Tuesday, February 5, 2013

Microsoft to lend $2 billion to Dell, Silver Lake as part of buyout deal

Microsoft Corp has agreed to lend $2 billion to Michael Dell and private equity firm Silver Lake to help finance their move to take PC maker Dell Inc private.

The world's largest software maker has invested in or bought hundreds of tech companies in its 37-year history, but returns have been patchy.

Here is a list of some of Microsoft's most notable investments over the last 15 years, starting with the most recent:

Nook - Last year agreed to invest $605 million in Barnes & Noble Inc's Nook e-reader and college textbook business over five years. The Nook still trails Amazon.com Inc's market-leading Kindle.

Skype - In May 2011, inked deal to buy online video chat company Skype for $8.5 billion. Price was considered high at the time, but is still too early to judge success.

Nokia - Microsoft has paid more than $1 billion to Nokia since the Finnish handset maker agreed to build phones running Windows software in 2011. Payments back to Microsoft in royalties have been disappointing as Windows phones have not dented the market domination of Apple Inc's iPhone and Google Inc's Android.

Yahoo - After failing to buy the former internet giant in 2008, Microsoft signed a 10-year deal to provide internet search services to Yahoo in exchange for a cut of the ad revenue. The deal has disappointed both companies so far.

Danger - Reportedly paid $500 million for the edgy smartphone designer in 2008, but most staff left and it ended badly with the disastrous Kin phone.

Facebook - Scored a home run with a $240 million purchase of a 1.6 per cent stake in the social network in 2007, which is now worth much more and paved the way for co-operation between Facebook Inc and Microsoft's Outlook email and Bing search engine.

aQuantive - paid $6.3 billion in cash for the online ad company in 2007 and wrote off virtually all of that in 2012, effectively admitting the investment had been worthless.

Great Plains/Navision - the acquisition of these two companies in 2001 and 2002, respectively, laid the foundation of Microsoft's corporate software business and is considered a success.

Korea Telecom - Agreed to invest $500 million for a stake in government-owned telecoms company in 2001, hoping to grab a foothold in one of the world's most advanced Internet markets, for an uncertain return.

Bungie - Paid only tens of millions of dollars for game studio Bungie, creator of the mega-hit shooter game Halo, in 2000. Bungie eventually split from the company, but Microsoft kept the lucrative Halo franchise.

AT&T - In 1999, Microsoft bought $5 billion in stock of cable and phone giant AT&T Inc with the aim of getting its Windows software into set-top boxes, but it did not deliver the desired entry into the emerging cable-based broadband market.

Apple - Invested $150 million in a struggling Apple in 1997 and committed to make software for the still unpopular Mac. The deal ended a long-running patent spat between the two companies but arguably saved Apple and put it on course to eventually eclipse Microsoft financially.

Comcast - Invested $1 billion in stock of the cable provider Comcast Corp in 1997 to help it build out high-speed data and video services. Bill Gates' vision of connecting the PC and TV was slow to materialize and Microsoft sold the stake 12 years later.