Microsoft Unveils Its Strategy for a New Interactive Online Service

The Microsoft Network Is Designed to Expand the Market for Customers and
Content Providers

LAS VEGAS -- Nov. 14, 1994 -- Microsoft Chairman and CEO Bill Gates today
outlined the company's strategy for its new interactive online service
called The Microsoft Network. Gates detailed the key elements of the
strategy, which include providing a compelling business model and platform
for content providers, easy and inexpensive access for users, and
availability of rich and powerful development tools. The Microsoft
Network, scheduled to go into beta testing this month, is designed to
provide easy, affordable access to the rapidly expanding world of
electronic information and communication for users of the Windows 95
operating system.

"Microsoft has long believed in the promise of personal computers enabling
new ways of thinking and communicating. We call this vision 'Information
At Your Fingertips,'" said Gates. "The Microsoft Network online service
will represent a significant step toward the realization of this vision."

The Microsoft Network's technology and business model is designed to help
content and service providers fully realize the potential of the online
market. The Microsoft Network uses a platform model in which content and
service providers will have maximum flexibility in creating products and
pricing their services. Microsoft anticipates that providers will offer
various pricing options, such as subscriptions, online transactions and
ticketed events. Other services will be supported by advertising and
commerce.

Content and service providers also will have control over the look of their
services. To enable the easy creation of rich multimedia content and
services, Microsoft plans to provide a complete tool set and sponsor
developer and design conferences to educate providers on how to make best
use of the online medium.

"We believe that the success of The Microsoft Network depends on our
ability to deliver a comprehensive platform that enables successful online
businesses for our providers," said Russ Siegelman, general manager of the
online services group at Microsoft. "While 40 percent of users of Windows
have modems, only 10 percent of them, and only 4 percent of U.S.
households overall, subscribe to any online service. That's a huge
opportunity for content providers."

Access to The Microsoft Network will be offered as a feature to users of
Microsoft Windows 95. The Microsoft Network is designed to fully harness
the power and ease of use of Windows 95.

When The Microsoft Network becomes available in 1995, it will offer
interactive online communities built around ideas, people, products and
brands. It is designed to bring customers affordable and easy-to-use
access to electronic mail, bulletin boards and "chat rooms" on a variety
of topics, file libraries, and Internet newsgroups. Members will be able
to access online tips, add-ons, tools, product information and technical
support directly from the Microsoft area of the service.

The Microsoft Network will be accessible in more than 35 countries, and its
client application will be localized in 20 languages. In conjunction with
today's announcement, four of the world's leading telecommunications
carriers announced they are providing the worldwide network infrastructure
to enable access to The Microsoft Network. Members of The Microsoft
Network will be able to access the service with a local phone call and
connect at speeds of up to 14.4 kilobits per second. The data center for
The Microsoft Network, located in the Seattle area, uses scalable
technology based on PCs running the Microsoft Windows NT Server operating
system.

Beta testing for The Microsoft Network will begin with the shipment of
Windows 95 beta version M7, which is slated for mid-November.

"We're excited about this first beta phase," said Siegelman. "This is just
the first step in what we plan to be a long-term investment for
Microsoft's information-highway efforts."

Founded in 1975, Microsoft (NASDAQ "MSFT") is the worldwide leader in
software for personal computers. The company offers a wide range of
products and services for business and personal use, each designed with
the mission of making it easier and more enjoyable for people to take
advantage of the full power of personal computing every day.

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