MCI AND MICROSOFT ANNOUNCE NEW STRATEGIC ALLIANCE

Alliance to jointly develop and market a variety of Internet and network
services

WASHINGTON, D.C. AND REDMOND, WASH. - JAN. 29, 1996 - MCI Communications,
Inc. and Microsoft Corporation chief executives, Bert Roberts and Bill
Gates today announced a broad alliance to jointly market and develop a
range of services in the online, Internet and networking markets. The
alliance enables the companies to combine their core strengths to deliver
a new level of integrated computer and communications services to
consumers and businesses.

As the first phase of the initiative, Microsoft has selected MCI to
distribute MSN, The Microsoft Network, an Internet online service, and MCI
will market it as a customized version of MSN. MCI will adopt the
Microsoft Internet Explorer as its preferred browser software and package
it as an integral part of its Internet offering along with other Microsoft
products including, Internet Information Server and Microsoft Exchange
Server. Microsoft will market to its millions of users of Microsoft
WindowsR operating system a range of MCI services, initially including MCI
Conferencing and MCI ISDN, as well as vertical market service offerings.
Microsoft has also selected MCI as its key telecommunications providER at
its Professional Developer Conferences and other U.S.-based software
developer events.

"With this new strategic alliance, both companies will work closely
together to deliver and market integrated computer and communication
services to the homes and workplaces of our customers." said Bert Roberts,
MCI chairman and CEO. "We believe that Microsoft's Internet strategy and
its commitment to create platforms based on open standards are the perfect
complement to MCI's global communications solutions."

"MCI is a clear leader and innovator in the telecommunications arena. This
alliance with MCI is an important component in broadening our scope to
delight customers with expanded Internet solutions and networking
services," said Bill Gates, Chairman and CEO of Microsoft. "We are pleased
that MCI has chosen Microsoft's Internet products to enhance its Internet
offerings."

MCI will market a customized version of MSN called "MSN from MCI." This
internet online service will provide Internet access via MCI's Internet
network, the largest and fastest Internet backbone in the world, Microsoft
Network content and communities, information on the World Wide Web, as
well as MCI customized content, and other services. MCI will offer "MSN
from MCI" to its customersand prospects through its mass market sales
channels, including telemarketing, direct mail and advertising. Customers
will be able to subscribe to the MSN service through either Microsoft or
MCI. Last Fall, Microsoft selected MCI to provide all customer service to
its MSN customers in the U.S.

OTHER ALLIANCE INITIATIVES

 WEB HOSTING SERVICES: MCI announced today that it will provide
 web-site hosting services to help its customers connect to the
 World Wide Web, host and create content MCI will also assist
 customers in establishing and operating their own internet web
 sites for enhanced company-wide information exchange. MCI will
 deploy Microsoft Internet Information Servers and Microsoft Exchange
 Servers on its internet MCI service.

 NETWORK SOLUTIONS: MCI will also market turn-key services for
 distributed applications allowing small businesses and satellite
 offices to leverage the power of Microsoft Exchange Servers, which
 includes a universal electronic mail client supporting Internet
 mail, faxing and other messaging applications. MCI and Microsoft
 said these enhanced capabilities position the companies at the
 forefront of integrated messaging and groupware applications.

In addition, MCI, through its newly acquired SHL Systems house subsidiary,
will jointly offer MCI's network services, Microsoft's applications and
systems software, and provide consulting and support expertise. This
represents another key step in MCI and Microsoft's strategies to offer
end-to-end network solutions to their customers.

 VERTICAL MARKET SERVICES: MCI and Microsoft will jointly develop
 customized products and services targeted at vertical markets.
 Initially, the companies will focus on the education market where
 MCI will enhance its campus MCI programs with desktop applications
 and Internet products provided by Microsoft. Campus MCI is currently
 utilized by over 400 colleges and universities.

 CONFERENCING SERVICES: The two companies will develop and market
 audio, video and document conferencing services using MCI's
 conferencing capabilities. Customers will be able to order MCI's
 Conferencing services on MSN.

 ISDN: Microsoft and MCI will offer ISDN services enabling customers
 to obtain high-speed connections over dial-up phone lines. Customers
 will be able to order MCI's ISDN service online.

MCI, headquartered in Washington, D.C., is one of the world's largest and
fastest-growing diversified communications companies. With annual revenue
of more than $15 billion, MCI offers consumers and businesses a broad
portfolio of services including long distance, wireless, local access,
paging, Internet software and access, information services, outsourcing,
business software, advanced global telecommunications services, and music
distribution and merchandising.

Founded in 1975, Microsoft (NASDAQ "MSFT") is the worldwide leader in
software for personal computers. The company offers a wide range of
products and services for business and personal use, each designed with
the mission of making it easier and more enjoyable for people to take
advantage of the full power of personal computing every day.

The Microsoft Network is operated by Microsoft Corp. on behalf of Microsoft
Network LLC.

Microsoft: http://www.microsoft.com/corpinfo

MCI: http://www.mci.com
 
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