Avistar Creates Independent Video Network For Financial Services Value Chain; Video Community Expands to Include New Customers and Enhanced Services.

Business Editors/High-Tech Writers

REDWOOD SHORES, Calif. & NEW YORK--(BUSINESS WIRE)--June 8, 2004

Avistar Communications Corporation (Nasdaq:AVSR), a provider of business video collaboration solutions, today announced that it has created an independent video network for the financial services value chain of investment banks, asset managers and their partners, suppliers and outsourced vendors. This multi-enterprise video community is now offered as a hosted service available to new organizations. Community members are expected to benefit from enhanced services and a reliable, robust and secure network.

Launched one year ago to link sell-side and buy-side firms, the inter-enterprise video community has grown steadily and now connects thousands of users who are dispersed across multiple banks and related organizations in the financial services value chain. With two new customers joining recently, the community now includes 10 companies with locations in over 20 countries.

"The need for video is growing not only within financial services but across the supply chain to other industry participants," said Larry Tabb, Founder & CEO of The Tabb Group. "By linking the complete value chain from buy-side, to sell-side, to outsourced vendors, research organizations, software developers, law firms, executive recruiters and network providers, the industry becomes more efficient. Not from just reducing the cost of travel, but increasing communications, reducing time delays, enhancing relationships, and insuring that projects get done right the first time."

Today, financial services professionals use the video network to communicate and collaborate effectively with dispersed global teams. Executives at investment banks use the video network to connect to recruitment firms to interview job candidates. Complex derivative trades can be completed in days rather than weeks due to faster access to risk managers and independent legal advisors. Face-to-face video communication with outsourced vendors helps ensure that outsourced projects stay on track, irrespective of geographies, language and cultures.

"Avistar is optimistic that the video community will continue to grow in size and importance," said Jerry Burnett, Chairman and CEO of Avistar. "Over the coming months we expect to see more banks and related institutions join, and we plan to continually enhance our services to meet the changing needs of this community."

At the core of the video community is the Avistar Community Exchange (ACX), which exchanges information among the AvistarVOS Proxy (VOSP) servers running at each member enterprise. Running on a secure web server and using industry standard protocols, the ACX exchanges user presence directory information, routing, and system resource reservations between member enterprise VOSPs. This allows easy and quick presence-based calling between different enterprises in the community. The VOSP includes powerful capabilities that enable each participating enterprise to manage user visibility across the community.

Avistar recently located the central ACX at a secure, professionally managed, independent data center at DataPipe Managed Hosting Services. As a result, member enterprises are expected to experience a reliable, robust, secure network, with increased scalability. Avistar also delivers management services to set-up and maintain enterprise accounts, and to monitor and service the performance of the ACX.

About Avistar Communications Corporation

Avistar develops, markets and supports video collaboration solutions for the enterprise, all powered by the AvistarVOS software. From the desktop, Avistar delivers TV-quality video calling, recording, publishing to web and emails, video-on-demand, broadcast, and document sharing. Avistar delivers on vBusiness -- video-enabling business -- by integrating visual communications into the daily workflow and connecting communities of users within and across enterprises.

Founded in 1993, Avistar Communications Corporation is headquartered in Redwood Shores, California, with sales offices in New York and London. Avistar's technology is used in more than 35 countries. Collaboration Properties, Inc., a wholly owned subsidiary of Avistar Communications Corporation, holds a broad portfolio of patents covering the AvistarVOS platform as well as multiple software and hardware video collaboration products. For more information, visit www.avistar.com.

Forward Looking Statements

This press release contains forward-looking statements including statements regarding the performance, reliability, impact and benefits of the Avistar video community, growth in opportunities for video collaboration services, growth in the Avistar video community and future enhancements to the Avistar network. In some cases, these forward-looking statements can be identified by words such as "expects," "expected to" or "plans." Such statements are subject to risks and uncertainties that could cause actual results to differ materially, including such factors, among others, as technical difficulties, difficulties and delays in distribution, costs and technical difficulties associated with product development, the development of competitive technology and solutions, general economic conditions and conditions in the financial services industry in particular, and delays in adoption or acceptance of video collaboration technology. We refer you to the documents that Avistar files from time to time with the Securities and Exchange Commission, in particular the section entitled "Factors Affecting Future Operating Results" in Avistar's annual report on Form 10-K and its quarterly reports on Forms 10-Q.

All rights reserved. Avistar, AvistarVOS, and the Avistar logo are trademarks or registered trademarks of Avistar Communications Corporation