Microsoft has announced a $200 million investment in Qwest, one of a new breed of US broadband telecommunications networks, as part of a move to extend its reach into the world of e-commerce between companies. Though representing less than 1.5 per cent of Qwest's value, the investment could mark a significant link with a company that has set out to become one of the leading carriers of Internet traffic. It provides a platform for Microsoft's Windows NT Server operating system, which the two companies said would be used to support a broad range of business-to-business e-commerce and web hosting services on Qwest's network.

The Microsoft investment will be used to build webhosting facilities and develop a range of services that are expected to generate $150 million of revenues in the first two years. Microsoft said it would license a range of its software products to Qwest and pay $45 a share for its small stake.