MSN and Gilat Satellite Networks Introduce First Consumer Two-Way Satellite High-Speed Internet Access Service

REDMOND, Wash., and PETAH TIKVA, Israel, Feb. 16, 2000 — Microsoft Corp. (Nasdaq
) and Gilat Satellite Networks Ltd. (Nasdaq
) today announced plans to provide the first consumer two-way satellite broadband offering designed to improve Internet connection speed and user experience across America. This marks the first time that two companies have teamed up to offer consumers high-speed Internet access via two-way satellite, which is especially exciting for people who do not have access to any other broadband connectivity solutions. Trials of the two-way satellite service have begun, and wide availability of service is expected by the end of 2000.

Gilat has formed a new company, Gilat-To-Home, to deliver two-way broadband satellite access to consumers. After receiving all necessary approvals, Microsoft expects to invest $50 million, and it will initially hold a 26 percent stake in the new company. In addition to its cash investment, Microsoft has plans to purchase a significant number of very small aperture terminal (VSAT) units over the initial four-year period, subject to completion of technological milestones. Both companies will contribute significant technology and financial resources to Gilat-To-Home, whose headquarters will be in McLean, Va. The new company will be led by CEO Zur Feldman, formerly executive vice president of operations at Packard Bell Electronics Inc., where he gained extensive experience in life-cycle support services and retail distribution channels. Both Jon DeVaan, senior vice president in the Consumer Group at Microsoft, and Yoel Gat, chairman and CEO of Gilat Satellite Networks, will serve with Feldman on the board of directors.

MSN TM Internet Access via satellite is a tremendous value proposition for our subscribers, especially those who live in areas where broadband connectivity is not an immediate option,”
said Richard Belluzzo, group vice president for the Consumer Group at Microsoft.
“This offering helps us deliver the Everyday Web by making high-speed access a reality for more consumers, and joining forces with an industry leader like Gilat makes this possible.”

Gilat-To-Home Satellite Service Availability and Consumer Benefits

Gilat-To-Home two-way satellite service users can expect Internet access speeds up to 10 times faster then normal modem speeds, with burst rate considerably higher. Two-way satellite service offers significant benefits for consumers, including a persistent or
“always on”
connection that saves time when dialing up to the Internet and eliminates the need for a second telephone line. MSN and Gilat will continue to add value to the service for consumers with future offerings, including satellite broadcast and multicast services that will deliver live video and audio events in a higher-quality format. The new broadband service allows users to watch television-quality video and participate in interactive online events from their home computers. The Gilat-To-Home two-way satellite Internet service is offered as a complete hardware and services solution, which further streamlines the consumer experience by including complete installation of equipment and eliminates the need for multiple infrastructure providers.

“We’ve said from the outset that one of the most important aspects for launching Gilat-To-Home is finding a strong Internet brand that would provide rapid access to the consumer,”
said Yoel Gat, chairman and CEO of Gilat Satellite Networks.
“MSN, with its market leadership and high customer satisfaction, is the perfect partner with which to build Gilat-To-Home.”

The MSN Internet Access broadband satellite offering will be available directly from Microsoft as well as through retailers offering MSN. The retail offer will roll out first at Tandy Corp.’s (NYSE
) RadioShacks throughout the United States as part of Microsoft’s recently announced strategic alliance with RadioShack and the resulting
presence. With more than 7,000 RadioShack stores located within five minutes of 94 percent of U.S. households and businesses, the retailer will be ready to demonstrate, offer and install this national broadband solution to all interested U.S. consumers by the end of 2000.

About MSN Internet Access

MSN Internet Access works with Microsoft® Windows® 95 or Windows 98 operating system-based PCs to provide a fast, reliable Internet connection so users can make the most of their time online. At the heart of MSN Internet Access is Microsoft Internet Explorer 5 browser software. This powerful software delivers a cleaner, more intuitive interface that allows users to spend less time figuring out how to use the Internet and more time getting things done online. MSN Internet Access offers award-winning e-mail functionality with the Microsoft Outlook® Express messaging and collaboration client, local phone numbers across the United States, 24×7 toll-free technical support, and a customizable home page. Customers can order a free* one-month trial of MSN Internet Access by visiting or by calling (800) FREE-MSN (373-3676).

About Gilat Satellite Networks

Gilat Satellite Networks Ltd., with its global subsidiaries Spacenet Inc., Spacenet Services Europe GmbH and Gilat Florida Inc., is a leader in very small aperture terminal (VSAT) technology, manufacturing and service. The company, based in Petah Tikva, Israel, provides satellite-based, end-to-end enterprise networking and rural telephony solutions to customers across six continents, and currently markets nationwide interactive broadband data services for U.S.-based corporations and service providers.

About Microsoft

Founded in 1975, Microsoft 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.

*Details of the MSN Internet Access offer: For users of Windows 95 or 98 operating systems only. Includes MSN Internet Access client software only. You must additionally subscribe to MSN Internet Access in accordance with its Member Agreement to access the service. One-month trial offer is only available to new members in the 50 United States and the District of Columbia. A major credit card is required. After the trial period, the current price for the MSN Standard Unlimited Access Plan will be automatically charged to your credit card until you cancel your account or select an alternative plan. MSN is available only for personal noncommercial use. Additional phone and/or long-distance toll charges may apply. It is customers’ responsibility to check with their phone company to determine if additional phone charges may apply. Local market network activity and capacity may affect access availability. Offer expires June 30, 2000.

Certain statements made herein that are not historical are forward-looking within the meaning of the Private Securities Litigation Reform Act of 1995. The words
“estimate,” “project,” “intend,” “expect,” “believe”
and similar expressions are intended to identify forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties. Many factors could cause the actual results, performance or achievements of Gilat to be materially different from any future results, performance or achievements that may be expressed or implied by such forward-looking statements, including, among others, changes in general economic and business conditions, inability to maintain market acceptance to Gilat’s products, inability to timely develop and introduce new technologies, products and applications, rapid changes in the market for Gilat’s products, loss of market share and pressure on prices resulting from competition, introduction of competing products by other companies, inability to manage growth and expansion, loss of key OEM partners, inability to attract and retain qualified personnel, inability to protect the company’s proprietary technology and risks associated with Gilat’s international operations and its location in Israel. For additional information regarding these and other risks and uncertainties associated with Gilat’s business, reference is made to Gilat’s reports filed from time to time with the Securities and Exchange Commission.

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

Skystar Advantage, Clearlink, ISAT, OneWay, TwoWay, Ready Receiver, SkyWay, DialAway, FaraWay, SkySurfer and SkyBlaster are registered trademarks or trademarks of Gilat Satellite Networks Ltd. or its subsidiaries.

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. For further information about Gilat-To-Home, please visit the Gilat-To-Home Press Center at .

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