Microsoft inks with Sony for TV-Web link

Global giants to jointly develop set-top boxes

TOKYO — In a development that may signal a growing alliance between the two global giants, Sony Corp. and Microsoft Corp. have agreed to jointly develop interactive set-top boxes that will allow cable TV users to connect to the Internet.

The two companies are aiming to have the new boxes hit the market in mid-1999 and be equipped with Microsoft’s Windows CE as the operating system, Sony said.

The two companies concluded a tie-up agreement in April, and their new set-top boxes are expected to be supplied to Tele-Communications Inc. and other cable operators in the U.S.

The boxes can accommodate video-on-demand, online shopping and other interactive services.

Microsoft chairman Bill Gates and Sony president Nobuyuki Idei said in an interview with the Nihon Keizai Shimbun that they expect their joint development program will help them seize the lead in the global digital home electronics market.

The two said once they complete the set-top box project, they are looking for other joint development projects to keep the al-liance moving into the 21st century. The two are hoping to cooperate on such things as bringing Sony’s movies, music and electronic games online with the help of Microsoft.

Idei told the paper the two decided to collaborate on projects in January when he met Gates at a gathering of the world’s economic and political leaders in Davos, Switzerland.

The development comes on the heels of the announcement Monday that Microsoft was buying a 10% stake in the cable Internet access joint venture operated by Time Warner and MediaOne. Compaq Computer took an equal $212.5 million stake.

Sony returned to the personal computer market last year with the introduction of its Vaio series. Since introducing the Vaio series of notebook and desktop PCs last July, the notebook computer has become one of the leading sellers in the notebook class in Japan.