NeoMedia Implements Acquisition Strategy in Becoming a 'Driving Force' in Mobile Internet Applications

Business Wire, Feb 16, 2006

FORT MYERS, Fla. -- NeoMedia Technologies, Inc. (OTC BB: NEOM), has implemented an acquisitions strategy designed to impact corporate shareholders, consumer goods and services companies, and enterprise partners, as well as shoppers seeking low prices, information, or a discount coupon.

More than a decade ago, NeoMedia created its visionary PaperClick(R) platform, a patented technology that as part of the company's complete portfolio of intellectual properties has opened the door for the next generation in mobile applications. The initial application of PaperClick is targeted at mobile marketing, a market projected to exceed $1 billion in 2008 according to Infinity Research.

For consumers, PaperClick means clicking on SmartCodes or entering keywords on cell phones to link directly to specific content on the Mobile Internet . . . to compare prices while shopping, watch a how-to video from an instructional manual, receive an in-store coupon at a fast-food restaurant, buy movie tickets from a newspaper ad or poster, access real-time stock quotes, and many more applications to come.

And for business, PaperClick means unprecedented access to consumers though what is now known as "the third screen" - after the TV and PC - utilizing the full multimedia capability of the mobile Web.

Acquisition Strategy Set

Now, as part of the plan to make NeoMedia a leading provider of global mobile marketing services, incorporating PaperClick and the fullest range of mobile solutions, President and CEO Charles T. Jensen has devised a program of strategic acquisition of what he called "quality mobile marketing service providers in the U.S. and abroad.

On February 9, NeoMedia signed an agreement to purchase Mobot(R), Inc., of Lexington, Mass., a pioneer in mobile visual recognition technology, for $10 million in cash and stock, with the transaction expected to close this month. Mobot's visual search technology connects mobile consumers with international brands, including L'Oreal(R), Samsung(R) and Saturn(R), major media companies, including ELLEgirl(R), VIBE(R) and JANE(R) magazines and leading music labels, including WEA (Warner Music Group's U.S. sales and retail marketing company). Mobot campaigns require no changes to existing visual media and work seamlessly with all wireless carriers.

Then, earlier this week, NeoMedia signed an agreement to purchase 12snap AG, a Munich, Germany-based award-winning leader in marketing and entertainment applications and programs via cellular phones. The acquisition was announced at the 3GSM Congress in Barcelona, the world's premier mobile event, where 12snap was exhibiting. The price was $22 million in cash and shares, with closing scheduled to take place before the end of February.

12snap has offices in New York, London, Milan, Vienna, Stockholm, Dusseldorf and Munich, and a technical development center in Romania. It is the only mobile marketing company ever to win "Lions" - the Oscars of the advertising industry - at the Cannes International Advertising Festival for its work with Sony(R), Coca-Cola(R) and Nokia(R), capturing four Lions in all. 12snap was the only German company named by leading tech industry publication Red Herring in its "100 most innovative technology companies in Europe" for 2005.

Mr. Jensen said that NeoMedia's strategy for 2006 and beyond "focuses on companies that leverage their intellectual properties as a competitive advantage, and serve markets with major share growth potential."

Taking PaperClick World-wide

"We are confident that PaperClick will be embraced by consumer goods and services companies in many industries, all over the world," said Martin Copus, NeoMedia's COO and chief executive of its PaperClick wireless business unit.

"10 million subscribers in Japan are already clicking on SmartCodes with their cell phones to receive information and promotions, and in Europe, international mobile marketing providers such as 12snap have helped run successful campaigns for major blue chip clients, such as Kellogg's(R), that attracted literally millions of consumers to participate."

Mr. Copus cited another example of the power of mobile marketing:

"A recent campaign was developed and implemented by Sponge, a London-based mobile provider, for Walker's(R) (Frito-Lay) potato chip company," he said. "It went so far as to offer a free iPod(R) every 5 minutes for a month, in return for texting in unique codes printed inside bags of the product. Not surprisingly, the level of response was in the multi-millions."

"NeoMedia recognizes and salutes this pioneering success in mobile marketing as we work to be a driving force in the industry," Mr. Jensen said.

"We have put, and continue to put, stakes in the ground in the U.S. and Europe, implementing strategies designed to make us an industry leader. Today," he said, "we believe that NeoMedia is well positioned due to its access to significant capital, connections to growth markets, solid IP position, proven technology, known customer acceptance, convergence of market trends, demonstrated business models, and its management built from the respective markets the company serves."