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Toshiba Announces Major Initiatives in Internet Businesses

14 February, 2000

i-Value Creation Company and e-Net Division
to Spearhead Toshiba's B2C and B2B Solutions

Tokyo -- Toshiba Corporation is promoting a series of initiatives designed to reinforce its overall capabilities in Internet businesses covering both business-to-business (B2B) and business to consumer (B2C) operations. Chief among the moves announced today is the establishment of the i-Value Creation Company, which will start operations as Toshiba's ninth in-house company on April 1st, 2000. The new company will lead the way in developing consumer-oriented Mobile Internet services, increasingly seen as the key drivers to widening use of Internet in coming years, and also promote a synergy with the content businesses with which Toshiba has been laying foundations for its activities in the digital age.

The company also announced that it will add weight to its thrust into Internet-based B2B business by establishing the e-Net Division in its Information & Industrial Systems and Services Company. This new division will promote further advances into the high growth areas of outsourcing services and promote Toshiba's role as an application service provider (ASP). Underpinning these strategies is a 20 billion yen investment in upgrading the company's Server Center to provide all the facilities necessary for comprehensive outsourcing and ASP services.

The i-Value Creation Company
The i-Value Creation Company will initially have two divisions, the Webtop Service Division and Media & Content Division. Webtop Service Division will support a diverse range of information provision and portal services, with its main focus on mobile applications. The Media & Content Division will oversee planning and development of content businesses, and promote new services designed for the Internet, digital broadcasting, and other platforms.

The i-Value Creation Company sees the forthcoming launch of IMT2000, the next generation of cellular phone standard, as a major opportunity and will focus its resources on developing new businesses to take full advantage of its potential. IMT2000's support for transmission of high grade graphic and audio sources over cellular devices will provide users with the convenience of seamless access to information and services, whether at home, in the office or on the move. Not only is this expected to stimulate expanded Internet use, but its promotion of mobile terminals plays to one of Toshiba's greatest strengths. Toshiba is responding by enhancing its current Internet services and developing new ones.

The i-Value Creation Company will further Toshiba's current Internet services in Japan, including the popular Eki-mae Tanken Club and the Fresheye Search Engine, launched in 1997 and 1998 respectively, and News Watch Inc., the electronic news clipping service.

As Japan's most popular source for information on railway services and on entertainment in and around stations, Eki-mae Tanken Club currently enjoys over 1 million page views a day. It has already been selected for NTT DoCoMo's i-mode services and is now available to mobile users. i-Value Creation Company will develop its potential further by expanding its links and menus to embrace finance, travel information, entertainment and music.

The i-Value Creation Company will also develop a wide range of new Internet businesses in such areas as leisure, finance, travel, ticketing, music and video distribution and auctions, and offer them to mobile users.

In its operations, the i-Value Creation Company will seek to incubate promising new businesses and then spin them off to operate as independent entities. Each will be free to adopt its own business style and approaches to decision-making, financial, recruitment and remuneration systems.

One area where Toshiba will soon launch next-generation services is in provision of stock prices and investment trust information to mobile users. In this endeavor, the company will partner with Nihon Short-Wave Broadcasting Co., Ltd. in setting up an information provision center and infrastructure that will support expected emergence of on-line trading of stock over mobile terminals. In the first of an expected series of such agreements, Toshiba today entered into an agreement with Matsui Securities Co., Ltd., the pioneer of on-line, Internet-based stock trading in Japan, to provide Mobile Internet stock information services to Matsui's customers. The system will use Toshiba's proprietary format conversion technology and will support access from various types of cellular phones, portable PCs and other personal portable devices. Toshiba will extend this type of mobile solution service to various content providers.

Toshiba has also decided to invest in "HON-YA-SAN", one of Japan's leading Internet bookstores.

Expanding Content Services to Mobile Users
In the area of media content, Toshiba will fully take advantage of its existing alliances with global leaders in the entertainment and content industry. In particular, it will seek to further its partnership with AOL-Time Warner and to reinforce music services in cooperation with Warner-EMI. It will promote content services through such ventures as TOWANI Corporation, a joint venture with Nippon TV and Warner Brothers that produces movies and TV programs, and TOSKADOMAIN Co., Ltd, a joint venture in electronic publishing with Kadokawa Shoten Publishing Co., Ltd.

Toshiba will seek business opportunities by extending the scope of its content services to include new types of platforms through developing Internet-based systems for BS digital data broadcasting and mobile broadcasting services.

e-Net Division
Toshiba's Information and Industrial Systems & Services Company is dedicated to providing corporate customers with the infrastructure and platforms required to meet the demands of the digital age and B2B operations.

Drawing on its experience as a supplier of integrated systems solutions to a wide range of industries, the e-Net Division will direct its resources to procurement and transactions systems; knowledge integration services that call for electronic documentation and management; outsourcing services; ASP services that provide small- to medium-sized companies with modular, integrated platforms that support different aspects of business operations, such as personnel management and accounting; new types of e-commerce utilizing digital broadcasting services; and positioning information services using the Internet and mobile terminals.

Driving the Promotion of In-house Services
Toshiba is realigning its operations to take full advantage of the Internet and digitization, both in its own activities and in supporting its customers. It already promotes use of electronic data interchanges (EDI) and the Internet in its procurement systems, and expects 100% of its procurement to be on-line by 2001. By 2003, this transition is expected to produce procurement costs 200 billion yen lower than in 1999. Individual businesses are following a similar approach. The Semiconductor Company, for example, is developing a new Internet-based IT system with the goal of enhancing operational efficiency, by cutting costs and achieving a higher degree of customer satisfaction through on-line tracking of product availability, production and delivery information.

A comprehensive, Internet-based procurement system will be introduced at the Fuchu Operations, Toshiba's largest manufacturing facility, on April 1st, 2000. It will cover design, development, materials sourcing and ordering. The plant will provide a model facility from which Internet services will be extended throughout the company.

Toshiba expects its Internet-related business sales to reach 500 billion yen in 2003, and plans to invest 250 billion by 2003 in developing the business.

Information in the press releases, including product prices and specifications, content of services and contact information, is current on the date of the press announcement,but is subject to change without prior notice.

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