INTERTAINER AND MICROSOFT FORM STRATEGIC ALLIANCE TO ACCELERATE DEPLOYMENT OF ON-DEMAND ENTERTAINMENT SERVICES

Companies to Deliver A-List Content and Services to Consumers' PCs and Televisions on Demand

CULVER CITY, Calif., and REDMOND, Wash. - Jan. 24, 2000 - Intertainer Inc. and Microsoft Corp. today announced a strategic alliance to deliver a collection of A-list entertainment on demand to consumers via Intertainer's broadband service. This alliance underscores Microsoft's role as a key enabler of enhanced TV services and further expands the cooperative relationship formed when Intertainer announced support of the Microsoft® TV platform in June 1999.

The companies are collaborating to accelerate wide-scale deployment of Intertainer's best-of-breed content-aggregation service, providing consumers with a broad variety of on-demand entertainment. New releases and classic Hollywood films, music, television programs, and shopping will be available on consumers' PCs and televisions via Intertainer's service over cable and digital subscriber lines (DSL). As part of the alliance, Microsoft also announced a minority equity investment in Intertainer to help expedite widespread deployment of Intertainer's broadband service. Terms of the investment were not disclosed.

"When we first set out to develop a broadband service three years ago, we were confident that Intertainer would define the future standards of entertainment on demand in households," said Jonathan Taplin, president and co-CEO of Intertainer. "Our vision to lead the entertainment revolution is now validated and supported by Microsoft, the world's leading technology brand. This is a critical milestone for everyone at Intertainer, and we look forward to collaborating with the most prestigious, innovative company known today to further solidify Intertainer's leadership position."

Intertainer will become a preferred broadband content service provider for Microsoft and be offered as a service to network operators that license Microsoft TV platform software. In addition, Microsoft will become the preferred technology provider for Intertainer, which will utilize Microsoft Windows Media™ Technologies to deliver high-quality music and full-screen video entertainment to PCs and televisions. Intertainer will also use the Microsoft TV platform (and other Microsoft products) in cable, DSL and other future distribution platforms.

"As an innovative broadband service, Intertainer has demonstrated leadership and proven what is possible by introducing high-quality entertainment on demand," said Jon DeVaan, senior vice president of the Consumer Group at Microsoft. "This alliance is consistent with our strategy of focusing on delivering superior software platforms for broadband interactive services that are open and allow everyone in the industry to contribute their unique value."

Microsoft joins Comcast Corp., Intel Corp., NBC, Sony Corporation of America, Sterling Investment Partners and US West Inc. in committing capital resources to Intertainer. Intertainer also has formed relationships with leading cable and telephone company operators across the country to deliver its service via cable modems, DSL telephone lines and digital set-top boxes. Intertainer completed successful market trials with US West in Denver and Boulder, Colo.; Comcast in Willow Grove, Penn.; and RCN Corp. in New York City. Intertainer also launched its service on Online Avenue through US West and on zoomtown.com, a wholly owned subsidiary of Broadwing Inc. (formerly Cincinnati Bell Inc.). In addition, Intertainer will soon deploy to Comcast customers via Scientific Atlanta's Explorer 2000 set-top box.

About Intertainer
Intertainer (http://www.intertainer.com) is a new way to get movies, music and television any time users want on their PC or television. The service features content from unprecedented partner relationships including those with Warner Bros., DreamWorks SKG, Sony Music, ESPN, Twentieth Century Fox Film Corp., Disney Channel and Columbia TriStar Television, among many others. Enhanced TV functionality, interactive advertising, e-commerce opportunities and personalization features round out the Intertainer experience. Strategic partners include Comcast, US West, Sony, Intel and NBC.

About Microsoft
Founded in 1975, Microsoft (Nasdaq "MSFT") is the worldwide leader in software for personal and business computing. The company offers a wide range of products and services designed to empower people through great software - any time, any place and on any device.

This document is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS DOCUMENT.

Microsoft and Windows Media are either registered trademarks or trademarks of Microsoft Corp. in the United States and/or other countries.

The names of actual companies and products mentioned herein may be the trademarks of their respective owners.

For more information, press only:
Lauren de la Fuente, Intertainer, (310) 895-2168
Anne Burkhimer, BSMG Worldwide for Intertainer, (310) 966-5524,
Mobile: (310) 567-7040, aburkhim@bsmg.com
Jodie Cadieux, Waggener Edstrom for Microsoft, (408) 986-1140, jodiec@wagged.com
Rapid Response Team, Waggener Edstrom for Microsoft, (503) 443-7000, rrt@wagged.com
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