Microsoft Invests in Video Leader VDOnet; Strategic Relationship a Milestone for Internet Communication

REDMOND, Wash., and PALO ALTO, Calif., Oct. 28, 1996 — Microsoft Corp. and VDOnet Corp. announced today that Microsoft has purchased an equity stake in VDOnet, and that the companies have entered into a licensing agreement regarding key Internet communication technologies. The relationship between Microsoft and VDOnet represents a major milestone for Internet communication.

  • Breakthrough technology. VDOnet’s breakthrough VDOWave
    technology rounds out the foundation of video, audio and data sharing that will bring rich multimedia communication to the mainstream.

  • High-quality video. Optimized for communication over low-bandwidth connections, this technology provides both video-conferencing and video-broadcasting applications. It brings the high-quality video capabilities that will further the evolution of the Internet into an effective medium for reaching out to and working with others.

  • Video standards. To help ensure that this technology leads the industry toward ubiquitous communication over the Internet, Microsoft and VDOnet will continue to work closely with other industry leaders to further video standards for delivery over the Internet.

Also announced today is that US WEST Interactive Services, a division of US WEST Media Group (NYSE: UMG), has purchased an equity stake in VDOnet Corp. (see separate press release).

“Microsoft has been actively evolving technology and products to make communication over the Internet a valuable experience,”
said John Ludwig, vice president in the Internet platform and tools division at Microsoft.
“After substantial study, we concluded that VDOnet and its technology will complement our efforts and play a vital role in the future of network communications.”

VDOWave was built with the special challenges of the Internet in mind. The Internet and intranets are made up of complex webs of very narrow, uneven pipes – any video running through them must be compressed to a very small size. Data can be lost easily in this environment, resulting in a decrease of video quality. VDOnet’s technology addresses these challenges by combining sophisticated communications protocols with advanced compression techniques.

In addition to its investment, Microsoft will hold a seat on VDOnet’s board of directors, and VDOnet and Microsoft will continue to collaborate on solving the technical challenges inherent in evolving video-streaming technology standards. Specifically, the companies will work together to support and drive standards efforts, including H.323 for standards-based audio and video conferencing and future generations of the MPEG standard.

As part of its new relationship with Microsoft, VDOnet has licensed key Internet multimedia technology from Microsoft – Microsoft® NetMeeting
conferencing software and NetShow . NetMeeting 1.0 is a standards-based, data conferencing product that supports application sharing with one or more other users and real-time voice communications over the Internet and corporate intranets. With NetMeeting , multiple users can share applications, transfer files, chat, and share a whiteboard and the clipboard. NetMeeting 1.0 also allows users to perform point-to-point audio conferencing. The first beta version of NetMeeting 2.0, currently available, incorporates support for H.323 standards and allows audio conferencing with one or more other users.

Microsoft NetShow is an open, standards-based software platform for network multimedia applications. It provides live multicasting of audio and on-demand streaming of stored audio, illustrated audio (audio synchronized with images), and video. NetShow enriches one-to-many communication through Internet and intranet sites using live and stored multimedia content. NetShow is an extensible platform enabling third parties, such as VDOnet, either to provide compatible add-ons such as codecs and authoring tools or to augment their own products with NetShow functionality. It harnesses bandwidth-efficient Internet technologies and the power of the Windows NT® Server network operating system to transform information sharing into a richer and more effective medium, the network show.

“We have always believed that providing video on the Internet is both a very important and a very complex challenge to meet – a challenge that requires development of new, advanced technologies that are combined with standards and existing technologies,”
said Asaf Mohr, president and CEO of VDOnet.
“We believe this relationship with Microsoft will help us continue to work toward realizing our vision for the potential of video on the Internet.”

VDOnet Corp., based in Palo Alto, Calif., has developed and markets technology and products enabling Internet video broadcasting (VDOLive
) and video telephony (VDOPhone
) on the Internet and over regular telephone lines and private networks. Today, VDOLive is being used by hundreds of companies as well as CBS News, PBS, Preview Media, corporate intranet users and many others. The VDOPhone is available as a standalone commercial product and is available through OEM (original equipment manufacturer) relationships with Packard Bell Electronics Inc., Diamond Multimedia Systems Inc. and others. VDOnet was founded in 1995 and today has offices in the United States, Israel and Japan. Its investors are Microsoft Corp., US West Media Group, NYNEX, Battery Ventures and private sources. VDOnet’s URL is ( .

Founded in 1975, Microsoft (NASDAQ
) 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, NetMeeting and Windows NT are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

VDOnet, VDOWave, VDOLive and VDOPhone are either trademarks or registered trademarks of VDOnet Corp. in the United States and/or other countries.

For more information, press only:

For VDOnet:

Abigail Johnson, Roeder-Johnson Corp., (415) 802-1850, [email protected]

Mike Brogan, Roeder-Johnson Corp., (415) 802-1850, [email protected]

For Microsoft:

Marnie Bolton, Waggener Edstrom, (503) 443-7000, [email protected]

For online product information:

VDOnet Web page: (

Microsoft NetMeeting Web page:

Microsoft NetShow Web page:

Note to editors: For more VDOnet customer information, contact VDOnet Corp. by phone at (415) 846-7700, fax, (415) 846-7900, or e-mail, [email protected]. If you are interested in viewing additional information on Microsoft, please visit the Microsoft Web page at on Microsoft’s corporate information pages.

The text of this release as well as additional background information may be downloaded from the Roeder-Johnson Web site at ( .

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