This record is a partial extract of the original cable. The full text of the original cable is not available.

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