LEGO Company will integrate Zowie's proprietary sensing and recognition technology across all segments, categories and markets worldwide. Additionally, LEGO Company will tap the expertise of Zowie's seasoned team of product development and engineering professionals, who will contribute to the company's global research and development initiatives. Together with the LEGO Mindstorms brand and development operation in Marin, Calif., this agreement will firmly establish LEGO Company's presence in the San Francisco area, and enable the company to further explore opportunities for new ventures and partnerships in the Silicon Valley.

Zowie's technology enhances a child's play and learning experience by blending virtual and physical worlds through the power of the computer and Internet. LEGO will now capitalize on this technology and integrate it into its next generation of children's smart products that are expected to debut in 2001.

``Zowie's proven ability to create affordable interactive toys made the company's know-how an ideal alignment for us, which will further position LEGO Company as a leader in providing quality products for children, where we combine the physical and the virtual world in new ways,'' said Torben B. Sorensen, Executive Vice President of LEGO Company. ``We're looking forward to working with the strong creative and technical teams at Zowie to expand our smart toys offerings and to bring them to millions of consumers under the familiar LEGO brand. These products will really stimulate children's creativity, imagination and learning.''

``This alignment with LEGO creates access to an internationally recognized toy brand that can truly leverage our technology,'' said Amy Francetic, CEO and Co-founder of Zowie Intertainment. ``By becoming part of such an established and globally well-known company, we'll bring our technology and creativity to new smart toy product segments and retail outlets in a more powerful way than if we had continued to go it alone.''

Zowie's sensing and recognition technology was the result of years of research from Interval Research Corporation. ``Zowie has accomplished a tremendous amount since spinning off of Interval two years ago, including the introduction of Zowie technology to consumers nationwide,'' said Bill Savoy, President of Vulcan Ventures Inc., Paul Allen's venture capital group which is the primary Zowie shareholder.

Zowie's premiere offerings, Ellie's Enchanted Garden and Redbeard's Pirate Quest, debuted in the fall of 1999 and were enthusiastically embraced by retailers, consumers and media, with Newsweek heralding the toys as the ``It Toy of '99.''

Zowie Intertainment, Inc. designed and developed smart toys and other technology-based entertainment products. Headquartered in the Silicon Valley, Zowie Intertainment, Inc. has a portfolio of proprietary technologies that allow children to play and control on-screen activities through traditional play. The portfolio of Zowie Power technologies and the company's first products are the results of years of research from Interval Research Corporation.

LEGO Company is the world leader in providing quality products and experiences, which stimulate children's creativity, imagination and learning through playful activities that encourage hands-on, minds-on creation, fun, togetherness and sharing of ideas. The family owned LEGO Company was founded in Denmark in 1932. By the year 2005 the company wants the LEGO brand to be the strongest in the world among families with children.

[Update 4/05/2000]