SONY BMG MUSIC ENTERTAINMENT and Dada Form Joint Venture to Create a Leading U.S. Direct to Consumer Digital and Mobile Entertainment Service

Alliance to Create Next Generation Entertainment Service With Integrated

Web and Mobile Offering

Dada Entertainment - New 50%-50% Joint Venture

    NEW YORK and FLORENCE, Italy, July 16 /PRNewswire / -- SONY BMG MUSIC
 ENTERTAINMENT and Dada, a leading international provider of web and mobile
 community and entertainment services, today announced the formation of a
 U.S. joint venture to be known as Dada Entertainment LLC. The mission of
 the joint venture is to create a leading direct-to-consumer entertainment
 service with integrated mobile and web offerings. The venture's products
 will be marketed through the web and through mobile off-deck and on-deck
 distribution channels. Dada Entertainment will be 50% owned by Dada USA and
 50% owned by SONY BMG MUSIC ENTERTAINMENT.
     The new company will be led by the current CEO of Dada USA Inc.,
 Massimiliano Pellegrini, who will serve as the joint venture's CEO.
     Through the new joint venture, which will initially target U.S.-based
 consumers, SONY BMG and Dada intend to offer a next generation web and
 mobile entertainment service, combining a wide variety of music content,
 including ringtones, images, video ringers, mobile games, screen themes,
 and full length audio and video tracks, with a rich Web 2.0 community and
 social networking experience. The joint venture will include and build upon
 various direct-to- consumer offerings contributed by the parents, and will
 be supported by a full portfolio of web-based services designed to foster
 interaction between users and encourage a sense of community, including
 photo and video uploading and sharing, dating, blogs, social networking,
 and user-generated content.
     "This joint venture will provide us with an important platform to
 further expand Artists' presence in the mobile and web space, give
 consumers greater flexibility in how they consume music, and build the
 market for mobile and web entertainment in the U.S.," commented Thomas
 Hesse, President, Global Digital Business & U.S. Sales, SONY BMG MUSIC
 ENTERTAINMENT. "We look forward to working closely with Dada as we set new
 standards of excellence in off deck and on deck mobile services, providing
 the highest quality content, innovative new products, and the best possible
 levels of customer service."
     Dada Entertainment will derive its revenues mainly from subscriptions
 and pay per download services, as well as from the sale of advertising on
 its properties, and from innovative community based social advertising
 solutions, such as Dada's "friend$" program. This program, based on Google
 AdSense, allows users to earn money through sharing of advertising revenue
 generated on their personal spaces and through the community pages
 containing their content.
     "Dada Entertainment will build on the partners' collective experience
 and strengths in the web and mobile space," commented Paolo Barberis,
 Founder and Chairman of Dada. "It will make available to consumers
 music-related content from a variety of sources with user-friendly, web and
 mobile interfaces that give end users easy access to the content they want,
 as well as a chance to interact with each other. We think this new model
 represents a dynamic step forward for entertainment in the mobile and Web
 2.0 era."
     Dada and SONY BMG will each provide services to support the joint
 venture. Dada will provide access to its proprietary technology and billing
 platforms; and SONY BMG will promote the joint venture's services through
 its multiple distribution channels, including its web properties and video
 network, CDs, media buying, third-party media and physical retail
 relationships. Each party will also provide funding to meet the capital
 needs of the joint venture, and one or more of the entities of the Dada
 Group will provide the underlying platform and billing technology.
     While SONY BMG will provide the joint venture with access to its full
 catalog of music and video content, Dada Entertainment will be open to
 obtaining content from sources other than its current content providers.
 The joint venture will also be open to evaluating strategic partnerships
 with other organizations, including media groups and mobile operators.
     In fiscal year 2006 the business comprised by the contributed offerings
 of the two partners recorded net revenues of $66.5 million and Ebitda of
 $11.5 million.(1)
     The JV will be governed by a board of directors comprised of an equal
 number of representatives of each party. The chairmanship will rotate
 annually between the parties. Dada has the right to propose the initial CEO
 of the joint venture, and SONY BMG has the right to propose the initial
 CFO. The board will designate an audit committee also comprising an equal
 number of members designated by each party. Certain strategic decisions of
 the board will require unanimity.
     The closing of the transaction, which is expected to occur by the
 fourth quarter of 2007, is subject to satisfaction or waiver of certain
 customary conditions, including obtaining regulatory approvals and third
 party consents.
     Any developments of the present transaction will be communicated in
 accordance with applicable regulatory requirements.
     The guidance communicated by Dada to the financial community did not
 take into account the effects of extraordinary activities and any relevant
 impact of the present transaction on DADA's financial forecasts will be in
 such case communicated accordingly.
     About Dada S.p.A
     Dada S.p.A. (dada.dada.net), is a leading international provider of web
 and mobile community and entertainment services. Dada is listed on the
 Milan Stock Exchange in the STAR segment (DA.MI) and includes the RCS
 MediaGroup (which holds approximately 43.8%) among its shareholders, in
 addition to the management and founding shareholders with approximately
 14.6% of the share capital.
     Dada's services are provided through the community Dada.net
 (http://www.dada.net) and offers its customers a rich range of fee-based
 community and entertainment products and services to communicate, entertain
 and educate, and are accessible both via PC and mobile phone (through the
 SMS/MMS channel and the micro-portals of the main mobile phone operators).
 The Dada consumer offering is available, in Italy, in the USA, through its
 subsidiary Dada USA, in Spain, through its subsidiary Dada Iberia, in
 Brazil through its subsidiary Dada Brazil, in China through its subsidiary
 Dada China, and in Portugal, Germany, the United Kingdom, France, Belgium,
 The Netherlands, Austria, Hungary, Czech Republic, Canada, Australia,
 Indonesia, India, Mexico, Argentina, Chile, Columbia and Uruguay.
     The Dada Group includes Register.it (http://www.register.it),
 established leader in the registration of Internet domains, which has
 recently acquired Nominalia S.L., leader in Spain in the same sector; Upoc
 Networks Inc., a well established provider of web and mobile value added
 services in the US, Tipic Inc., an international leader in the blog and
 social networking sector with the Splinder and Motime brands and E-Box
 S.r.l., owner of Blogo platform, the most visited Italian network of
 vertical blogs.
     About SONY BMG MUSIC ENTERTAINMENT
     SONY BMG MUSIC ENTERTAINMENT is a global recorded music joint venture
 with a roster of current artists that includes a broad array of both local
 artists and international superstars, as well as a vast catalog that
 comprises some of the most important recordings in history. SONY BMG MUSIC
 ENTERTAINMENT is 50% owned by Bertelsmann AG and 50% owned by Sony
 Corporation of America.
     (1) Dada USA financials based on IFRS, Sony BMG based on US GAAP
 
 

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