$425 MILLION INVESTED IN 15 VIRTUAL WORLDS COMPANIES IN 4TH QUARTER 2007

Research by Virtual Worlds Management Reveals 15 Companies Raised $375 Million,
Two Companies Acquired for $50 Million

January 23, 2008 - Austin, Texas -- Virtual Worlds Management, the leading media company tracking the virtual worlds industry, has announced findings from a comprehensive study of accountable transactions showing that venture capital and media firms have invested more than $425 million dollars in 15 virtual worlds companies during the fourth quarter of 2007. Of the $425 million, $375 Million was invested in 13 companies and the remaining $50 million consisted of two acquisitions.

Fourth quarter numbers are up from $220 million having been invested in 23 virtual worlds-related companies in Q3 2007. In the third quarter Disney also announced its $700 million acquisition of Club Penguin. No comparable data is available for Q4 2006.

Investors during the Q4 2007 period include: Omnicom, Alloy Ventures and Storm Ventures, Vickers Financial Group, DHX Media Ltd., Benchmark Capital, Canaan Partners, GrandBanks Capital, Hummer Winblad Venture Partners, Trinity Ventures, Rustic Canyon Ventures, Providence Equity Partners, Charles River Ventures, Kodiak Venture Partners and Pequot Ventures, Gigamedia, Sony and Time Warner, Microsoft and BigFish Games.

"Most of the investors in Q4 were venture firms," said Christopher Sherman, Executive Director of Virtual Worlds Management. "Sony and Time Warner, the only two media companies investing during the period both opted for Gaia Online. Meanwhile Omnicom invested in virtual worlds agency Millions of Us, and television personality Pat Sajak became a significant shareholder of Numedeon. The largest investment by far was ZeniMax's $300 million financing from Providence Equity Partners."

Four of the companies that raised funding are squarely focused on the youth and kids virtual worlds market: Gaia, Hidden City, Numedeon and Star In Me.  The close proximity of the online game industry to the virtual worlds industry can be seen in the recent funding news as well. Many of the software companies who received funding service both the online game industry and the virtual worlds industry. Indeed of the total 15 companies who received funding six are squarely in the game business as well as the virtual worlds business.