REDMOND, Washington, April 5 /PRNewswire/ --

Microsoft Corp. (Nasdaq: MSFT) today sent the following letter to the
Yahoo! Inc. (Nasdaq: YHOO) Board of Directors:

April 5, 2008

Board of Directors
    Yahoo! Inc.
    701 First Avenue
    Sunnyvale, CA 94089

Dear Members of the Board:

It has now been more than two months since we made our proposal to
acquire Yahoo! at a 62% premium to its closing price on January 31, 2008, the
day prior to our announcement. Our goal in making such a generous offer was
to create the basis for a speedy and ultimately friendly transaction. Despite
this, the pace of the last two months has been anything but speedy.

While there has been some limited interaction between management of our
two companies, there has been no meaningful negotiation to conclude an
agreement. We understand that you have been meeting to consider and assess
your alternatives, including alternative transactions with others in the
industry, but we've seen no indication that you have authorized Yahoo!
management to negotiate with Microsoft. This is despite the fact that our
proposal is the only alternative put forward that offers your shareholders
full and fair value for their shares, gives every shareholder a vote on the
future of the company, and enhances choice for content creators, advertisers,
and consumers.

During these two months of inactivity, the Internet has continued to
march on, while the public equity markets and overall economic conditions
have weakened considerably, both in general and for other Internet-focused
companies in particular. At the same time, public indicators suggest that
Yahoo!'s search and page view shares have declined. Finally, you have adopted
new plans at the company that have made any change of control more costly.

By any fair measure, the large premium we offered in January is even more
significant today. We believe that the majority of your shareholders share
this assessment, even after reviewing your public disclosures relating to
your future prospects.

Given these developments, we believe now is the time for our respective
companies to authorize teams to sit down and negotiate a definitive agreement
on a combination of our companies that will deliver superior value to our
respective shareholders, creating a more efficient and competitive company
that will provide greater value and service to our customers. If we have not
concluded an agreement within the next three weeks, we will be compelled to
take our case directly to your shareholders, including the initiation of a
proxy contest to elect an alternative slate of directors for the Yahoo!
board. The substantial premium reflected in our initial proposal anticipated
a friendly transaction with you. If we are forced to take an offer directly
to your shareholders, that action will have an undesirable impact on the
value of your company from our perspective which will be reflected in the
terms of our proposal.

It is unfortunate that by choosing not to enter into substantive
negotiations with us, you have failed to give due consideration to a
transaction that has tremendous benefits for Yahoo!'s shareholders and
employees. We think it is critically important not to let this window of
opportunity pass.

Sincerely yours,

    Steven A. Ballmer
    Chief Executive Officer
    Microsoft Corporation

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.

This release does not constitute an offer to sell or the solicitation of
an offer to buy any securities or a solicitation of any vote or approval.
This material is not a substitute for the prospectus/proxy statement
Microsoft Corporation would file with the Securities and Exchange Commission
(the "SEC") if an agreement between Microsoft Corporation and Yahoo! Inc. is
reached or any other documents which Microsoft Corporation may file with the
SEC and send to Yahoo! stockholders in connection with the proposed
transaction. INVESTORS AND SECURITY HOLDERS OF YAHOO! INC. ARE URGED TO READ
ANY SUCH DOCUMENTS FILED WITH THE SEC CAREFULLY IN THEIR ENTIRETY WHEN THEY
BECOME AVAILABLE BECAUSE THEY WILL CONTAIN IMPORTANT INFORMATION ABOUT THE
PROPOSED TRANSACTION.

Investors and security holders will be able to obtain free copies of any
documents filed with the SEC by Microsoft Corporation through the web site
maintained by the SEC at www.sec.gov. Free copies of any such documents can
also be obtained by directing a request to Investor Relations Department,
Microsoft Corporation, One Microsoft Way, Redmond, Washington 98052-6399.

Microsoft Corporation and its directors and executive officers and other
persons may be deemed to be participants in the solicitation of proxies in
respect of the proposed transaction. Information regarding Microsoft
Corporation's directors and executive officers is available in its Annual
Report on Form 10-K for the year ended June 30, 2007, which was filed with
the SEC on August 3, 2007, and its proxy statement for its 2007 annual
meeting of stockholders, which was filed with the SEC on September 21, 2007.
Other information regarding the participants in a proxy solicitation and a
description of their direct and indirect interests, by security holdings or
otherwise, will be contained in any proxy statement filed in connection with
the proposed transaction.

Statements in this release that are "forward-looking statements" are
based on current expectations and assumptions that are subject to risks and
uncertainties. Actual results could differ materially because of factors such
as Microsoft Corporation's ability to achieve the synergies and value
creation contemplated by the proposed transaction, Microsoft Corporation's
ability to promptly and effectively integrate the businesses of Yahoo! Inc.
and Microsoft Corporation, the timing to consummate the proposed transaction
and any necessary actions to obtain required regulatory approvals, and the
diversion of management time on transaction-related issues. For further
information regarding risks and uncertainties associated with Microsoft
Corporation's business, please refer to the "Management's Discussion and
Analysis of Financial Condition and Results of Operations" and "Risk Factors"
sections of Microsoft Corporation's SEC filings, including, but not limited
to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies
of which may be obtained by contacting Microsoft Corporation's Investor
Relations department at +1-800-285-7772 or at Microsoft Corporation's website
at http://www.microsoft.com/msft.

All information in this release is as of April 5, 2008. Microsoft
Corporation undertakes no duty to update any forward-looking statement to
conform the statement to actual results or changes in the company's
expectations.

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