The Golden Lounge

[Jim Bishop]

'Statement from Brad Smith, General Counsel, Microsoft'

REDMOND, Wash., Feb. 3 /PRNewswire-FirstCall/ -- The combination of
Microsoft and Yahoo! will create a more competitive marketplace by
establishing a compelling number two competitor for Internet search and online
advertising. The alternative scenarios only lead to less competition on the
Internet.

Today, Google is the dominant search engine and advertising company on the
Web. Google has amassed about 75 percent of paid search revenues worldwide
and its share continues to grow. According to published reports, Google
currently has more than 65 percent search query share in the U.S. and more
than 85 percent in Europe. Microsoft and Yahoo! on the other hand have
roughly 30 percent combined in the U.S. and approximately 10 percent combined
in Europe.

Microsoft is committed to openness, innovation, and the protection of
privacy on the Internet. We believe that the combination of Microsoft and
Yahoo! will advance these goals.

This communication does not constitute an offer to sell or the
solicitation of an offer to buy any securities or a solicitation of any vote
or approval. In connection with the proposed transaction, Microsoft Corp.
plans to file with the SEC a registration statement on Form S-4 containing a
proxy statement/prospectus and other documents regarding the proposed
transaction. The definitive proxy statement/prospectus will be mailed to
shareholders of Yahoo! Inc. INVESTORS AND SECURITY HOLDERS OF YAHOO! INC. ARE
URGED TO READ THE PROXY STATEMENT/PROSPECTUS AND OTHER DOCUMENTS FILED WITH
THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY BECOME AVAILABLE BECAUSE THEY
WILL CONTAIN IMPORTANT INFORMATION ABOUT THE PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of the
registration statement and the proxy statement/prospectus (when available) and
other documents filed with the SEC by Microsoft Corp. through the Web site
maintained by the SEC at http://www.sec.gov. Free copies of the registration
statement and the proxy statement/prospectus (when available) and other
documents filed with the SEC can also be obtained by directing a request to
Investor Relations Department, Microsoft Corp., One Microsoft Way, Redmond,
Wash. 98052-6399.

Microsoft Corp. and its directors and executive officers and other persons
may be deemed to be participants in the solicitation of proxies in respect of
the proposed transaction. Information regarding Microsoft Corp.'s directors
and executive officers is available in its Annual Report on Form 10-K for the
year ended June 30, 2007, which was filed with the SEC on Aug. 8, 2007, and
its proxy statement for its 2007 annual meeting of shareholders, which was
filed with the SEC on Sept. 29, 2007. Other information regarding the
participants in the proxy solicitation and a description of their direct and
indirect interests, by security holdings or otherwise, will be contained in
the proxy statement/prospectus and other relevant materials to be filed with
the SEC when they become available.

Statements in this release that are "forward-looking statements" are based
on current expectations and assumptions that are subject to risks and
uncertainties. Actual results could differ materially because of factors such
as Microsoft Corp.'s ability to achieve the synergies and value creation
contemplated by the proposed transaction, Microsoft Corp.'s ability to
promptly and effectively integrate the businesses of Yahoo! Inc. and Microsoft
Corp., the timing to consummate the proposed transaction and any necessary
actions to obtain required regulatory approvals, and the diversion of
management time on transaction-related issues. For further information
regarding risks and uncertainties associated with Microsoft Corp.'s business,
please refer to the "Management's Discussion and Analysis of Financial
Condition and Results of Operations" and "Risk Factors" sections of Microsoft
Corp.'s SEC filings, including, but not limited to, its annual report on Form
10-K and quarterly reports on Form 10-Q, copies of which may be obtained by
contacting Microsoft Corp.'s Investor Relations department at [phone]
or at Microsoft Corp.'s Web site at http://www.microsoft.com/msft.

All information in this communication is as of Feb. 3, 2008. Microsoft
Corp. undertakes no duty to update any forward-looking statement to conform
the statement to actual results or changes in the company's expectations.
SOURCE Microsoft Corp.


Contact Information:
pr.mspx./ /CONTACT: Rapid Response Team of Waggener Edstrom Worldwide, +1-503-44

WebSite:
http://www.microsoft.com
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