Microsoft and Yahoo Announce IM Merger

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!”