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Viewpoint Corporation Reports Toolbar Version 2.0 Far Outperforming Earlier Version, With Monthly Search Revenue Four Times Higher

NEW YORK--(BUSINESS WIRE)--July 12, 2004--Viewpoint Corporation (NASDAQ: VWPT) - a leading provider of Internet graphics and delivery systems - announced today that Version 2.0 of the Viewpoint Toolbar is generating four times more revenue per installed bar than Version 1.0. This announcement comes as v2.0 completed its first week of official rollout. Financial results were also consistent with the previous two-week beta period.
Viewpoint reports that average net revenue per installed toolbar per month, based on a trailing seven-day average ending July 8th, increased to a run-rate of 12 cents for the 1.6 million installed toolbars which includes the new population of v2.0 toolbars. This compares favorably to the run-rate of 3 cents per month, based on a trailing seven-day average ending May 31st, for the previous population that included only v1.0 toolbars. Viewpoint attributes this revenue improvement to a higher number of searches for v2.0 toolbars and an increase in click-through rates attributable to enhancements in the product's design and functionality.

Version 2.0 boasts substantial usability and speed improvements over its predecessor as well as new features such as Comparative Search, Text and Image Results within the toolbar tray and a thumbnail preview option for the search landing page. The Company believes these features and speed enhancements, plus a marked increase in consumer awareness and positive reviews in the press, are responsible for the revenue performance improvements.

"This revenue performance now puts us in a strong position moving forward," said Jay Amato, Viewpoint president and chief executive officer. "When we first announced our search initiative back in February, we promised to make adjustments to the product and our distribution strategy, as needed, in order to optimize revenue. That's why, after seeing v2.0 performance in testing, we halted distribution of v1.0 until v2.0 was ready. It's now clear that users like what they see."

Version 2.0 of the toolbar was officially released on June 16, 2004. New toolbar offers via Viewpoint's distribution network of an estimated 120 million computers in the U.S. resumed at that time; the new product was available on the Company's web site (www.viewpoint.com) and users with computers powered with the Viewpoint Media Player began receiving opt-in messages offering them the new toolbar. At the same time, users of Version 1.0 began automatically receiving the updated version. In total, 1,600,000 v1.0 and v2.0 toolbars have been installed by U.S. consumers - a majority of which are active users. Acceptance rates for the new version have been consistently in the range of 25% previously reported for v1.0 bars.

"Once we released v2.0, the increase in revenue was immediate and dramatic," said William H. Mitchell, Viewpoint chief financial officer. "While this is still a new business for us and we can never be certain that this performance level will continue, if it remains consistent, it will have a positive effect on our company. Today, we are reaffirming our guidance of achieving a positive operating profit run-rate by year-end."

Later this month, Viewpoint plans to release new skins for the improved toolbar in support of the growing population of v2.0 users. The Company will also release further details on toolbar performance as well as news of progress in its other businesses during its next scheduled conference call in early August.

"I'm proud of the entire team here at Viewpoint for the agility and ingenuity they continue to show day in and day out," added Mr. Amato. "Not only did we launch Version 1.0 of our toolbar in record time, we managed to learn from our early experience and from consumer feedback to create an even better product. Version 2.0 is not only the coolest and the most innovative search product in the industry, it also serves the Company's central goal of improving shareholder value and paving the way for a promising future."

About Viewpoint

The Viewpoint Platform is the technology behind some of the most innovative, visual experiences on the Web and on the desktop with leading clients such as America Online, General Electric, General Motors, HP-Compaq, IBM, Lexus, Microsoft, Samsung, Scion, Toyota, and Sony. Creative Innovator - the Company's next-generation ad deployment and management system - and the Viewpoint Toolbar - the Vision for the Future of Search - are the latest breakthrough technologies using the full power of the Viewpoint Platform.

Viewpoint Corporation has 100 employees at its headquarters in New York City and in San Francisco, Los Angeles, Chicago, and Detroit.

This press release may contain "forward-looking" statements as that term is defined in the Private Securities Litigation Reform Act of 1995 and similar expressions that reflect Viewpoint's current expectations about its future performance. These statements and expressions are subject to risks, uncertainties and other factors that could cause Viewpoint's actual performance to differ materially from those expressed in, or implied by, these statements and expressions. Such risks, uncertainties and factors include those described in the Company's filings and reports on file with the Securities and Exchange Commission as well as the lack of assurances that the Company will remain in a strong position going forward, that the performance level of Viewpoint search toolbars will remain consistent with the performance achieved in the weekly period ending July, 8, 2004, that Viewpoint will achieve a positive operating profit run-rate by year-end, that the population of version 2.0 toolbar users will grow, or that Viewpoint will release new skins for the version 2.0 toolbar.

Contacts


Viewpoint Corporation
Media Relations:
Lisa Kemmerer, 212-201-0800
lkemmerer@viewpoint.com
or:
Investor Relations:
Financial Dynamics
Kellie Nugent, 212-850-5638
knugent@fd-us.com

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