Microsoft Announces its First Software Joint Venture in China

, January 16, 2002, Beijing — Microsoft Corp. signed its first share-holder agreement in China today to set up a software Joint Venture called Zhongguancun Software Co. Partnering with Beijing Centergate Technologies (Holding) Co., Ltd. (CENTEK) and Stone Group. The joint venture, will develop enterprise and government software applications and industry solutions for Chinese and overseas markets.

This will be the first software company in China that Microsoft has invested in and the new company’s application development platform will be based on Microsoft’s .NET platform. The joint venture has a registered capital of 100 million RMB ($USD 12 million) with CENTEK, Stone and Microsoft taking shares accounting for 51%, 30% and 19% respectively.

The new joint venture will be based in Zhongguancun Software Park and it is the first large software enterprise to locate in the area. CENTEK President Mr. Duan Yongji has been named chairman of the board, and Mr. Zhu Xiduo, former president of Stone Group, has been appointed president of the joint venture. Microsoft will be announcing a chief technology officer for the joint venture in the near future.

Beijing Vice Mayor, Liu Wenyi, commented: “China’s entry to the WTO and Beijing’s preparations for the forthcoming Olympic Games offer enormous business opportunities. We anticipate that the formation of Zhongguancun Software Company will establish a model for further local and international cooperation in the development of China’s software industry.”

Madam Zhang Qi, Director in General of Ministry of Information Industry (MII), spoke highly of the joint venture: “We appreciate Microsoft’s good will in supporting China’s software companies, and its efforts to help us develop software with its own intellectual property rights.”

Zhu Xiduo, President of Zhongguancun Software Company, stated: “Zhongguancun Software Company has been set up to develop enterprise and government application software for Chinese and overseas markets, provide system integration for the construction of enterprise and government information infrastructures, and offer software outsourcing, training and consulting services. Our aim is to become one of China’s largest software enterprises and software exporters within five years.”

CENTEK President Duan Yongji said: “Zhongguancun Software has great resources to draw on from its three joint venture partners. CENTEK offers a strong government background, great contacts in the business arena and the best data center. Stone Group has built up a wide range of experience in the provision of system integration and IT Services. And Microsoft offers advanced technology, world-class management experience and market leading software products. By leveraging this strong partnership, Zhongguancun Software will integrate the resources offered by each partner to develop its own independent software, with its own unique identity, and ultimately become a world class software company.”

“Microsoft has long been, and continues to be, committed to partnering and growing with the local IT industry in China,” said Craig Mundie, Senior Vice President and Chief Technology Officer of Microsoft Corporation. “This is demonstrated by Microsoft’s investment in and support of Zhongguancun Software Company to develop software products with their own intellectual property rights. The establishment of Zhongguancun Software Company is a positive response to the Chinese Government’s recognition that China needs to establish a world leading software industry in China. It’s also one of the important measures taken by Microsoft to support the city of Beijing as a leader in the information industry.”

Microsoft President, Steve Balmer, reached an intent of cooperation with CENTEK during his last visit to Beijing in May 2001, aimed at providing China with the requisite supportto develop its own independent software vendors.

Beijing Municipal Government’s Vice Mayor, Madam Lin Wenyi; Mr. Zhao Yuhai, Director in General from the Ministry of Science and Technology; Mr. Fan Bo Yuan, Director in General of Beijing Municipal Commission for Science of technology; Mr. Liu Rulin, Director in General of the Ministry of Information Technology; Mr. Craig Mundie, Senior Vice President and Chief Technology Officer of Microsoft Corporation and Mr. Duan Yongji attended the official signing ceremony for the joint venture.

Microsoft and Windows 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.

Media Contacts

Sharon Zhang/Jennifer Ma Sheila Kennedy

Microsoft China AUGUST.ONE

Tel: 8610-62617711 EXT 5325 +852 2541 8771

Fax: 8610-62536630 +852 9194 7583

E-mail: s sharonzh@microsoft.com sheila.kennedy@augustone.com

About Microsoft

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. For more information about Microsoft China, please visit http://www.microsoft.com/China/ or h http://www.microsoft.com/China/press/ .

About Beijing Centergate Technologies (Holding) Co., Ltd.

Beijing Centergate Technology (Holding) Co. Ltd (CENTEK) was established in 1999. It is listed on the China stock market. Its main business is to provide a value add telecom service. It has a first class hardware infrastructure, which provides internet access service and also supplies database management, server hosting, information security, GPS and SMS value services. Its customers include government, enterprise, and consumers. For more information, please visit web site: http://www.centek.com.cn /

About Stone Group

Stone Group is a famous non-state owned high-tech enterprise, established in 1984. It was listed in Hong Kong stock market in 1993. Stone group has long been engaged in electric products distribution. It has played a very important role in China IT industry. In recent years, Stone has focused on information application development and services based on Internet infrastructure, including software development, system integration, online value-add services, broadband infrastructure and other IT Services. For more information, please visit website: HITP://www.stone-group.com

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