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``We are pleased to announce our partnership with Creative Labs to deliver professional-quality audio production software to the masses,'' said Roy Elkins, Sonic Foundry vice president of sales and marketing. ``The Sound Blaster product line benefits users who are looking for excellent quality, affordable hardware and easy-to-use PC audio solutions. Sonic Foundry has established itself as the leader in the music, digital video and computer gaming industries. The partnership between Sonic Foundry and Creative Labs will now allow the PC enthusiast to enjoy the same level of audio performance that was once only enjoyed by professional studios.''

``Through Creative's agreement with Sonic Foundry, Sound Blaster Live!(TM) users will be able to take full advantage of the powerful audio technology available to them,'' said Hock Leow, vice president of Creative's multimedia division. ``Sound Blaster Live! is designed using the same technology used by Hollywood sound designers and professional musicians. Sound Forge XP is a great complement to this technology.''

Chairman and Chief Executive Officer Rimas Buinevicius commented, ``Our alliance with Creative Labs is another example of Sonic Foundry products reaching the audio market via bundling with a well-known third party. OEM bundling of this type has historically accounted for 10% of our revenues, with music, broadcast, multimedia and Internet markets accounting for the bulk of the remaining sales. We expect further alliances of this nature will continue to provide a steady source of revenue for Sonic Foundry in the future.''

Sound Forge XP is the streamlined version of the award-winning Sound Forge 4.0 and allows users to record, edit and process professional-quality digital audio files. Aimed at the computer game, web content, and digital video markets, Sound Forge XP is the preferred tool for audio production on the PC. With over 25 powerful digital audio effects, processes and tools, users can quickly and easily produce studio-quality audio in over 20 file formats for playback on PCs, the Internet and output back to tape or compact disc. The retail version of Sound Forge XP retails for U.S. $49 and is available from computer stores, music retailers and catalogs worldwide.

Since its introduction in July 1996, Sound Forge has continued to gain momentum as the leading audio editing product on the Windows platform. In addition to receiving two Editors Choice Awards from Electronic Musician magazine, two Hyper Awards from New Media magazine, and the Windows magazine Stellar award, Sound Forge was recently described by Electronic Musician magazine as ``one of the most powerful programs in the desktop-music world which now totally dominates in its class.''

Creative Technology Ltd. develops, manufactures and markets a wide array of advanced multimedia solutions for the PC, entertainment, education, music and productivity tools markets. Creative's products are marketed through both the OEM and retail channels under a variety of trademarks, including the ``Blaster'' family name. Sound Blaster has become the multimedia industry's de facto audio standard. Sound Blaster is an audio platform consisting of a sound card or chipset, software drivers and bundled software applications that enable PCs to produce high quality audio. Creative's corporate headquarters and primary manufacturing are based in Singapore, with sales, distribution and research and development being carried out through an extensive, global network of subsidiaries located in North America, Europe, Asia and Africa.

Founded in 1991, Sonic Foundry develops and markets award-winning digital audio software for the Windows platform. The Company's award-winning product line includes Sound Forge, ACID, CD Architect, Soft Encode, and a wide range of DirectX plug-ins. Sold internationally and used worldwide in applications ranging from digital video production to music production, Sonic Foundry has become the leader in audio editing software for the Windows platform. Sonic Foundry, Inc. (www.sonicfoundry.com) is publicly traded on the American Stock Exchange under the symbol SFO.

``Safe Harbor'' Statement under the Private Securities Litigation Reform Act of 1995: The statements in this release which are not historical fact are forward-looking statements based upon the Company's current plans and strategies, and reflect the Company's current assessment of the risks and uncertainties related to its business, including such things as product demand and market acceptance; the economic and business environment and the impact of governmental regulations, both in the United States and abroad; the effects of competitive products and pricing pressures; currency risks; capacity; efficiency and supply constraints; weather conditions; and other risks detailed in the Company's press releases, shareholder communications and Securities and Exchange Commission filings. Actual events affecting the Company and the impact of such events on the Company's operations may vary from those currently anticipated.

SOURCE: Sonic Foundry, Inc.