On2 and Equator Enter Into a Formal Licensing Agreement; Equator's MAP-CA Broadband Signal Processor to Feature On2's New and Groundbreaking VP4 Codec.

Business/High-Tech Editors

NEW YORK--(BUSINESS WIRE)--Jan. 9, 2001

On2.com Inc. (ASE:ONT), a leading broadband technology and services company specializing in providing the highest-quality streaming video over the Internet and to consumer electronic devices, announced today that Equator Technologies, Inc., the leading provider of solutions for broadband signal processing, has licensed On2's new VP4 codec for use in their MAP-CA Broadband Signal Processor (BSP(TM)).

The term of the license agreement is for three and a half years.

"We are delighted to further extend our relationship with On2 with this formal licensing agreement. On2's technology will allow us to offer our customers unprecedented near-DVD quality streamed video," said Avi Katz, President and CEO of Equator Technologies, Inc. "The MAP-CA has become the processor of choice worldwide for high quality streaming video at low bit rates, and an ideal platform for cost-effective broadband-enabled products. The partnership with On2 reflects our strategic direction of providing our customers with a comprehensive, cost-effective, integrated solution of hardware and software."

"We are very pleased with our new agreement with Equator, and are excited at the combination of VP4 and Equator's technology," said Douglas McIntyre, President and CEO of On2. "Finally, the possibility exists for the delivery of sporting events and full length feature films over devices such as Internet enabled set-top boxes at the highest quality."

On2's new VP4 video compression technology, which has been initially optimized for consumer electronic devices, offers the highest quality streaming video at the lowest possible data rates. VP4 represents a major breakthrough in compression technology, by achieving near-DVD quality at 450 Kbps -- up to a 30% improvement over any other compression technology available today.

On2's VP4 groundbreaking features include:

-- Near-DVD Quality at 450 Kbps: VP4 maintains the highest quality possible at
450 Kbps while delivering full-screen, full-motion at true 640x480 resolution
at 24fps for film and 30 fps for video.

-- Near-VHS Quality at 150 Kbps: VP4 is the only compression technology that
can achieve near-VHS quality at 150 Kbps, at a screen size of 320x240
resolution at 24-30 fps.

-- Seamless Bandwidth Management for IP-based delivery networks.

"VP4 marks a significant leap forward in video compression and streaming technology," said Daniel B. Miller, Founder and Chief Technology Officer of On2. "Never before have such levels of quality been available at such low data rates. By pushing the state of the art in compression further than ever before, VP4 for the first time brings the world of IP-based video delivery over bandwidth constrained networks into the realm of professional video quality that consumers have come to expect on their television sets."

About On2.com

On2.com Inc. (ASE:ONT) is a broadband application service provider offering a suite of products and services, including high-level video encoding, hosting, streaming, interface design, customized technical support, and consulting services. Founded in 1992, the company has consistently been at the forefront of the broadband revolution with the creation of its advanced full-motion, full-screen, TV-quality video compression and streaming technology (TrueMotion(R) VP3). In assisting new and traditional media companies, Internet enterprises and Web site customers to move from a traditional media distribution model to a broadband IP strategy, On2 is enabling the Internet to become a truly viable delivery medium for video, audio, 3D, and other media and data. Headquartered in New York City, with offices in Albany, NY, San Francisco, CA, and London, UK, On2 may be reached at 375 Greenwich Street, New York, NY 10013, telephone [phone] or [e-mail]. Investor inquiries should be sent to [e-mail]. More information is available at www.on2.com.

About Equator Technologies

Equator Technologies (http://www.equator.com) is the leading provider of solutions for programmable broadband signal processing. The company's VLIW Media Accelerated Processor (MAP) BSP(TM) architecture is 100 percent programmed in C, enabling the rapid development of high-performance, flexible, media-intensive systems. The MAP-CATM is the world's fastest digital signal processor. Equator is a privately held fabless semiconductor company and was founded in 1996. The company is headquartered in Campbell, California, with offices throughout the world.

This release contains statements that constitute forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are subject to the safe harbor provisions of those sections and the Private Securities Litigation Reform Act of 1995. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risk uncertainties including those described in our filings with the SEC, and that the actual results or developments may differ materially from those in the forward-looking statements as a result of various factors. We have based these forward-looking statements on information currently available and disclaim any intention or obligation to update or revise any forward-looking statement.