Microsoft Acquires Teleo, Innovative VoIP Technology Company

Deal Expected to Augment Microsoft's Investments in Voice Over Internet

Protocol Technology, Opens Opportunities to Bring Additional Powerful Customer

Solutions to MSN Messenger and Other MSN Services

Aug 30, 2005, 01:00 ET from Microsoft Corp.

    REDMOND, Wash., Aug. 30 /PRNewswire-FirstCall/ -- Microsoft Corp.
 (Nasdaq:   MSFT) today announced it has acquired Teleo Inc., a provider of voice
 over Internet protocol (VoIP) software and services that enable the placement
 of phone calls from PCs to traditional phones and that deliver this technology
 in unique ways through a variety of software and Web applications.  Microsoft
 expects to combine the technology and expertise of Teleo with the existing
 VoIP investments of MSN to further develop products and services that connect
 consumers to the people and information that most matter to them. Financial
 details were not disclosed.
     (Logo: )
     Founded in 2003 and headquartered in San Francisco, Teleo is a privately
 held company whose initial planned service offering, also called Teleo, was
 designed to allow customers to use their PC to make phone calls to cell
 phones, regular phones or other PCs.  Through its integration with
 Microsoft(R) Outlook(R) and Microsoft Internet Explorer, the Teleo service was
 designed to facilitate click-to-call dialing of any telephone number that
 appears on-screen, for example through a Web site or via search results or
     VoIP technology already is prominently featured in MSN(R) Messenger as
 well as other Microsoft products and services.  Microsoft plans to incorporate
 and expand upon Teleo technologies, integrating them into the infrastructure
 that supports MSN and ultimately projects delivering new VoIP consumer
 applications in future releases of MSN services.
     "Teleo has great technology to deliver superior VoIP quality and an
 excellent overall customer experience," said Blake Irving, corporate vice
 president of the MSN Communication Services and Member Platform group at
 Microsoft.  "This acquisition opens up infinite opportunities for Microsoft to
 enable even more relationship-centric communications experiences for our
 customers in the future."
     Members of the Teleo executive team will continue to work closely with MSN
 following the acquisition, and a number of Teleo product developers are
 expected to join the MSN ranks.
     "It's going to be very exciting to see Teleo software extended into MSN
 products and services that millions of consumers worldwide rely upon every day
 for their information and communication needs," said Wendell Brown, co-founder
 of Teleo.  "The union of our respective technologies and talents has the
 potential to deliver great value to customers."
     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
 ( ).  MSN worldwide sites are located at
 ( ).
     About Microsoft
     Founded in 1975, Microsoft is the worldwide leader in software, services
 and solutions that help people and businesses realize their full potential.
     NOTE:  Microsoft, MSN and Outlook are either registered trademarks or
 trademarks 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.

SOURCE Microsoft Corp.