HiPiHi and IBM intend to collaborate to drive innovation of

virtual worlds for China

March 7th, 2008

BEIJING, China – March 7th, 2008 – HiPiHi, China's pioneer of the 3D virtual world, and IBM (NYSE: IBM), today announced that they intend to explore innovation in the 3D Internet. The goal is to explore the optimization of the HiPiHi World technology platform, promotion of virtual-world interoperability and innovation of virtual world business models.

HiPiHi and IBM intend to focus on technology, operations, business development and marketing. The years of research expertise and operating experience of IBM in virtual environments, particularly focused on driving business transformation, is expected to complement HIPIHi's efforts in realizing the goals of platform stability, high operating performance and scalability.

HiPiHi has established its community culture through progressive customization of product features and early residents have already begun their own exploration of commercial applications in HiPiHi world. The challenges faced by the virtual world industry, such as platform architecture and viable business models, will continue to evolve and consolidate.

Regarding this proposed relationship, Dr. Thomas Li, Director, IBM's China Research Laboratory, said, "IBM's commitment to driving the future of 3-D Internet activities is based upon a futuristic outlook on the state of the internet. The development of the industry ecosystem will certainly yield richer and more diverse user applications and spur broader adoption. We believe that the changes on our daily lives will be profound and impactful. The progressive development of the virtual world economy in the form of business applications will drive the inter-operability need of virtual world platforms. China's rapid economic development and its large internet user market validate the importance of China's virtual worlds in the global industry.

HiPiHi's founder and CEO Xu Hui said: "We are all at the cusp of a new internet era. HiPiHi is not only fighting at the leading edge to take the 2D text-based web into the era of 3D virtual worlds; we are also strongly focused on resolving the practical issues of growth and innovation of 3D internet applications. We strive to create a virtual world where people could make their dreams come true and we also want to create positive contributions to people's daily lives. We look forward to cultivating the virtual world industry in China and around the globe, to advance R&D in virtual world related technology, and to set industry standards. I believe that a China-based virtual world, that is committed towards relentless innovation, will unleash the creative power of the people and add real value to people's lives."