Acquisition: Microsoft to Acquire Interactive Objects Digital Audio Technology, Signs Contract for Ongoing Windows CE Development - Company Business and Marketing

Edge: Work-Group Computing Report, May 3, 1999

Interactive Objects Tuesday announced Microsoft Corp.'s purchase of the company's digital audio player technology and the signing of a contract with Microsoft to develop additional streaming technology for the Windows CE operating system.

Interactive Objects' exceptional player provides the first stereo playback software for the Palm-size PC market, supporting Microsoft's new Windows Media Technologies 4.0 platform. The value of the combined purchase and contract agreement provides significant revenue for Interactive Objects.

Under the terms of the contract, Microsoft assumes ownership of Interactive Objects' media player technology. Interactive Objects' technology provides the first digital audio player supporting Microsoft's Windows Media file format for the Palm-size PC operating system, Windows CE. With almost twice the compression of MP3 yielding half the file size, Windows Media 4.0 effectively doubles the storage capacity of music files on Windows CE while concurrently increasing the device's multi-tasking abilities.

"Microsoft chose Interactive Objects' digital audio player for Windows CE based on its unsurpassed functionality," said Anthony Bay, General Manager, Streaming Media Division at Microsoft. "Our ongoing contract enlists Interactive Objects' exceptional skills in continuing to bring the finest digital media software to the Palm-size PC industry."

Showcased at Microsoft's recent Windows Media 4.0 press conference in Los Angeles, Interactive Objects' color media player demonstrated the power of high fidelity audio playback for Windows CE. When loaded on the Casio E-100 Palm-size PC, the media player supports one to four hours of music in the Windows Media format, up to four times that of current MP3 players. Interactive Objects' original media player, complete with detailed information, may be viewed on the company's web site at: http://infoapp.iobjects.com/products/media_player.htm.> "Our research and development team is on the cutting edge of technology, producing software that adds functionality to our everyday lives," said Steve Jackson, Executive Vice President of Business and Technology Development, Interactive Objects, Inc. "This contract reinforces our team's exceptional talent and brings substantial ongoing revenue to the company, representing significant progress in the continued success of our business plan."

In addition to the purchase of the media player software for Windows CE, Interactive Objects has entered into an ongoing contract with Microsoft to develop Windows desktop utilities that enable users to manage audio libraries between PCs and portable devices. Support for Windows Media Rights Manager will enable packaging of copyrighted audio files, ensuring authenticity of the audio files as well as the legal right to use the files, a solid step forward in the fight against digital music piracy.

"Our development of this extraordinary audio software pushes the envelope for all Windows CE-based applications to come," said Mark Phillips, Chief Technology Officer, Interactive Objects, Inc. "We've raised the bar on what can be developed for the Palm-size PC and have greatly increased consumer expectations of the PDA market."

Former Microsoft employees founded interactive Objects in 1995 to develop object software for commercial Internet and intranet applications. Today, Interactive Objects continues to evolve and expand its offerings by leveraging revenue generating intellectual property and technical talent. FMI: http://www.iobjects.com