internet" (L.A. TIMES, 12/11). The WALL STREET
JOURNAL cites sources saying the rumor is "false," but that NBC
and Microsoft "are weighing" a $100M investment in the news
channel to be split 50/50 (WALL STREET JOURNAL, 12/11).
OTHER NETWORK NEWS: Westinghouse announced they will sell
some defense business and another division to help pay for its
purchase of CBS. One CBS exec said Westinghouse may "start its
own cable television network featuring CBS shows as an additional
means of generating cash" (Greg Clarkin, N.Y. POST, 12/9). The
development of "all-news" channels is featured in the current
BUSINESS WEEK (Dreising & Oneal, BUSINESS WEEK, 12/18 issue).
Viacom CEO Frank Biondi said a merger between Viacom's UPN and
Time Warner's WB Network would be a "great idea," adding that he
doesn't know why such a merger "hasn't happened" (CHICAGO
TRIBUNE, 12/9).
