Microsoft Corporation has signed a massive $5 billion agreement with AT&T so that the two companies will work together to deploy digital cable access to the Internet to millions of homes in America. Under terms of the agreement, Microsoft will purchase $5 billion of AT&T securities and AT&T will increase its use of Microsoft Windows CE-based WebTV technology.
"Our agreement today represents an important step in Microsoft's vision of making the Web lifestyle a reality," said Microsoft chairman and CEO Bill Gates. "Working with AT&T, a leader in the delivery of cable and telephony technologies, we will expand access to an even richer Internet and television experience for millions of people."
Before the agreement, AT&T had previously planned to use Windows CE/WebTV in 5 million set-top devices. Now, the company will expand its Windows CE license to an additional 2.5 to 5 million devices. Additionally, AT&T will license Windows NT/2000-based software for email and interactive TV use.
"We're gratified that Microsoft shares our strategy of using broadband cable to bring a new generation of digital communications, information and entertainment services to millions of American families," said AT&T Chairman and CEO C. Michael Armstrong. "We look forward to expanding our relationship with Microsoft and adding its creativity and technical know-how to our own. This will accelerate the work we're already doing with many other software and hardware companies.