Justice OKs Microsoft-WebTV deal

WASHINGTON — The Justice Dept. on Friday approved Microsoft Corp.’s $425 million acquisition of WebTV Networks, pointing to competition in the business of connecting home televisions to the Internet.

The department’s antitrust division said a thorough investigation of the deal announced April 6 has been closed with a decision not to challenge it in court.

“The investigation confirmed that a number of other companies, several of whom are significant participants in the computer or consumer electronics industries, have or will soon enter the market with competitive products and alternative technologies,” the division said in an unsigned, three-sentence statement.

The computer software giant Microsoft acquired WebTV Networks, a Palo Alto company that sell systems that allow people to surf the Internet over their TVs. Microsoft senior vice president Craig Mundie said, “We hope to dramatically accelerate the merger of the Internet and television.”

The deal comes as the computer industry and existing TV-set makers race to shape the next generation of digital TV sets. The prize: $150 billion in spending needed to replace the existing 220 million analog TV sets in the United States that operate over radio waves.

A competitor, NetChannel, said the Justice Dept.’s decision moves Microsoft “one step closer to fulfilling its strategy of dominating all aspects of the entertainment, electronic commerce and communications industries.”

“Microsoft is becoming a standards, not a software company, positioned to collect a toll at virtually every link in the communications delivery system,” said NetChannel CEO Philip J. Monego.

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