Microsoft to Acquire Tellme Networks

REDMOND, Wash. — March 14, 2007 — Microsoft Corp. today announced it will acquire Tellme Networks, Inc., a leading provider of voice services for everyday life, including nationwide directory assistance, enterprise customer service and voice-enabled mobile search. Microsoft and Tellme share a vision around the potential of speech as a way to enable access to information, locate other people and enhance business processes, any time and from any device. Combining Tellme’s talented people and expertise in high-volume voice services with Microsoft’s platform, resources and worldwide customer reach will inspire new and innovative solutions.

“Speech is universal, simple and holds incredible promise as a key interface for computing,” said Steve Ballmer, chief executive officer of Microsoft. “Tellme brings to Microsoft the talent, technology and proven experience in speech that will enable us to deliver a new wave of products and revolutionize human-computer interaction.”

Tellme is a leader in voice services for the phone, including its popular mobile search services on 1-800-555-TELL. Founded in 1999, the privately held company answers millions of calls every day for information such as finding local businesses, driving directions, sports scores, stock quotes, weather, news, movie show times and more. Businesses use Tellme’s voice services and platform to provide customers with voice-access services ranging from banking to package tracking. These services are built on Tellme’s voice platform that analyzes caller requests to continually improve the system’s accuracy and overall caller experience.

Potential areas of development resulting from the deal will range from hosted voice-enabled customer service solutions that complement Microsoft’s existing unified communications offerings to voice user interfaces in existing Microsoft products to search services on mobile phones that integrate with Live Search for mobile offerings. In addition, developers and partners will be able to build new speech-based solutions on top of a scalable, standards-based voice-enabled applications platform.

“We’ve made great strides in speech technologies, but have only scratched the surface of what is possible,” said Jeff Raikes, president of the Microsoft Business Division. “The acquisition of Tellme will bolster Microsoft’s existing speech capabilities, bringing both immediate and longer-term value to our customers and partners.”

“Tellme was founded with the idea that anyone should be able to simply say what they want and get it from any device, starting with the phone,” said Mike McCue, co-founder and CEO of Tellme. “Now, with Microsoft, we’ll be able to extend that vision to millions of businesses and consumers around the world.”

This acquisition will mark an important step forward in Microsoft’s strategy for delivering software plus services that put people at the center of technology solutions in the office, at home and on the go. For more than a decade, Microsoft has enabled speech, handwriting and touch as forms of natural user input, making computing and digital devices easier to use. Combining Tellme’s technologies with Microsoft’s existing and future products and services will help improve the way people use voice to find, use and share information:

Speech platform. Tellme’s robust voice-enabled platform helps open new doors for Microsoft’s hundreds of thousands of developers and partners to build innovative speech solutions based on open standards.

Mobile services and search. Tellme’s speech expertise and work in mobile search, combined with Microsoft’s innovative local and mobile search offerings, will help take the mobile search usability experience to the next level.

Software plus services. In the long term, Tellme technology will enhance Microsoft’s many voice-enabled applications, including the Windows Vista™ operating system, the Microsoft Office system, and mobile applications such as Windows Mobile® and Windows® Automotive.

Financial terms of the acquisition were not announced. The deal is expected to be completed in the second quarter of 2007. Tellme, which has more than 320 employees, will continue to operate from its Mountain View, Calif., headquarters as part of the Microsoft Business Division. Following the closing of the acquisition, the Tellme business is expected to be maintained, and members of the Tellme executive team and staff are expected to join Microsoft.

At 9:30 a.m. PDT today, Microsoft and Tellme will hold a teleconference to discuss the acquisition. To participate, U.S. residents can dial (888) 790-3163, and those outside the United States can dial +1 (212) 547-0237. Passcode is 4386031. The call will be available for playback beginning at 11:30 a.m. PDT today through 11:59 p.m. PDT March 23. To access the playback, U.S. residents can dial (866) 376-2435, and those outside the United States can dial +1 (203) 369-0299. Passcode is 93469.

About Tellme

Through innovation and design, Tellme improves how people and businesses use the phone. By combining Internet data and a voice interface, Tellme radically simplifies how people use the phone to get the information they need every day. Today the company powers billions of calls to hundreds of phone services used by more than 40 million people every month. Some of the applications running on Tellme’s platform include business search on 411, information search on 1-800-555-TELL as well as customer service and ordering for companies like Merrill Lynch, E*TRADE and American Airlines. Headquartered in Mountain View, Calif., Tellme’s goal is to let anyone say what they want and get it, from any phone.

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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