Microsoft and Gateway Lay Foundation for Future Cooperation, Resolve Antitrust Claims

REDMOND, Wash., and IRVINE, Calif. — April 11, 2005 – Microsoft Corp. and Gateway Inc. today announced that they have entered into an agreement to resolve legal issues between the two companies and work together on the marketing and development of Gateway personal computing products.

As part of the agreement, Microsoft will provide funds that Gateway expects to use for marketing initiatives, including advertising, sales training and consulting, as well as the research, development and testing of new Gateway products that can run current Microsoft products and Microsoft’s next-generation operating system and productivity software.

“Gateway continues to enjoy a strong relationship with Microsoft and we’re pleased to put these legacy legal issues behind us,” said Wayne Inouye, president and CEO, Gateway. “We look forward to even greater collaboration with Microsoft going forward as we work together towards the future of computing.”

“Our relationships with PC manufacturers are integral to our success, and we look forward to working even more closely with Gateway to communicate the benefits of its products and our software to consumers,” said Rodrigo Costa, OEM corporate vice president, Microsoft. “We are very pleased to be able to resolve our past differences in a constructive manner that will allow us to continue our focus on the interests of our mutual customers.”

The agreement provides for periodic Microsoft payments to Gateway totaling an aggregate amount of $150 million over four years. As part of this agreement, Gateway will release all antitrust claims against Microsoft based on past conduct. Gateway’s claims arose from the circumstances of the United States v. Microsoft antitrust case in the mid-1990s, where Gateway was specifically identified in U.S. District Judge Thomas Penfield Jackson’s findings of fact as having been impacted in its business by practices on which he ruled against Microsoft. Under the statute of limitations, the time period for Gateway to bring claims against Microsoft based on these findings of fact expired in late 2003. Microsoft and Gateway entered into an agreement before that time to extend this period so they could explore an approach that would serve their mutual business and customer interests. Today’s agreement resulted from a recent mediation between the parties. Although Microsoft denies any liability to Gateway, the parties are pleased to resolve this dispute and move forward to better serve their customers.

About Gateway

Since its founding in 1985, Irvine, Calif.-based Gateway (NYSE: GTW) has been offering award-winning PCs and related products to consumers, businesses, government agencies and schools with highest quality and service and best overall value. Gateway is now the third largest PC company in the U.S. and among the top ten worldwide. See http://www.gateway.com for more information.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

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