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FOR IMMEDIATE RELEASE

Microsoft and 3Com Resolve Product Naming Dispute

Santa Clara, Calif. and Redmond, Wash -- April 8, 1998 -- Microsoft Corp., 3Com Corp. and Palm Computing Inc. have announced that they have agreed to amicably settle their dispute over the naming of the category of palm-size devices currently referred to by Microsoft as "Palm PCs". 3Com's Palm Computing subsidiary manufactures the Palm III connected organizers, and Microsoft recently began licensing its Windows CE operating system for use in palm-size devices. As part of the agreement, Microsoft will discontinue use of the term "Palm PC" and will begin referring to this category of devices as "Palm-size PCs".

Under the terms of the agreement, Microsoft will initiate a worldwide transition to the new term. In the coming months, Microsoft will ship to its original equipment manufacturers a worldwide English release of the Windows CE 2.0 operating system that substitutes the new category name. Additionally, existing inventories of initial devices using the current term may be sold until software and devices using the new descriptor are available later this year. This agreement resolves the pending legal dispute.

"Microsoft and 3Com have a strong, longstanding business relationship," said Paul Maritz, Microsoft's Group Vice President, Systems. "This agreement further strengthens that relationship and allows us to move quickly beyond our differences over this particular issue."

"3Com and Microsoft are working together on a number of fronts, driving key product and technology initiatives," Eric Benhamou, 3Com chairman and CEO, stated. "We are pleased that we are able to amicably resolve this dispute."

"This agreement ensures that our customers can make clear, informed choices to meet their handheld computing needs," said Donna Dubinsky, 3Com vice president and president of Palm Computing.

Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

3Com Corporation [Nasdaq: COMS] enables individuals and organizations worldwide to communicate and share information and resources at anytime from anywhere. As one of the world's preeminent suppliers of data, voice and video communications technology, 3Com has delivered networking solutions to more than 100 million customers worldwide. The company provides enterprises, network service providers and carriers, small businesses and consumers with comprehensive, innovative information access products and system solutions for building intelligent, reliable and high performance local and wide area networks. For further information, visit 3Com's World Wide Web site at http://www.3com.com, or the press site at http://www.3com.com/pressbox.

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Microsoft and Windows CE are registered trademarks of Microsoft Corp. 3Com and Palm Computing are registered trademarks and Palm III is a trademark of 3Com Corporation or its subsidiaries.