Farallon and Microsoft Announce Strategic Relationship To Share Communications and Collaboration Technologies.

ALAMEDA, Calif.--(BUSINESS WIRE)--Oct. 8, 1996--

Joint Commitment to Develop Interoperable Internet Collaboration Products Based on Industry Standards

Farallon Communications, Inc. (NASDAQ: FRLN) and Microsoft Corporation (NASDAQ: MSFT) today announced a strategic relationship to deliver interoperable Internet/Intranet communication and collaboration products for personal computer users. This relationship will help to accelerate cross-platform availability of joint technologies from the two companies.

As part of this relationship, Farallon announced that Microsoft has licensed Farallon's patent covering cross-platform screen-sharing technology. Microsoft paid an undisclosed sum to license Farallon's cross-platform screen-sharing patent covering all major desktop operating systems, including Microsoft(R) Windows(R) 3.1, Windows(R) for Workgroups 3.11, Windows 95, Windows NT(R) (3.x and 4.x), and MacOS.

Farallon's cross-platform screen-sharing technology, currently found in its Timbuktu Pro real-time Internet/Intranet collaboration software, is covered by U.S. patent number 5,241,625. In order to promote wide-scale Internet/Intranet collaboration, Farallon also announced patent license availability to other interested software vendors.

"We look forward to working with Farallon to make optimal use of joint technologies and deliver standards-based cross-platform interoperable products to our customers," said John Ludwig, vice president of Internet platform and tools division at Microsoft.

Interoperability Commitment

Farallon and Microsoft plan a separate technology-sharing agreement to develop cross-platform interoperable Internet collaboration products to be announced later this year. These products are expected to integrate screen-sharing technology covered by the patent and provide common capabilities across all versions of Windows-based and MacOS platforms. These plans strengthen the ongoing alliance between Microsoft and Farallon, including earlier announcements of Farallon's commitment to support Microsoft's standards-based NetMeeting(TM) conferencing software, and Microsoft's agreement to ship Farallon's ActiveX(TM) Control collaboration products.

"We're excited about Microsoft's commitment to a standards-based Internet/Intranet communications and collaborative platform, and look forward to further technology cooperation with them," said Alan Lefkof, president and CEO, Farallon.

About Microsoft

Founded in 1975, Microsoft 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.

About Farallon

Founded in 1986, Farallon Communications, Inc. develops complete, easy-to-use Internet connectivity solutions and real-time Internet/Intranet collaboration software. The Company's products are designed to increase the productivity and efficiency of Internet, Intranet and LAN users and to target remote offices, home offices, mobile users, small businesses, and schools that may not have access to sophisticated technical support.

Further information can be obtained via phone [phone], fax [phone], Internet "[e-mail]," or web "www.farallon.com." Farallon products are available through distributors and resellers worldwide, as well as through licensing relationships with other computer vendors. Farallon has its headquarters in Alameda, Calif., and its European office in Paris.

This release contains forward-looking statements which involve risks and uncertainties. The Company's actual results could differ materially from the results discussed herein. Factors that could cause or contribute to such differences include, but are not limited to, those discussed from time to time in the Company's public reports filed with the Securities and Exchange Commission, as well as those discussed in "Risk Factors" included in the Company's Registration Statement on Form S-1 as declared effective by the Securities and Exchange Commission on June 12, 1996 (Reg. No. 333-3868). -0-

Note to Editors: The Farallon logo design, Farallon and Timbuktu are registered trademarks of Farallon Communications, Inc. Microsoft, Windows, NetMeeting and ActiveX are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries. All other trademarks are the property of their respective holders.

CONTACT: Farallon Communications

Amal Abed, 510/814-5307

[e-mail]

or

Thomas Associates

Kristin Knudsen, 415/596-2700

[e-mail]

http://www.farallon.com/www/gen/relpage