ScanSoft and Microsoft Sign Expanded Global Speech Technology Licensing Agreement.

PEABODY, Mass. & REDMOND, Wash. -- Microsoft Selects ScanSoft Text-to-Speech Technology for Microsoft Server Family of Products and Deepens Collaboration.

ScanSoft, Inc. (Nasdaq: SSFT), the global leader of speech and imaging solutions, and Microsoft Corp. (Nasdaq: MSFT) today announced an expanded worldwide agreement that authorizes Microsoft to deploy ScanSoft text-to-speech (TTS) technology in Microsoft(R) server application product lines, beginning with Microsoft Speech Server 2004. This global agreement covers the full portfolio of ScanSoft's industry-leading network text-to-speech offerings, access to ScanSoft's premier professional services organization and ScanSoft's Virtuoso(TM) custom voice program. The terms of the agreement were not disclosed.

"Microsoft and ScanSoft share a common vision for bringing speech technologies into the mainstream. The breadth and human-like quality of ScanSoft's TTS technology was a key factor in our decision to partner strategically with ScanSoft in this area," said Kai-Fu Lee, vice president for Microsoft Speech Technologies at Microsoft. "Usage of ScanSoft's technology and services will add significant value and a great user experience for our enterprise customers."

Microsoft has licensed ScanSoft TTS software as the flagship TTS solution for a range of Microsoft server applications, including Microsoft Speech Server 2004. The industry-leading TTS software accurately converts textual information such as account balances, store locations, stock quotes and billing addresses into natural-sounding speech, and is included in Microsoft Speech Server 2004 as part of the standard product offering, in addition to being licensed for Microsoft's inclusion in future offerings of other Microsoft servers.

ScanSoft delivers field-proven speech solutions that use the human voice to interact with information systems and devices, and its unmatched portfolio and expertise help thousands of companies around the world to improve the way we communicate. These resources are now available for Microsoft server application customers who wish to further customize their experience, either through ScanSoft's Virtuoso(TM) custom voice program, or for those who simply wish to leverage ScanSoft's professional services organization to design and deploy their speech application.

"Our strategic relationship with Microsoft is a critical component to our strategy to extend the same high level of value, economic and customer satisfaction benefits to a broader and growing marketplace by leveraging Microsoft's extensive global distribution network and expertise," said Paul Ricci, chairman and CEO, ScanSoft. "We are excited to work with Microsoft on these strategic initiatives."

SpeechWorks(R) solutions from ScanSoft have helped thousands of enterprise and telecommunications organizations around the world, including Aetna, Bank of America, Boeing, Singapore Telecom and Verizon, redefine the way they communicate and interact. Through its global partner network, the company delivers field-proven solutions that use the human voice to interact with information systems and devices. Today, thousands of companies and millions of users around the world depend on ScanSoft and its SpeechWorks division to deliver vital business information and simplify everyday life.

About Microsoft

Founded in 1975, Microsoft (Nasdaq: MSFT) is the worldwide leader in software, services and solutions that help people and businesses realize their full potential.

About ScanSoft, Inc.

ScanSoft, Inc. (Nasdaq: SSFT) is the global leader of speech and imaging solutions that are used to automate a wide range of manual processes - saving time, increasing worker productivity and improving customer service. For more information regarding ScanSoft products and technologies, please visit www.ScanSoft.com.

Microsoft is a registered trademark of Microsoft Corp. in the United States and/or other countries. ScanSoft, Virtuoso, and the ScanSoft logo are trademarks or registered trademarks of ScanSoft, Inc. and/or its subsidiaries in the United States and other countries. All other company names or product names may be the trademarks of their respective owners.