Microsoft features in the Com-Di affair

MUMBAI: While a lot of speculations are being made in the media about the outcome of the Comcast-Disney merger if it does come about; here's the latest on that front.

Now looks like the world's leading software company Microsoft is a possible suitor for Disney. It may turn out that in the bid that Comcast made for Disney; Microsoft may be the silent partner.

The software company owns 7.4 per cent of Comcast and would eventually end up controlling about four per cent of the world's largest media company if Comcast's bid succeeds.

A few analysts said in a media report that the stake could give Microsoft leverage over the course of the deal and afterward as it looks to push its software beyond the maturing market for personal computers and into the still-developing boom in digital entertainment.

Since Microsoft has long sought to forge links in the telecommunications and entertainment industries in order to sell its software, it could definitely emerge as a rival bidder for Disney. With nearly $53 billion in cash, Microsoft could easily pay for a large media franchise, such as Disney, with cash or stock.

Reports indicate that even a minority ownership in a media giant rivaling Time Warner Inc. could be enough to create stronger links between Microsoft's software, Comcast's distribution and Disney's prized entertainment assets.

On the other hand, Disney's CEO Michael Eisner said today that Walt Disney Co. did not need a new distribution outlet for its films and television shows because of their popularity. Eisner was quoted in a media report saying, "There are great distribution companies, there are great content companies. They can be together. They don't have to be together. We feel we're running a pretty good company as it is."

In the midst of all this, Eisner is also fending off calls to resign by ex-directors of the company - Roy Disney and Stanley Gold as he campaigns for re-election to the board before the company's annual meeting on 3 March.

If you are wondering what a staid cable company like Comcast might want with the Mickey Mouse business. Well, lots. If the merger does come about, Comcast would be, for one, saving up on a lot of money. Disney's films and television shows and networks add up to programming that - if owned by Comcast - wouldn't have to be bought regularly.

To spell it out, Comcast can benefit from Disney's content in the following ways:

* By creating new cable channels based on Disney content.

* Comcast Cable president Steve Burke, a former Disney executive, said in a media report last week that he envisioned all-Disney, all-the-time channels he could offer for $9.95 a month. Likewise, Comcast could sell movies from Disney's vast archives.

* With cross-promotion. Comcast could sell packages of commercial time for both Disney's ESPN and Comcast's Golf Channel, for instance, to advertisers willing to pay a bit more to be on both channels.

* Bargaining power with other content providers. With its own supply of films, television shows and other features, a combined Comcast-Disney might be in a better position to negotiate with other content suppliers like TNT or HBO for cheaper prices.

In all this drama, Disney's boy Roy Disney remains his silence on Comcast's offer for the company.

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