Microsoft Corp.'s constant stalking of cable operators has taken on a new level of
intrigue as a securities filing showed that two entities controlled by Microsoft
chairman Bill Gates have bought a $500 million stake in Cox Communications
Inc.
A Securities and Exchange Commission filing showed that Gates' personal
holding company, Cascade Investments, and the Bill and Melinda Gates Foundation
bought a combined 13.5 million shares of Cox Communications in October.
The seller?
Cox Enterprises Inc., the MSO's parent, which is controlled by the Cox
family.
Cox Enterprises wanted the cash to pay down debt -- not surprising, given that its four
business units are terribly vulnerable to a recession: TV stations, newspapers,
radio and a wholesale car-auction house.
Cox Enterprises' sale was disclosed around the time of the deal, but didn't disclose the
name of the buyer.
But late Wednesday, the company filed the full agreement, which actually named
Gates.
The deal comes to around 3 percent of Cox Communications' outstanding shares, and
Wall Street executives said Gates has been buying more shares in the open
market.
Microsoft has aggressively invested in U.S. and foreign MSOs to get a foot in
the door when it comes to deploying the "Microsoft TV" operating system for set-top
boxes.
Bear Stearns & Co. analyst Ray Katz said he doesn't see the investment as part of a
broader move on Cox, adding, "Gates likes cable, Gates likes broadband as an
investment. Microsoft had a chance to play a much bigger role in
the Comcast [Corp.]/AT&T Broadband deal and didn't."
