Stock Watch: Microsoft Deal Boosts Best Buy

Shares of consumer electronics retailer Best Buy (NYSE: BBY) climbed 2 to 49-1/4 on Thursday after the company announced a broad alliance with Microsoft. Under the terms of the deal, Microsoft’s MSN Internet access and other connectivity solutions will be offered at the more than 350 Best Buy stores in the United States.

Microsoft plans to invest $200 million in Best Buy. In addition, Best Buy and its Web site will be prominently promoted on Microsoft’s online properties, including MSNBC.com, Expedia, Hotmail, WebTV and the new MSN eShop online shopping experience.

The announcement came one day after Best Buy rival Circuit City announced its deal with America Online, and the Microsoft deal could help Best Buy maintain its impressive lead over Circuit City. Despite the fact that Circuit City has about 250 more stores, Best Buy is ahead of its competitor in terms of both revenues and market value.

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