Microsoft Announces Acquisition of VXtreme

Rolls Out Streaming Multimedia Strategy With Release of NetShow 2.0

Support From More Than 30 Industry Leaders Provides Solid Foundation For Growth of Streaming Media Market

REDMOND, Wash. - Aug. 5, 1997 - Microsoft Corp. today announced it has acquired VXtreme Inc., the Sunnyvale, Calif.-based developer of award-winning streaming media solutions. In a related move, Microsoft also announced the release of the Microsoft® NetShow™ 2.0 streaming media server. Together with additional announcements from more than 30 industry leaders, these events will encourage the growth of a broad streaming media industry, allow Microsoft to provide the industry's most comprehensive support, and accelerate adoption of streaming media for in-house corporate use. Today's announcements complement Microsoft's recent news that it would license technology from Progressive Networks Inc. and integrate NetShow into Microsoft Site Server.

"The Internet and intranets are empowering technologies that advance the functionality of broadcast networks such as radio, television, cable and satellite," said Bill Gates, chairman and CEO of Microsoft. "Our goal is to enable everybody - media companies, businesses and consumers - to receive, originate and interact with these next-generation broadcasts. That's why Microsoft is making significant investments in this technology and integrating it into our Windows® and BackOffice® platforms."

Microsoft to Take Leadership Role in Streaming Media

All of Microsoft's recent moves in the streaming media market are geared toward benefiting customers, developers, end users and the industry as a whole in the following ways:

• Encouraging the growth of a broad market for streaming multimedia, in which many companies offer competitively priced compatible products. Microsoft has gained agreement from the industry's leading companies to work together to define future standards based on Microsoft's Active Streaming Format (ASF) specifications. Following are key areas of agreement supporting NetShow and ASF also announced today:

• Content. AudioNet Inc., a leader in Internet broadcasting, will accelerate its adoption of Microsoft NetShow and deploy new content and services, including a personal broadcasting service, using NetShow.
• Systems integration. VDOnet Corp. will become a Microsoft Solution Provider, offering video solutions - based on NetShow-based products - for broadband networks.
• Audio and video tools. Vivo Software Inc. has agreed to base its broadcast tool product line on NetShow, ASF and Microsoft DirectShow technology.
• Streaming media servers. Progressive Networks has agreed to use ASF as the native format for its next streaming media products.

A full list of third-party announcements is available at http://www.microsoft.com/netshow/.

• Providing the industry's most comprehensive support for streaming multimedia. Microsoft will enhance NetShow with technology from both VXtreme and its own high-end streaming media technology for dedicated networks, the NetShow full-screen video service previously code-named "TIGER." Microsoft has also licensed RealAudio and RealVideo 4.0 source code from Progressive Networks and will incorporate compatibility with the file formats into the next version of NetShow to ensure that customers can use the broadest base of existing content.
• Accelerating adoption of streaming media for in-house corporate use. In addition to its growing use on the Internet, streaming media can support employee training, online meetings and executive presentations. Microsoft is integrating NetShow into Microsoft Site Server to make it easier for customers to deploy sophisticated Web sites that take advantage of streaming media capabilities as well as Site Server's industry-leading features such as content deployment, commerce and site analysis.

VXtreme Acquisition Brings Microsoft Superb Technology, Personnel and Customers

The acquisition of VXtreme is a key part of Microsoft's streaming media strategy. VXtreme has been an innovator in the streaming media market, building adaptive compression technology that dynamically adjusts to available bandwidth. The company has attracted top customers including CNN Interactive and CNNfn, The Financial Network, Bridge Information Systems Inc. and General Electric Co.

"VXtreme has developed superb compression technology and network delivery solutions that fully complement our streaming media product strategy," said Paul Maritz, group vice president, platforms and applications at Microsoft. "We look forward to having VXtreme's excellent development team join Microsoft to work on innovating and integrating VXtreme technology into NetShow and Site Server."

"This partnership marries Microsoft marketing expertise and strong development framework with cutting-edge streaming media technology from VXtreme," said Pete Mountanos, CEO of VXtreme. "Together, we'll define future streaming media standards and quality levels."

NetShow 2.0 Now Available

Microsoft's streaming media server, NetShow 2.0, is available worldwide as a free Web download product until the end of the year (connect-time charges may apply). NetShow is Microsoft's technology for streaming production-scale video, audio, and audio with synchronized images over the Internet and corporate intranets. More than 135,000 broadcasters, corporations and Web developers have downloaded the product during its prerelease testing period, and more than 11 million users have downloaded the NetShow 2.0 player.

"We're very pleased with NetShow, said Lora Jackson, manager, Internet technology, Taco Bell Corp. "We use it to share video and other multimedia content over the Internet and our intranets. The tight and simple integration with Microsoft Internet Information Server, along with its incredible ease of use, makes this an invaluable tool in delivering cost-effective business value over the Internet."

The benefits of NetShow 2.0 for broadcasters, IS managers, Web developers and end users include the following:

• It's powerful. The NetShow server takes full advantage of the high scalability of the Windows NT® Server network operating system, supporting needs ranging from low bandwidth to full commercial production-scale requirements. NetShow enables high-quality content generation and streaming with new, next-generation MPEG compression technology.
• It's easy to use. The open architecture of NetShow makes it easy for developers and Web professionals to build innovative, interactive applications that take advantage of the media streaming and multicast technologies in NetShow. NetShow lets developers take advantage of their knowledge of Microsoft and third-party multimedia authoring tools.
• It's of high quality. NetShow 2.0 is a standards-based platform that includes more than 20 popular audio and video codecs, or compression models, to satisfy the needs of virtually all content providers. NetShow supports a variety of network transport protocols, so it delivers superb interactivity and multimedia while reducing demands on network bandwidth.

The NetShow 2.0 client is available for the Windows 95 operating system and Windows NT, Windows 3.1 and UNIX and will soon be available for the Macintosh.

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.

Microsoft, NetShow, Windows, BackOffice and Windows NT are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

Other product and company names herein may be trademarks of their respective owners.

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