MediaBay and Sonic Foundry Enter into Digital Media Partnership

CEDAR KNOLLS, NJ, AND MADISON, WI — Sonic Foundry[R] Inc. (NASDAQ: SOFO), the leading developer and marketer of digital media and Internet software tools, services, and systems, and MediaBay Inc. (NASDAQ: MBAY), the leading provider of premium spoken word audio content and products in hard goods and digital download formats, today announced that they have expanded their partnership to include the encoding of MediaBay's audio content library for digital download distribution in various formats including Windows Media[TM] Audio, RealAudio[R], and Acelp.net[R].

Since 1995, MediaBay has successfully migrated a large portion of its offline customer base online and continually strives to offer its customers premium spoken word content and products in new formats. The company has selected Sonic Foundry's state-of-the-art encoding technologies to encode its library of spoken audio content to be available for secure digital download at www.mediabay.com.

"This partnership will extend MediaBay's online offerings, generating an increase in sales and revenue for us," commented Michael Herrick, chief executive officer of MediaBay Inc. "Given the growing popularity of digital downloads, we knew we had to convert our current and future content into a user-friendly format, and Sonic Foundry proved to be the partner that could offer us the best service in digital encoding."

"We are pleased to meet MediaBay's extensive encoding needs," stated Dan McLellan, general manager of Sonic Foundry Media Services. "As the broadband industry continues to expand and more consumers use the Internet as their purchasing source, MediaBay will benefit greatly by having their material available online in a digital format."

About MediaBay Inc.

MediaBay Inc. is the leading provider of premium spoken word audio content and products in hard goods and digital download formats, both online and offline, which it markets to its customer database of over 2.5 million names and more than 2.0 million unique Web site visitors.

MediaBay Inc. is one of the world's largest marketers of audiobooks through its Audio Book Club membership club, which markets and sells tens of thousands of audiobook titles through direct mail and the Internet at www.audiobookclub.com. MediaBay Inc. is also one of the world's largest marketers of old-time radio shows and classic videos through its Radio Spirits subsidiary, which markets and sells its content library of over 60,000 radio shows and 3,500 videos on audio cassette, compact disc, and video cassette through direct mail, retail, and radio channels as well as through the Internet at www.mediabay.com. MediaBay.com, the Company's media portal site, is an innovative content and e-commerce Web site offering the Company's millions of customers and Web site visitors a single location for premium spoken word content and products available in hard goods and secure digital download formats.