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Microsoft 'in Dell buyout talks'

Microsoft has joined the negotiations to buy struggling computer maker Dell, according to media reports.

Both CNBC and The Wall Street Journal reported that Microsoft may invest some of the money needed to take Dell private after 25 years as a publicly traded company. Tuesday's stories cited unidentified people familiar with the negotiations.

If Microsoft joins in a Dell buyout, CNBC and the Journal say the software maker would contribute 1 billion dollars to 3 billion dollars. That amount would make Microsoft a minority investor in a complex deal expected to cost 23 billion dollars to 27 billion dollars if completed.

Microsoft declined to comment on the reports.

Word that Dell is interested in selling to a group led by buyout firm Silver Lake Partners first surfaced last week. Dell's stock price has climbed about 20% since then. The stock rose 33 cents, or 2.6%, to 13.17 dollars in Tuesday's early afternoon.

Dell, which is based in Round Rock, Texas, has not said whether it is interested in selling. Going private, though, would enable the company to overhaul its operations without having to meet Wall Street's demands for higher quarterly earnings.

Dell, the second largest US computer maker behind Hewlett-Packard, is one of Microsoft's biggest partners. Among other things, Microsoft licenses its Windows operating system to Dell's personal computer makers.

Like many other PC makers, Dell's revenue has been sliding as the popularity of smartphones and tablet computers divert consumer and business spending from laptop and desktop machines.

By becoming a part-owner in Dell, Microsoft would risk being viewed by HP and other PC makers as more of a rival than a partner. Microsoft already has rankled some of its PC makers by releasing a tablet computer called Surface that competes against their products.

So far, though, there has been little evidence indicating that the Surface is reshaping the market for computing devices.

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