May 23, 1996

NYNEX CONTACT: Media Relations, (212) 395-0500

VDOnet Announces Major Investment By NYNEX

PALO ALTO, Calif. -- VDOnet Corp. announced today that NYNEX has invested $3 million dollars to acquire an equity position in VDOnet.

VDOnet is a leading developer and marketer of products and technology that allow video broadcasting and video telephony over the Internet, using regular telephone lines and private networks.

In addition to acquiring an equity position in VDOnet, NYNEX will gain market and technology information related to the rapid growth of multimedia services and technologies. This is one of several alliances NYNEX has made to help bring multimedia services to market more quickly.

"The telecommunications infrastructure is one of the keys to the growth of the Internet and the applications that can be enhanced by video," said Asaf Mohr, president and CEO of VDOnet. "We are very pleased that NYNEX, with its important role in driving the growth of that infrastructure, has invested in VDOnet as part of its plans to develop Internet services."

"NYNEX invested in VDOnet because VDOnet is a leader in the development of video compression technologies for the Internet and that technology will help to bring the truly global communications network to reality, said Casimir S. Skrzypczak, president, NYNEX Science & Technology Inc.

Skrzypczak noted that VDOnet's unique "bandwidth scalability" allows the transmission of video over any connection to the Internet, be it a regular telephone line or a more sophisticated ISDN line. For example, with a standard PC and a regular phone line, it can take nearly one full minute to download one second of video -- but using VDOnet's technology, a video clip appears in real time.

VDOnet was launched in the fall of 1995 and today offers both VDOLive(TM) products for Internet video broadcasting and VDOPhone(TM) products for Internet video telephony. Users of VDOnet's products and technology are producers of information and entertainment content, advertising and promotion, distance learning and just about anyone who wants to communicate with video over the Net.

Today, VDOLive is being used by nearly 150 sites to develop video -- including PBS, CBS News, Paramount Digital Entertainment, and many others. The VDOPhone -- launched last month -- has been downloaded by more than 10,000 Internet users and was recently licensed by America Online for use with Virtual Places.

Both of these product families are based on the same VDOnet technology that enables bandwidth scalability as a result of two elements: the first is a scalable compression algorithm that not only can compress video down small enough to run over the small bandwidth portions of the Internet, but also allows the quality of the video to increase with the size and quality of the connection at the other end.

The second element -- the heart of VDOnet's overall technology -- is a set of communications protocols, which maintains the integrity of the video as it makes its way through the "bumpy roads" of the Internet. The relative benefit of these combined technologies is that motion video from VDOnet's products can be used by virtually anyone on the World Wide Web, regardless of their connection.

VDOnet Corp., based in Palo Alto, has developed and markets technology and products enabling Internet video broadcasting and video telephony on the Internet and over regular telephone lines and private networks.

The company was founded in 1995 and today has offices in the U.S. and Israel. It has raised $10 million in funding from private sources, including Battery Ventures, and NYNEX.

NYNEX is a global communications and media company that provides a full range of services in the northeastern United States and high-growth markets around the world, including the United Kingdom, Thailand, Gibraltar, Greece, Indonesia, the Philippines, Poland, Slovakia and the Czech Republic.

The Corporation is a leader in the telecommunications, wireless communications, cable television, directory publishing and entertainment and information services.

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