Avid Technology Completes Acquisition of Softimage From Microsoft.

TEWKSBURY, Mass.--(BUSINESS WIRE)--Aug. 3, 1998-- Avid Technology, Inc. (NASDAQ:AVID), the leading provider of computer-based video, film and audio solutions for entertainment and information applications, announced today that it has completed the previously announced acquisition of Softimage Inc., a subsidiary of Microsoft Corp. (NASDAQ:MSFT). This acquisition strengthens Avid's presence in the television market by allowing Avid to offer its customers comprehensive solutions for television program finishing and adds leading 3D animation technology to Avid's product line.

Softimage is a leading developer of 3D animation, video production, 2D cel animation and compositing software solutions for creative professionals. Located in Montreal, Quebec and employing approximately 300 people worldwide, Softimage was founded in 1986 and purchased by Microsoft in 1994.

"Avid gains numerous benefits from this acquisition, including the expansion of our presence in television finishing market with Softimage|DS , a television finishing tool which complements our current product offerings and enables Avid to leverage existing Softimage technology," said Avid CEO and Chairman William J. Miller. "We look forward to reporting on the progress of our new product roadmap and how Avid and Softimage are combining complementary products, technology, and talent to provide the most powerful comprehensive digital solutions for finishing television programs of all types. We believe this predominantly tape-based market is a natural extension for Avid and should provide Avid significant future growth as we offer our customers a variety of uncompressed finishing tools for the full spectrum of their television projects."

According to Miller, the acquisition also provides Avid with a 3D animation software product and an alliance with a key strategic partner, Microsoft. The close strategic relationship further ensures the ongoing support of our joint initiatives in digital television and interactive content development while underscoring Microsoft's ongoing commitment to drive the distribution of media content in all-digital environments and to make any computer a visual media platform.

"Microsoft is pleased to gain a strategic relationship with Avid, which brings to the table proven expertise in the creation and distribution of digital media tools," said Craig Mundie, senior vice president, consumer platforms division, Microsoft. "Softimage has been a leader in the digital media space since its inception and will extend that leadership by leveraging the new Digital Studio architecture as part of Avid."

Softimage will function as a wholly-owned subsidiary of Avid and will continue to be based in Montreal. Hugues Leveille, who joined Softimage in 1991 and recently served as director of worldwide sales, has been appointed General Manager of Softimage, reporting to Avid Executive Vice President Cliff Jenks.

Softimage founder Daniel Langlois is expected to join Avid's board of directors. "We will be fortunate to have Daniel Langlois join our board," said Miller. "As a filmmaker, entrepreneur and industry visionary, his experience working with the entertainment and animation communities will be of great value to the customers of our film, television, and video production solutions."

The above may include forward-looking statements based on current expectations that involve a number of risks and uncertainties. Actual results may differ materially from those described therein, depending on such factors as the Company's ability to successfully integrate the operations of Softimage, and those other factors described under "Certain Factors That May Affect Future Results" in the Company's Annual Report on Form 10-K for 1997 and the Form 10-Q for March 31, 1998, filed with the SEC.

Avid Technology, Inc. is an international, industry-leading provider of digital audio video tools for creating content for information and entertainment applications. The company's products are used by customers ranging from corporate communications professionals to film, television, and interactive content producers to broadcast news organizations. For more information, visit Avid's World Wide Web site at www.avid.com.

Avid is a registered trademark of Avid Technology, Inc. Softimage and Softimage|DS are trademarks of Softimage, Inc. All other trademarks contained herein are the properties of their respective owners.

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