Press Release

MENLO PARK, Calif. -October 27, 2003 Marking the end of five years of development including a nine-month, large-scale public beta test, There, Inc., an online communications and entertainment platform company, today announced the broad consumer availability of its innovative online 3D world. There is the first online getaway that combines the power of chat with the fun and excitement of online games. Found at www.there.com, the online destination debuts today with support from thousands of paying Beta members and seven leading industry partners: ATI Technologies, Inc.; Discreet, a division of Autodesk, Inc.; HP; iVillage; Plantronics, Inc.; Levi Strauss & Co.; and Nike, Inc. Consumers can sign up now for a 14-day free trial - no credit card required - with an option to buy a There membership for as little as $4.95/month with a one time $19.95 activation fee.

"There has built an innovative software platform with a patented physics engine that supports multiple applications, from consumer to military," said Steve Victorino, CEO of There, Inc. "Our first consumer application, There Limited Access, has shown that consumers can see a real difference between the rich experience in There and traditional chat rooms and online games," he continued.

"After nine months of public beta testing we've proven that consumers are interested in a social online product where they can choose how they look, who they hang out with, what they do for a living and what they want to buy."

There Limited Access is the first consumer application rolled out to the public. It capitalizes on several behavioral and market trends, including:

• Chatting and online game play are mass market activities: 50MM people have chatted online and 35MM people have visited an online "game parlor," like AOL Games and Yahoo Games, in the last month (Nielsen NetRatings). There combines the ability to connect with friends with the fun of online play.
• Women rule: Women continue to be an underserved audience for online games despite women outnumbering men on the Web and spending more money online than men. There appeals to women; during Beta they returned more often than men and were more often leaders of the community.
• Gamer audience changingGamers are becoming more mature, with the average age of video game players now at 29 according to Entertainment Software Association.
• Faster PCs are becoming commonplace: PC-based video games are driving faster, more powerful CPU and graphic cards into everyday PCs. This provides There's potential customers with more affordable and easily available PC option in order to enjoy There's online 3D world.
• Broadband household penetration increases: According to Jupiter Research, by the end of 2003, 30 percent of online households will connect to the Internet using broadband. By 2007, analysts believe that 46 percent of the online population will connect via broadband. While There can connect using a 56K dial up connection, There also delivers consumer-relevant broadband features such as voice and music.

Who Goes There?
Since There, Inc. launched its beta product in January 2003, more than 180,000 consumers have applied to experience There. Of those, 27,000 invited members participated in the beta test over a nine-month period. The resulting community was demographically and geographically diverse. The membership was relatively balanced between men and women, ranged in age from 13 to 76, and lived across the U.S.

The most highly retained members and the biggest spenders fell between the ages of 29 - 49. Women, despite representing more than 50 percent of Internet users (Nielsen/NetRatings, May 2003), have traditionally been underserved in the online games market. There was developed to appeal to both men and women members, and it was discovered during beta that female members were retained longer, spent significantly more money, and took more community leadership positions compared to men.

In addition, members who visited three or more times spent an average of two-and-a-half hours per session in There and referred an average of two friends.

Socialize, Play and Create in There
Beta members can attest to the fun and socializing appeal of There, experienced through four key areas:

• Socialize: There offers many ways for members to connect and socialize. Members can talk using text chat, instant messaging, voice chat, or even communicate through body language. Body language allows a member to laugh, smile, be sexy or express emotions in a physical way. Each person in There also has a member profile, and can include both in-world and real-world information about themselves. Using member profiles, members can connect with each other by quickly identifying each other's common interests. Clubs (more than 2,000 have been formed to date), along with a Clubhouse, provide great group meeting space in There and a place to gather to discuss topics of interest to members. And each night members can choose from an average of 100 events and parties to attend or simply hang out with friends, old and new.
• Play: There has created a playful environment, where members can compete against themselves or other members for a top ranking, or enjoy a casual game just for fun. Members can join a buggy or hoverboard race and compete for prizes and recognition. Members can cruise the world together using a hoverboat or hoverbike. Members can also participate in social play activities such as scavenger hunts, capture the flag, game shows and trivia.
• Create: Powerful yet easy-to-use software tools let members design their own clothing, customize buggies and hoverboards and create other "in-world" objects. Members can then sell those items through an "in world" auction system and earn Therebucks^TM, There's currency. Members can also create organized events and parties, fashion shows, island tours, adventure games or their own racecourses. The suite of tools is intuitive enough for casual enthusiasts yet robust and scalable for use by professional developers. Designing and creating content became so appealing that 70 percent of all objects currently for sale in There is created by members and 80 percent of events in There are organized by members.
• Explore: There is roughly the shape and scale of Earth. On the There "planet," there are currently four different types of islands to explore, each with its own personality. Members can explore new worlds like the Monkey Ruins in "Tiki" (a South Pacific Island), the Pyramids and Tombs in "Egypt," the dark castles of "Tyr" and the floating lily pads of "Saja."

"There is based on the concept of 'connecting while doing,'" said Will Harvey, founder of There, Inc. "This idea is relevant and powerful for consumers because it's similar to real life experiences - sometimes "hanging out" with friends at the bar after the softball game is more fun than the game itself. The beta period has proven to us that our mix of socializing and play activities, coupled with the tools that allow members to create objects, events or businesses is the right dynamic for making There a consumer success."

There, Inc has positioned itself for competitive advantage by developing many patented or patent-pending technology features. A few examples of There's unique technology includes:

1. DiPhy (Distributed Physics) Engine: Distributed Physics is one of the cornerstones of the There technology platform. DiPhy allows the world to act like a real world, providing gravity, real world "collisions," and a scalable design.
2. Avatar-Centric Communication: This technology creates real-world conversations. Avatars are automatically positioned so that natural chat groups are formed and eye contact maintained, and automated gestures help ensure that members feel fully engaged in a conversation.
3. Artificial Intelligence Animals. In world, animals such as dogs can be trained to respond to owner commands.

There Economy
The There" in-world" economy is similar to a real world economy. In fact, the There economic structure was developed with the assistance of an International Monetary Fund economist who has helped build real-world economies in developing nations. Econometrics such as the velocity of money, money supply and spending and savings rates are watched carefully. During beta testing, There developed a vigorous standalone economy in which the Therebuck currency maintained its perceived value. Members used Therebucks to purchase There-created items, and bought member-created objects as well.

Members can earn Therebucks by taking an "in-world" job such as a newspaper writer, a fashionista, an event host or even an Island Tour Guide. Members can also buy Therebucks with credit cards at an exchange rate of 1,787 Therebucks to 1 U.S. dollar.

"We asked members how they felt about Therebucks and they told us that having an in-world economy definitely improved their experience in the product," explains There, Inc.'s chief marketing officer Andrew Donkin. "Members felt like they had a stake in a real economy and were in control of their spending and saving. Members liked Therebucks so much, they voluntarily spent on average of $7 USD per month purchasing There currency and buying in-world goods."

Distribution Partners for There
There, Inc.'s partners will provide a broad group of consumers easy access to the product. Below is a brief overview of each partnership:

• ATI: In Q4 of this year, There will be bundled in retail boxes with ATI's RADEON^TM9200 graphics card. ATI customers who purchase this special "bonus pack" receive an initial free 14-day trial of There and a special ATI customer promotional offer. These specially branded RADEON^TM 9200/There retail boxes will be available through select North American retail locations. This bundle allows both ATI and There to reach a broad market of PC users by providing them with an opportunity to experience a new and unique 3D visual experience in an innovative gameplay environment.
• Discreet: The There 3-D Developer Toolkit will include tools from Discreet including Discreet 3ds max®
• HP: Starting in early 2004, There will be bundled with the HP Media Center PC line as a value-added home entertainment application. The "Sign On To There" icon will appear on the HP desktop allowing HP users to quickly become There members.
• iVillage: Starting in Q1 2004, There members can visit an iVillage branded area in There and access iVillage message boards, clubs and other community elements. iVillage will be prominently placed in There navigation and also included in There's "favorite places." In addition, astrology kiosks will be located in There, where visitors will have the opportunity to purchase digital products from iVillage's Astrology.com site.
• Plantronics: The world leader in communications headsets, Plantronics computer audio headsets will be the product of choice for use in the There online community. Plantronics will offer new customers promotional incentives to join There and leverage the products' live voice functions using Plantronics headsets.

Marketing Partners in There
There provides a new kind of online medium for marketing partners called "Immersive Advertising." Immersive Advertising allows members to experience branded goods and services just like they would in the real world, by interacting with them. Consumer companies can create detailed "in-world" products that members find valuable - products that can deliver brand attributes and branded product messages. The There environment provides consumers with a positive interaction with the brand and a more compelling brand experience vs. banner ads, pop ups or video game billboards

• Levi's: Levi's jeans have captured the attention, imagination and loyalty of generations and are available in more than 100 countries around the world. Now There visitors can wear their favorite jeans- and find that Levi's jeans are still a perfect fit, even in a new world.
• NIKE, Inc: Digital versions of Nike's AirMax 2003 and Nike's Zoom Celar have been created and are available for purchase by members. Members who buy these Nike shoes for their avatars will find an immediate performance benefit - they can run faster.

How There Makes Money
As a company, There, Inc. has built a powerful software platform. Multiple applications can be developed on top of that platform including the There Limited Access consumer product and the Military simulation application currently under development.

The launch of There Limited Access will generate revenue in two ways - the purchase of Therebucks in world with a credit card and the purchase of There member subscriptions.

Beyond the consumer application, There is developing an application for the U.S. Army based on a multimillion-dollar contract that was signed in June 2003. The military application is being developed to build a true-to-life environment, depicting various regions of the world, where soldiers can train against an unpredictable opponent.

There is also pursuing other long-term application development projects, such as educational environments or "planets." For example, members going in-world today can teleport to a land mass called "Egypt" and see accurately re-created versions of the Egyptian Sphinx and ancient murals that adorn the Tombs; There could re-create other real-world places for members to visit. International markets provide another potential business area.

"One of the most appealing factors of There, Inc. is the fact that the company has so many ways to leverage its platform and create varied applications that will drive multiple revenue streams," said Jim White, Managing Director, Sutter Hill Ventures. "And, as the There business scales, you also begin to take advantage of technology and bandwidth economies of scale."

Pricing & Availability
There's immersive 3D online community is accessible to anyone age 13 or over, who has a minimum 800MHz Pentium III PC, 256MB of RAM, an ATI Radeon 7200 graphics card or equivalent, Windows 98SE or better and at least a 56K dial-up connection. Broadband offers There members additional features such as voice chat and the ability to play and hear music.

Consumers can choose from two membership options for ThereLimited Access: an Annual membership or a Monthly membership. In There Limited Access, members can also join as a "Charter member" and receive substantial discounts off list. The annual Charter membership is $49.95 for one year plus members receive a 20,000 Therebucks bonus to join. The monthly membership consists of a one-time $19.95 registration fee and a monthly membership rate of $4.95 per month.

In return for their monthly membership the member will receive a monthly allowance of Therebucks. In addition, There will offer premium services to members, including voiceover IP, streaming music and explorer options. Each option can be purchased separately.

There Limited Access is being launched in an innovative fashion. Instead of moving from a successful Beta to a public launch and opening the doors to a flood of new members, There will continue to have a "velvet rope" in place. A "velvet rope" allows There, Inc. to manage product scale by having an orderly process for adding new members. There, Inc. can then manage the member experience as it scales, delivering a better overall in-world experience.

About There, Inc.
There, Inc. is an entertainment and communications platform company that has created a new application for online interaction. There (www.there.com) is the first destination that combines the power of chat with the fun of online games. There is supported by thousands of paying Beta members and partners including iVillage, HP, Levis and Nike. There, Inc. is privately held, with over $37 million in funding from Sutter Hill Ventures, individual investors, and employees. For more information, visit www.there.com.