Can it get worse? Yes it can...

[Tagrel]

As if Comcast isn't bad enough...

:viking: Everyone move away from the Mouse :viking:

original article: Microsoft a Disney Suitor? (http://www.reuters.com/newsArticle.jhtml?type=businessNews&storyID=4357251)

Microsoft a Disney Suitor?
Fri February 13, 2004 02:17 PM ET

(Page 1 of 2)
By Reed Stevenson
SEATTLE (Reuters) - One of the biggest winners in Comcast Corp.'s (CMCSA.O: Quote, Profile, Research) surprise $47.6 billion bid to buy Walt Disney Co., (DIS.N: Quote, Profile, Research) , analysts said on Friday, may be the silent partner looming in the wings, Microsoft Corp. (MSFT.O: Quote, Profile, Research) .

Since Microsoft already owns 7.4 percent of Comcast, it would end up controlling about 4 percent of the world's largest media company if Comcast's bid succeeds.

That stake could give Microsoft leverage over the course of the deal and afterward as it looks to push its software beyond the maturing market for personal computers and into the still-developing boom in digital entertainment, analysts said.

Microsoft has long sought to forge links in the telecommunications and entertainment industries in order to sell its software, leading some observers to question whether the world's largest software maker could emerge as a rival bidder for Disney.

With nearly $53 billion in cash, analysts said Microsoft could easily pay for a large media franchise, such as Disney, with cash or stock.

"The missing link in all of Microsoft's plans is content," said Rob Helm, research director at Directions on Microsoft, a Kirkland, Washington-based independent researcher.

With the next version of Microsoft's market-dominant Windows operating software not expected for another two years or so, Helm said that "Microsoft is counting on digital audio and video to keep PC sales intact."

A spokeswoman for the world's largest software maker declined to comment on any acquisition rumors.

But analysts said that even a minority ownership in a media giant rivaling Time Warner Inc. (TWX.N: Quote, Profile, Research) could be enough to create stronger links between Microsoft's software, Comcast's distribution and Disney's prized entertainment assets.

Just this week Disney agreed to license digital media technology from Microsoft for distributing movies over the Internet that would prevent illegal distribution and copying of digital movies.

"At one time Microsoft seemed very intent on expanding its media role, particularly when looking at the perceived threat of then AOL and Time Warner," said Joe Wilcox, analyst at Jupiter Media, "But right now, the company is now focusing on getting back to basics."

Much of this week's merger hype echoed events seen five years ago, when AOL was constructing its merger with Time Warner Inc. and Microsoft invested billions in cable providers, only to write much of that off in subsequent years.

Microsoft also proved to be a key player when Comcast acquired AT&T Corp.'s (T.N: Quote, Profile, Research) cable business, exercising its influence both through its stake in Comcast and a $5 billion investment it made in AT&T.

Analysts said that a competing Microsoft bid for Disney was unlikely, given that the software maker has backed away from investing heavily in content after launching MSNBC and online magazine Slate, which remain relatively small operations. MSNBC is a joint venture between Microsoft and General Electric Co.'s (GE.N: Quote, Profile, Research) NBC network

Moreover, the Federal Communications Commission has promised to go through Comcast's proposed merger with a fine-toothed comb, the kind of anti-trust attention that Microsoft has worked hard to put behind it in recent years.

"They've never done an acquisition of more than a couple of billion dollars," said Jamie Friedman, analyst at Fulcrum Global Partners. "They're not content creators and their content dissemination is a relatively small part of their business."

Helm at Directions on Microsoft said that Microsoft tends to have "arm's-length" cooperation with content providers, a model it prefers.

"Microsoft has said repeatedly it's not a content company," Helm said.

[MissBianca]

Why do you think Microsoft would be worse? At least they have deep pockets...as a user of both I have warmer feelings about M$ than about Comcast.

Unfortunately, doesn't look like they'd be bidding, just benefitting. Buy more M$!

[Tagrel]

I've worked with Microsoft products for so long that I'm EXTREMELY jaded where they are concerned. They have lined those deep pockets through monopolistic measures, and behind the scenes manipulations. Nothing I'd associate with 'Disney Magic'.

While they may be no better or worse than ComCast from a business perspective, my first choice is for the Mouse to heal itself without some huge conglomerate that decides to sell off pieces or use all the profits from one division to support another. We've all seen what THAT does to the parks budget already. I'd like to see Disney return to core areas - the ones we all know that they can do so well when they put their hearts and minds to it.

Besides,

DO YOU want Microsoft handling security issues at WDW? :winking:

And it will suddenly be Business as usual for everything all over WDW to crash any old time.

There was only one other CEO I disliked MORE than Ei$ner and that was Gate$.

No thanks...

[WillCAD]

Looking at the company's history, I'd see some MS 'improvements' waiting in the wings if they held a part of Disney:


MS would sue Universal, Six Flags, and a dozen smaller theme park operators, claiming copyright infringement, since Walt invented the whole concept of a theme park in the first place. The suit would go on for years, cost billions in legal fees, and the end result would be lots of the smaller theme parks either shutting down or getting swallowed by the biggies, creating inferior mini-Disneys all over the country.

Resort-only bookings would be a thing of the past, since theme park passes would be an 'integral' part of the WDW experience. UPHs would increase in price to $100 a day.

Park-hopper passes would dissapear. Only 1-day 1-park passes would be available. "Hey, we're not saying you can't come to WDW if you don't stay at one of our hotels," they'd say, "But we've made park-hopping privileges one of the many perks available only to on-site Guests."

Disney Transportation would be limited to on-site Guests, since you don't need a bus if you don't have park-hopping privileges. But, to pay for the ever-increasing costs of maintaining the system, Disney Transportation would require a daily $25 surcharge on the Guests' bills.

No cameras would be allowed in the parks except Disney cameras. "As the creator of this content," they'd say, "we feel we have the right to guide how and where it is disseminated. Buying a park pass does not entitle the Guest to make visual or audio-visual copies of the legally protected audio-visual material inside our parks and freely distribute them." If you want pics or videos of your vacation experience, you'd rent a Disney digital still or video camera (at $40 a day) and take home a copy-protected, time-limited, self-destructiong DVD of the images and videos at the end. Additional DVDs could be bought at a later time after the first one expires, for a 'small' fee.

All character interaction would be limited to special 'Character Encounter' tours, which are not covered by the cost of park admission or a resort stay. 5x7 photos of your Character Encounter could be ordered for $25 each. To make sure that Guests won't have to wait too long in the CE lines, only one Guest allowed per photo. Family photos with characters can be obtained by ordering a special Family Character Encounter tour at a higher rate.

Michael Eisner and Bill Gates would each receive $4 billion bonuses per year.

[sandar]

5 years ago, my friend Michael predicted that someday we'd see the rise of MSMcDisney, which would basically own everything. :shock:

Sigh.

[Belle]

I'd have to agree with Tagrel & WillCAD on this one... MSDisney is NOT what I want to be seeing :( If MS keeps up, pretty soon we'll be hearing "Brought to you by the United States of America - a wholly owned subsidiary of MicroSoft..."

{hugs}
Belle

[MissBianca]

Tagrel, I totally agree with you about wanting Disney to heal itself. Also that Bill Gates is a robber baron as well as a spoiled child. My opinion of him has mellowed somewhat in recent years since he married Melinda and she has him actually using some of his money for good works.

Nicely done, WillCAD. Did you have a source for Microsoft's history when you wrote that? Or just your own love of Windows ;)