Microsoft To Use New Revenue Segments for Fiscal Year 2001

REDMOND, Wash., Sept. 27, 2000 — Microsoft Corp. today announced new revenue segments for fiscal year 2001. These new segments will consist of Desktop Software; Enterprise Software and Services; Consumer Software, Services, and Devices; Consumer Commerce Investments; and Other. Previously, the segments that Microsoft reported were Windows® Platforms; Productivity Applications and Developer; and Consumer and Other.

“Microsoft’s business continually evolves, and our financial reporting needs to evolve accordingly,”
said John Connors, chief financial officer at Microsoft.
“We recently unveiled Microsoft® .NET, our vision for the next-generation of Internet-based products and services. With .NET, we are focused on growing our core business franchises, such as Microsoft Windows, Microsoft Office, Enterprise Servers, and MSN® , while at the same time investing in business opportunities that will fuel the company’s future growth. The new segments reflect the company’s recent re-organization around these priorities and will help investors evaluate our progress in these areas.”

The major products included in each of the new segments are as follows:

  • Desktop Software : The Microsoft Windows operating systems and Microsoft Office

  • Enterprise Software and Services : Microsoft Windows 2000 Server, Microsoft SQL Server™
    , Microsoft Exchange Server, Developer Tools, Microsoft Consulting Services, and Microsoft Product Support Services

  • Consumer Software, Services, and Devices : MSN, WebTV® , Learning and Productivity Software, Embedded Software, Mobile and Wireless, and Games

  • Consumer Commerce Investments : Expedia, Inc., the HomeAdvisor™ online real estate service, and the CarPoint™
    online automotive service

  • Other : Microsoft Press® , keyboards, and mouse products

Microsoft will use these new revenue segments when it reports first quarter results on Oct. 18. Attached to this release are two years of historical financial results using the new revenue segment format. Total revenue for these fiscal years is unchanged, as this new reporting format affects only the way in which Microsoft’s revenue segments are reported, not total revenue. This historical information can also be downloaded from the Microsoft Web site at http://www.microsoft.com/msft/ .

Founded in 1975, Microsoft (Nasdaq
“MSFT”
) is the worldwide leader in software, services and Internet technologies 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.

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

Expedia is a registered trademark of Expedia, Inc. in the United States and Canada.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

For more information, financial analysts only:

Carla Lewis, senior director, Investor Relations, (425) 936-3703

For more information, press only:

Caroline Boren, Waggener Edstrom, (425) 637-9097, carolineb@wagged.com

Katy Fonner, Waggener Edstrom, (503) 443-7000, kfonner@wagged.com

Note to editors: If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at http://www.microsoft.com/presspass/ on Microsoft’s corporate information pages. Shareholder and financial information as well as today’s 2 p.m. PDT conference call to discuss these segments is available at http://www.microsoft.com/msft/ .

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