RioPort and Microsoft Announce Digital Audio Relationship

SAN JOSE, Calif., June 24, 1999 — RioPort Inc., a wholly owned subsidiary of Diamond Multimedia (Nasdaq
“DIMD” ), and Microsoft Corp. today announced a broad relationship in which RioPort will incorporate support for Microsoft® Windows® Media Audio, a key feature of its Windows Media TM Technologies, in future Rio-brand digital audio players. Windows Media Audio (WMA) offers exceptional audio quality as well as digital rights management and content protection. RioPort and Microsoft will collaborate on the development of secure technology – Windows Media Management Services – for the transfer of digital music between PCs and Rio-compatible players. In addition, the two companies will work together to provide easy access to downloadable audio content from their respective portal sites, www.WindowsMedia.com and www.RioPort.com.

“We are tremendously excited about working with Microsoft to support Windows Media Audio on future Rio-brand digital audio player designs,”
said David Watkins, president, RioPort.
“The small size of Windows Media Audio files means consumers can fit more high-fidelity digital audio content on their Rio players, and the Windows Media digital rights management system will encourage content providers to continually make more of their audio catalogs available in the WMA format.”

Future Rio players will support the Windows Media Audio format. WMA files are half the size of standard MP3 tracks while offering superior quality to larger MP3 files. Consumers who use Windows Media Audio will be able to store twice the amount of audio content on the new Rio players and still enjoy a high-quality listening experience.

“We’re thrilled that RioPort has chosen to integrate Windows Media Audio technology into its next-generation Rio-brand players,”
said Anthony Bay, general manager, Streaming Media Division, Microsoft.
“Working together, RioPort and Microsoft will deliver to our mutual customers the best digital audio experience on the PC and on portable digital audio devices.”

RioPort Software and Devices to Support Windows Media Audio

Future Rio players with WMA support will ship with RioPort’s Rio Audio Manager software package, which enables the easy creation, management and playback of digital audio content in both the WMA and MP3 formats. Consumers will be able to easily convert content from audio CDs to either digital format, store and play these files on their computers, or transfer them to their Rio players and other compatible devices for playback. Music will by default be converted to Windows Media Audio because of the small file size and improved audio quality. MP3 and WAV formats are also supported. New Rio devices will store up to four hours of music in Windows Media Audio format.

RioPort and Microsoft Collaborate on Windows Media Management Services for Portable Devices

RioPort is the first company to work with Microsoft on its Windows Media Management Services and related application services. Windows Media Management Services will enable software applications and peripheral devices, such as RioPort’s line of Rio portable digital audio players, to seamlessly and securely transfer content. Windows Media Management Services will address the means by which protected content is moved from Windows-based systems to personal devices in accordance with SDMI recommendations and requirements. Microsoft, RioPort and other development partners will help further define and evolve Windows Media Management Services.

Broad Consumer Access to Downloadable Music

Microsoft and RioPort will also work together to promote downloadable audio content in Windows Media Audio format from their respective audio portal sites, www.WindowsMedia.com and www.RioPort.com, for use on both PCs and portable audio devices.

RioPort Inc.

RioPort Inc. is redefining digital audio by delivering an integrated platform for acquiring, managing and experiencing music and spoken audio programming from the Internet. RioPort delivers an extensive selection of digital music and spoken audio programming through its RioPort.com digital audio gateway, full content management with its Rio Audio Manager software and cutting-edge playback solutions with its Rio brand players, which are licensed to third-party companies. Company headquarters are in San Jose, Calif., where its business development, engineering and marketing teams are located. RioPort’s artist relations, content aggregation and online creative team is based in Los Angeles, and its portable player design team is based in Korea.

Diamond Multimedia

Diamond Multimedia is a leader in PC multimedia and Internet connectivity, providing advanced products that enable desktop computer users to create, access and experience compelling new media content from their PCs and through the Internet. Products include the Rio series of Internet audio appliances, the Stealth and Viper® series of video accelerators, the Monster series of 3-D gaming accelerators, the Fire series of professional graphics accelerators, the Supra® series of modems, and the HomeFree line of home networking products. Diamond’s common stock is traded on the NASDAQ under the symbol DIMD, and its Web site address is http://www.diamondmm.com/ . The company’s Internet music portal site is at http://www.RioPort.com/ .

How to Contact Diamond Multimedia

There are many ways to reach Diamond for sales support, technical assistance, driver updates and general information:

Internet Web Site: http://www.diamondmm.com/ and http://www.RioPort.com/

Diamond Multimedia’s Headquarters and Multimedia Division: (408) 325-7000;
fax: (408) 325-7070

Communications Division (Supra brand modems): main phone number: (360) 604-1400;
fax: (360) 604-1401

European Division (Germany): +49-8151-266-0; (UK): +44-1189-444400; (France) +33-1-55381600

Korean Office (Seoul): +82-2-2185-3388; fax: +82-2-501-7522

Japanese Office (Tokyo): +81-3-5695-8401; fax: +81-3-5695-8403

ASEAN Office (Singapore): +65-353-9511; fax: +65-353-9510

Hong Kong Office: +852-2262-9518; fax: +852-2262-9555

Australian Office (Sydney): +61-2-9460-2355; fax +61-2-9460-2360

Latin America Office (Miami): (305) 593-8777; fax: (305) 593-2779

Mexico Office (Guadalajara): (523) 110-1144; fax: (523) 110-0744

Product Support (voice), United States: (541) 967-2450; Europe (Germany) +49-8151-266-330;

Europe (UK) +44-1189-444444; Europe (France) +33-1-55381616; TDD/TTY support
(541) 967-2451

Product Support (fax), United States: (541) 967-2401; Europe (Germany) +49-8151-266-331;

Europe (UK): +44-1189-444445; (France) +33-1-55381601

Presales information: (800) 468-5846

24-hour fax-on-demand service: (800) 380-0030

Investor relations: (408) 325-7476; (888) 474-3463 (United States and Canada)

FTP site: ftp.diamondmm.com

BBS: Europe (Germany) BBS at +49-8151-266333 (to 28.8 Kbps) or +49-8151-266334 (ISDN); Europe (UK) at +44-1189-444415 (to 33.6 Kbps)

Microsoft

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

HomeFree, Monster 3D, Rio, Shotgun, SpeedStar and SupraSonic are either trademarks or registered trademarks of Diamond Multimedia Systems Inc. Monster is a registered trademark of Monster Cable. Viper is a registered trademark of Directed Electronics Inc., used under License.

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

This announcement relates to products whose introductions are in North America. The product name, contents, prices and availability may differ elsewhere in the world according to local factors and requirements.

Except for historical information contained herein, the matters set forth in this press release, such as statements relating to the company’s ability to successfully exploit technological and market developments, the timing and success of new product introductions by the company and its competitors, and the company’s ability to invest in new technologies and to enhance its existing systems are forward-looking statements that are subject to risks and uncertainties, including the impact of competitive products and pricing and alternative technological advances, the timely and successful development and market acceptance of new products and upgrades to existing products, and other risks as detailed from time to time in Diamond Multimedia’s SEC filings, including its most recent Forms 10-K and 10-Q.

For more information, press only:

Lorraine Comstock for RioPort Inc., (408) 325-7346, lorraine@rioport.com

Bob Nelson for RioPort Inc., (408) 325-7419, bobn@rioport.com

Mary Dec, Waggener Edstrom for Microsoft, (503) 226-8240, mdec@wagged.com

Sara Murphy, Waggener Edstrom for Microsoft, (503) 226-8244, saram@wagged.com

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