DivX Acquires Technology for Enhanced Video Searches

[Digital Puppy]

DivX Acquires Technology for Enhanced Video Search and Discovery Services

SAN DIEGO & LAWRENCE, Kan. -- Aug. 22, 2007 DivX, Inc. (NASDAQ: DIVX) announced today the acquisition of the assets of Veatros, L.L.C., a Kansas limited liability company. Veatros's technology was designed to conduct real-time digital video processing and will be used by DivX primarily for the purposes of producing enhanced video search and discovery services. Veatros was spun out of the Information and Telecommunication Technology Center at the University of Kansas.

The Veatros technology, when integrated with the DivX Connected platform for enjoying network-based media in the living room, will provide users with a powerful, high-quality environment for managing and enjoying all their digital media through an easy-to-use interface. As digital media comes of age, more consumers are demanding greater connectivity and better solutions for finding media, on the PC, in the living room, and on the go. DivX provides widespread access to content through a range of products and platforms, with over 100 million DivX Certified devices from major partners including DVD players, digital televisions, digital still cameras, portable media players and mobile phones, as well as through Internet distribution platforms.

"DivX is building a better media experience in partnership with the world's leading consumer electronics companies, and innovative search and discovery technology will be an important piece of that solution," said Kevin Hell, Acting Chief Executive Officer of DivX. "Veatros's assets will add powerful capabilities to our Connected platform that will allow consumers to more easily find and enjoy digital media content, and effortlessly add metadata such as cover art, director, and actors to all their video titles."

"Veatros benefited from incubating the technology with support from the Information and Telecommunication Technology Center," John Gauch, co-founder of Veatros and professor of electrical engineering and computer science (EECS), said. "We were able to focus on development and new applications for the inventions for several years while the market for our technologies developed. Now we are thrilled to work with DivX on a mature implementation."

Victor W. Hwang, outgoing Chief Strategy Officer of Veatros and Managing Director of T2 Venture Capital, which backed Veatros in its recent growth, stated, "Veatros has been at the cutting edge of video processing research for years, and the Veatros team is extremely excited to see its technology put to use by a company as innovative as DivX." T2 Venture Capital is the venture affiliate of Larta Institute, a nonprofit leader in technology commercialization sponsored in part by the Kauffman Foundation.

About DivX, Inc.

DivX creates products and services designed to improve the experience of media. Our first product offering was a video compression-decompression software library, or codec, which has been actively sought out and downloaded over 240 million times since January 2003, including over 80 million times during the last twelve months. We have since built on the success of our codec with other consumer software, including the DivX Player application, which is distributed from our website, http://www.divx.com. We also license our technologies to consumer hardware device manufacturers and certify their products to ensure the interoperable support of DivX-encoded content. In addition to technology licensing to consumer hardware device manufacturers, we currently generate revenue from software licensing, advertising and content distribution.