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Microsoft and Turner seek multimedia link

Monday 14 August 1995 18:02 EDT
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Investors warmed to Microsoft and Turner Broadcasting System in US trading yesterday, writes Mathew Horsman, as confidence grew that they two would strike a strategic multimedia alliance.

Boosted by analysts' positive comments about a link, shares in Microsoft rose by $2 to $98.5 (pounds 61.5) by midday. TBS rose $1 to $22.5.

Neither company would comment publicly. "We have nothing to say," Gary McKillips, a TBS spokesman in Atlanta, said yesterday. But company insiders suggested there may be further news later in the week.

Ted Turner, the TBS founder and chairman, is believed to be seeking financial backing to bid for CBS, the US national network, whose shareholders are considering an agreed $5.4bn (pounds 3.4bn) offer from Westinghouse.

The entertainment and information conglomerate, Time Warner, which owns 18 per cent of TBS, is reported to be against the bid.

New York-based analysts speculated yesterday that Microsoft, which may spend up to $2bn for a stake in TBS, would be more supportive of Mr Turner's ambitions. He has coveted CBS for 10 years.

But a possible link between Microsoft, the world's largest computer software company, and TBS was viewed as a positive development for both companies, whatever the outcome of the battle for CBS.

"The markets for computer, software, broadcasting and entertainment are all converging," Barry Caplan, media analyst at Goldman Sachs in New York, said. "It makes sense to have participation by companies in other sectors."

Analysts see a natural fit between Microsoft's software activities and TBS's extensive entertainment and information library and its satellite broadcasting network. TBS operates several broadcasting networks worldwide, including Cable News Network and TNT, the film channel.

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