MP3 Goes China - U.S. Company Inks Historical Internet Agreement With Chinese Government

Business Wire, Feb 29, 2000

Business Editors and High Tech Writers

HOUSTON--(BUSINESS WIRE)--Feb. 29, 2000

New Joint Venture Establishes the First

Major Government Approved MP3 Site in China

Houston InterWeb Design (OTCBB:HITD) announced today that it has formed a joint venture with the Chinese government and a Chinese investment company to build the first governmentally approved MP3 music site in China. The new joint venture, Beijing Artists Online L.L.C. plans to launch a Chinese MP3 music site similar to the popular MP3.com (Nasdaq:MPPP) within 60 days.

Although the Chinese government has adopted an open-door policy toward letting its citizens download and use MP3 players, every Chinese song posted on a Web site still requires approval by the Ministry of Culture. Houston InterWeb's proprietary technology allows the Ministry to administrate the site quickly and efficiently.

The objective of the joint venture is to promote and develop Chinese music through the use of Houston InterWeb's advanced Internet technology both in China and overseas. By creating a gigantic MP3 portal for its 1.2 billion people, the Chinese government can not only promote and develop China music industry, but it can also create a completely new, financially sustainable music distribution platform for its artists.

The joint venture is an ideal tool for the Chinese Ministry of Culture. By taking an active role in the MP3 market, the Ministry of Culture can also continue monitoring and controlling the content. Even though the artists are given a full liberty to build and update their own Web sites and upload their songs - all at no cost to them - the site will still make the decisions on whether the material is acceptable and should be posted on the Internet.

The new site will be based on Houston InterWeb's SiteBlazer(TM) technology. Artists will be able to design and update their own web sites, and upload their own music and graphics. The artists will have instant access to Web visit statistics to see the real-time number of downloads and page views. Even though the joint venture is partly owned by the government, it is a private enterprise and therefore a commercial, for-profit operation. By teaming up with Houston InterWeb, the new venture has the luxury of importing InterWeb's expertise and experience as well as utilizing the proven technology and Internet business models applied by its Western counterparts.

"An MP3 site is an ideal way for China to start promoting its hundreds of thousands of artists, not only in China, but worldwide. There are over 21 million Chinese speaking Internet users who reside outside China and have therefore had limited access to Chinese music in the past. Our new site will change all this," says Harry White, CEO of Houston InterWeb.

"Our service will be uniquely positioned to become the first major governmentally approved and owned MP3 site. We believe that the market opportunity is huge. Currently, China has only approximately 10 million Internet users, but according to the Yankee Group, Asian Internet usage is expected to reach nearly 374 million people by 2005. This combined with China's rapid economic growth will create an ideal marketplace for the MP3 site as well as our other products and technologies. We should be announcing additional joint ventures with China in the very near future," states White.

The English version of the new MP3 music site will be launched within 60 days, and the Chinese version should be completed within 120 days. At the time of the launch, the site will have an unprecedented amount of existing Chinese music available to the Internet users. The new company is already in the process of collecting and uploading a database of Chinese classical and folk music.

The new Beijing-based company, Beijing Artists Online L.L.C. is jointly owned by Houston InterWeb, China Culture Information Net, www.ccnt.com.cn - an Internet arm of the Chinese Ministry of Culture - and Hainan Dingshen Investment Co. Ltd. In addition to its ownership, Houston InterWeb will receive a significant license fee for its SiteBlazer(TM) technology.

Houston InterWeb Design is a publicly traded, fully reporting company traded on the OTC BB under the ticker symbol HITD. Other publicly traded Internet content companies focusing on the Chinese market include China.com (Nasdaq:CHINA) and MyWeb Inc.com (OTCBB:MYWB).

In addition to the growing Internet usage, another factor fueling Asian market expansion is the explosive growth in the number of PCs. PC shipments grew by more than 35% last year, with Western brand names like IBM (NYSE:IBM), Compaq (NYSE:CPQ), Hewlett-Packard (NYSE:HWP) and Dell Computer (Nasdaq:DELL) posting major gains.

MP3 is a downloadable music format that stores audio files on a computer, keeping the file size small, but retaining near CD-quality sound.

For more information on Houston InterWeb, please visit www.hiwd.net. To obtain a photograph of the joint venture signing ceremonies between the representatives of Houston InterWeb, Chinese investors and the Chinese government, please visit Business Wire's photowire service later today at www.businesswire.com.