TOKYO (Reuters) - Microsoft Corp. and News Corp. are discussing a joint investment in satellite broadcasting in the United States, a key business partner of both companies said.
"We understand that talks between Microsoft and News Corp. about a joint investment in a satellite business in the U.S. are going quite well," said cable television dealmaker John Malone, who is also chairman of Liberty Media Group.
"There is considerable enthusiasm in pursuing it on both sides," he told a seminar.
News Corp. Chairman Rupert Murdoch on Thursday declined to comment on those talks, but a banker close to one of the parties has said Malone was instrumental in bringing the two firms together and driving the negotiations.
Media reports said
Microsoft [MSFT] was considering investing about $1 billion to take a 3.5 percent stake in a planned News Corp. [NWS] satellite spin-off, called Sky Global Networks, but neither side has confirmed the deal.
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Once Sky Global is spun off, it would become the world's largest satellite TV broadcaster, with a potential global audience of 85 million, and analysts have said its initial public offering (IPO) is likely to be the largest ever for a media company.
Sky Global's shares will be offered in the first three months of 2001, delayed from the original schedule for the fourth quarter of this year, Murdoch said at a separate news event on Thursday.
Malone added: "Financial markets are not appropriate now for an IPO."
In the run-up to the flotation, Murdoch has been seeking strategic investments in the venture, including the complex stock swap that made Malone's Liberty Media [
LMG] the second-largest shareholder in News Corp.
Sky Global's main assets include British Sky Broadcasting , Hong Kong-based Star TV, SkyPerfecTV in Japan, services in Italy, Germany and Latin America, and program listings company TV Guide.
Murdoch has recently said his company was in discussions with other companies including DirecTV, owned by
Hughes Electronic Corp. [GMH], in a deal that could extend Sky Global's programming to the United States.
"We're enthusiastic about the concept," Malone said of Sky Global. "We think the scale that Rupert will achieve by bringing these businesses together is incredible."
Liberty Media has also invested in a range of Microsoft's ventures, including the Microsoft Network and a failed venture to create interactive video known as "Penguin," Malone said.
"We go way back," Malone said of his ties to Microsoft. "We have found them to be an excellent partner, sometimes rambunctious and aggressive, but nevertheless a good one."
Liberty Media has stakes in about 100 cable channels and has operated as a separate unit of
AT&T [T] under Malone, who is the largest personal shareholder in the parent company.
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