Microsoft and KT Extend Strategic Alliance

REDMOND, Wash., and SEOUL, Korea, Jan. 4, 2005 — Microsoft Corp. and KT Corp. today announced they have signed a memorandum of understanding (MOU) renewing their current strategic relationship. The new arrangement represents the second phase of a relationship originally established in December 2001. Under the new MOU, which calls for the possible creation of a joint research and business development center, the companies are teaming to develop new communications technologies and solutions for the Korean market.

“We are very excited to continue our collaboration with KT, building on the success we have experienced together over the past three years,”
said Maria Martinez, corporate vice president for the Communications Sector at Microsoft.
“This relationship combines the respective strengths of KT in network infrastructure and Microsoft in software solutions. We look forward to a long and fruitful alliance, and to working closely with KT to develop and deliver new solutions and services to Korean consumers and businesses.”

Under the new pact, Microsoft and KT are investigating the creation of a joint research and business development (R & BD) center in Korea. Its mission would be to establish new business models and new technologies in conjunction with KTs five new
“growth engine”
businesses. In addition, Microsoft and KT will investigate forming a joint fund through which the R & BD center could access third-party content, technologies and external human resources. Finally, Microsoft and KT plan to participate in an employee exchange program, which will include seminars, training and exchange of employees in various business areas.

“The world of ubiquitous computing, which allows Internet access anytime and anywhere, is enabled through the integration of the world-renowned software technology of Microsoft and the high-speed network infrastructure of KT,”
said Yong-Kyung Lee, president and CEO of KT.
“The ongoing relationship between Microsoft and KT will contribute to this new world, where anything is possible through computing.”

Since establishing their strategic alliance in 2001, Microsoft and KT have successfully collaborated on several projects incorporating the companies core technologies and infrastructure. The companies have developed bizmeka, which provides Web-based applications support for small and midsize enterprises, and Nespot, which leverages Microsoft®
wireless network support applications. Microsoft and KT also have worked together in developing next-generation operations support systems. Terms of the MOU were not disclosed.

About KT

KT Corporation (NYSE: KTC) is a world leading provider of broadband and telecom services to more than 30 million customers. KT has put forward a new vision of
“The Value Networking Company”
with an aim to emerge as one of the worlds leading companies in the 21st century. The companys 38,000 employees are committed to providing world-class services that exceed customers expectations. For more information please visit the KT Web site at www.kt.co.kr .

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.

Microsoft is a registered trademark 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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