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Gates in talks over $1 billion Deutsche Telekom deal

Will DT be jealous over the bigger piles everybody else is getting? But it's got lots already...

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Today's Microsoft mega investment story is for a $1 billion stake in Deutsche Telekom or its cable TV operations. According to German newpaper Die Zeit today, His Billness has been deep in talks with DT chairman Ron Sommer, and the pair envisage a broad alliance covering Internet, online services and mobile phones. DT is a whopper in all those fields, and indeed in cable TV, although it has clashed with the German authorities over this, so if Microsoft can get in there, it could mean serious business. Presumably 'broad alliance' is code for DT promising to use lots of CE set-top boxes, Microsoft e-commerce software and CE-based mobile phone services (a happy coincidence, given the Sendit purchase). But wouldn't $1 billion be cheap for all this? Talks with DT could well turn out to be more complex, and less amenable to producing concrete results, than some of the other deals Microsoft has been doing. The German giant has is own vast money pile, so isn't gagging for Microsoft dollars, as some other over-extended outfits are. On top of that, DT's money pile can be viewed as effectively infinite, because its ever-so-slow privatisation can continue to yield cash for a long while yet. So Microsoft is going to have to make it clearer what it can do for DT, and cash doesn't necessarily answer the question. ®

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