Microsoft to Begin Selling Its Minority Stake in RealNetworks

REDMOND, Wash., Nov. 18, 1998 — Microsoft Corp. today announced it will immediately begin selling its minority ownership position in RealNetworks Inc. with the intention of completely selling its shares over time. Microsoft first notified RealNetworks in June 1998 that Microsoft was considering a sale of its position, and this fall offered to work with RealNetworks on an underwritten secondary offering. The two companies could not reach agreement on terms of an underwritten secondary offering, and Microsoft will therefore sell its shares on the open market.

In July 1997, the two companies announced that while they would continue to develop competing streaming media technologies, they would also work together to enhance the interoperability between their technologies in order to advance the overall market for streaming audio, video and other data types on the Internet and corporate intranets. Though the companies have achieved some initial interoperability, RealNetworks and Microsoft have decided to accelerate their innovations and improvements in different directions.

“Microsoft and RealNetworks are each developing exciting technologies, but the rapid pace of innovation and our competing visions for streaming media means our investment in RealNetworks no longer makes sense,”
said Greg Maffei, chief financial officer at Microsoft.
“RealNetworks will continue to be an effective developer for Windows® as well as an effective competitor.”

Microsoft has been a pioneer in developing multimedia technologies dating back to 1989. Microsoft’s Video for Windows development kit was sent to developers in 1993. Microsoft’s video server technologies, originally code-named
“Tiger,” which led to its current innovation in streaming media for the Internet, were first demonstrated in 1994. Microsoft launched the Windows NT® Server NetShow
Services and the Advanced Streaming Format (ASF) technology in 1996.

Today, the Windows Media Technologies provide a platform that enables corporate, education and Internet customers to develop richer business and entertainment solutions using streaming media. The Windows Media Technologies include the Windows Media Player, Windows NT Server NetShow Services, and NetShow Theater Server.

Founded in 1975, Microsoft (Nasdaq
) 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.

Microsoft, Windows, Windows NT and NetShow are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

Other product and company names herein may be trademarks of their respective owners.

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