Digital Island and SRI International Announce Alliance to Exchange Digital Island Stock for Internet Acceleration Technology

Technology Research Alliance to Focus on Maximizing Speed and Reliability of Global e-Business Transactions
 
San Francisco (December 08, 1999) -- Digital Island, Inc. (NASDAQ: ISLD), a leading provider of network services for globalizing e-Business applications, and SRI International, a leading independent technology innovator, announced today that Digital Island has acquired high-speed Internet technology from SRI International in exchange for Digital Island stock - marking the formation of a Technology Research Alliance.
 
SRI's patent-pending technology reduces the download time of Web sites by half, based on prototype tests conducted by SRI using the Media Metrix Top 50 Web sites as the test base. The advanced technology intelligently avoids Internet congestion for all types of Internet traffic, including secure e-Business transactions, streaming media and dynamic content. Moreover, the SRI technology is completely transparent to users and requires no changes to Web sites.
 
"This alliance is based on the shared vision between SRI and Digital Island to research, develop and implement proven technologies that break down the barriers to global e-Business," said Ruann F. Ernst, president and CEO of Digital Island. "SRI has yielded some of the most important breakthroughs in the information technology industry, and now Digital Island's customers stand to benefit directly from their innovations through improved Web-site experiences.
 
"Moving innovative technology from the laboratory to the marketplace is a key component of SRI's strategy for delivering value to our clients," said William Mark, vice president of Information and Computing Sciences at SRI International. "This technology research alliance with Digital Island, a leader in network services for e-Business, allows us to bring to users our first innovative approach to creating an intelligent Internet infrastructure.
 
Pursuant to the terms of the agreement, SRI received $6 million of Digital Island stock at closing and will receive an additional $4 million in shares of Digital Island stock over the next 12 months for all rights to the patented technology.
 
The purchase of the SRI technology is a significant addition to Digital Island's library of intellectual property. Digital Island has patents pending on TraceWare^TM, an Internet atlas that allows Digital Island customers to identify with 96-percent accuracy the country of origin of an Internet query. Sandpiper Networks has patents pending on Footprint^SM, the world's first Content Delivery Network. Footprint reduces page access time and increases Web server scalability by replicating content to servers worldwide and by transparently rendezvousing browsers to the best server. Digital Island and Sandpiper announced a merger agreement in October 1999.
 
SRI, which 30 years ago hosted one of the two first nodes on the ARPANET, the predecessor of today's Internet, will serve as Digital Island's preferred research partner. The relationship will leverage SRI's deep engineering talent to provide Digital Island with ongoing consultation on emerging technologies in intelligent Internet infrastructure, content delivery and network security. Digital Island will appoint Patrick Lincoln, director of SRI's Computer Science Laboratory, to Digital Island's Strategic Advisory Council of industry luminaries.
 
Silicon Valley-based SRI International is one of the world's largest independent research, technology development and consulting organizations. Founded in 1946 as the Stanford Research Institute, SRI has been meeting the strategic needs of global markets for more than 50 years. As part of its strategy to bring its technologies to the marketplace, SRI licenses its technologies, forms strategic partnerships and creates spin-off companies. www.sri.com
 
Digital Island® is a leading provider of network services for globalizing e-Business applications. Digital Island serves companies that need to securely and consistently extend business-critical applications for marketing, selling, supporting or distributing products via the Internet. Digital Island's e-Network Services include global content distribution and hosting services, localization of the end user online experience and a reliable global Intelligent Network, all of which are designed to deliver the right content, to the right customer, in the right market, at the right time. The Company has regional data centers in New York, Santa Clara, Honolulu, London, and Hong Kong, connecting directly into 21 countries with Local Content Managers in 13 markets worldwide to provide the ubiquity and reach of the public Internet with the quality and functionality normally available only in a corporate wide-area network.
 
Important Notice
 
Digital Island is a registered trademark of Digital Island, Inc. TraceWare is a trademark of Digital Island, Inc. SRI International is a registered trademark of SRI International. All other trademarks are properties of their respective owners.
 
This release may contain forward-looking statements that involve risks and uncertainties. Important factors which could cause actual results to differ materially from those in the forward-looking statements, include but are not limited to: the company's short operating history which makes it difficult to predict its future results of operations; the company's history of operating losses and expected future losses which could impede its ability to address the risks and difficulties encountered by companies in new and rapidly evolving markets; the company's future operating results could fluctuate which may cause volatility or a decline in the price of the company's stock; the company may not be able to price its services above the overall cost of bandwidth causing its financial results to suffer; and other factors detailed in the Company's filings with the Securities and Exchange Commission including its recent filing on Form S-1.

Contact at Digital Island:
Irwin Greenstein
415/738-4162
irwin@digitalisland.net
 
Investor Relations contact at Digital Island:
Tom Thompson
415/738-4102
tomt@digitalisland.net