Microsoft Takes $100 Million Stake in RadioShack.com

With the holiday season fast approaching, Microsoft Corp. Thursday formed a partnership with brick-and-mortar chain RadioShack, agreeing to pour $100 million into the consumer electionics company’s new online store, RadioShack.com.

The five-year agreement calls for RadioShack to create a Microsoft (MSFT) section within its offline stores where customers can see Microsoft demonstrations and sign up for Microsoft’s MSN Internet access.

Through the alliance, Microsoft can specifically promote its broadband Internet access to potential customers, said Bill Gates, chairman and CEO of Microsoft.

“By forming an alliance with RadioShack, we’re reaching customers in a new way, giving them a unique opportunity to experience and obtain online solutions through RadioShack’s trained salespeople and
expert home-installation team,” he said. “This model for convenient, one-stop shopping will allow us
to greatly accelerate America’s conversion to broadband services.”

The deal also calls for a $100 million investment in RadioShack.com, a site newly devoted to e-commerce of RadioShack products. The online store will have premier placement across all of MSN and its properties, including the newly launched MSN eShop online shopping service, the companies said.

RadioShack is a division of Tandy Corp. (TAN).

“We thought we were looking for an ISP partner, but what we found was much, much more,” said Leonard Roberts, chairman, president and CEO of Tandy/RadioShack. “We actually found a home connectivity partner, offering not just services but innovative technologies as well.”