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Microsoft in talks with Flextech over interactive television

Microsoft, the global computer software giant, is considering a move into the emerging UK digital interactive television market which would represent a serious challenge to the planned offerings from satellite and cable operators.

It emerged yesterday that discussions were under way between Microsoft and Flextech, the pay television group which could see the two companies collaborate on a rival interactive service. Shares in Flextech rose 15p to 502.5p, though sources indicated the talks were at a "very early stage" and were just one of a number of potential ventures under discussion.

A push by Microsoft would throw down the gauntlet to British Interactive Broadcasting (BIB), the satellite venture part owned by BSkyB, and British Telecom, which aims to launch a service offering home banking, shopping and educational channels by the end of the year.

Flextech has already launched a home shopping channel called Screenshop and plans a travel shopping channel in the spring, though in both cases customers have to use the telephone to buy goods or making bookings.