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Gates rules out outright MS purchase of content companies

Co-op deals possible, and minority stakes still seem likely

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Microsoft will not own "50 percent or 100 percent in businesses that are primarily driven by content activities", Bill Gates said in Davos, where he is attending the World Economic Forum. But co-operation agreements were possible, he said. Bernard Vergnes, chairman of Microsoft Europe expanded a little, and suggested that the strategy to be a pure software company was linked to Gates' assumption of the title "chief software architect". While it is true that the AOL-Time Warner merger was announced before Gates' job change, there is little evidence to suggest that the events were really linked. Microsoft is evidently breathing a little more easily - Vergnes called AOL an important Microsoft customer - now that AOL appears to be heading towards content rather than platform competition. However, the timing of the Gates' announcement may have had more to do with the DoJ mediation talks. Vergnes added that the "potential" technology innovations offered by the Internet were more important than content enhancement. He tried to distinguish between people being drawn to the Internet for what's there, and Microsoft's desire (to be spelt out in New Generation Windows Services this Spring) as to how the Internet could be used in other ways. ®

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