Microsoft and Trans World Entertainment Announce Broad-based Business, Technology and Marketing Alliance to Deliver Enhanced Shopping Experience For FYE Customers

REDMOND, Wash. and ALBANY, N.Y., Oct. 22 /PRNewswire/ —
Microsoft Corp. (Nasdaq: MSFT) and
Trans World Entertainment Corp. (Nasdaq: TWMC) today announced a comprehensive
business, technology and marketing alliance involving the integration of
Microsoft(R) .NET, Windows(R) XP, Windows Media(TM) and MSN(R) technologies
into Trans World’s 700 “FYE” branded music and video retail outlets across the
United States, as well as its fye.com Web site.

FYE, the nation’s largest mall-based specialty retailer of music and video
products, will employ Microsoft .NET technologies, Windows Media technology
and the Windows XP operating system to deliver a richer music-shopping
experience for FYE customers both in-store and online. Through its “eWorks”
initiative, FYE will deploy more than 25,000 Windows XP-based listening and
viewing stations and kiosks in its stores, using Windows Media to provide
high-quality audio and video samplings. The “eWorks” initiative will also
feature .NET technologies such as .NET Passport authentication, single sign-in
service and .NET My Services platform to deliver personalized recommendations
and services to participating customers. In addition, FYE will become the
premier online music and video retailer on MSN Shopping as well as a music
partner for Windows XP, Microsoft’s next-generation operating system.

“We are incredibly excited at the opportunity to work with Trans World and
FYE, the nation’s leading music and video retailer, to deliver a much richer
and more personal user experience for their millions of customers both
in-store and online,” said Steve Ballmer, chief executive officer at
Microsoft. “This is a compelling and tangible example of how next-generation
software such as .NET, Windows XP and Windows Media can provide value for
large consumer-focused businesses like FYE and the customers they serve. With
such technologies, Trans World will be on the leading edge of delivering a new
user experience for its customers.”

“The alliance between FYE and Microsoft, two industry leaders, marks an
important milestone for Trans World, as well as a significant step forward in
our combined ability to address the changing demands of America’s music
consumers,” said Bob Higgins, chairman and CEO of Trans World Entertainment.
“For FYE, it’s a validation of our position as the market leader in music
sales and an endorsement of the strength of our ‘eWorks’ initiative. For our
customers it means that FYE will enjoy Microsoft’s industry-leading
technologies and the innovative capabilities of Windows XP, Windows Media, MSN
and .NET to deliver an unmatched entertainment experience.”

.NET and FYE’s “Backstage Pass”

Building on Microsoft .NET technologies such as Passport and the .NET My
Services platform, FYE announced that it will soon launch its “Backstage Pass”
loyalty program. In addition to transforming customers’ music-shopping
experience by making it easier and faster, this will create the music
industry’s most robust and comprehensive customer relationship management
system. Through the Microsoft Passport authentication service, FYE will be
able to provide tailored offerings to customers and richer personalization
online and in-store.

Participating FYE “Backstage Pass” members will receive personalized
messages and product offerings, including recommendations based on their
preferences and interests. Information about a user’s preferences or musical
tastes will follow consumers from FYE’s listening and viewing stations to
their retail and online purchases. Those consumers who choose to sign up for
the “Backstage Pass” service will be able to access their profile through a
swipe of their “Backstage Pass” loyalty card. This profile will offer the
user helpful information about recent purchases, and they can update their
listening or viewing habits to improve recommendations for new releases and
archived classics.

“Our business is really about connecting customers to fun and
entertainment. Where, how and why consumers purchase music has changed
dramatically. This new FYE and Microsoft alliance will directly address these
changing preferences by providing a new and exciting way to purchase music and
experience entertainment across multiple channels and consumer touch-points,”
Higgins said. “It will also enable FYE to substantially enhance our customer
relationship management programs through our unique ability to capitalize on
the personalization and the leading edge software services of Windows XP and
.NET. Whether it’s providing users with deeper access to all titles through
our store-based kiosks, the ability to sample music tracks through our
listening stations or our ability to offer customers more relevant and timely
information, we expect this new technology to drive increased sales and
profitability.”

“eWorks” Initiative

Windows XP, Windows Media and Microsoft .NET technologies will power FYE’s
“eWorks” initiative designed to offer consumers the most personal
entertainment experience in-store and online via next-generation listening and
viewing stations, kiosks, FYE’s “Backstage Pass” loyalty program and
industry-leading customer relationship management initiatives. For example,
Windows XP technology will allow FYE to individually tailor the shopping
experience for consumers both online and in-store. The “eWorks” initiative
positions FYE as the industry leader in the areas of customization and
personalization of entertainment, including emerging wireless applications and
digital downloading. For example, FYE’s “eWorks” initiatives offer
comprehensive product samplings that provide the ability for customers to
digitally preview any item in inventory. Through the “eWorks” program, FYE
and Microsoft will jointly create and deliver software applications.

Windows Powered In-Store Experience

The centerpiece of FYE’s in-store music experience will be more than
25,000 industry-leading listening and viewing stations built on Microsoft
Windows XP and Windows Media technology, offering consumers a revolutionary
new shopping experience through the “Backstage Pass” program. Through these
listening and viewing stations, consumers will have the ability to sample
music and videos, as well as preview any selection stocked in the store.

And, with more than 1,000 new Windows XP-powered kiosks, consumers will be
able to search and browse FYE’s entire library, sample music, and order and
ship normally hard-to-find selections. Both the Windows XP-powered kiosks and
listening stations are scheduled to be rolled out to FYE locations over the
next year. Initial locations include the Company’s flagship store in midtown
Manhattan near Rockefeller Center, as well as locations in Detroit, Hartford,
Conn., Seattle and Tampa, Fla.

fye.com

Trans World’s online destination, http://www.fye.com/, which launched
earlier this month, will become the premier online music and video retailer on
MSN Shopping, making it the preferred site for music news, new releases and
contemporary favorites.

Joint Marketing

The FYE and Microsoft alliance also will include significant marketing,
advertising and promotional initiatives to create a premier music experience
with FYE, support the rollout of the FYE brand, help drive traffic to FYE
locations and fye.com, and support Windows XP launch activities on Oct. 25.

Trans World/FYE

Trans World Entertainment is a leading specialty retailer of music and
video products. The company operates retail stores, including 700 mall-based
FYE locations in 46 states, the District of Columbia, the U.S. Virgin Islands,
Puerto Rico and an e-commerce site, fye.com. Freestanding locations include
FYE, Coconuts Music and Movies, Strawberries Music, Specs and Planet Music.

About Microsoft

Founded in 1975, Microsoft (Nasdaq: MSFT) is the worldwide leader in
software, services and Internet technologies for personal and business
computing. The company offers a wide range of products and services designed
to empower people through great software — any time, any place, and on any
device.

Microsoft, Windows, Windows Media and MSN are registered trademarks or
trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the
trademarks of their respective owners.

For more information, press only:

Rapid Response Team, Waggener Edstrom for Microsoft, (503) 443-7070,

John Gogarty, The MWW Group for Trans World/FYE, (201) 507-9500,

Carol Beaugard, The MWW Group for Trans World/FYE, (201) 507-9500,

SOURCE Trans World Entertainment Corp.

/NOTE TO EDITORS: If you are interested in viewing additional information
on Microsoft, please visit the Microsoft Web page at
http://www.microsoft.com/presspass/ on Microsoft’s corporate information
pages./

CONTACT: John Gogarty, +1-201-507-9500, or , or Carol
Beaugard, +1-201-507-9500, or , both of The MWW Group for
Trans World-FYE; or Rapid Response Team, Waggener Edstrom for Microsoft,
+1-503-443-7070, /