Microsoft and Yahoo! Announce Landmark Interoperability Agreement to Connect Consumer Instant Messaging Communities Globally

Consumers will be able to exchange instant messages, see presence, share emoticons and add friends from Yahoo! Messenger or MSN Messenger.

SUNNYVALE, Calif., and REDMOND, Wash. — Oct. 12, 2005 — Yahoo! Inc. (Nasdaq: YHOO) and Microsoft Corp. (Nasdaq: “MSFT”) today announced a landmark agreement to connect users of their consumer instant messaging (IM) services on a global basis. The industry’s first interoperability agreement between two distinct leading global consumer IM providers will give MSN® Messenger and Yahoo!® Messenger users the ability to interact with each other, forming what is expected to be the largest consumer IM community in the world, estimated to be more than 275 million strong.

Being able to instant message between IM communities is one of the features most requested by MSN Messenger and Yahoo! Messenger users, and Microsoft and Yahoo! share a commitment to provide IM interoperability while keeping consumer security and privacy first and foremost. In addition to exchanging instant messages, consumers from both communities will be able to see their friends’ online presence, share select emoticons, and easily add new contacts from either service to their friends’ list, all as part of their free IM service.* Yahoo! and Microsoft plan to introduce these interconnectivity capabilities between MSN Messenger and Yahoo! Messenger to customers around the world in the second quarter of 2006, and in doing so expect to help make IM an even more useful part of consumers’ online communications and communities.

“Yahoo! and Microsoft share a commitment to providing the highest-quality experience possible for consumers, and today’s groundbreaking announcement underscores our desire to provide consumer interoperability between our thriving IM communities,” said Terry Semel, chief executive officer, Yahoo! Inc. “This is truly a turning point for the IM industry, and we believe our agreement with Microsoft will help usher in a new era of IP communications.”

“Microsoft and Yahoo! look forward to bridging the divide between our global communities, creating richer and easier ways for our customers to connect,” said Steve Ballmer, chief executive officer of Microsoft. “IM interoperability is the right thing for our customers, our businesses and the industry as a whole, and Microsoft is delighted to help lead these efforts with Yahoo!”

About Yahoo! Messenger

As one of the most popular instant messaging services on the Internet, Yahoo! Messenger with Voice (http://messenger.yahoo.com) makes it easier than ever for people to express themselves, interact and manage relationships with friends and family. Yahoo! Messenger with Voice has a unique and proven history of innovation in instant messaging as the first to offer Webcam functionality, the first to introduce an interactive and shared experience with IMVironments®, and the first to introduce animated emoticons. Yahoo! Messenger with Voice continues to the lead the marketplace by integrating with leading Yahoo! services including games, music, photos and search, and providing the greatest choice for consumers to stay connected to one another through text IM, voice calling, e-mail, video or mobile messaging.

About MSN Messenger

MSN Messenger (http://messenger.msn.com) is a world-leading free instant messaging service that allows people to connect with others in real time, expressing themselves in a rich, convenient and fun way. MSN Messenger is available in 26 languages and is used in nearly every country in the world by more than 180 million active accounts each month. MSN Messenger provides customers with a window into their contacts — enabling them to chat with friends, family and colleagues online via text, voice, mobile phone or video conversation; express themselves with winks and dynamic display pictures; and share photos, files, searches and more instantly. MSN Messenger works well with other MSN services including MSN Hotmail®, MSN Spaces, MSN Search and MSN Music to give customers a more flexible way to connect to the people and information that matter most to them.

About Yahoo! Inc.

Yahoo! Inc. is the most trafficked Internet destination with approximately 379 million monthly unique users worldwide. The No. 1 global Internet brand, Yahoo! is a leading provider of a wide variety of essential online products and services to consumers and also provides a comprehensive set of marketing solutions for businesses to connect with Internet users worldwide. 18 Yahoo! properties rank as one of the top three destinations in their respective vertical categories,* including Yahoo! Mail, the No. 1 e-mail service in the world, Yahoo! Finance, the Internet’s No. 1 financial destination, and My Yahoo!, the No. 1 personalized site. Headquartered in Sunnyvale, Calif., Yahoo!’s global network is available in more than 15 languages and over 20 world properties. (*Comscore/MediaMetrix, June 2005)

About MSN

MSN attracts more than 420 million unique users worldwide per month. With localized versions available globally in 41 markets and 21 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.

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Contact Information

Jessie Anderson

Hill & Knowlton for Yahoo!

Yahoo! Inc.

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