Microsoft Corp. (Nasdaq: MSFT) today
announced that Taco Bell Corp. has signed on as
the first promotional partner for the launch of the highly anticipated Microsoft® Xbox(TM) video game system. The
companies plan to combine their powerhouse brands in a promotional campaign to reach their shared target
audiences across the United States and Canada. Taco Bell will provide substantial media support that will aggressively
publicize Xbox, and the company will host major in-store promotions to support the Xbox launch.

“We are excited about teaming up with Taco Bell to turn up the volume on the Xbox excitement during the system’s
launch period,” said John O’Rourke, vice president of sales and marketing for Xbox. “Our co-marketing relationship is
based on our commitment to deliver an entertaining, top-of-the-line promotion to our customers.”

The video game console industry is recognized as a hot form of entertainment with a broadening demographic. Taco
Bell will build on the anticipation around Xbox to connect to its target audience through fun and entertaining vehicles.

“We’re thrilled to team up with Microsoft as a promotional partner for Xbox, one of the most exciting entertainment
products of 2001,” said Debbie Myers, vice president of media, entertainment and licensing for Taco Bell. “Our
energetic brand personality mirrors the edgy Xbox brand, which is already resonating with our customers.”

The marketing alliance between Microsoft and Taco Bell was orchestrated by GMR Marketing, a recognized leader in
music, entertainment and lifestyle marketing. Taco Bell is the first promotional partner to be announced in a series of
strategic co-marketing relationships that will creatively drive brand awareness and preference for Xbox.