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Microsoft Corp.

Road Runner Online Venture Valued at $2 Billion, Promises Fast and Fun Internet Experience

Strategic Insights

— 1 min read

The media landscape has witnessed a significant development with the creation of Road Runner, a high-speed online service, through the merger of MediaOne Group and Time Warner. The venture has attracted Microsoft Corp. and Compaq as key players, with each contributing $212.5 million for a 10 percent stake. This deal marks the largest high-speed online service in the U.S., boasting an impressive 90,000 customers signed up and access to 27 million cable homes. Road Runner promises to revolutionize the internet experience by making it fast and fun, with the ability to access numerous channels, similar to TV.

Key Takeaways:

  • Road Runner, a high-speed online service, has been valued at $2 billion through the merger of MediaOne Group and Time Warner.
  • Microsoft Corp. and Compaq have joined the venture, contributing $212.5 million each for a 10 percent stake.
  • The service will be governed by Time Warner and MediaOne Group, with MediaOne contributing its Media One Express in exchange for a 34 percent stake.
  • Time Warner will retain the Road Runner name on its internet service, holding a 37 percent ownership stake.
  • Microsoft has also produced server software for Road Runner and will bring development expertise to the business.
  • Road Runner will serve its respective cable affiliates as they upgrade to handle fast two-way data, while competing head-to-head with a similar venture, At Home, for roughly 20 million cable homes not affiliated with either.

Statistics:

  • $2 billion - The value of the Road Runner online venture.
  • $212.5 million - The contribution of Microsoft Corp. and Compaq to the venture.
  • 10 percent - The stake held by Microsoft Corp. and Compaq in the company.
  • 34 percent - The stake held by MediaOne in the company, in exchange for contributing its Media One Express.
  • 37 percent - The ownership stake held by Time Warner in the company.
  • 90,000 - The number of customers signed up for the Road Runner service.
  • 27 million - The number of cable homes with access to the Road Runner service.

Sources:

  • MediaOne Group
  • Time Warner
  • Microsoft Corp.
  • Compaq
  • The Rocky Mountain News

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