Press Release Regarding Netage Group's Launch of 3Di Inc. and Jiku Lab Inc. Becoming a Subsidiary Through Stock Acquisition.

Netage Group enters the 3D virtual space business

TOKYO -- Netage Group Inc. (TOKYO:2497; CEO: Satoshi Koike) announced at a board of directors' meeting on June 19, 2007 the establishment of 3Di Inc. (Minato-ku, Tokyo; President: Tsuyoshi Ogawa; "3Di"), a wholly-owned subsidiary that will provide planning, development, operation, and integration of services using 3D Internet technology ("3Di"), which is positioned as the sector of major focus for Netage Group's future business strategy.

Netage Group also acquired 100% of the stocks of Jiku Lab Inc. (Minato-ku, Tokyo; President: Hirotaka Jiku; "Jiku Lab") from its existing shareholders and formed a consolidated subsidiary. Jiku Lab is involved in the research and development of open source and other platforms and elemental technology in the 3Di sector.

During the board of directors' meeting held after Netage Group's annual meeting of shareholders on June 22, 2007, Mr. Hirotaka Jiku was informally appointed as the executive officer (3Di business technical representative) of the Company.

1. Objective and overview of establishing 3Di

Recently, Netage Group constructed a 3D virtual space service on the Internet called "Second Life" where users operate their own avatars to interact in a virtual world. Similar new 3Di services are appearing in countries around the world, and there is great anticipation for the next-generation Internet that will succeed Web 2.0.

Netage Group sees 3Di as a major trend in new Internet business that includes virtual worlds such as Second Life but also 3D Web services and network gaming. The Company also believes 3Di will be a sector that is highly expected to expand the market of Web 2.0-related services, and it has become a business sector of intense focus for Netage Group.

Amid this situation, Netage Group decided to establish 3Di as a strategic subsidiary for legitimately expanding its future business into the extensive 3Di sector.

2. Overview of 3Di

(1) Company: 3Di Inc.
(2) Board of Directors President: Tsuyoshi Ogawa
                       Vice-president/CTO: Hirotaka Jiku
                       Director: Satoshi Koike
(3) Headquarters Address: Akasaka Twin Tower Main Tower 10th Floor,
                          2-17-22 Akasaka, Minato-ku, Tokyo, Japan
(4) Established: June, 2007 (scheduled)
(5) Capital:     50 million yen
(6) Fiscal Term: March 31
(7) Website:     http://3di.jp
(8) Main Business: Internet services using 3D technology, business
                   planning, development, operations, and integration

3. Objective and overview of Jiku Lab becoming a subsidiary

For Netage Group to expand its business in 3Di, a business sector of intense focus for the Company, it is necessary for the Company to strengthen its 3D technical development capabilities, which cannot be achieved with conventional Web technology.

For this reason, Netage Group acquired Jiku Lab as a subsidiary for the technical capabilities of its engineering staff centering around Mr. Jiku, president of Jiku Lab, and its proprietarily-developed 3Di prototype products. Bringing together the engineering staff of Jiku Lab and the services offered by 3Di enables Netage Group to provide competitive comprehensive business, from the development of platforms and elemental technology to the provision of 3Di services.

4. Overview of Jiku Lab
(1) Company:   Jiku Lab Inc.
(2) President: Hirotaka Jiku
(3) Headquarters Address: 3-1-3 Higashi, Shibuya-ku, Tokyo, Japan
(4) Established: February, 2007
(5) Capital:     6 million yen
(6) Fiscal Term: March 31
(7) Main Business: Development of opens source and other platforms and
                   elemental technology in the 3Di sector

5. Date of transfer of Jiku Lab Inc.

Late June, 2007/Date of stock transfer (scheduled)

6. Candidate for 3Di executive officer and business technical representative

On the occasion of the board of directors' meeting to be held after Netage Group's tenth annual meeting of shareholders on June 22, 2007, Mr. Hirotaka Jiku, a pioneer in 3Di technology in Japan, will be informally appointed as executive officer and business technical representative of 3Di.

This appointment is expected to strengthen Netage Group's leading-edge technical development capabilities in the 3Di sector.

7. Biography of executive officer candidate
Name: Hirotaka Jiku
Born: December 11, 1965
Biography
  July, 1988     Graduated from Shanghai Jiao Tong University with a
                 degree in Oceanography Engineering
  March, 1996    Graduated from Yokohama National University,
                 Engineering Faculty with a Doctor of Engineering
                 (Structural Calculation)
  April, 1996    Entered Yamazaki Construction Co., Ltd.
  January, 2000  Entered 3D Incorporated.
  February, 2007 Established Jiku Lab Inc. and appointed president
                 (present post)
  February, 2007 Graduated from The Graduate School of Digital Content
                 with a Masters degree in Digital Content Management

8. Other press release information

Rines Inc. ("Rines"), a Website consulting and graphic design company, is shifting its business to production specializing in 3Di.

As a result, Netage Group will form a business base linking together 3Di, Jiku Lab, and Rines, which centers around Mr. Jiku, and will work to aggressively expand its business in the 3Di sector.

9. Future outlook

The effect of this on Netage Group's consolidated performance for the current fiscal year will be minimal.