Avatar Interactive Enters Into Long-Term Consulting Agreement with Microsoft Desktop Finance Division.

SEATTLE--(BUSINESS WIRE)--June 22, 1999--

Avatar Interactive, a wholly-owned subsidiary of Interactive Objects (OTC BB:OBJX), today announces the signing of a long-term consulting contract with Microsoft to develop Internet solutions for the Desktop Finance Division (DFD).

The value of the contract agreement provides significant revenue and technology exposure for the newly acquired organization.

Under the terms of the contract, Avatar Interactive will provide project management, design, planning, implementation, testing and support services for an unnamed commercial Internet product within the Desktop Finance Division (DFD).

"Microsoft selected Avatar Interactive for its proven track record of high quality Internet software development," said Jeff Thiel, Product Unit Manager, Desktop Finance Division at Microsoft. "We look forward to the contributions of the Avatar Interactive team to assist us in producing an exceptional customer experience."

Microsoft's Desktop Finance Division (DFD), founded in 1996, is dedicated to helping consumers better manage their daily financial needs and plan for the future. DFD's Money Financial Suite is a personal finance management tool for banking, bill paying, budget, expense-tracking, investment and long-term goal-planning management, including financial guidance and information. DFD's MoneyCentral is a one-stop personal finance Web site that provides easy-to-use tools and objective information, and features MSN Investor, the award-winning site which teaches consumers how to better invest, track their portfolio, and research their next investment.

"We are excited that Microsoft chose Avatar Interactive to provide Internet technology solutions for Desktop Finance Division products," said Kayleen Arafiles, President, Avatar Interactive. "We will work hard to provide continued benefit to both Microsoft and the Interactive Objects organization."

About Interactive Objects, Inc.

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. Through its consulting division, Avatar Interactive, the Company offers a full range of development services including custom software solutions, Internet development, software training, and testing. The Company's Information Appliances division continues to develop and mature its research and development efforts for embedded systems.

Interactive Objects is headquartered at 217 Pine Street, 8th Floor, Seattle, WA 98101, USA. Interactive Objects is listed on the OTC BB under the symbol "OBJX" and on the "Third Segment" of the Frankfurt and Berlin Stock Exchanges under the symbol "IOX" and German securities code WKN: 913011. The Company can be reached on the web at http://www.iobjects.com

About Microsoft

Founded in 1975, Microsoft (Nasdaq:MSFT) is the worldwide leader in software for personal computers. The company offers a wide range of products and services for business and personal use, each designed with the mission of making it easier and more enjoyable for people to take advantage of the full power of personal computing every day.

Other product and company names herein may be trademarks of their respective owners.

Certain information included in this communication contains statements that are forward-looking, such as statements relating to the future anticipated direction of the high technology industry, plans for future expansion, various business development activities, planned capital expenditures, future funding sources, anticipated sales growth and potential contracts. These forward statements are subject to a number of known and unknown risks and uncertainties that could cause actual operations or results to differ materially from those anticipated. These risks include, among others, risks associated with unproven sales of the Company's products, risks associated with the software development process and risks related to the transition to a new management team. Certain of these risks and other risks are described in the Company's Registration Statement on Form SB-2 filed with the Securities and Exchange Commission (SEC). The registration statement is available from the SEC's Web site at http://www.sec.gov.