FOR IMMEDIATE RELEASE

Contact: Bob Griffin, Griffin Public Relations & Marketing
(212) 481-3456
Bgriffin@griffinpr.com

IMAGINON DEBUTS NEXT GENERATION ImaginVideo™ FOR DELIVERY AND MANAGEMENT OF INTERACTIVE VIDEO

Formerly ImOn.comTV™, the new ImaginVideo™ system is optimized for Microsoft Windows® 98/2000/ME and Microsoft Internet Explorer™ 5.5.

SAN CARLOS, CALIFORNIA, January 12, 2001 -- Significantly broadening the market potential of its interactive video client-server systems, ImaginOn, Inc. (NASDAQ: IMON) (www.imaginon.com) today announced the introduction of its next generation interactive video solution -- ImaginVideo™. Formerly known as ImOn.comTV™, ImaginVideo brings a new level of performance and flexibility to a significantly wider potential customer base because it has been fully optimized for Microsoft Windows® 98/2000/ME and Microsoft Internet Explorer 5.5. What's more, according to ImaginOn Chief Executive Officer David Schwartz, ImaginVideo doesn't need browser plug-ins. Instead, seamless video branching during playback is based on the Microsoft Windows Media Format.

"We are very excited to bring ImaginVideo to market, as it truly does represent the next generation way to deliver and manage interactive video over the Internet," Schwartz said today. "ImaginVideo runs optimally within the latest Windows and Internet Explorer environments, an achievement that is due, in part, to ImaginOn's participation as a Premier member of the Microsoft Developer Network, which accelerated the development of ImaginVideo." According to Schwartz, a key benefit of the ImaginVideo system is that it will enable more Web sites to deliver ImaginOn's patented seamless video branching. "Prior to this, ImaginOn seamless branching was available only on sites using Apple's QuickTime format. We believe our new implementation based on Microsoft's Windows Media Format will immediately and significantly expand the market for our technology."

ImaginVideo is a Java client-server application for the delivery and management of interactive video. On the client side, it operates in a Java-capable TCP/IP set-top box, browser, Sony PlayStation 2, or Microsoft X-Box and is delivered by HTTP servers running on Solaris or Linux. Multiple video encoding standards are supported and streamed from a single server. In addition to video streaming, new features defined for interactive TV and e-commerce functions are included. Schwartz noted that, "ImaginVideo is the best-of-class solution for developing and deploying interactive streaming video. Its powerful feature set - including video-on-demand, embedded Web links, viewer-directed branching, random access, and automated Web searching - can help any business sell, educate, entertain, and inform vividly - flexibly - like never before. Using ImaginVideo, businesses can create interactive content by simply dragging and dropping digitized video clips into ImaginAuthor, an intuitive development tool. Once the video is uploaded to the ImaginVideo server, users can view, search, and direct it from within a standard Web browser window."

ImaginVideo, ImaginAuthor and ImOn.comTV
are trademarks of ImaginOn and are protected under U.S. Patents.
All other trademarks herein are the property of their respective owners.

Except for the historical information presented herein, the matters set forth in this press release are forward-looking statements within the meaning of the "safe harbor" provision of the Private Securities Litigation Reform Act of 1995, or by the Securities and Exchange Commission in its rules, regulations, and releases. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially. These risks include acceptance of ImaginOn software by developers and users, the successful development of competitive software to ImaginOn's, competitive pricing pressures for ImaginOn software and services, and the availability of financing to complete management's plans and objectives. In addition, other risks are detailed in the Company's periodic reports and in its Form S-1 registration statement declared effective by the Securities and Exchange Commission on May 11, 2000. These forward-looking statements speak only as of the date hereof. The Company disclaims any intent or obligation to update these forward-looking statements. ###