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.