Microsoft's cable play

Brian Roberts, Comcast Corp. CEO, is in Seattle this week, and during an appearance yesterday he told the behind-the-scenes story about how Microsoft Corp. decided to make substantial financial investments in cable companies in the late 1990s. P-I reporter John Cook relayed the story in this article this morning, as Roberts described a 1997 dinner meeting involving himself and Gates at Bellevue's Harbor Club:

At that meeting, Roberts and other cable executives described some of the challenges facing the industry, including depressed stock prices and competition from satellite television. When Gates asked how he could help out, Roberts boldly suggested that the billionaire buy a 10 percent stake in every major cable company.

"There was a lot of laughter and people were kind of looking at their shoes," recalled Roberts.

After asking how much it would cost and if there would be any regulatory problems, Gates -- who was leaving for a vacation to the Amazon -- had his chief financial officer follow up with Roberts that week. Thirty days later Microsoft invested $1 billion in Comcast, paving the way for the widespread adoption of cable Internet in the United States.

Its stake in Comcast may have been the exception, but on the whole, Microsoft's investments in cable and telecommunications companies ultimately proved less-than-successful from a financial standpoint for the Redmond company.