Microsoft Sale of Expedia Stake to USA Networks Delayed

REDMOND, Wash., Dec. 18, 2001 — Microsoft Corp. today announced that the closing of the companys sale of its stake in Expedia Inc. to USA Networks Inc. would be delayed as a result of USA Networks announcement of a transaction involving the transfer of its entertainment assets to a joint venture with Vivendi Universal.

Microsoft announced the sale of its Expedia stake to USA Networks in July 2001, and anticipated closing during the quarter ending Dec. 31, 2001. The transaction, which was expected to result in a pretax gain of about $650 million, is now expected to close during the March or June quarter of 2002.

Other than the delay in the timing of the expected gain on the sale of its Expedia stake, Microsoft is not providing any update to the financial guidance it released on Oct. 18, 2001. The company expects to announce results for the December quarter during the week of Jan. 14, 2002.

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.

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For more information, print and online media only:

Katy Fonner, Waggener Edstrom, (503) 443-7000, [email protected]

Rachel Wayne, Waggener Edstrom, (503) 443-7000, [email protected]

For more information, financial analysts only:

Krishnan Srinivasan, Senior Director, Investor Relations, Microsoft, (425) 706-3703

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