MSN Significantly Upgrades MSN Search for Consumers With Major Performance and Relevancy Improvements

REDMOND, Wash., June 30, 2004 — MSN today launched a range of new and updated services for its MSN®
Search service, aimed at helping people get faster, cleaner and easier access to the information they want. As part of a $100 million investment in improving the customer experience, MSN is delivering the most significant upgrade to MSN Search in its history, including a new MSN Search home page ( http://search.msn.com/ ) that features easy navigation to popular MSN services; a new, cleaner look for its search results page that separates algorithmic results from paid results links and eliminates paid inclusion; direct access to popular information sources such as Microsoft® Encarta®
, the No. 1 best-selling encyclopedia brand*; and extensive performance improvements.

“With this significant upgrade to MSN Search, we are delighted to now offer what we believe is the best search service available for the 350 million MSN customers. Among the many improvements, we’re particularly excited to increase the relevancy of many search query results by up to 45 percent,” said Yusuf Mehdi, corporate vice president of MSN. “This massive investment kicks off a wave of innovation from MSN that will move search beyond its current, limited offering to delivering the next-generation search experience.”

These improvements are initial steps toward achieving the MSN vision of taking search beyond today’s basic Internet search services to deliver direct answers to people’s questions from a broad range of information. As part of this vision, MSN will launch a new algorithmic search engine and a range of other search services worldwide within the next year. Today, MSN reached an important milestone by releasing an initial technology test of its forthcoming algorithmic search engine to gather feedback from webmasters and search enthusiasts.

Cleaner Design Leads to Quicker, Easier Answers

MSN launched a new MSN Search home page today that features fast loading times and quick access to the information that people care about most. The new MSN Search home page is the lightest home page available from the major search providers, delivering lightning-fast results. The new home page offers people one-click access to their favorite MSN services, such as the world’s leading free e-mail service, MSN Hotmail®
, and the world’s leading free instant messaging service, MSN Messenger. Other popular information is available through easy access including Weather, News, Sports, Entertainment, Stock Quotes and My MSN personalized home page options. In addition, people can make the new MSN Search home page their default home page for fast searching and easy access to their favorite online services.

MSN also redesigned its search results page to offer a cleaner design, which clearly differentiates algorithmic search results — those that are delivered purely based on relevancy — from sponsored links from advertisers. The number of sponsored links has also been reduced so that MSN displays algorithmic answers prominently on the first page of every query result. MSN has also removed paid inclusion links from algorithmic search results in its new design to help ensure people will clearly understand which results are generated through commercial relationships. MSN will continue to evaluate the potential of paid inclusion to improve relevancy for consumers. Beginning today, any links paid for by advertisers will be displayed in shaded boxes that clearly identify them with a Sponsored Sites heading, enabling consumers to clearly choose between algorithmic results and sponsored links. These changes have resulted in dramatically increased usage by customers, because the clearly differentiated sections for algorithmic results and sponsored links give them a clear understanding and choice of results. People using the new design in beta testing spent 42 percent more minutes using the MSN Search service, and queries per user increased by 36 percent.

Providing Direct Access to Information People Know and Love

In addition to providing Internet searching capabilities, MSN will be offering more and more services that help people locate the information they want without having to search through pages of Web links. With today’s improvements, the MSN Search home page offers a drop-down menu next to the search box that provides direct access to a variety of in-depth information sources, including more than 50,000 articles and resources from the No. 1 Encarta Reference Library 2004, featuring the Encarta Encyclopedia Deluxe 2004, Encarta World English Dictionary and other industry-leading resources that vary by country such as stock quotes from MSN Money, movie listings from MSN Entertainment and more. MSN also improves its news Search by offering a vertical news option in its drop-down menu and through its Newsbot technology, which offers personalized news search across more than 4,000 news sources.

Next-Generation Search Development Under Way

Although search is one of the most popular online activities today, people often don’t find the information they want. According to Vividence Corp., nearly half of complex online queries never lead to the desired answers. Even when people do find the exact information they’re looking for, an internal MSN study found that it takes an average of 11 minutes per search for people to go through the long lists of links offered by today’s search services.

MSN is working to solve these challenges by developing innovative, new search technologies that will offer smarter answers to people’s questions. These new approaches build on the experience, insights and customer feedback gathered since MSN launched its first online search service in 1998, and on over a decade of experience gathered across Microsoft Research, Windows®
, Office and other areas within the company.

Reaching a major milestone in the journey to deliver innovative search solutions, MSN today also released a Technology Preview of its upcoming search engine in 28 markets and 11 languages to gather feedback from webmasters and search enthusiasts on the relevancy of search results delivered by MSN technology. The Technology Preview is an early test of the raw algorithmic search engine built by MSN, utilizing Microsoft technology, and currently contains more than 1 billion documents in the index. When launched within the next year, the new search engine will offer unique features that help answer people’s questions directly by pulling information from a variety of sources.

About MSN

MSN attracts more than 350 million unique users worldwide per month. With localized versions available globally in 38 markets and 18 languages, MSN is a world leader in delivering Web services to consumers and online advertising opportunities to businesses worldwide. The most useful and innovative online service today, MSN brings consumers everything they need from the Web to make the most of their time online. MSN is located on the Web at http://www.msn.com/ . MSN worldwide sites are located at http://www.msn.com/worldwide.ashx .

About Microsoft

Founded in 1975, Microsoft (Nasdaq “MSFT”) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

* NPD TechworldSM, March 1993–March 2004. Based on total U.S. retail sales.

Microsoft, MSN, Encarta, Hotmail 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.

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