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Time Warner Inc is reportedly talking with IBM about combining computer capabilities with cable television systems, though neither company confirms this. Meanwhile, Time Warner is conducting a trial of a 150-channel cable system that allows customers to 'interact' with their television sets, choosing pay-per-view movies and using computer-like arrangements to scan through channels and program listings. Eventually, systems will incorporate features of computers, television sets and compact disk players, with customers empowered with interactive control. A deal between the world's largest computer company and the world's largest entertainment company would signify a major step toward actualizing these possibilities. Since the 1960s, American television has provided a diverse and multicultural population with a common, shared experience. The social consequences of altering the nation's media in a fundamental way are open to speculation.

The world's largest computer company, IBM, and the entertainment giant Time Warner are considering ways to combine IBM's data transmission technology and Time Warner's television shows, movies and cable television systems. The two firms hope to use IBM's storage and transmission technologies to provide a multitude of new entertainment services to consumers. Under the proposed agreement, viewers would be able to request specific movies over cable networks, The programming would then be sent in compressed form to the viewer's home. Interactive television that enables viewers to participate in game shows and vote on issues raised during a show is another possible outcome of the IBM-Time Warner negotiations. IBM and Time Warner already have strong links at the directorial level with some officials serving both organizations; there is nevertheless no guarantee the two will reach an agreement.

United Telecommunications Inc will purchase the remaining 19.9 percent stake of GTE Corp in US Sprint. The two firms were equal partners in US Sprint until 1988 when United Telecom purchased 30.1 percent of GTE's stake. The purchase of GTE's remaining interest for $500 million was expected by most analysts. US Sprint is the third largest long-distance telephone service, with 1st qtr 1990 revenue of $1.2 billion, up 24 percent from the previous year. Analysts feel United Telecom made an astute deal because Sprint is a very strong company at the moment. As part of the deal, United Telecom will change its name to Sprint Corp.

Publishing giant Mcgraw-Hill is in trouble after a year of sagging profits and failed acquisitions. The company reported a 74 percent drop in net income for FY 1989 after a $152 million restructuring charge. McGraw has tried to diversify by entering the electronic publishing realm in a strong way, but so far the expected revenues have failed to materialize, which they must if the company is to regain profitability. Analysts also cite as a problem a series of ill-advised acquisitions that have done little for the company except create write-offs. Perhaps the most intangible problem is in management, where moral is low because of the perceived nepotism involved with the rapid promotion of H.W. McGraw III over other more seasoned and qualified people.