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Microsoft has SkyTel stake
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January 6, 1999: 12:58 p.m. ET
SEC filing reveals software giant has 5.7-percent stake in paging company
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NEW YORK (CNNfn) - Software giant Microsoft Corp. reported a 5.7 percent stake of paging company SkyTel Communications Inc., according to a Securities and Exchange Commission filing made public Wednesday.
According to the filing, Microsoft (MSFT) acquired 1.755 million common shares of SkyTel (SKYT) on July 19, 1995 in exchange for 1,500 class A common shares of Destineer Corp., which Microsoft bought in 1994 for $30 million.
It then acquired 1.65 million shares on May 14, 1998 upon the conversion of 25,000 shares of series A 7.5 percent cumulative convertible accruable pay-in-kind preferred stock, which it had bought in 1996 for $25 million.
Microsoft said it acquired the 3.4 million shares of Jackson, Miss.-based SkyTel for investment purposes.
Jeffrey Maxick, an analyst at Madison Securities, said the SkyTel investment is another example of Microsoft attempting to push its Windows CE operating system -- designed for use in a variety of hand-held computing and consumer-electronics devices -- into the mainstream.
"Microsoft is trying to extend its dominance from Windows to Windows CE on hand-held devices," Maxick said. "With investments like this, they're trying to make it easier for some firms to push the technology envelope, because sooner or later, all these companies will need Windows CE software."
In June, SkyTel forged an agreement with cable channel MSNBC, a partnership of General Electric Co. 's (GE) NBC television network and Microsoft, to transmit news to its paging customers.
SkyTel and Microsoft signed an agreement March 29, 1996 whereby, prior to March 29, 2001, Microsoft will not acquire more than 10 percent of SkyTel's voting securities without the approval of the paging company's board of directors.
Microsoft shares climbed 3-1/4 to 149-3/4 in midday trade. SkyTel shares rose 1-3/8 to 22-3/8. 
-- from staff and wire reports
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