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Letter from MSN

The following is Microsoft's response to the three-way deal among WorldCom, America Online, and CompuServe.

The following is Microsoft's response to the three-way deal among WorldCom, America Online, and CompuServe.

September 9, 1997

The WorldCom acquisition of CompuServe, while not a surprise, is evidence of just how quickly the online service industry is evolving. Mergers are always hard and this acquisition is particularly complex. It is unclear how this merger will impact the industry and consumers long-term; however, it is clear that it will not affect MSN's core strategy moving forward. Our focus remains on our members and providing them the most out of their time online.

Microsoft remains completely committed to having a great Internet online service. We view this announcement as an opportunity, as millions of consumers reexamine their online service options.

Over the years, CompuServe provided its members with a quality online service. At MSN, we're also focused on providing our members with a valuable and secure online experience. Like CompuServe, we appreciate our members' desire for privacy, nonintrusive third-party offers, and reliable access.

In addition to recent network capacity upgrades, we're about to launch MSN 2.5, which will provide our members with a number of new features, including Microsoft's Internet Explorer 4.0 Web browser, improved email, faster installation, and additional new functionality. By providing reliable and fast Internet access and email combined with outstanding content that is useful to consumers, we're making MSN the best choice for many online users.

Our relationship with UUNet remains strong and committed. We have a nonexclusive, multiyear contract with them. While they provide the network backbone for several Internet service providers, together we've been focused on substantially expanding the number of modems available for accessing MSN and improving Internet access for our members. Since January, we have increased the number of modems available to our members by more than 300 percent, growing by nearly 500 percent by the end of the year. Today, MSN has one of the best call success rates in the industry, delivering reliable and fast Internet access for consumers.

Regarding our own interest in purchasing CompuServe, Microsoft is always looking for smart business opportunities that are in line with our overall business strategies. We tend to focus on companies that can bring a combination of great development talent and great technologies at the right price. After investigating this opportunity in the early stages, we made a strategic business decision to invest our resources internally. The upcoming release of MSN 2.5 is a good example of how this internal investment is now paying off for MSN members.

Finally, let me reinforce that MSN remains completely dedicated to providing our members with the best possible online experience. We have improved access dramatically and we continue to work with UUNet to ensure the highest quality network for our members. MSN today delivers great content and services, with such leading sites as Expedia, MSNBC, and Investor, which help people get the most out of their time online. We will remain focused on these things. With our recent capacity upgrade and the forthcoming launch of MSN 2.5, we're making MSN the best choice for many online users.

Sincerely,

Laura Jennings
Vice president, the Microsoft Network

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