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Sonic Foundry Completes Acquisition of MediaSite

(October 17, 2001)
Sonic Foundry Inc. has completed the asset purchase of MediaSite, Inc., a provider of automated rich media publishing, management, and access solutions. The acquisition was approved by MediaSite's shareholders and its Board of Directors. Under terms of the purchase agreement, a wholly-owned subsidiary of Sonic Foundry purchased the assets of MediaSite and assumed certain of its liabilities, in exchange for 3,780,000 shares of Sonic Foundry common stock. Sonic Foundry has begun to operate the former MediaSite unit as a subsidiary of Sonic Foundry.

MediaSite's co-founder Krishna Pendyala will join Sonic Foundry as Senior Vice President of Strategy and Consulting.

Going forward, Sonic Foundry anticipates that it will allocate a greater percentage of its resources to continuing to develop the systems side of its business and the newly acquired technology. The new Sonic Foundry subsidiary plans to focus sales and marketing efforts on solutions that enhance the use of media throughout the enterprise, but more importantly, demonstrate a measurable return on investment. Specifically, key advantages of the newly acquired technology include:

  • Accurate search and retrieval of streaming media based on Integrated Speech, Language and Image Processing (ISLIP) thereby improving relevance and thus, saving time and money

  • Reducing bandwidth costs through higher accuracy search and retrieval techniques

  • Improving time efficiencies of data transfers associated with searching, skimming and navigating media

  • Expanding the usability of traditional media through interactivity and accessibility, thereby addressing broader distribution opportunities

  • Reducing vault management costs through digital infrastructure deployment resulting in demonstrated savings and distribution efficiencies

    Earlier this year, Frost & Sullivan recognized MediaSite with an award for Technology Leadership in Digital Media Management Systems and listed MediaSite's specific cost advantages. According to Frost & Sullivan, "For rich media producers, MediaSite's integrated approach to automated processing of media content provides a huge reduction in time and cost over conventional methods and enables content creators to generate high volumes of digital media at the lowest possible unit cost."

    Sonic Foundry intends to focus the new subsidiary on several key market segments that include government systems applications in digital video storage, surveillance and analysis, entertainment industry opportunities designed to expand the utilization of media assets within the enterprise and corporate remote communications and associated video mining solutions. The acquisition has also transferred intellectual property and a number of key issued and pending patents to Sonic Foundry. A portion of this technology is derived through an ongoing relationship with Carnegie Mellon University, and specifically, Dr. Howard D. Wactlar, co-founder of MediaSite and currently director of the Informedia Digital Video Library Project at Carnegie Mellon. Dr. Wactlar has been cited by Massachusetts Institute of Technology's "Magazine of Innovation" as an innovator in the emerging video mining technology space. This technology integrates natural-language processing, speech recognition, image analysis as well as face recognition to create the next generation media search and retrieval engine. Sonic Foundry expects its continued relationship with Carnegie Mellon researchers will offer additional opportunities for commercialization of this and other newly emerging technologies.

    Commenting on the acquisition of MediaSite, Rimas P. Buinevicius, Chairman and CEO of Sonic Foundry, Inc. stated, "The growing synergies of Sonic Foundry with its new systems company are being discovered on a regular basis. Specifically, the research strength of MediaSite meshes well with the well-honed commercial software methodology of Sonic Foundry. Most importantly, the acquisition forms a new operating strength that allows Sonic Foundry to become a more powerful force in the rapidly growing rich media marketplace."

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