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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
________________
SCHEDULE 13G
________________
INFORMATION STATEMENT PURSUANT TO RULES 13d-1 AND 13d-2
UNDER THE SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. )*
Microsoft Corporation
(NAME OF ISSUER)
2 3/4% Convertible Exchangeable Series A Preferred Shares
(TITLE OF CLASS OF SECURITIES)
594918 20 3
(CUSIP NUMBER)
__________________
* The remainder of this cover page shall be filled out for a reporting
person's initial filing on this form with respect to the subject class
of securities, and for any subsequent amendment containing information
which would alter the disclosures provided in a prior cover page.
The information required in the remainder of this cover page shall not
be deemed to be "filed" for the purpose of Section 18 of the Securities
Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of
that section of the Act but shall be subject to all other provisions of
the Act (however, see the Notes).
PAGE 1 OF 7 PAGES
13G
CUSIP No. 594918 20 3
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
John A. Levin & Co., Inc.
13-3134273
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [ ]
(b) [x]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_____________________________________________________________________________
NUMBER OF (5) SOLE VOTING POWER
21,050
SHARES ______________________________________________________________
BENEFICIALLY (6) SHARED VOTING POWER
364,200
OWNED BY ______________________________________________________________
EACH (7) SOLE DISPOSITIVE POWER
21,050
REPORTING ______________________________________________________________
PERSON WITH (8) SHARED DISPOSITIVE POWER
612,750
_____________________________________________________________________________
(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
633,800
_____________________________________________________________________________
(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
5.1%
_____________________________________________________________________________
(12) TYPE OF REPORTING PERSON **
IA
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
PAGE 2 OF 7 PAGES
13G
CUSIP No. 594918 20 3
_____________________________________________________________________________
(1) NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO.
OF ABOVE PERSON
Baker Fentress & Company
36-0767530
_____________________________________________________________________________
(2) CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP **
(a) [ ]
(b) [x]
_____________________________________________________________________________
(3) SEC USE ONLY
_____________________________________________________________________________
(4) CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
_____________________________________________________________________________
NUMBER OF (5) SOLE VOTING POWER
21,050
SHARES ______________________________________________________________
BENEFICIALLY (6) SHARED VOTING POWER
364,200
OWNED BY ______________________________________________________________
EACH (7) SOLE DISPOSITIVE POWER
21,050
REPORTING ______________________________________________________________
PERSON WITH (8) SHARED DISPOSITIVE POWER
612,750
_____________________________________________________________________________
(9) AGGREGATE AMOUNT BENEFICIALLY OWNED
BY EACH REPORTING PERSON
633,800
_____________________________________________________________________________
(10) CHECK BOX IF THE AGGREGATE AMOUNT
IN ROW (9) EXCLUDES CERTAIN SHARES ** [ ]
_____________________________________________________________________________
(11) PERCENT OF CLASS REPRESENTED
BY AMOUNT IN ROW (9)
5.1%
_____________________________________________________________________________
(12) TYPE OF REPORTING PERSON **
IC
_____________________________________________________________________________
** SEE INSTRUCTIONS BEFORE FILLING OUT!
PAGE 3 OF 7 PAGES
Schedule 13G of John A. Levin & Co., Inc. "Levin & Co.") and Baker,
Fentress & Company ("Baker Fentress") with respect to the 2 3/4% Convertible
Exchangeable Series A Preferred Shares (the "Preferred Shares") of Microsoft
Corporation (the "Company").
ITEM 1(a) NAME OF ISSUER:
Microsoft Corporation
ITEM 1(b) ADDRESS OF ISSUER'S PRINCIPAL EXECUTIVE OFFICES:
One Microsoft Way, Redmond, Washington 98052-6399
ITEM 2(a) NAME OF PERSON FILING:
John A. Levin & Co., Inc. ("Levin & Co.")
Baker, Fentress & Company ("Baker Fentress")
ITEM 2(b) ADDRESS OF PRINCIPAL BUSINESS OFFICE OR, IF NONE, RESIDENCE:
John A. Levin & Co., Inc. Baker, Fentress & Company
One Rockefeller Plaza 200 West Madison Street
New York, New York 10020 Chicago, Illinois 60606
ITEM 2(c) CITIZENSHIP:
Levin & Co. and Baker Fentress are each corporations organized
under the laws of the State of Delaware.
ITEM 2(d) TITLE OF CLASS OF SECURITIES:
2 3/4% Convertible Exchangeable Series A Preferred Shares (the
"Preferred Shares")
ITEM 2(e) CUSIP NUMBER:
594918 20 3
ITEM 3. IF THIS STATEMENT IS FILED PURSUANT TO RULES 13D-1(B),
OR 13D-2(B), CHECK WHETHER THE PERSON FILING IS A:
(a) ( ) Broker or Dealer registered under Section 15 of the
Securities Exchange Act of 1934 (the "Act")
(b) ( ) Bank as defined in Section 3(a)(6) of the Act
(c) ( ) Insurance Company as defined in Section 3(a)(19) of
the Act
(d) ( X ) Investment Company registered under Section 8 of the
Investment Company Act of 1940
(e) ( X ) Investment Adviser registered under Section 203 of
the Investment Advisers Act of 1940
(f) ( ) Employee Benefit Plan, Pension Fund which is subject
to the provisions of the Employee Retirement Income
Security Act of 1974 or Endowment Fund; see Sec.
240.13d-1(b)(1)(ii)(F)
(g) ( ) Parent Holding Company, in accordance with Sec.
240.13d-1(b)(ii)(G) (Note: See item 7)
(h) ( ) Group, in accordance with Sec. 240.13d-
1(b)(1)(ii)(H)
PAGE 4 OF 7 PAGES
ITEM 4. OWNERSHIP.
(a) Amount Beneficially Owned:
633,800
(b) Percentage of Class:
5.1% (based on the 12,519,562 Preferred Shares
reported to be outstanding by the Investor Relations
Department of the Company on the date hereof).
(c) Number of shares as to which such person has:
(i) sole power to vote:
21,050
(ii) shared power to vote or to direct the vote:
364,200
(iii)sole power to dispose or to direct the disposition of:
21,050
(iv) shared power to dispose or to direct the disposition of:
612,750
Levin & Co., an investment adviser registered under Section 203 of
the Investment Advisers Act of 1940, as amended, holds for the
accounts of its investment advisory clients, and thereby
beneficially owns, within the meaning of Rule 13d-3 under the
Securities Exchange Act of 1934, the foregoing shares of Preferred
Shares. Baker Fentress & Company ("Baker Fentress"), a Delaware
corporation and an investment company registered under the
Investment Company Act of 1940, as amended, is the sole shareholder
of Levin Management Co., Inc., a Delaware corporation ("Levin
Management"), which is the sole shareholder of Levin & Co. Baker
Fentress, therefore, may be deemed the beneficial owner of the
Preferred Shares held by Levin & Co.
ITEM 5. OWNERSHIP OF FIVE PERCENT OR LESS OF A CLASS
Not applicable.
ITEM 6. OWNERSHIP OF MORE THAN FIVE PERCENT ON BEHALF OF ANOTHER PERSON
This Schedule 13G is filed by Levin & Co. and Baker Fentress with
respect to Preferred Shares purchased by Levin & Co. on behalf of
Levin & Co.'s investment advisory clients. Each such client has
the right to receive or the power to direct the receipt of
dividends from, or the proceeds from the sale of, the securities
held in such person's account. No such client has any of the
foregoing rights with respect to more than five percent of the class
of securities identified in Item 2(d). There is no agreement or
understanding among such persons to act together for the purpose of
acquiring, holding, voting or disposing of any such securities.
PAGE 5 OF 7 PAGES
ITEM 7. IDENTIFICATION AND CLASSIFICATION OF THE SUBSIDIARY WHICH ACQUIRED
THE SECURITY BEING REPORTED ON BY THE PARENT HOLDING COMPANY.
Not applicable.
ITEM 8. IDENTIFICATION AND CLASSIFICATION OF MEMBERS OF THE GROUP
Not applicable.
ITEM 9. NOTICE OF DISSOLUTION OF GROUP
Not applicable.
PAGE 6 OF 7 PAGES
ITEM 10. CERTIFICATION. (if filing pursuant to Rule 13d-1(b))
By signing below, Levin & Co. and Baker Fentress
certify that, to the best of their knowledge and belief, the
securities referred to above were acquired in the ordinary course
of business, were not acquired for the purpose of and do not have
the effect of changing or influencing the control of the issuer
of such securities and were not acquired in connection with or as
a participant in any transaction having such purposes or effect.
SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: February 14, 1997
JOHN A. LEVIN & CO., INC.
/s/ John A. Levin
---------------------------
John A. Levin
President
BAKER FENTRESS & COMPANY
/s/ John A. Levin
---------------------------
John A. Levin
President
PAGE 7 OF 7 PAGES