Microsoft, Compaq Get In on Road Runner

Microsoft Corp. and Compaq Computer Corp. said Monday they each invested $212.5 million for 10% stakes in Time Warner Inc.’s Road Runner unit, which provides high-speed Internet access over cable television lines.

Road Runner on Monday completed its merger with US West Media Group’s MediaOne Express unit. The venture, to be marketed under the Road Runner name, has more than 90,000 customers and reaches more than 27 million households that have cable.

The venture promises to enhance significantly the range and depth of Internet services U.S. consumers receive at home. The system effectively eliminates the wait normally associated with receiving data-intensive graphics via the World Wide Web of computer networks. The Road Runner system relies on cable modem technology that allow Internet services to be transmitted via the same coaxial cables used to deliver cable television services into homes.

As part of the agreement with Road Runner, Houston-based Compaq will make cable-ready PCs to accelerate the roll-out of high-speed Internet access, the companies said. Microsoft will provide software for the system.

Microsoft and Compaq beat out Intel and Oracle, which were working together on a bid for a stake in Road Runner.