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Microsoft Bids to Acquire Catholic Church

VATICAN CITY (AP) -- In a joint press conference in St. Peter's Square this morning, MICROSOFT Corp. and the Vatican announced that the Redmond software giant will acquire the Roman Catholic Church in exchange for an unspecified number of shares of MICROSOFT common stock. If the deal goes through, it will be the first time a computer software company has acquired a major world religion.

With the acquisition, Pope John Paul II will become the senior vice-president of the combined company's new Religious Software Division, while MICROSOFT senior vice-presidents Michael Maples and Steven Ballmer will be invested in the College of Cardinals, said MICROSOFT Chairman Bill Gates.

"We expect a lot of growth in the religious market in the next five to ten years," said Gates. "The combined resources of MICROSOFT and the Catholic Church will allow us to make religion easier and more fun for a broader range of people."

Through the MICROSOFT Network, the company's new on-line service, "we will make the sacraments available on-line for the first time" and revive the popular pre-Counter-Reformation practice of selling indulgences, said Gates. "You can get Communion, confess your sins, receive absolution-even reduce your time in Purgatory-all without leaving your home."

A new software application, MICROSOFT Church, will include a macro language which you can program to download heavenly graces automatically while you are away from your computer.
An estimated 17,000 people attended the announcement in St Peter's Square, watching on a 60-foot screen as comedian Don Novello-in character as Father Guido Sarducci-hosted the event, which was broadcast by satellite to 700 sites worldwide.

Pope John Paul II said little during the announcement. When Novello chided Gates, "Now I guess you get to wear one of these pointy hats," the crowd roared, but the pontiff's smile seemed strained.
The deal grants MICROSOFT exclusive electronic rights to the Bible and the Vatican's prized art collection, which includes works by such masters as Michelangelo and Da Vinci. But critics say MICROSOFT will face stiff challenges if it attempts to limit competitors' access to these key intellectual properties.

"The Jewish people invented the look and feel of the holy scriptures," said Rabbi David Gottschalk of Philadelphia. "You take the parting of the Red Sea-we had that thousands of years before the Catholics came on the scene."

But others argue that the Catholic and Jewish faiths both draw on a common Abrahamic heritage. "The Catholic Church has just been more successful in marketing it to a larger audience," notes Notre Dame theologian Father Kenneth Madigan. Over the last 2,000 years, the Catholic Church's market share has increased dramatically, while Judaism, which was the first to offer many of the concepts now touted by Christianity, lags behind.

Historically, the Church has a reputation as an aggressive competitor, leading crusades to pressure people to upgrade to Catholicism, and entering into exclusive licensing arrangements in various kingdoms whereby all subjects were instilled with Catholicism, whether or not they planned to use it. Today Christianity is available from several denominations, but the Catholic version is still the most widely used. The Church's mission is to reach "the four corners of the earth," echoing MICROSOFT's vision of "a computer on every desktop and in every home".

Gates described MICROSOFT's long-term strategy to develop a scalable religious architecture that will support all religions through emulation. A single core religion will be offered with a choice of interfaces according to the religion desired-"One religion, a couple of different implementations," said Gates.

The MICROSOFT move could spark a wave of mergers and acquisitions, according to Herb Peters, a spokesman for the U.S. Southern Baptist Conference, as other churches scramble to strengthen their position in the increasingly competitive religious market.

Copyright © 1994 Knight-Ridder / Tribune Business News
Received via NewsEDGE from Desktop Data, Inc.: 03/07/94 19:20


VATICAN CITY-A division of Italian television giant RAI said Wednesday it has invested $125 million for a 20 percent stake in Microsoft Corp.'s planned on-line computer service, The Microsoft Divine Network.

The investment lays the groundwork for delivering planned on-line religious services to personal computers over television cable, which will allow much faster and richer transmission of data such as sound clips and video than is permitted today over regular telephone lines.
"We are big believers in connecting PCs to cable for on-line because
it gives us more bandwidth to do new kinds of applications using audio and video," said Ziggy Mann, general manager of the Microsoft on-line services group.

Under the agreement, RAI's Vatican Technology Ventures has made an all-stock investment in the newly formed Microsoft Online Church Partnership, which will hold the assets and cash flow of the planned on-line service.

The service was announced in November and is expected to be launched next year as an optional feature (Microsoft Church) of the Windows 95 operating system, which now is expected to be available in August 1995.

The service will be offered at first over telephone lines, but Don Novello, senior vice president of the RAI-Vatican technology unit, said by 1996, some on-line services likely will be delivered over cable as cable modems and other equipment are perfected.

While RAI would market and distribute the service to the 20 million households, the relationship would not be exclusive and the cable provider would offer connections to any on-line services available and requested by its customers, Novello said.

America OnLine, Compuserve and other on-line service providers have been testing the possibility of delivering their services over cable rather than telephone lines.

The partership announced Wednesday, which long had been rumored, is one of several between RAI and Microsoft.
The two companies also are about to begin a small-scale test of interactive television services broadcasting from the Vatican, and have announced plans to develop a cable television channel focused on computing, which Novello said will be launched next year.

Rob Goldman, an analyst at Imperiale Shwain, said the latest agreement was strategically important to both companies and signaled an increasing convergence of media on the information superhighway.
"I think it is very strategic for Microsoft to try to leverage their investment in an on-line service to be able to offer it to RAI's 20 million households," he said.

"Ultimately you ought to able to access this through your television and not just your personal computer. Having the same on-line service connected to (both) would be a very powerful thing."

Executives of the two companies did not provide details on how they arrived at a figure that values The Microsoft Divine Network at $625 million even though it likely won't begin operation until August.
"We negotiated a fair valuation based on what we know today," Novello said in a Vatican conference call with reporters and analysts.
Mann said Microsoft had no current plans to take on additional equity
partners in the on-line business, "but if the right deal or right partner came along we'd be open to that."


VATICAN CITY-Pope John Paul II led the world's 960 million Roman Catholics in Christmas celebrations Sunday at a midnight mass that included prayers and praise for technology and the family.

More than 10,000 people, including members of the Vatican Technology group, crowded into St. Peter's Basilica, Christendom's largest church, for the traditional sung mass broadcast live around the world.

They were joined on the information superhighway by a select number of subscribers to the Microsoft Divine Network pilot, a recently formed joint venture between the Redmond giant and the italian RAI cable communication network.

As is customary with the Christmas midnight mass, the pope's homily centered on the Biblical story of the birth of Jesus.

The pope usually reserves his most powerful comments on world events for his Christmas Day "Urbi et Orbi" (to the city and the world) blessing and message from the central balcony of the Basilica.
"During the night of the Lord's birth, the shepherds guarding their flock in the fields round Bethlehem heard the words inviting them to go to the place where the Child was laid," the 74-year-old pope said during the homily.

"An angel said to them, 'Behold, I bring you good news of great joy
which will come to all the people; for to you is born this day in the
City of David a Savior, who is Christ the Lord'.

"The shepherds of Bethlehem are thus able to realize that the way of
salvation passes through the family. We too have been able to realize
this truth once more during this year that is about to end...this year
has been the year of technology for the entire family."

The pope has often spoken this year in favor of the traditional family and against what he says is a frontal assault on its values by the technological revolution, and praised Microsoft's Christian initiative to end world suffering.

He has repeatedly called on families to fight what he says are their greatest enemies on the information superhighway: "mushrooming sex-crazed user groups, pedofiles, gay and lesbian militants, perverted adult stories", which the Pontiff credited to the work of the devil.
The pope, looking healthy and alert, wore vestments of gold and white to symbolize the message of joy and hope brought into the world with Christ's birth in Bethlehem, complemented by a discrete gold pin bearing the embossed logo of the new Microsoft Divine Network.

He also said during the electronically transmitted homily that he had not forgotten those who were suffering behind their screens.
"We find ... happiness in the songs which from midnight tonight are heard here in St. Peter's Basilica and throughout the world, thanks to the marvels of technology" he said.

"They are heard even in the midst of censorship, as can be confirmed by those experiencing interdictions to access religious services... in other places where people have suffered or continue to suffer. Joy at the birth of the son of God is greater than suffering."

The Polish pope is celebrating his 17th Christmas season as the Roman Catholic Church's supreme leader since his election in October 1978. The electronic broadcast was the first time a pope reached out to the information superhighway's virtual crowd.

Traditionally, tens of thousands of people flock to St. Peter's Square
on Christmas Day to listen to the "Urbi et Orbi" message and hear the
pope wish the world holiday greetings in more than 50 languages.

For the first time in history this year, a select number of subscribers
to the Microsoft Divine Network pilot were able to enjoy the Pontiff's
message from behind their computer screens.

From: Newswire Mailing
To: IS Daily News Services for Executives
Cc: Newswire Mailing
Subject: IBM Raises Ante in Religious Software Biz: Acquires
Episcopal Church
Date: Thursday, 12/1/94

For Immediate Release

The Chairman of IBM announced today that, in response to
Microsoft Corp.'s acquisition of the Roman Catholic Church, IBM has bid for and acquired the Protestant Episcopal Church in the United States of America for $1 billion.

"We are the oldest and most prestigeous computer company in
the world," he said, "and we cannot be seen to be lagging behind in
the race for preeminence in the religious software and hardware markets. We have tendered an offer to the Most. Rev. Edmund Browning, Presiding Bishop of the Episcopal Church and Pamela Chinnis, President of the House of Deputies of General Convention, and they have recommended acceptance to the shareholders and communicants."

The Episcopal Church is one of the oldest and most respected denominations in the United States. Many current and former officeholders, including many Presidents, have been communicants.
Although its membership was declining in recent years, the latest
figures show a slight increase in membership. A combination with
IBM will probably be beneficial in terms of putting "fannies in the
seats" in Episcopal Churches across the United States.

There will also be great benefits to IBM in terms of international connections through the Episcopal Church. The Church is one of the most senior members of the international Anglican communion by way of its separation from the Church of England after the Revolutionary War and the consecration in 1784 of its first Bishop, Samuel Seabury. IBM hopes to gain a foothold in the international religious business through these connections, and perhaps tender a bid for the entire Anglican Communion by the time of the next meeting of the world Anglican bishops in London in 1998 (Lambeth Conference). The Archbishop of Canterbury, George Carey, was unreachable for comment.

IBM and Episcopal Church are "good fit" IBM has had the distinction of being the first and, up until several years ago, the most successful computer company in the world. It was founded by Herman Hollerith, the inventor of the computer card, in the late 1800, and concentrated on business machines such as adding machines and typewriters until the invention of the computer in the 1940. They invested heavily in this new technology, and became rich from selling and maintaining them in the 1950's through 1980's.

However, IBM's stodgy corporate culture prevented it from
taking advantage of newer technology. It almost entirely missed the
value of personal computer technology in the late 1970's, allowing other companies to use processes it developed to make so-called "clone" personal computers. It therefore lost out on billions of dollars spent on this technology over the past 15 years.

IBM has recently spun off its typewriter and printer businesses and concentrated on PC building and software, and has even resorted to layoffs for the first time in its history. The slogan, "No one was ever fired for buying IBM" has become a bitter joke in the business world.
The Episcopal Church was, for a long time, considered the most
successful of the Protestant Churches in terms of wealth and power. Many of the rich and famous swelled its numbers, and its liturgy was noted for its archaic beauty as much as its treasury was noted for its gilt-edged bonds.

However, in recent years, with the dying-off of the elderly rich and the fall in the birth rate among the bluebloods who remained, the Episcopal Church has suffered both a decline in numbers and in influence and wealth. Notwithstanding the slogan, "The Episcopal Church Welcomes You," numbers have only recently begun to increase again as the Church begins to be seen as a place where outcasts can take part in its life.

Along with IBM, the Episcopal Church has had to resort to layoffs to balance its budget, and the merger will allow both organizations to trim even further their personnel costs.

IBM's chairman said today, "We have been known as the place
where the white-coated mystics take charge of computers in sealed
rooms. As a direct result of this merger, our white-coated mystic
roster will be cut by half and merged with the ordained ministry of
the Episcopal Church. After all, they also wear white garments when
celebrating their mysteries. The similarities outweigh the differences, and we think that we can bring their white-suited mystics up to speed in JCL and C++ within a few months."

The Presiding Bishop and Ms. Chinnis issued a joint statement saying: "We welcome this merger as a meshing of two great but sometimes old-fashioned institutions. The merger will allow us to cut our technical staff by half again, and concentrate our resources on becoming the largest and most successful Protestant Church in the United States. Our first IBM mainframe is already being installed in the basement of 816 Second Avenue, Church Headquarters in New York."

They continued: "So that we can assure ourselves that the
Apostolic Succession will be continued, the Bishops of the
Episcopal Church will lay hands on the Board of IBM in a ceremony
at the Cathedral of St. John the Divine in New York City. Then, the
entire House of Bishops will travel up to Armonk, where they will be instructed in the use of the personal computer."

The business writers of most US newspapers will join the religion correspondents in recording this momentous occasion. Both the business and the religious communities are awaiting the new developments that this historic merger will make possible.

His Eminence, Bill Gates, had no comment.

Copyright © 1994 Christian P. Hansen at hansen@quantime.co.uk





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