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Microsoft plans to buy firm that links Web, TVs

SHARE Microsoft plans to buy firm that links Web, TVs

In a move it hopes will spur the merging of personal computers and televisions, Microsoft Corp. will acquire WebTV Networks, a company that sell systems that allow people to surf the Internet over their TVs, Craig Mundie, Microsoft's senior vice president, announced Sunday.

The announcement came at the National Association of Broadcasters convention here. "Earlier this morning Microsoft completed a definitive agreement to acquire WebTV Networks."He said the purchase price for the Palo Alto-based WebTV Networks was $425 million.

WebTV founder Steve Perlman said the two companies clicked and thought: "Let's get married."

"Through their efforts . . . we hope to dramatically accelerate the merger of the Internet and television," Mundie said.

Microsoft's announcement comes as the computer industry and existing TV set makers race to define what the next generation of digital TV sets will look like.

The prize: $150 billion in spending needed to replace the existing 220 million analog TV sets in the United States.

The computer industry's vision is essentially a large-screen computer in living rooms that people use not only to get a crystal clear TV picture, but to surf the Internet and send e-mail.