Philips Electronics and WebTV Networks to Deliver New Personal TV Hardware and Services for Consumers

LAS VEGAS, Jan. 6, 2000 — Today at the 2000 International CES, Philips Consumer Electronics, one of the world’s largest electronics companies, and WebTV Networks, Inc., a subsidiary of Microsoft Corp., announced their plans to develop and deliver a set-top box incorporating the new Microsoft® WebTV Network TM Personal TV service featuring digital video recording (DVR) capabilities, Live TV Pause and optional Internet services. Philips will manufacture and market the hardware, which will be based on WebTV® services.

The new product will be among the first to include the new WebTV Personal TV service, as well as the popular WebTV Plus interactive service, which offers Interactive television programming and Internet access. To date, such advanced capabilities have generally only been available in separate set-top boxes, requiring consumers to buy multiple devices.

“We are excited to continue working with Philips in Personal TV,”
said Bruce Leak, president of WebTV Networks.
“Together, Philips and WebTV plan to provide a comprehensive combination of best-of-breed hardware and services to meet the growing consumer demand for digital video recording and enhanced TV services.”

This evolution in the TV-viewing experience will be made possible via the shared vision of Philips and WebTV Networks to develop and promote enhanced TV products and services. Until now, consumers have been forced to schedule their television viewing into predetermined time slots. With the power of the WebTV personalized TV services, viewers can watch television on their own time. Viewers now have more control over
television and can create a customized prerecorded show lineup for later viewing.

“We’re fundamentally changing the way people view television,”
said Willem de Zoete, president of Philips Home Access Solutions.
“Together with WebTV, we have played a key role in the introduction of Internet and Interactive Television, which now boasts over 1 million subscribers. Our new plans build on this tremendous success, and take the TV-viewing experience one step further by adding personal TV services together with Internet access and interactive TV services. Ultimately, the consumer wins as the TV set-top box evolves into a more integrated gateway of customized information and entertainment in the living room.”

Personal TV Features Deliver Choice and Control for TV Viewers

The Philips Receiver with WebTV Personal TV service will offer digital video recording capabilities, allowing simultaneous recording and playback of full-quality digital video – without a VCR or videotape.
“Channel overload”
will be a thing of the past, with easy-to-navigate interactive TV listings from WebTV that enable viewers to quickly find programs to watch, as well as to record and view programs of their choice with the touch of a button. The Philips Receiver with WebTV Personal TV service also enables viewers to freeze a
TV program with TV Pause, instantly replay or rewind a program being watched, and skip ahead in a recorded program to their favorite movie scene or the next big play of a sporting event, offering greater control over their TV-viewing experience.

Information regarding pricing and availability of the Philips Receiver with WebTV Personal TV service will be available soon.

About Philips Digital Networks

A business group of the Philips Consumer Electronics division, Philips Digital Networks is a world-leading provider of advanced digital system solutions for service and network providers in broadcasting and video distribution. Philips Digital Networks offers product and service solutions for customers in both the professional side of the distribution chain, as well as for consumers to use in the home. In the consumer domain, Philips Digital Networks is a leading provider of set-top boxes for digital television and Internet delivery, as well as personal video recording. The broad professional product portfolio includes a comprehensive range of television cameras, studio and compression equipment, conditional access systems, and transmission systems for broadband cable networks to deliver a full array of interactive services. A flexible customer support program and active involvement in the bodies setting tomorrow’s entertainment and information delivery standards makes Philips a natural partner for the digital broadcast era.

About Royal Philips Electronics

Royal Philips Electronics of the Netherlands is one of the world’s biggest electronics companies and Europe’s largest, with sales of $33.9 billion (U.S.) in 1998. It is a global leader in color television sets, lighting, electric shavers, color picture tubes for televisions and monitors, and one-chip TV products. Its 230,700 employees in more than 60 countries are active in the areas of lighting, consumer electronics, domestic appliances, components, semiconductors, medical systems, business electronics and IT services (Origin). Philips is quoted on the NYSE, London, Frankfurt, Amsterdam and other stock exchanges. News from Philips is located at .

About WebTV Networks

WebTV Networks, Inc., is a leading provider of enhanced TV services using Internet and digital technologies. WebTV Networks offers a range of enhanced TV services for set-top boxes, satellite products and other TV-related devices. Today, these services include the WebTV Classic Internet service, the WebTV Plus interactive service, and WebTV Personal TV service. WebTV Networks owns and operates a network of TV services and provides enabling software and hardware reference designs to consumer electronics manufacturers.

WebTV Networks, based in Mountain View, Calif., is a wholly owned subsidiary of Microsoft Corp. Microsoft incorporates WebTV technologies in the Microsoft TV software platform, which it licenses to television network operators worldwide.

About Microsoft

Founded in 1975, Microsoft (Nasdaq
) is the worldwide leader in software for personal and business computing. The company offers a wide range of products and services designed to empower people through great software – any time, any place and on any device.

The information contained in this document relates to prereleased products which may be substantially modified before first commercial release. Accordingly, the information may not accurately describe or reflect the products when first commercially released. This document is provided for informational purposes only, and Microsoft and WebTV Networks make no warranties, express or implied, with respect to this document or the information contained in it.

Microsoft, WebTV Network and WebTV are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the 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.

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