VitalStream Announces Next-Generation Streaming Service for Flash Video; Reaffirms Streaming Media Industry Leadership with Support For Macromedia Flash Media Server 2

Business Wire, Oct 17, 2005

IRVINE, Calif. -- VitalStream, Inc. (OTCBB:VSTH), the world leader in video streaming, today announced its latest VitalStream(R) Streaming Service for Flash Video(TM), delivering interactive, rich media content with enhanced video components and expanded workflow management capabilities through its reliable, secure, award-winning content delivery network (CDN).

VitalStream's Streaming Service for Flash Video supports Macromedia's new Flash Media Server 2, which offers a unique combination of traditional streaming media capabilities and a flexible development environment for creating and delivering innovative, interactive media applications. Working closely with Macromedia, VitalStream leads the market as the first Macromedia partner to power streaming services for Flash.

MediaConsole(R), VitalStream's workflow management toolset, now integrates with all streaming formats (including the new Flash 8), and includes a media manager, pre-built video skins and a real-time reporting dashboard. To accelerate its customers' Flash application development, VitalStream provides the MediaOps(TM) software development kit -- a library of Flash software and Flash-developed objects that enable developers to quickly and easily implement their Flash projects.

Additional features include:

--High-quality video -- As the founding member of the Macromedia Flash Video Streaming Service program, VitalStream delivers a higher capacity service than other, non-certified CDN Flash providers, delivering high-quality video, while ensuring faster and smoother video playback, now supporting Flash 8.

--Globally load-balanced trafficking -- VitalStream's system is architected specifically for massive capacity and scalability. Technology from Radware, a leading provider of integrated application delivery solutions, enhances VitalStream's selection of the ideal data center from which to get a data stream, providing customers with quicker, more reliable delivery.

--Authentication services -- VitalStream's authentication services act as a gatekeeper by letting only authorized viewers access content on customer Web sites; now available for live as well as on-demand events.

--Support for raw data logs -- VitalStream customers can now access raw data easily to quantify their streaming traffic, empowering them to create their own custom reports and analyze their Web traffic.

--Web services-based reporting -- VitalStream's reporting system offers an industry-standard SOAP-based portal, enabling users to connect to the server and create their own data feeds, target specific customers and identify problem areas.

In addition, agency-designed Flash templates give customers more choices and creativity for delivering their content. Professional and enterprise content management tools give users quick access to control the delivery of their live media assets.

"Over the last couple of years, we have seen rapid customer adoption of Flash Video streaming, proving that Flash is a competitive platform," said Philip N. Kaplan, president and chief operating officer of VitalStream. "Our latest product only strengthens our position as the industry leader in Flash Video streaming, delivering top-notch streaming video quality and workflow management control."

"As a Macromedia-certified partner, VitalStream continues to offer ground-breaking capabilities for delivering streaming Flash Video," said Chris Hock, director of product management for Macromedia, Inc. "Now, compelling new features found in Flash Professional 8, Flash Media Server 2 and Flash Player 8 enable customers tap to into unprecedented levels of expressiveness and greatly improved video quality, meeting their demands for better ways to engage end users."

VitalStream recently published a white paper, Stream High Quality Flash 8 Video, outlining its Streaming Service for Flash, and detailing basic use of the product, key features and requirements. To download the paper or for more information on VitalStream, please visit www.vitalstream.com.

About VitalStream, Inc.

VitalStream, Inc., a wholly owned subsidiary of VitalStream Holdings, Inc. (OTC:VSTH), is a global provider of integrated content delivery services that enable businesses to broadcast digital media and communications to worldwide audiences via the Internet. The company provides complete solutions, including video and audio streaming, live event broadcasting, media asset management, integrated Web hosting and consulting services, that seamlessly integrate with today's leading streaming media technologies. To ensure a worldwide reach, VitalStream engineered its award-winning content delivery network certified for quality delivery in the United States, Europe and Asia. For more information, visit www.vitalstream.com.

Forward-Looking Statements

This news release contains forward-looking statements made in reliance upon the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results may differ materially from those indicated by these statements as a result of various important factors including, but not limited to, the possibility that our new product offerings or releases based upon or incorporating our partners' proprietary technology may not predictably be accepted by our customers, perform as anticipated or be available longer-term due to arrangements that may be terminable under certain circumstances, we may be unable to keep up with evolving industry standards and changing user needs, our network security and performance may be adversely affected by both internal and external causes, and other factors that are discussed in "Risk Factors" and elsewhere in the Annual Report on Form 10-K of VitalStream Holdings, Inc. and other documents periodically filed by VitalStream Holdings, Inc. with the SEC. Such forward-looking statements speak only as of the date of this release. The company is under no obligation and expressly disclaims any obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise.