Microsoft broadcasts Web TV buyout

The software giant is set to dominate the digital broadcasting market with its #425m purchase

Microsoft bought startup firm Web TV Networks for $425 million last week in a bid to gain control of the latest digital broadcasting technologies.

The acquisition revealed that Microsoft chairman Bill Gates was determined to reach the home market by playing a leading role in the convergence of computers, broadcasting and telephones.

The Californian-based firm, which makes set-top boxes enabling users to surf the Web through their TVs, will continue to operate as a separate company.

Steve Perlman, who remains president and CEO of the firm, said: ?Our vision has been to make internet access via TV a low-cost, fun, easy and compelling experience for consumers. We are looking forward to working with Microsoft and to making that experience available to an even broader range of consumers.?

Web TV?s set-top box adaptors cost about $350, compared with up to $2,000 for a PC.

According to Craig Mundie, senior vice president of Microsoft, only 40 per cent of homes have PCs, compared with 98 per cent which have televisions.

Mundie said: ?This acquisition is the cornerstone of our long-term effort to combine the best of the internet and the best of digital television technology.?

Web TV was set up in 1995 by ex-Apple staff Perlman, Bruce Leak and Phil Goldman. Investors in the company include Microsoft co-founder Paul Allen. The acquisition is subject to regulatory approval.

In a statement, Gates said: ?This partnership with Web TV underscores our strategy of delivering to consumers the benefits of the internet together with emerging forms of digital broadcasting.?

Microsoft hopes to integrate its Windows CE operating system with the Web TV devices by next year. It also plans to incorporate broadcasting components in future versions of Windows 95 and Windows NT.