Phoenix Technologies Launches ebetween Internet Subsidiary in Partnership With SOFTBANK Holdings.

SAN JOSE, Calif.--(BUSINESS WIRE)--June 21, 1999--

Contracts Announced with Internet Leaders AOL, CNET,

EarthLink, Excite@Home, Lycos, Snap.com, Trend Micro, YAHOO!

and Thirteen Leading Motherboard Manufacturers

Phoenix Technologies Ltd. (Nasdaq:PTEC) -- a developer of system software currently used in more than 70 percent of PCs sold -- today announced a comprehensive new Internet strategy with the formation of ebetween(TM) a new subsidiary in which SOFTBANK Holdings has signed a letter of intent to acquire a 20 percent stake.

ebetween will leverage Phoenix's core technology to allow Internet service and content providers to better reach, register and retain online users and subscribers. Internet market leaders America Online (AOL) (NYSE:AOL), CNET (Nasdaq:CNET), EarthLink (Nasdaq:ELNK), Excite@Home (Nasdaq:ATHM), Lycos (Nasdaq:LCOS), Snap.com, Trend Micro and YAHOO! (Nasdaq:YHOO) have all signed contracts with Phoenix for initial products and services scheduled to be announced and delivered later this year.

Phoenix also announced today that it has signed a letter of intent to acquire the operations of SOFTBANK Marketing Solutions (SMS) from SOFTBANK Holdings, in exchange for an equity stake in ebetween and other consideration. SMS, headquartered in San Francisco, is a leader in electronic registration for original equipment manufacturers, independent software vendors and device manufacturers, including Acer, CTX Fountain Technologies, Fujitsu and several unannounced branded PC manufacturers.

In addition, SMS is an authorized registration center for Microsoft Windows 98(TM). Founded in 1998, SMS is owned and operated by SOFTBANK Holdings, Inc., which also holds significant financial interests in leading Internet and computer industry companies, including E-TRADE, SOFTBANK COMDEX, YAHOO!, and Ziff-Davis. The acquisition is subject to completion of definitive agreements and the satisfaction of certain closing contingencies.

"Phoenix's system software products are fundamental and indispensable building blocks for more than 70 million PCs sold annually," said Jack Kay, president and CEO of tion and the ability to better serve their custoending this franchise to the Internet has created a significant opportunity for users and manufacturers to take advantage of a channel of distribution that was previousln have agreed to distribute Phoenix's Internet ftware, which includes a new product category called Virtual Bundling Technology (VBT). VBT will provide Internet companies the potential to increase consumer reach, accelerate Internet user sign-up, and reinforce user loyalty and retention. Phoenix's VBT has the ability to rapidly reach an unprecedented number of potential Internet users, allowing them to personalize their Internet experience and deliver user-directed services and content directly to the PC.

Initially, ebetween's market strategy will focus on manufacturers of "white box" (non-branded) PCs; some 35 million white box PCs are shipped each year. The white box market is a global supply chain that manufactures, assembles and delivers personal computers through a variety of channels worldwide, including value-added resellers, system integrators and retailers.

This market is approximately 35 percent of the PC industry, and Phoenix's ROM-based software products are built into more than 80 percent of white box PCs. Phoenix's high unit volume will allow ebetween to provide its Internet partners with a virtual PC channel, delivering a broad reach directly into a previously fragmented market.

Phoenix's first Internet-enabled offerings are anticipated for delivery in the fourth calendar quarter of 1999. They will provide new PC users with a convenient means of personalizing their Internet experience, as well as additional capabilities, such as anti-virus protection.

The initial contracts with AOL, CNET, EarthLink, Excite, Lycos, Snap.com, Trend Micro and YAHOO! are for ebetween's first VBT-based service, which will provide immediate user access to Internet service and content providers. This service will provide a unique "first look" position on the desktop of millions of new potential Internet users. The Company anticipates generating $10-$15 million of revenue from these initial agreements in the first year.

Partner Comments:

"America Online and Phoenix's ebetween are both dedicated to creating the easiest and most convenient online experience for new PC users, and we look forward to working with ebetween on this agreement to give first-time computer users fast and easy access to AOL, the world's leading interactive service," said Jan Brandt, AOL's President of Marketing.

"As the leading source for computers and technology, CNET can be a very helpful resource for computer users, especially those with new systems," said Tom Melcher, CNET Executive Vice President of Strategic Development. "The Phoenix ebetween offering helps us reach people who have just bought a computer by placing easy-to-use CNET icons right on e Internet quickly and reliably. EarthLink has been very aggressive in the OEM channel, and this is a great ing them to take control of the Internet experi tools," said Jeff Crown, vice president of corThis agreement with Phoenix Technologies' new ebetween subsidiary will enable Snap.com to reach users directly when they turn on their computers. We will be hitting a large, new audience of users and demonstrating to them the value of starting their Internet experience with Snap's high-quality search, hand-built directory and other leading applications," said Edmond Sanctis, Snap.com's Chief Operating Officer.

"Our partnership with Phoenix's ebetween provides us with an easy platform for providing users with the most up-to-date antivirus information, products, and services on the market," said Steve Chang, president and founder of Trend Micro. "Internet virus threats are increasingly frequent and require immediate action to assure adequate protection. Our partnership with ebetween will let us easily reach millions of users and allow Trend Micro to become their complete Internet antivirus service provider."

"We are pleased to work with Phoenix to allow Internet users worldwide to default to the Yahoo! World property of their choice right from the desktop," said Ellen Siminoff, vice president of strategic planning and business development at Yahoo!. "This agreement with Phoenix is an innovative and dynamic extension of our Yahoo! Everywhere(TM) strategy."

Related Third-Quarter Special Costs, Charges and Credits

Phoenix anticipates recognizing the following incremental costs, charges and credits in its third fiscal quarter ending June 30, 1999. These items relate to the start-up of the ebetween Internet business and the related refocusing of Company operations: -0-

--   ebetween expenses of approximately $3.7 million, mostly related
     to market research, product development, patent filings, branding
     and other start-up activities.

--   An in-process research and development charge of approximately $2
     million associated with the acquisition of SOFTBANK Marketing
     Solutions.

--   A restructuring charge of $2.5 million to $3.5 million related to
     the discontinuance of several PICO and PC Enhancing (PPE)
     software products and to certain management changes.

--   A gain of $4 million on the sale of the Company's remaining
     equity interest in Xionics Document Technologies, Inc.
     (Nasdaq:XION).

-0-

Including these items, Phoenix anticipates net income in the range of breakeven to $1 million, or $.04 per share, for the fiscal third quarter. Excluding these items, Phoenix's anticipated net income for the quarter would be approximately $4 million to $5 million, or $0.14 to $0.18 per share.

About Phoenix

Phoenix Technologies is the global leader in Internet platform-enabling software, system BIOS, and connectivity semiconductor software intellecits ebetween subsidiary's offerings, enable Intan 70 percent of all PCs sold and millions of o other connectivity standards. Founded in 1979, be found at http://www.ebetween.com.

ents that involve risk and uncertainties. The Company cautions readers that a number of important factors could cause actual results to differ materially from those in tnst the Company's intellectual property; the sihoenix, to the contemplated business model; the fact that the Company's markets are characterized by rapidly bility to respond to such changes; difficulties which the Company may experience in completing the developmekets for the Company's products; the phase-out o and other factors which could cause actual resn Form 10-K and Form 10-Q.

Note to Edito