TANDBERG Television today announced that it has signed a definitive merger agreement to acquire Zetools Inc., a Los Angeles-based developer of software that enables the delivery of next-generation digital video services over the Internet. The move expands TANDBERG Television's ability to support content owners and operators as they look to build Internet TV and broadband businesses. In the past five years, Zetools has built a customer base of leading media companies, including AOL, NBC Universal, MTV Networks and Viacom. By incorporating its on-demand and interactive technologies with Zetools' award-winning Internet TV software, TANDBERG Television is increasing its ability to enable the publishing, distribution and monetization of video content across any platform, to any digital device.

"Our business is to help operators and content owners move video across today's growing choice of distribution platforms to satisfy subscribers' growing demand for improved picture quality, and convenience in their viewing experience. For cable, satellite, terrestrial, IPTV, wireless and now the Internet, we are the world's leading provider of solutions that enable our customers to create new consumer video experiences and generate online revenues through interactive advertising and pay-TV, a truly unique proposition," says Eric Cooney, President and CEO of TANDBERG Television. "The deal with Zetools enables us to help our customers build broadband businesses through the delivery of digital video over the Internet to PCs and to the TV using the next generation of broadband enabled set-top-boxes and PVRs."

With Zetools, TANDBERG Television acquires a core team of leading IP video and broadband specialists whose skills complement those of TANDBERG Television. Zetools' publishing and management applications remove road blocks inherent in monetizing and syndicating video over the Internet and simplify the process of creating multi-platform portals, so content providers can reach the maximum number of viewers. Through its award-winning products such as MediaModeler(TM), Zetools automates the formatting, management, programming and publishing of interactive and on-demand Internet video with a focus on ease-of-use.

"Internet video adoption is accelerating rapidly, and it's clear that TANDBERG Television has the right mix of global resources and vision to capture a large share of the digital video market," said Richard Cardran, co-founder and vice president of product development. "The combination of Zetools software and TANDBERG Television's on-demand, interactive systems and asset management solutions enables us to continue to create rich media ecosystems, and further generate profitable revenue growth for our customers."

The deal is anticipated to be closed by third quarter 2006 and remains subject to customary closing conditions.