Beatnik, Inc. - Enhanced Audio Solutions

BEATNIK ANNOUNCES $30 MILLION FUNDING ROUND

Multiple Industries Embrace Beatnik's Audio Platform

SAN MATEO, CA - MAY 25, 2000 - Beatnik, Inc., a leader in interactive audio technologies and content for the Web and digital devices, today announced that it has received $30 million in Q1 2000 funding from a premiere group of technology, content and service companies including Pacific Century CyberWorks, Media 100, Space Shower, Sun Microsystems, Inc. and The MTVi Group.

"Strategic investments from these key firms will be used to support Beatnik's implementation of a technology platform to deliver interactive audio to the Web, cell phones, set top boxes and Sun's Java™ technology," said Lorraine Hariton, Beatnik's president and CEO.

"We are delighted to have these market visionaries join Beatnik's already impressive family of investors," said Patrizia Owen, Beatnik's chief financial officer. "Additionally, we welcome the return of significant early round investors including The Mayfield Fund and Entertainment Media Ventures to this latest round of funding."

Beatnik Partners with Leading Technology, Content and Services Companies

Technology
Beatnik has well-established alliances with a number of leading technology companies and has licensed the Beatnik Audio Engine to companies including Intel, Liberate Technologies, Sun Microsystems and WebTV Networks, Inc. Beatnik's Rich Music Format™ (RMF®) has a compact and secure audio file format for use in digital devices - including cell phones and set top boxes.

Beatnik provides the core technology behind Sun's Java™ Sound API, featuring a playback and capture engine designed to be the audio subsystem for the Java™ 2 platform. This API lets professional musicians and sound designers build sound applications in an environment that will run on any platform, ensuring consistent sound across the Internet and beyond.

Content
In the content marketplace, Beatnik has a long-term agreement with The MTVi Group that includes leading music and entertainment sites MTV.com, VH1.com, and Sonicnet.com to provide interactive audio experiences for millions of Web surfers. Through Beatnik technologies, music fans can create their own background music to guide them as they surf MTVi's sites, instantly preview new songs by simply rolling the mouse over artist graphics, remix tracks to create their own personalized versions of songs and email their creations to friends. In addition to an existing equity relationship, Beatnik also has a strategic content partnership with The Zomba Music Group. Zomba gives Beatnik access to music from some of its popular artists and the ability to promote and license music from Zomba's extensive music production libraries. Some of this music is available through the Beatnik Production Music site.

Services
Beatnik's Leaders Program works with many of the top Internet professional service firms such as iXL. As part of Beatnik's relationship with iXL, iXL uses Beatnik's training and support tools to educate its creative teams on the art and business of "sonifying" sites with music and sound. Adding the interactive audio functionality to Web sites brings the Internet experience to a new level; providing stronger brand recognition, further heightening the user experience and creating some of the highest user session times on the Web.

International
Beatnik announces equity relationships with top players in Asia including Pacific Century CyberWorks, a leading Internet company is Asia, and Space Shower, Japan's premium television music channel to bring immersive audio experiences to Asian Web surfers.

A recent report by Jupiter Communications recommends Web sites push audio content to deliver a passive experience for utility, guidance and cueing, as well as judiciously applying pushed audio for branding. Conversely, sites should rely on active pull for consumers to experience music, information and narrative audio.

About Beatnik, Inc.
Beatnik brings interactive music and sound to the Web through its combination of technology, content and services. Beatnik's solution includes a line of applications, production music, sound content and the Mixman software product line, enabling the integration of interactive audio content into the Web experience. Beatnik develops, markets and sells its interactive audio solution to a community of creative professionals, potential licensees of its technology and consumers enabling them to build and interact with music and sound over the Web, on computers and other digital devices. Mixman Technologies, Inc. became a subsidiary of Beatnik in December 1999. Incorporated in 1996, Beatnik was founded by musician and composer Thomas Dolby Robertson.

# # #