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Press Releases Wednesday, August 8, 2001   
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Digimarc and Netkey Join Forces To Connect Printed Promotions to Web-based Kiosks

08/07/2001

Technologies combine to help businesses reach customers through multi-channel marketing

Digimarc Corp. (Nasdaq:DMRC), the world leader in digital watermarking technology and applications, and Netkey Inc., the leading provider of enterprise software for Internet self-service devices including kiosks and managed PCs, today announced an alliance to combine Netkey`s retail kiosk software with Digimarc`s MediaBridge(TM) digital watermarking technology to improve customer-focused marketing campaigns.

Netkey will promote Digimarc MediaBridge to customers who are deploying Netkey`s software and want to drive traffic to their in-store kiosks via print promotions. The combination of the two technologies is designed to improve the effectiveness of multi-channel marketing campaigns and increase customer satisfaction through the use of self-service devices.

Retailers or financial institutions seeking to better integrate their marketing promotions and drive traffic to their store or branch have a new solution in the partnership between Digimarc and Netkey. Digimarc`s technology provides a "finger friendly" way of working with the kiosk or other self-service device by linking printed materials to online information. For example, a customer might receive a coupon embedded with an imperceptible Digimarc watermark, bring it to the in-store device then hold it up to the attached Web camera. The Digimarc MediaBridge software would then launch a specific Web page, targeted to the promotion related to the coupon and perhaps to that specific customer.

Digimarc MediaBridge technology operates with commercially available off-the-shelf Web cameras that easily integrate into the kiosk environment using Netkey software.

"In a time when businesses such as retailers and financial services companies are striving to increase customer loyalty through targeted marketing, interactive kiosks provide a powerful way to improve the customer experience," said Indra Paul, vice president and general manager of the Digimarc MediaBridge business. "We are excited to be partnering with Netkey, one of the industry`s key providers of kiosk software, to bring Digimarc MediaBridge to this growing marketplace."

Netkey, with headquarters in Branford, Conn., develops, markets and supports innovative software products that allow companies to manage high volumes of self-service customer transactions and increase opportunities for multi-channel sales.

"Netkey is committed to helping businesses strengthen customer relationships and build loyalty through effective multi-channel marketing programs," said Alexander Richardson, CEO of Netkey. "Digimarc MediaBridge technology is a new way to connect Netkey-powered systems with other marketing promotions and significantly enhance the delivery of information to the customer."

Digitally watermarked print materials such as brochures, newspaper display ads, product packaging and direct response mailers link readers to online information when held in front of a Web camera or other image-capture device enabled with Digimarc MediaBridge software. The software initiates a response that instantly connects the user to relevant information, applications, offers or opportunities to purchase. A Digimarc `D` symbol located on the printed material indicates that the object is Digimarc MediaBridge-enabled.

About Digimarc
Digimarc Corp. (Nasdaq:DMRC), based in Tualatin, Ore., is the world leader in digital watermark technology and applications. Digimarc`s patented digital watermarking technologies allow digital data to be embedded imperceptibly in traditional and digital media content, including photographic or artistic images, movies, music, packaging, printed materials, promotional items, value documents, tickets and holograms, among others. The company continues to build a pervasive new communications platform by developing an increasing array of diverse media applications. These applications benefit a broad range of consumers, corporations and government institutions, enhancing the protection of copyrights, security of value documents, management of media and fostering integrated marketing and e-commerce for many goods and services. Digimarc`s leading customers include creative professionals, major media companies and central banks.

The company`s products include Digimarc ImageBridge, a means to communicate copyrights in digital images, track the images on the Internet and facilitate online licensing and related e-commerce; Digimarc MediaBridge, a fundamentally new way for consumers to access the Internet that transforms printed materials into direct portals to relevant destinations on the Internet; and a system, developed in cooperation with a consortium of leading central banks, that deters the use of personal computers in the counterfeiting of value documents. Digimarc is also a member of the Video Watermarking Group (VWM Group), which includes Hitachi, Macrovision, NEC, Philips, Pioneer and Sony, to provide video copy prevention and play control solutions for digital recording devices. In addition, Digimarc video watermarking technology is being licensed for innovative new applications, such as broadcast monitoring. Digimarc has more than 232 U.S. patents pending and 25 issued. Digimarc`s vision is to have its watermarking technology become a standard feature of all media content. Please go to www.digimarc.com for more company information.

About Netkey Inc.
Netkey Inc., the leading provider of software for kiosks and managed PCs, develops, markets and supports innovative software products that allow companies to manage high volumes of self-service customer transactions and increase opportunities for multi-channel sales. Netkey`s software suite has become the authoring platform of choice for developers and systems integrators across the globe. Frost & Sullivan ranks Netkey as "the premier provider of kiosk software." Netkey`s customers include Yahoo!, J.C. Penney Co., Microsoft, E*Trade, Borders Group. Inc, Fidelity Investments, Ford Motor Co. and Service Merchandise. Founded in 1983, Netkey is headquartered in Branford, Conn., and has satellite offices in New York and San Diego. Netkey holds U.S. Patents for its browser kiosk system and for its peripheral integration software for browser kiosk systems. For more information on Netkey, please visit us on the Web at www.netkey.com.

Securities Safe Harbor
All statements contained herein that are not statements of historical fact, constitute forward-looking statements and are made pursuant to the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements, including acceptance of our products by retailers and financial institutions, are subject to certain assumptions, risks and uncertainties. Although Digimarc believes that the expectations reflected in its forward-looking statements are reasonable, actual results could differ materially from those expectations or from historical results. Such risks and uncertainties are outlined in Digimarc`s Annual Report on Form 10-K for 2000 and its most recent Quarterly Report on Form 10-Q, each as filed with the Securities and Exchange Commission. Digimarc is not obligated to revise or update any forward-looking statements in order to reflect events or circumstances that may arise after the date of this release.

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