Globo and Microsoft Announce Strategic Agreements and Investments To Develop and Deploy New Internet Services in Brazil



O PAULO, Brazil, and REDMOND, Wash., Aug. 16, 1999 —
es Globo and Microsoft Corp. today announced a series of agreements under which the companies will work together to accelerate the deployment of advanced broadband and Internet services to millions of Brazilians. Both companies share a vision for tangible benefits being provided to consumers through the combination of leading content, broadband digital networks, software and Internet technology. The Globo and Microsoft alliance is intended to foster the creation, delivery and operation of a set of joint services for PCs and advanced digital set-top boxes for Brazilian consumers. As a first concrete step in building this relationship, Microsoft will invest in Globo Cabo S.A., the leading cable television operator in Brazil.

Joint Marketing and Technology Group

The overall agreement between Organiza
es Globo and Microsoft is intended to establish a position of leadership on the Internet in Brazil. “The unique Portuguese-language content brought by Globo and the state-of-the-art technology from Microsoft can create a leading combination to translate into greater value for both our consumers and our shareholders,” said Roberto Irineu Marinho, vice president of Organiza
es Globo.

In this initial phase, Globo and Microsoft will create a joint Marketing and Technology Group that will evaluate potential business opportunities, including the creation of a joint portal that would merge the existing MSN TM Brazil service and Globo’s portal ( currently under development; interactive TV services based on advanced set-top boxes and the Microsoft TV platform; and providing Internet access services.

It is expected that the parties will work together to combine Organiza
es Globo’s news, sports, entertainment and educational content with Microsoft’s existing services including the MSN Hotmail TM Web-based e-mail service, MSN Messenger Service, MSN Web Communities, MSN search and directory, and Microsoft Passport services. “Microsoft believes in enabling the rapid roll-out of digital services to consumers,” said Mauro Muratorio Not, general manager of Microsoft Brazil. “We are looking forward to the rapid deployment to the Brazilian market of next-generation digital services enabled by the combination of Microsoft’s platform technologies and services with Organiza
es Globo’s network and leading content.”

Investment in Globo Cabo S.A.

Microsoft will make a $126 million (U.S.) investment in Globo Cabo by acquiring newly issued ordinary and preferred shares at an average price of $0.60 (U.S.) per share ($6 per ADR-equivalent). In conjunction with the investment, Microsoft will be given the right to participate in the company’s board of directors, among other governance provisions. “Microsoft’s capital infusion and the broader strategic alliance will assist Globo Cabo in providing its subscribers with earlier access to a wide range of advanced services over its broadband network,” commented Moys
s Pluciennik, Globo Cabo’s chief executive officer. “This investment is an important first step in our ongoing strategic recapitalization initiative.” Globo Cabo currently has the most advanced cable network in Brazil, with two-way architecture that covers more than 4.5 million homes.

As part of a continuing strategic involvement with Globo Cabo, the investment agreement will provide Microsoft with the option to acquire additional Globo Cabo stock over the next three years. “Our agreement represents an important step in building a truly global Web lifestyle,” said Mauricio Santillan Razo, regional vice president for Microsoft Latin America. “We are very excited to expand our existing relationship with Globo Cabo to new areas that will generate an even richer Internet and television experience for millions of people.”

After the initial investment, the next planned step in the strategic alliance is the full-scale launch of Virtua, Globo Cabo’s broadband high-speed Internet access service. This service, currently a fully operational commercial test using the Microsoft Commercial Internet System (MCIS) platform, is expecting approval from the Brazilian telecommunications regulatory authority in the near future.

About Organiza


es Globo

es Globo is a group of companies controlled by the Marinho family, leaders in the media and entertainment businesses in Latin America. The companies are known for their capacity to produce a wide range of high-quality information and entertainment content. Among these companies are the leading broadcast television network Rede Globo; pay television channels including a 24-hour news and a sports channel, Globonews and SporTV; market-leading newspapers and magazines; and a network of radio stations and telecommunications companies. The Marinho family also sponsors the Roberto Marinho Foundation, which is dedicated to educational and cultural projects, including a 24-hour educational channel.

About Globo Cabo S.A.

Globo Cabo S.A. (Nasdaq “GLCBY” and BOVESPA “PLIM4”) is the largest cable television operator in Brazil, with ownership interests in 18 cable television systems and one MMDS operation, including systems in Brazil’s three largest cities: S
o Paulo, Rio de Janeiro and Belo Horizonte. All except one of these systems are located in southeast and central-west Brazil, the most developed and populous regions in the country. The controlling shareholders of Globo Cabo are Organiza
es Globo and Bradesco, the largest retail Bank in Brazil.

About Ltda. is the newest venture of Organiza
es Globo. The company will aggregate the multimedia content produced by the group’s media companies in the Internet environment. The company will target Portuguese-speaking audiences around the world.

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) 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, MSN and Hotmail 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.

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at on Microsoft’s corporate information pages. Shareholder and financial information is available at .

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at on Microsoft’s corporate information pages.

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