Digital Island Acquires Live On Line, Creating a Global Streaming Media Network for e-Business Transactions

Business Wire, Jan 19, 2000

Business Editors/High-Tech Writers

SAN FRANCISCO--(BUSINESS WIRE)--Jan. 19, 2000

Digital Island Now Packages Technology and Professional Services

to Support Live Multicast and On-Demand Streaming Media That

Feature Seamless Ad Integration

Digital Island, Inc. (Nasdaq:ISLD), a leading global e-Business Delivery Network, announced today that it has acquired Live On Line, Inc., a provider of live and on-demand streaming media services, to create a powerful multimedia network with integrated e-Business transaction support.

The combination of a superior experience to the ultimate consumer coupled with a network infrastructure for global e-Business allows corporations to add new revenue opportunities to online events. Digital Island can now provide seamless ad integration into TV-quality streaming events, enabling a consumer to click on the ad, link to a form, and complete a transaction over its secure 23-country network. Digital Island can also reduce time-to-market for e-Business streaming events through an expanded Professional Services Organization that packages all the essential components through a single point of contact.

Pursuant to the terms of the acquisition the transaction is valued at approximately $70 million in cash and stock, based on the closing price of Digital Island shares on January 18, 2000.

"Our customers have indicated that rich media fills a critical need in their global e-Business strategies as they seek new and competitive ways to do business on the Internet," said Ruann F. Ernst, chairman and CEO of Digital Island. "We believe that transactive multimedia, or the ability to complement streaming media with transactional capabilities, is a powerful fusion of technologies that will give consumers today capabilities that they only dreamed of before. Augmenting rich media with the ability to consummate a sale anywhere in the world increases the value of that media significantly."

Digital Island's new service is capable of handling more than 250,000 concurrent streams and is expected to grow to 700,000 concurrent streams by the end of the calendar year. The new service can also support 840 unique satellite downloads per day and has an aggregate bandwidth of more than 7 gigabits per second. Overall, Digital Island now operates one of the largest commerce- and multicast-enabled streaming media networks in the world.

The network also runs all major formats, including QuickTime(TM), RealAudio(R) G2 and RealVideo(R) G2, the Microsoft(R) Windows Media(TM) Player, MP3 and Flash. This flexibility allows content providers to develop programming only once yet be able to reach a wider audience through cross-format compliance.

The Live On Line group will be incorporated into Digital Island's expanding Professional Service Organization. Adam Cohen, CEO of Live On Line, has been appointed Digital Island's vice president of streaming, live events. Debra LaChance, Live On Line president, will become Digital Island's vice president of streaming production and operations. As a result, Digital Island can supply complete turnkey live and on-demand streaming events, including a syndication service that makes the content available on any number of relevant Web sites to increase the size of the audience. Other services include encoding for all major streaming formats, satellite-signal acquisition and full production crews. The benefits to corporations consist of reduced cost, single point of contact worldwide, and faster implementation of commerce-enabled streaming media events.

Combined, Digital Island and Live On Line now have more than 100 streaming media customers. Live On Line's customers include AIG, American Express, Apple Computer, Arista Records, Bristol-Myers Squibb, Comedy Central, Continental Airlines, Eastman Kodak, Edelman Worldwide, Fox.com, Home Box Office (HBO), Inter-Continental Hotels and Resorts, Microsoft Corp., MTV, RealNetworks, Ricoh Ltd., Rivals.com, SFX Radio Network, Sony Music, Sotheby's International, VH1 and Virgin Records. To date, the company has booked more than 300 live events for the calendar year 2000. Live On Line (www.liveonline.net) is based in New York City.

"Fox.com's goal is to offer unique multimedia-driven content on the Web, and the experienced and professional production support provided by Live On Line has helped us achieve this with impeccable results," said Jordan Kurzwell, vice president of product development for news digital media at Fox.com.

"Live On Line enabled AIG to strategically disseminate key intelligence both internally and externally," said Michael Cohen, senior vice president at AIG, Strategic Brokerage Group. "They helped us define the streaming medium, and were key in solving an important business problem."

"We have collaborated with Live On Line on both virtual tours and live broadcasts for Sothebys.com, both of which exceeded our expectations and enabled us to bring the world of Sotheby's to new audiences," said Jennifer MacDonald, senior vice president for content and interactive design at Sotheby's International. "Their understanding of the needs of live broadcasts and streaming media is unparalleled. Their ability to execute live broadcasts seamlessly is unique in this field. Their energy and exuberance for the possibilities in new media are infectious."