Microsoft Realigns Product Groups, Creates Chief Technology Officer; Enhances Focus on Internet, Interactive Media and Future Technologies

REDMOND, WA, Oct. 29, 1996 — Continuing its drive to focus on the Internet and building on its investments in future technologies, Microsoft announced today an organizational realignment that creates two worldwide product groups and establishes the new position of chief technology officer. The company also announced today the resignation of Patty Stonesifer, Senior Vice President of the Interactive Media Division and the executive credited with building Microsoft’s position as the world’s leading consumer and interactive media company.

Under the realignment, two new major product groups are created – Platforms and Applications under Group Vice President Paul Maritz and Interactive Media under Group Vice President Pete Higgins. Group Vice President Nathan Myhrvold takes the new position of Chief Technology Officer, focusing broadly on technology across the company. Maritz had headed the Platforms Group, but now broadens those responsibilities to include productivity software. Higgins and Myhrvold had co-managed Microsoft’s Applications and Content Group.

“Today’s realignment optimizes Microsoft’s ability to take advantage of the business and technical opportunities we see as customers rapidly adopt the Internet and intranets into their daily lives,” said Chairman and CEO Bill Gates. “Customers demand increased synergy among products, more compelling content, improved ease of use and lower cost of ownership. Networked personal computers are delivering on each of these benefits and the realignment we are announcing today positions Microsoft well to continue its leadership.”

Interactive Media Group

Consolidating desktop finance, consumer input devices and the Interactive Media Division, Higgins will now head Microsoft’s Interactive Media Group, which includes MSN(tm), The Microsoft Network, the MSNBC joint venture, multimedia games, consumer CD-ROM titles, hardware and the desktop finance division. Higgins is a member of Microsoft’s Office of the President and reports directly to Gates.

Microsoft has built the leading consumer software business in the industry, and has made bold investments in interactive media to position the company for continued leadership. Just this year alone, the Interactive Media Group has introduced numerous popular new products: Slate(tm) online magazine; a newly revamped MSN; Expedia(tm) online travel; cable news channel and Internet news service MSNBC; more than a dozen new consumer CD-ROM titles, and; seven new multimedia games. Innovative new hardware products include Microsoft(r) SideWinder(tm) Game Pad and the IntelliMouse(tm) pointing device. The Desktop Finance Division has introduced Microsoft Money 97 and has developed a breakthrough personal Internet productivity product with Microsoft Investor.

“Pete is an outstanding leader and manager who built Microsoft Office into a $4 billion business,” said Gates. “Microsoft’s Interactive Media Group is a significant future business for us and is critical to our long-term vision. It is the fastest growing group in the company with a terrific team already in place that reflects our commitment to success. Pete is the right person to build on the significant investment we’re making in interactive media and to carry it forward with sound management experience and a keen understanding of our customers.”

Chief Technology Officer

Myhrvold, a Ph.D. in theoretical and mathematical physics who has held numerous executive positions at the company since 1986, will lead Microsoft’s Advanced Technology and Research Group, and as Chief Technology Officer will provide technical leadership for the more than $2 billion a year investment made in research and development across the company. Dr. Myhrvold is a member of the Office of the President and reports directly to Gates.

“Nathan is a true visionary who will lead our initiative to build personal computers that see, listen, learn and think,” said Gates. “Nathan’s vision and leadership will further focus our increasing investments in research areas such as speech and visual recognition, decision theory, intentional programming, 3D graphics and animation. We also are making important R & D investments in technologies across the company that make our products more innovative and easier to use for everyone.”

Platforms and Applications Group

The Desktop Applications Division (DAD), which includes development, testing and marketing of all Microsoft Office applications for Windows(r) and Macintosh, becomes part of the Platforms and Applications Group. DAD is headed by Vice President Richard Fade, who will now report directly to Maritz.

Over the past three years, DAD has built Microsoft Office into the most popular suite of productivity software in the world. Microsoft Access, Microsoft Word, Microsoft Excel, Microsoft Project and Microsoft PowerPoint(r) are the most popular products in their categories as well. The recent acquisition of the FrontPage(tm) Web authoring and management tool makes creating professional-quality Web sites effortless with powerful new functionality and seamless integration with Microsoft Office.

Moving forward, DAD will introduce Microsoft Office 97 in January, reflecting more than two years of work and more than 25,000 hours of usability testing and research and development. Office 97 enables customers to share information online, search networks, and integrate the Internet with everyday tasks. Early reviews by the PC industry trade publications have been universally positive.

“DAD has been instrumental to Microsoft’s growth and will play an increasingly important role in meeting the needs of customers who want to see increased synergy between browsers, mail and other applications in this world of networked personal computers,” said Gates. “We are excited about the opportunities for collaboration and coordination as we continue to focus on the challenge of providing our customers with better, more innovative and easier to use software products.”

Patty Stonesifer

Stonesifer said she has chosen to leave after eight years at Microsoft to pursue personal interests and a new career as a management consultant. Her first client will be DreamWorks SKG. She plans to remain with Microsoft through the end of the year.

Stonesifer joined Microsoft in 1988 and rose through the organization by bringing innovation, efficiency and effectiveness to the people she worked with and the products she led. Stonesifer began as senior manager of Microsoft Press and later served as General Manager for Microsoft Canada. She was named Vice President of Product Support Services (PSS), which she re-engineered into an organization widely viewed as the standard for customer support in the industry today. In 1993, she became head of the Consumer Division of Microsoft which became the Interactive Media Division in 1996.

“It’s a difficult decision to leave a company with people and products that I care so deeply about, but I want to focus my energies now on some personal interests and on some very exciting opportunities in new areas,” said Stonesifer. “That means working a little less intensively in one regard but in a more focused way in others. Such a change is difficult in my current position given the daily challenges of building an entirely new business for Microsoft in a highly competitive field. I’m proud of the work we’ve done over the past few years and believe that a strong management team is in place today to continue that progress.”

“Patty has built the top consumer software business in the world,” said Gates. “She began talking about moving on and focusing on personal interests and new professional opportunities a year ago but agreed to stay on and step up her involvement because of the unique challenges we faced with interactive media and to ensure a great transition. She made incredible contributions in a variety of roles, and we will miss her.”

Founded in 1975, Microsoft 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.

For More Information, Press Only: Greg Shaw (Corp. Public Relations) or John Pinette, Microsoft Corp., 206-882-8080 Alison O’Brien, Waggener Edstrom, 503-443-7000

Microsoft, Expedia, FrontPage, IntelliMouse, MSN, PowerPoint, SideWinder, Slate and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.

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