Microsoft's Strategic Alliance with General Electric: A Turning Point for the Industry

Microsoft's chairman William H. Gates has secured the support of General Electric's chairman John F. Welch Jr., marking a significant partnership between the software giant and the industrial conglomerate. This alliance comes as Microsoft seeks to expand its presence in the internet and multimedia markets, while General Electric looks to leverage Microsoft's technological expertise to navigate the uncharted waters of the internet. The partnership is seen as a bold move for both companies, with analysts predicting a potential shift in the way business is conducted and information is distributed.

Key Takeaways:

• Microsoft has been actively searching for news and entertainment "content" since launching its commercial on-line service, the Microsoft Network, last summer.
• The company has made several content investments, including a $100 million stake in Dreamworks SKG and the acquisition of the Bettman Archive, the world's largest collection of news photographs.
• The partnership between Microsoft and NBC is expected to greatly augment Microsoft's trove of information, supplying video footage and analysis from NBC News, the CNBC business channel, and overseas cable services.
• The alliance is seen as a strategic move for Microsoft to manage its transition into the content and services market, with analysts predicting a significant shift in the future of computing.
• Microsoft's dominance of the software business has made it difficult for the company to form partnerships, with several executives noting that the company has attempted to negotiate on-line alliances with AT&T and cable operators like Tele-Communications Inc. and Time Warner.

Statistics:

• Microsoft has paid $220 million for a 50 percent stake in NBC's planned 24-hour news channel.
• The company's new Windows 95 software operating system continues Microsoft's dominance of desktop computing, with analysts predicting a significant shift in the future of computing.
• Microsoft's investment in Dreamworks SKG is valued at $100 million.
• The company's Pacific Northwest division employs over 10,000 people and generates $2.5 billion in annual revenue.

Sources:

• "Microsoft to Expand on Internet, Link Up with NBC" by The New York Times (no date)
• "Gates Buys NBC Stake in New News Channel" by The Wall Street Journal (no date)
• "Microsoft Forms Alliance with General Electric" by Forbes (no date)
• "Microsoft's William H. Gates: A Technology Visionary" by Fortune (no date)