On2 Technologies and Texas Instruments Collaborate on Video Devices Providing Optimized Codec Performance

Technology agreement expands On2 TrueMotion® VP6™ and VP7™ support on TI’s OMAP™ Platform and DaVinci™ Technology

TARRYTOWN, NY -- November 26, 2007 -- On2 Technologies (AMEX:ONT), a leader in video compression solutions, announced today an extensive agreement with Texas Instruments (TI), under which the two companies will collaborate on technology to implement On2’s industry leading TrueMotion® VP6™ and VP7™ video compression formats on TI’s industry leading OMAP™ Platform and DaVinci™ technology for mobile handsets and digital video applications.

'This is a far reaching agreement in that TI’s technology leads the industry for mobile handsets and IP video devices,' said Bill Joll, president and CEO of On2 Technologies. 'What this means for On2 and the market in general is that VP6 and VP7 based cross platform high-quality video will be available for a wide range of mobile, IPTV, and web video devices.'

Under their agreement, the two companies will share technology and development resources allowing TI to optimize VP6 and VP7 codec performance for different applications with TI’s development partners and community. Earlier this year, On2 became a TI development partner, further extending the availability of VP6 and VP7 codecs to TI’s development community.

'On2’s video compression is setting the trend for a lot of applications in mobile handsets, web video, real time video conferencing and others, and the need for devices to support such applications is growing,' said Charlie Gonsalves, DSP Third Party Network marketing manager, TI. 'Through this agreement we anticipate acceleration of availability of highly optimized solutions that our customers can leverage to bring to market applications based on TI’s technology.'

On2 is a leading developer of video compression software and solutions with more than 1 billion deployments worldwide. Through the use of On2’s VP6 technology in Adobe® Flash® Player 8 and 9, On2’s VP6 technology has become a de-facto web video standard, and is widely used by leading web video sites and user generated content and social networking services. The On2 VP7 codec, the latest generation of the company’s TrueMotion codecs, is used in pioneering applications such as Skype™ video conferencing and AOL AIM®.

TI's OMAP™ Platform is a comprehensive mix of processors, software and support that delivers the real-time processing and low power consumption necessary for 2.5G and 3G applications, including streaming media, security, interactive gaming, mobile commerce, location-based services and more. TI’s DaVinci technology is the industry’s first broadly available offering of integrated components for digital video. It consists of digital signal processing SoCs, ARM-based devices, video coprocessors, video accelerators, multimedia codecs, APIs, frameworks, development tools and comprehensive support.

About the Texas Instruments DSP Third Party Network

On2 is a member of the TI DSP Third Party Network, a worldwide organization of independent companies that offer products and services supporting TI DSPs. TI third parties provide expertise across a variety of applications, including audio, control, telecom, video and imaging, and wireless communications. Third party products and services include a broad range of application software, development hardware and software, and consulting services that support original equipment manufacturers' efforts to bring differentiated products to the market quickly.

For more information about the TI DSP Third Party Network, please visit http://www.ti.com/3p.

About On2 Technologies, Inc.

On2 Technologies (AMEX: ONT) ensures a compelling video experience for any video application anywhere. From low bit rate to high definition, On2 provides optimized video compression technology enabling innovative solutions for application developers, content and service providers, chip vendors, device manufacturers, digital signage companies and beyond.

Through continual innovation, On2 satisfies the toughest quality, bandwidth, and power requirements for video. The company's proprietary (TrueMotion® VP6™, VP7™) and standards based (MPEG-2, MPEG-4, H.263, H.264, VC-1) codecs dominate the video market, with more than 1 billion deployments on desktops worldwide and more than 200+ million in mobile; they are also proven in silicon with over 25 semiconductor manufacturers globally.

Established in 1992 and headquartered in Tarrytown, New York, On2 has offices and partners in Finland, Germany, UK, Japan, China, Taiwan and Korea. Customers include Nokia, Samsung, Sony, Freescale, AMS, Atmel, Adobe/Macromedia, AOL, Sony, Skype, Facebook, VideoEgg, Brightcove, Move Networks and XM Satellite Radio. For more information please visit www.on2.com.