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Microsoft, Compaq Round Out RoadRunner Investment

Microsoft Corp. and Compaq Computer Corporation each invested over $212 million in Time Warner's Road Runner business today, finalizing a 10% stake for each company in the cable-modem service.

The investment closes out an agreement announced late last year between the companies to launch high-speed online services to cable TV households.

Microsoft said it will expand on its earlier Road Runner ties and contribute Internet, client, server and application software for the venture. The move is seen as further evidence of the software giant's continued commitment to the Internet via cable market.

In what marks the latest step by the company to further its new Internet PC strategy, Compaq said it will also deliver cable-ready PCs to the market.

Microsoft and Compaq join Advance/Newhouse and MediaOne in the Road Runner joint venture.

Ownership of the business now breaks down like this:

  • Microsoft and Compaq will each have 10%;
  • Time Warner Inc. around 9%;
  • Time Warner Entertainment about 20%;
  • MediaOne Group approximately 25%;
  • and TWE-Advance/Newhouse will have about 26%.

"Today's investments by Microsoft and Compaq validate the cable architecture as a premier Internet distribution medium, which will benefit consumers nationwide," said Gerald M. Levin, chairman and CEO of Time Warner Inc. "This combination of world-class companies will enable us to develop a powerful, branded package of content that will become the high-speed online service of choice for our customers."

Last week, Time Warner announced it would use FORE Systems' asynchronous transfer mode (ATM) backbone to deliver Road Runner Internet access service to its Florida customers.



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