Microsoft In Talks To Buy Stake In Gigamedia

[TAIPEI] Microsoft Corp. is in talks to invest up to
$31.5 million in Hoshin Gigamedia Center Inc.,
a Taiwanese broadband cable Internet access provider.

A link with Microsoft would make it easier for Gigamedia to raise funds
from other investors, commentators have remarked. Microsoft could also
provide technology and software support.

Gigamedia executive vice president Raymond Chang was reported as
saying: “It would basically be a total strategic alliance including both
investment and other strategic alliances such as Web TV, e-commerce and
so forth.”

Gigamedia, 74 percent owned by Koo’s Group, one of Taiwan’s largest
financial services and media conglomerates, sells high-speed Net access
and related services over cable TV networks.

Koo’s Group is aggressively assembling an integrated e-commerce/Internet
business. The Group’s Chinatrust bank offers online banking services;
stockbroking arm China Securities provides online trading facilities to
investors. Koo’s also owns a cellular telephone company and 16 local cable
TV providers.

Gigamedia, which was founded in October 1998, currently has around
7,000 customers and has yet to show a profit.

Chang said Gigamedia hopes to become Taiwan’s No. 3 Internet provider
by the end of next year, after HiNet, a unit of state-owned Chunghwa
Telecom, and SeedNet, which was set up by Taiwan’s Institute of
Information Technology.