MICROSOFT TARGETS TURKEY

UNCLAS ISTANBUL 000124

SIPDIS

E.O. 12958: N/A
TAGS: ECON ETRD EINV ECPS TU
SUBJECT: MICROSOFT TARGETS TURKEY


Sensitive but unclassified - not for internet distribution.
This message was coordinated with Embassy Ankara.


1. (U) Summary: In his third trip to Turkey in a little over
a year, Microsoft Chairman Bill Gates met in Istanbul with
senior Turkish government and business leaders and announced
a range of new initiatives aimed at increasing internet
penetrationin Turkey. These included a new Turkey web portal
(in cooperation with Turkey's leading media group, Dogan
Holding) and a "My First Computer" campaign in partnership
with Intel and Turk Telecom. The extensively publicized
January 28-30 visit included a dinner with Prime Minister
Erdogan and a town-hall meeting with 2500 students. In his
public comments, Gates praised Turkey's progress in
combatting pirated software. While not announcing any
specific investment plans, he highlighted the fact that
Istanbul serves as Microsoft's regional headquarters for 79
countries in the Middle East and Africa, and predicted that
its footprint here will continue to grow in the years ahead.
End Summary.


2. (SBU) In addition to its Turkey-centered events, Microsoft
had initially planned to take advantage of Gates' presence to
organize a summit of business leaders from throughout the
Middle East and Africa. Following the outbreak of avian
influenza in Eastern Turkey, it put those plans on hold, and
instead targeted local business leaders and students. In
addition to his meeting with Prime Minister Erdogan and
Transport and Communications Minister Yildirim, Gates met
with Microsoft's partners here (including notably Dogan
Holding),and spoke to students (a town hall of 2500 students
from a range of schools gathered at an urban campus in
Istanbul),journalists, and Turkish business leaders.


3. (SBU) While there was no announcement regarding the
planned "Techno-city," which Prime Minister Erdogan announced
last year and which Microsoft has indicated in general terms
that it will support, Gates did announce a range of new
initiatives, including a "My First Computer" project, in
cooperation with Intel and Turk Telecom. Noting that Turkey
lags behind other developed countries with an internet
penetration rate of 16 percent (an estimated 10 million
people using 750,000 computers),he said the project targets
to reach 80 percent of Turkish households through the new PC,
which will be introduced this spring and will cost around 300
USD. Gates said this project will build on Microsoft's work
in partnership with Turkey's Ministry of Education, the
United Nations Development Program (UNDP),and local NGO's,
which has succeeded in bringing internet access to public
spaces in most Turkish communities.


4. (SBU) Gates also met with Dogan Holding Chairman Aydin
Dogan to announce that the two companies will work together
to launch a local search engine to challenge Google's
dominance in the Turkey. The portal will also provide
internet telephone services (VOIP),and will utilize
Microsoft's technical expertise and Dogan's experience in the
local market.


5. (SBU) Speaking to the press, Gates praised Turkey's
progress in reducing the level of pirated software, and noted
Microsoft's own efforts in this regard, in cooperation with
other IT partners in the local Business Software Alliance
(BSA). He underlined the potential Turkey offers with its
young and dynamic population, and highlighted Microsoft's
decision to use Istanbul as a base for its regional
operations in the Middle East and Africa. While disclaiming
any specific investment plans, he predicted the company's
footprint will grow as its activities in the region continue
to expand.


6. (SBU) Comment: While his presence attracted a handful of
protestors from fringe parties, Gates was enthusiastically
welcomed by most Turks, and his visit won wide coverage.
(The fact that Dogan Holding dominates local print and
broadcast media didn't hurt.) Even Istanbul's normally tough
press corps appeared overawed, lobbing mainly softballs in
Gates' extended press conference. While Techno-city is not
on the immediate horizon, Gates made clear that Turkey
figures in Microsoft's future plans. End Comment.
JONES