Microsoft Needs Nbc For Content

Microsoft Corp.’s reported interest in investing in NBC’s planned 24-hour news channel - or perhaps in NBC itself - comes as no surprise, given Microsoft’s goal of extending its business to the Internet, according to industry analysts.

Microsoft Chairman Bill Gates said last week that most of the money that is to be mined from the global network of computer networks will come from content - movies, sports, news and other information - rather than from Internet-related software.

Gates also said Microsoft, which has about $5 billion in cash, had amassed a “significant budget” to purchase content for the company’s Internet online service, Microsoft Network.

The report that Microsoft is talking with NBC, although denied by the companies, “is more evidence that Microsoft wants to be a player in content, because that’s where the money is,” said Phil Lemmons, of PC World magazine.

An investment in NBC would give Microsoft “an ongoing source of revenue - ongoing, reliable, renewable content,” said Mark Mooradian, an analyst with Jupiter Communications and editor of the Interactive Content newsletter.

Microsoft already plans to give away many of its Internet software products, Mooradian said, which means that business has relatively low potential for generating revenue.

But “getting news on-line is going to be a major application in the future,” he said. “That’s part of their grand plan.”

Currently, Internet content and on-line news consist primarily of text and limited graphics.

But as communication technology improves to allow extensive audio and video transmission over the Internet, demand for content will mushroom, said Allen Weiner, an analyst with Dataquest, a California market research firm.

On-line services such as Microsoft Network “are all going to be hungry monsters waiting to be fed,” Weiner said.

According to reports, Microsoft and NBC are in the early stages of talks that could result in Microsoft’s providing around $100 million in capital to the cable news network.

Analysts said they doubt that Microsoft would purchase up to 49 percent of the television network, worth at least $4 billion, as reported Monday in the trade newspaper Daily Variety. Officials at Microsoft and NBC denied the software company was considering an equity stake in the network.