Microsoft Corp. is investing $1 billion in Comcast Corp., the nation's fourth-largest cable company, in an effort to push forward the marriage of the Internet and television.
The deal, announced Monday, strengthens the software company's position in cable TV. It already jointly owns cable's MSNBC, with partner NBC.Microsoft chairman Bill Gates has expressed frustration at the speed with which broadcasters and consumer electronics companies have adopted digital technologies.
In a statement Monday, Gates said his vision for connecting computers and television includes advanced "capabilities to deliver video, data and interactivity to the home. Comcast's integrated approach to cable distribution, programming and telecommunications complements that vision of linking the PC and TV."
Brian L. Roberts, Comcast's president, said his company's customers will become the "beneficiaries of the innovations that America's most advanced computer and cable companies can offer."
The companies said in their statement that Gates and Roberts will work closely together regarding the direction of Comcast. Microsoft executive Greg Maffei, vice president of corporate development, will serve as an observer on Comcast's board of directors.
Terms of the deal call for Microsoft to invest $500 million in Comcast common stock and the rest in convertible preferred stock. That works out to a stake of up to 11.5 percent of Comcast.
With the investment, Microsoft, based in Redmond, Wash., would gain a footing in Comcast's distribution pipeline, possibly making the Microsoft Network, an online service, more easily accessible. MSNBC and Microsoft's electronic magazine Slate also could benefit.