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TCI pulls $125 million MSN stake

Cable giant TCI has withdrawn a $125 million investment in the Microsoft Network and plans to head off on a divergent Internet path.

The once-hot partnership between Microsoft (MSFT) chairman Bill Gates and Tele-Communications Incorporated (TCI) (TCOMA) president John Malone appears to have cooled, as TCI has withdrawn a $125 million investment in the Microsoft Network and plans to head off on a divergent Internet path.

Denver-based TCI, the nation's largest cable TV operator, originally acquired a 20 percent stake in the MSN operation in 1994 in exchange for $125 million in TCI stock, which will be returned. Since then, Microsoft has changed the original format of the service and transformed MSN into a Web-based service as part of its push to embrace the Internet.

The two companies, however, are reportedly discussing other possible collaborations for production of cable TV programming and Internet services that could be delivered through new digital set-top boxes.

Meanwhile, TCI has been hedging its bets by pumping money into the fledgling @Home high-speed Internet service.

The leading cable company made the disclosure in its third-quarter financial report filed yesterday. The company posted an anticipated loss of $72 million for the quarter that ended September 30. Revenue grew 26 percent to $1.65 billion for the same period.

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