audiohighway.com and Liquid Audio Join Forces in a Strategic Development Agreement for Secure Audio Delivery Via the `Net.

CUPERTINO, Calif.--(BUSINESS WIRE)--Dec. 3, 1998--

Deal Furthers audiohighway.com's Quest to Expand to Include

E-Commence With the Sale of Premium Content 

audiohighway.com, an Internet-based information and entertainment company, today announced a strategic development agreement with Liquid Audio, the leading developer of secure online music and audio delivery systems, designed to enhance both firms' abilities to deliver audio content via the Internet easily and securely.

Under terms of the agreement, audiohighway.com will work to incorporate Liquid Audio's industry-leading Liquid Music System into AudioWiz(TM) and the AudioCast(TM) System.

Once completed, audiohighway.com will be able to offer its users the ability to preview, select, purchase, download and own premium selections for storage on virtually any media, from recordable CDs and cassette tapes to personal computer hard drives and removable media.

"This agreement will take audiohighway.com and its users into a new realm of audio entertainment," said Nathan Schulhof, president and CEO of audiohighway.com.

"As one of the leading providers of free audio content over the Internet, we have always tried to acquire the best audio content and deliver it with ease of use. However, there are certain types of premium audio content that do not fit into the advertising model.

"As a result of our partnership with Liquid Audio, we will soon be able to also offer a wide variety of premium content to our users. This will be done securely to ensure that the content creators are properly compensated and that our users will be able to purchase the premium materials they desire."

Currently, new visitors to the audiohighway.com Web site (www.audiohighway.com) can browse and listen to thousands of free audio selections found in eight channels of audio-based content, including audiobooks, business, entertainment, music, news, sports, technology, and travel. At the present time, all content posted on the audiohighway.com site is available free-of-charge.

As part of the agreement, audiohighway.com will also work with Liquid Audio to help it better support portable audio and to improve ease-of-use in the Liquid Music system. The partnership with Liquid Audio will allow audiohighway.com to offer premium content with an e-commerce model.

"Given the mobility of our society, audio portability is becoming an increasingly important issue for us, and audiohighway.com has always been at the forefront in this arena," said Gerry Kearby, Liquid Audio CEO.

"At the same time, audiohighway.com has done a great job of making AudioWiz an extremely easy to use product, and we are confident that this new integration of the Liquid Music System will provide an even more rewarding musical experience for consumers. As a result, we look forward to a long and mutually successful relationship with audiohighway.com."

Redwood City, Calif.-based Liquid Audio, www.liquidaudio.com, is the first Internet company focusing exclusively on the needs of the professional audio and music industries, providing labels, artists, and production facilities with software tools and technologies to enable the secure online distribution of professional-quality audio.

Liquid Audio's technology allows consumers to preview and purchase CD quality music over the Internet, while ensuring copyright protection and tracking royalties. Formed by veterans of the music industry and professional recording engineers, Liquid Audio is leading the convergence of music and technology to establish the Internet as a new medium for music publishing.

audiohighway.com is an Internet-based information and entertainment company which, through its AudioCast System, uses the capabilities of the World Wide Web to enable users to download from the Internet and play back selected audio content, such as audio books, music, timely news programs and other forms of information and entertainment.

The company currently has available on its Web site audio content from such providers as National Public Radio, Newsweek On Air, Associated Press, Penguin Books USA, ESPN, and Compact Classics. For more information, contact the company at 408/255-5301 or 800/77LISTEN, or visit its Web site at http://www.audiohighway.com.

The statements made in this release that are not historical facts contain forward-looking information that involves risks and uncertainties. Important factors that may cause actual results to differ include, but are not limited to, the impact of competitive products and services, the company's ability to manage growth and acquisitions of technology or businesses, the effect of economic and business conditions, and other risks detailed from time to time in the company's filings with the Securities and Exchange Commission.

Note to Editors: audiohighway.com, AudioWiz and AudioCast are trademarks of audiohighway.com. All other trademarks are the property of their respective owners.