AOL May Join Microsoft to Thwart AT&T;

America Online and Microsoft Corp. have taken the first step toward joining Comcast Corp. in a counter-bid against AT&T; for MediaOne Group.

MediaOne announced Friday that AOL and Microsoft had signed confidentiality agreements, enabling them to review the Englewood, Colo.-based cable company’s financials to determine whether to join Comcast in its attempt to outbid AT&T.;

At the same time, sources said, MediaOne’s board was set to meet today to assess AT&T;’s bid last week to buy the nation’s third-largest cable company for cash and stock. AT&T;’s offer was valued Friday at $51.5 billion, edging out Comcast’s all-stock bid, now worth $45.7 billion.

Analysts said a merger agreement between MediaOne and AT&T; could be reached over the weekend, though the deal could trouble the Justice Department because it gives the phone company access to about half of the nation’s cable households.

The potential for a bidding war drove up MediaOne’s stock Friday by $2.25 to close at $81.63, while Comcast fell 75 cents to $62.88. AT&T; was down $2.63 at $50.50. All trade on the New York Stock Exchange.

Both sides are racing against the clock. Under MediaOne’s initial pact with Comcast, MediaOne has until Wednesday to accept a better offer, though it can seek a 21-day extension to end the Comcast deal.

The AT&T; offer sent Comcast scrambling for a partner last week that could help it top the $20-billion cash component that makes the phone company’s bid superior. Sources say the Philadelphia-based cable company has approached Microsoft, America Online and computer billionaire Paul Allen, who has built Charter Communications into a leading cable provider over the last year.

MediaOne is the largest cable company to come up for sale since Tele-Communications Inc. agreed to be purchased by AT&T; last summer. It is also desirable because of the advanced state of its cable system, which is accessible to more than 8 million homes, and its concentration in large urban markets, including Los Angeles.

The cable industry, which was pioneered by scores of local entrepreneurs, is fast consolidating into the hands of a few giants that can shoulder the high cost of upgrading to new technologies.

Comcast’s reliance on industry outsiders could create a schism in the otherwise-close-knit industry. AOL, for example, has been eager to gain access to cable’s high-speed pathway for its 18 million Internet customers. It has become the cable industry’s top enemy in recent months because of its battle in Washington to force cable operators to lease access on their high-speed runways to online providers.

Cable operators are peddling their own Internet services.

Microsoft has in large part been shut out of the cable industry over the last two years despite its attempts to get its content on these high-speed Internet services and, more important, its efforts to get its Windows operating system to run advanced cable set-top boxes that will drive a revolution in television.