Monday, February 16, 2004

Microsoft -- winner of the coming convergence collision and the next media empire?

William Safire, whose conservatism is on best behavior when he's focusing on the important issue of media consolidation, has just predicted that Microsoft will become one of the three biggest media companies in the world, acquiring ABC/Disney, NBC, or possibly even both.

Remember, Microsoft is sitting on a $49 billion cash reserve the last time that anyone checked.

Bob Cringely, who is entertaining even when he's not prescient, has an entertaining and possibly prescient claim that Microsoft is laser-focused on owning the next generation of converged computing/entertainment/communications through control of underlying protocols such as Windows Media Player 9. What Bob is probably missing here is that Bill Gates is as likely to fight the next war (media) as the last war (standards). Why worry about owning the standards when you can just own the media (or a large chunk of the media) itself?

Over in the communications side of the converging global future, AT&T Wireless is being sold to either Vodafone or Cingular; and win or lose, one of these two will almost certainly merge or acquire T-Mobil in the U.S. within the next 18-24 months. This will shake the U.S. cellular market (long overdue, pundits say) down to perhaps 3 1/2 companies by 2006 -- uber-dogs Verizon/Sprint (on compatible CDMA) and Vodafone/AT&T/T-Mobil or Cingular/AT&T/T-Mobil; and trailing lap-dog Nextel, plus one other component that somehow loses out of the great mating dance.

All of this is about the same thing -- convergence of communications, computing, and media/entertainment. The stakes are simply all the money in the world. Enjoy the show!

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