Microsoft and THOMSON multimedia to Work Together on Interactive TV

Redmond, Wash., July 30, 1998 — Microsoft Corp. and THOMSON multimedia today announced that they have signed a memorandum of understanding (MOU) to develop and promote interactive and enhanced television products and services and to accelerate the adoption of digital television worldwide.

The two companies will work to develop and promote new “enhanced” televisions (eTVs), which will feature an electronic program guide, support for interactive television programs and an integrated TV receiver, in both analog and digital versions. With the integrated receivers, consumers will get as a part of their television sets the kind of interactivity that today is available only through set-top boxes. Microsoft will provide HTML-rendering technologies based on the Microsoft Windows CE operating system for use in the eTVs.

As part of this new relationship, Microsoft proposes to take a 7.5 percent interest in THOMSON multimedia, following the usual due diligence and regulatory approvals. Microsoft will have one seat on the THOMSON board of directors, and a Microsoft representative also will serve on THOMSON’s newly formed strategic committee. Three other companies – NEC, Alcatel and DIRECTV Inc. — will enter into similar agreements with THOMSON. After due diligence and regulatory approvals, each of those companies proposes to take a 7.5 percent interest in THOMSON multimedia.

THOMSON will license and sell WebTV set-top boxes under its RCA brand in the United States and the THOMSON brand in Europe. The two companies plan to collaborate on products and services related to the future of television with a common U.S.-based team. One focus of this effort will be the development of products and services for digital television that combine WebTV technologies with THOMSON technologies for satellite and cable operators.

“Microsoft believes that consumers can only benefit from the fruits of this relationship,” said Craig Mundie, senior vice president, consumer platform division, Microsoft. “THOMSON’s leadership in consumer electronics, combined with Microsoft’s desire and ability to provide technologies to enable digital television, is sure to bring products and services to the market that consumers will embrace and which will improve their entertainment experience with TV.”

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