Microsoft, Firms Pour $900 Million into Winstar

Winstar Communications Inc. Wednesday
pulled in a massive $900 million round of financing from a group of
investors led by Microsoft Corp.

Microsoft (MSFT)
was joined by Credit Suisse First Boston Equity Partners, L.P.; Welsh,
Carson, Anderson and Stowe, VIII, L.P.; and Cascade Investments, among
others, in the convertible stock investment. Winstar plans to use the
funding to support its business plan and to expand its network.

The investors’ shares will convert into common stock priced $67.50 per
share. Several firm representatives will also join Winstar’s board,
including Lawrence B. Sorrel, a general partner of Welsh, Carson, Anderson
and Stowe, and Hartley R. Rogers, managing director and co-head of Credit Suisse
First Boston Equity Partners, L.P.

Winstar’s offers businesses packages of bundled communications services, including high-speed Net access and Web hosting, among other features.

The company holds broadband fixed wireless licenses in 60 U.S. and 10
overseas markets, as well as maintaining a domestic fiber network. Winstar
plans to extend its network more than 16,000 miles in the U.S.

Last year, Winstar launched Office.com
to target online services for small- to mid-sized businesses. In April, CBS
took a 35 percent stake in office.com for $42 million, and will add it to
its expanding site network.