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LAS VEGAS — Microsoft and Sony have competed ferociously over whose technology will dominate digital entertainment in the future, but they've also been quietly working on a partnership that could build a bridge between the computer and consumer-electronics industries.

Sony, Microsoft, Intel and other companies involved had hoped to announce — at this week's Consumer Electronics Show — new standards for making computers work better with stereos, televisions and other audio and video equipment. But they have yet to agree on the details.

Sony President Kunitake Ando hinted at the partnership in a news conference yesterday, as did Intel Chief Executive Craig Barrett in a speech. "We don't want to always compete," Ando said. "It's better to collaborate."

A Microsoft official acknowledged the discussions were taking place but declined further comment. "We love working with partners," said Steve Guggenheimer, consumer and partner experience manager.

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News source: Seattle Times

Although the executives didn't specifically address the talks, a fuller picture emerged from interviews with others involved in the negotiations, as well as industry observers.

Being discussed is a set of technical protocols. Without them, it would be difficult for some products to work with others.

"If they don't come to an agreement on the set of standards, that stuff won't interoperate," said Russ Craig, an industry analyst at the Aberdeen Group in Boston. "You may buy stuff from one vendor that will work fine with another product from that vendor but won't work with a third party."

The details may be tedious, but agreements on such protocols underlie many major advances in technology. Fixed communication protocols, for instance, make the Internet universally accessible.

"We are working behind the scenes on the protocol stack to make this happen," said John Romano, senior vice president for consumer PCs at Hewlett-Packard.

He said the companies hoped to announce the partnership at the show; now the announcement is likely later this year.

Any agreements are likely to affect consumers around the world, leading to so-called convergence devices that combine the power of computers, the flexibility of digital media, the reach of the Internet and the multimedia capabilities of stereos and TVs.

They would also provide assurance that TVs, music players, digital cameras and stereos would work together and not quickly be made obsolete by rival technology.

One objective is to combine the computer industry's expertise in developing standards with consumer-electronics expertise in audiovisual technology, Romano said.

It would also help computer companies such as Hewlett-Packard as they move into the consumer-electronics business with crossover products, such as the Media Center PC, a Windows-based HP product that has a built-in video recorder and TV-like remote for watching digital content on TV sets.

Another goal is to avoid the kind of disputes over standards seen in the Betamax vs. VHS debacle and the recent debate over recordable DVD formats. Such fights often confuse consumers and slow new technologies.

It's unclear just how far the companies will go to make everything work together.

Sony and Microsoft have invested millions in technologies such as software that compresses and plays digital music and videos, and both are investing in ways to protect copyright digital content. Neither is likely to give away these golden keys to lock and unlock digital media.

Another obstacle could be concerns that such partnerships are anti-competitive, possibly spurring excluded companies to seek regulatory action.

Although Microsoft is under a federal decree ordering its compliance with antitrust law, some critics say it is using standards and protocols to extend its monopoly into the consumer electronics industry.

But Craig, the Aberdeen Group analyst, said an agreement could actually increase competition, much as competition in the computer industry increased after the PC established a common platform. "Rather than in the computer space, it's in this connected consumer space," he said.

Still, many companies, including those in the consumer-electronics industry, are wary of doing business with the aggressive Microsoft, said P.J. McNealy, an analyst with the Gartner consulting company.

"Building that kind of relationship takes time," he said.

Microsoft and Sony have been big rivals, as exemplified by the Xbox vs. Sony PlayStation 2 game-console battle. Xbox established a beachhead in the living room for Microsoft with a device that's basically a Windows-powered PC connected to a TV.

In recent months, Sony has gone on the offensive, buying into a company that provides software for digital media copyright protection and launching plans for a Linux-based operating system that it will share with other consumer electronics companies.

Ando said Microsoft's projects often parallel Sony's. But he frequently talks about his support for "open" software, a widely known code word for nonproprietary software unlike that sold by Microsoft.

Whether they work together or not, Sony and Microsoft share visions for a world of digital entertainment that will emerge as high-speed Internet connections become widespread in homes.

If their visions come true, music, movies and TV will all be sold, delivered, shared and consumed on phones, TVs and computers — all connected by the Internet and wireless radio waves.

Microsoft sees computers running its software at the heart of this world, while Sony thinks life will revolve around its Wega-brand televisions with advanced remote controls.

"It's a battle for the living room eyeballs and dollars," McNealy said.