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Microsoft, HK Telecom Team Up on Interactive

Hong Kong -- Microsoft Corp. signed a joint-venture
agreement with Hongkong Telecom to develop a service that will allow consumers here to
access the Internet, send e-mail and watch videos and TV over their personal computers and
TV sets.Users will be able to download news, movies, music, games and business information
at high-speed rates using Microsoft's software and Hongkong Telecom's fiber
optic network.

The network is already used to carry local telephony, as
well as Hongkong Telecom's Interactive Media Services unit's video-on-demand
service, "Interactive TV," which has around 100,000 subscribers among Hong
Kong's 1.7 million households.

Microsoft chairman Bill Gates and Hongkong Telecom CEO
Linus Cheung showed a TV-news video, a movie preview, text news stories and a moving
stock-price ticker on a single computer screen.

"This is the Internet in a more powerful form than 99
percent of the users in the world have access to," Gates said.Hongkong Telecom is set
to roll out a trial service in the second quarter of this year, and a commercial rollout
is scheduled for early 2000. Financial details of the joint venture were not disclosed.

Gates also said he would support the $1.29 billion
"Cyberport" project -- a separate undertaking that will aim to further
information-technology development in Hong Kong. Gates didn't elaborate on exactly
how Microsoft would support the project.

After Hong Kong, Gates traveled to the mainland China city
of Shenzhen, where he was due to sign deals with five Chinese companies to promote the
installation of Microsoft's Windows software in TV set-top boxes.