Sony Completes Acquisition of Sonic Foundry

Promises Active Role in Community...promotes “entertainment everywhere on any device”

MADISON, Wis. – Sonic Foundry announced Wednesday shareholder approval for the sale of the company’s desktop products group for $19 million cash to Sony Pictures Digital. (SPD) The transaction is now complete and Sony Pictures Digital’s Executive Vice President Patrick Kennedy has stated that it will keep the company‘s employee base in Madison and in fact will begin recruiting 10-12 more engineers immediately. The company also has pledged to be an active player in the growth of Wisconsin’s growing software and technology industry.

Sony Pictures Digital executives have been in Madison all week meeting with their new employees, technology business leaders and government officials, including Governor Jim Doyle and Madison’s Mayor Dave Cieslewicz. Last night Patrick Kennedy was welcomed to Madison by more than 100 attendees at Accelerate Madison’s monthly meeting. He spoke to the audience about SPD’s plans for it’s newly acquired products, plans for the future, the future of Sony’s integrated device and content strategy and fielded many questions from the audience.

Governor Doyle commenting on Sony’s planned arrival in Wisconsin said, “Sonic Foundry has had a history of great technology and products. The fact that Sony has recognized that is great.”

Kennedy, who is humble and a bit shy, told the audience at the Accelerate Madison meeting that both he and his company have received an incredibly warm welcome in Madison. He has fond memories of this area as he grew up in Minnesota and spent many summers at his family’s farm just outside Madison. “We intend to be an active member of the community. We will be visible and do what we can to support the technology community. We need to help businesses and technology flourish in Madison,” Kennedy told the audience.

“The quality of Sonic Foundry’s development team and award-winning software give us the opportunity to offer the best possible products on the market,” said Kennedy. “The Madison area has demonstrated a commitment to continued development of technology-based businesses and we look forward to joining this community.”

Sony Pictures Digital plans to continue support and development of its newly acquired products, ACID, Sound Forge, and Vegas Series of products. New versions of Screenblast Movie Studio and Screenblast ACID 4.0 will be available at the end of August.

Sony plans to continue to integrate its new products into its existing product and service offerings, including Screenblast.com which gives consumers the ability to create, enhance and share their digital videos, music, and photos with a combination of software and an easy-to-use online service for sharing and personalizing consumer media.

Kennedy discussed many trends, including the emergence and transformation of digital media creation and cited Sony Image Works involvement in cutting-edge technology, animation, and special effects in recent hit movies Finding Nemo, Spiderman, Charlie’s Angels and Men in Back. Other trends include consumers’ power to share their videos and stories with friends on the Screenblast service and the growth of on-line, mobile and wireless games in which 100,000 people can play a game together at the same time.

Sony is also making it possible to distribute broadband content and services over the Internet and wireless phone. The company presently offers a vast array of downloads, wireless games and images over cell phones and other mobile devices as well as major feature movies and soap operas that are available over the Internet for download via MovieLink and their SoapCity web sites with a single use or monthly subscription charge.

“Sony’s main mission is to be able to provide entertainment on any device. We continually look at how we can bring entertainment to the consumer on any platform,” said Kennedy. “The Sonic Foundry acquisition will allow us to add new features to our current offerings. We will take the power of the software and talent that we have acquired and look at what we can enable to consumers to do. We intend to make the products (Sonic Foundry’s) better and then evolve as network services evolve. Our strategy is to take the technology to make new revenue stream and new businesses,” he added.

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