Microsoft Business Leaders Outline Plans to Deliver Breakthrough Innovations at Annual Financial Analyst Meeting

REDMOND, Wash., July 29, 2004 — Today at the Microsoft Financial Analyst Meeting, Microsoft Corp. Chairman and Chief Software Architect Bill Gates, Chief Executive Officer Steve Ballmer and other top Microsoft executives will outline the companys strategies and plans for continued business success in fiscal 2005 and beyond. The event will be webcast for the public on the Microsoft Investor Relations Web site at .

Microsoft Chairman and Chief Software Architect Bill Gates telling financial analysts about the company’s long-term commitment to innovation and R & D investment. Redmond, Wash., July 29, 2004 Click image for high-res version.

More than 300 analysts, investors and journalists attending the annual event at the companys Redmond, Wash., campus will see demonstrations of some of Microsofts newest products and hear leaders from each of the companys business groups outline plans for future innovation and growth. In addition, the company will provide updates on the strong performance results across all of its business groups over the past fiscal year.

During his presentation, Ballmer will highlight how Microsofts continued focus on delivering value to its customers is driving sustained, long-term success for the company. Our opportunity to have a positive impact on the world through delivering breakthrough software solutions has never been greater, Ballmer said. Every one of our seven businesses is growing, and we are uniquely positioned for strong performance as we help customers in business, government and at home optimize the use of technology that enables them to realize their full potential.

Long-Term View of Innovation

During his presentation, Gates will highlight Microsofts long-term commitment to innovation and investment in research and development across all product groups. As evidence of this commitment, Microsoft plans to apply for 3,000 patents this year while continuing to invest heavily in research and development, maintaining its position among the top companies investing in innovation. The company also plans to hire up to 7,000 new employees in the coming fiscal year to help fill existing and anticipated vacant positions as well as newly created jobs.

We are well-positioned to deliver a wide range of breakthrough technologies in the coming years that will provide sweeping new benefits for customers, new opportunities for the broader industry, and strong continuing growth for Microsoft, Gates said. We will continue to invest significantly in R & D to build on the solid performance of our core products Windows, Office, and Server and Tools while developing important new areas of growth in our emerging businesses such as MSN, mobile devices entertainment, and small and midmarket business solutions.

Microsoft Unlocks Shareholder Value

Microsoft Chief Financial Officer John Connors will highlight the improvements in Microsofts emerging businesses, the companys strong financial performance relative to the industry, and key revenue drivers for the upcoming fiscal year. Connors also will note Microsofts commitment to long-term profit growth and investment strategies as key components to returning shareholder value consistently.

Financial Analyst Meeting Webcast

The meeting will be webcast from 8 a.m. to 6 p.m. PDT today and will be archived on the Investor Relations Web site under speeches/events. Visitors to this site can read presentation transcripts, view slides or watch a replay of the audio/video presentation at .

About Microsoft

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