ActiveVideo Networks Acquires TAG Networks

ActiveVideo Networks, the global leader in cloud-based
interactive television solutions, today announced that it has completed
an acquisition of TAG Networks, adding the world’s most scalable network
game platform to its CloudTV interactive streaming platform.

The acquisition extends ActiveVideo’s CloudTV development
platform to include games development, a growing and profitable segment
of the entertainment market. The combined entity leverages TAG
Networks’ successful technology and content portfolio with ActiveVideo’s
proven CloudTV to create a powerful and versatile platform that
supports both casual and twitch or fast-motion games.

Using TAG’s extensive portfolio of licensed titles,
ActiveVideo can enable the development of new revenue streams for cable
system operators and the CE industry through the delivery of advertising
supported casual games to any digital set-top box or CE device.
ActiveVideo, which currently is in approximately 5 million homes,
anticipates that the combined benefits of TAG and CloudTV, the addition
of compelling new titles and the ultimate introduction of faster-paced
games will significantly drive distribution of both services for the
foreseeable future.

"We believe that the games category, which exceeds $25
billion, is among the most significant growth opportunities for our
cable, programmer and CE manufacturer customers," said Jeff Miller,
president and CEO of ActiveVideo Networks. "Combining TAG’s advanced
games platform with our own industry-leading cloud platform provides our
distribution and programming partners with a single, robust solution
for delivering games, social communities, iVOD, internet video, advanced
advertising, interactivity and commerce to TVs around the world."

In conjunction with the acquisition, TAG Networks’ management
team and staff have been relocated to ActiveVideo’s corporate
headquarters in San Jose. Sangita Verma, CEO and founder of TAG
Networks, and Robert Craig, chief creative officer and founder, will
serve as President of TAG Games and Chief Creative Officer of TAG Games,
respectively, for ActiveVideo Networks; TAG CTO Cliff Mercer will serve
as Senior Vice President, Engineering of ActiveVideo Networks.

"TAG and ActiveVideo Networks have successfully collaborated
for many years and together we have proven the value of games as drivers
of television interactivity," said Verma. "Now as a part of the
ActiveVideo team, we’re looking forward to expanding our vision and
making the TAG games platform available to other games developers and
content owners."

Earlier this year, TAG announced that its games-on-demand
channel was the stickiest channel on Oceanic Time Warner Cable,
according to TNS set-top box data. The TNS Average Daily Minutes
(Viewed) data for 2009 indicated that TAG households averaged 116.5
minutes per day in engagement with the channel. TAG Networks also
recently announced that it had established an industry record for
streaming games density and scalability by supporting 2,000 concurrent
MPEG game streams at 1.25Mbps with a single off-the-shelf 1RU dual
quad-core server,

TAG is currently deployed to hundreds of thousands of
households throughout the US via digital cable. Additional deployments
and trials are slated over the next 12 months.

ActiveVideo immerses viewers in an engaging experience that combines
Web video, Web 2.0 functionality and traditional television. With
ActiveVideo, viewers can navigate a completely interactive environment
of both linear and broadband programming, including rich interfaces and
graphics optimized for TV and remote control navigation; social
networking; personal media; niche content; and targeted, actionable
advertising. ActiveVideo uses intelligent MPEG streaming to deliver the
Web 2.0 experience to a worldwide television audience through both
legacy and next-generation digital set-top boxes and broadband-connected


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