Autonomy to Make Strategic Acquisition of Virage

CAMBRIDGE, UK and SAN MATEO, CA - Autonomy Corporation plc (Nasdaq:AUTN; LSE: AU.; Nasdaq Europe: AUTN), a leading provider ofinfrastructure software for the enterprise, and Virage, Inc.(Nasdaq-SCM:VRGE), a leading provider of video and rich mediacommunication software, today announced they have signed a definitiveagreement under which Autonomy will acquire Virage for a purchase priceof $1.10 per share in cash.

The transaction reflects a fully diluted cash purchase price ofapproximately $24.8 million, and a net cash purchase price ofapproximately $13.3 million adjusted for Virage's expected cash balanceas of September 30, 2003. "This transaction will enable us to furtherextend the adoption of Autonomy’s Intelligent Data OperatingLayer (IDOL) as the key infrastructure for the automated management ofall forms of unstructured information.

With the inclusion of Autonomy’s Dremedia video technology(whose customers include leading media and communications companiessuch as the BBC, CNN and Quantel) and Autonomy’s infrastructuresoftware at the core of the Virage products, we believe that Viragewill be better able to take advantage of its clear leadershipposition," said Dr. Mike Lynch, CEO of Autonomy.

Dr. Lynch continued, “With this transaction, Virage’scustomer base of over 400 companies, including Bloomberg, Citigroup,CNN, Coca Cola, the FBI, General Electric, Microsoft, MIT, the UnitedNations and multiple U.S. federal agencies, will gain access to theworld’s leading technology. The transaction will alsosignificantly broaden Autonomy’s installed base of enterprise,media and entertainment, educational and governmentcustomers.”

The Boards of Directors of Autonomy and Virage have approved thetransaction, and stockholders representing approximately 40% ofVirage’s outstanding shares have signed agreements to vote theirshares in favor of the transaction at a special stockholders meeting tovote on the transaction.

Broadview International LLC has acted as financial adviser to Viragein connection with the transaction, and Deutsche Bank Securities, Inc.has acted as financial advisor to Autonomy in connection with thetransaction.

"We’re excited about this transaction as we believe itrepresents good value for our shareholders. At the same time, thetransaction with Autonomy will enable Virage to provide enhancedproducts, as well as maintaining the support for the investment ourcustomers have made," said Paul Lego, Virage Chairman and CEO.

Dr. Lynch added, “We believe that the addition of the Autonomyand Dremedia technologies into Virage’s award-winning productswill enable existing and prospective customers to maximize theirreturn-on-investment in video and easily integrate it within the largerenterprise infrastructure.

Finally, the transaction will also bring efficiencies to Viragethrough the integration of Autonomy’s technologies, as well asexpected sales and costs synergies." The transaction is subject tocustomary closing conditions, including the approval of Virage'sstockholders. The transaction is expected to be completed late in thethird quarter of 2003.

Autonomy expects the transaction to be accretive to earnings pershare within six months of closing, and expects to have a cash balanceof approximately $110 million following completion of the transaction.Combined Autonomy and Virage products are expected to be generallyavailable during the first quarter following completion of thetransaction.

Autonomy Corporation plc (Nasdaq: AUTN; LSE: AU.; Nasdaq Europe:AUTN) is a global leader in infrastructure software for the enterprise.Autonomy's technology powers applications dependent upon unstructuredinformation including customer relationship management, knowledgemanagement, enterprise portals, enterprise resource planning, onlinepublishing and security applications.

Autonomy's customer base includes more than 600 global organizationsincluding AstraZeneca, BAE Systems, Ford, Ericsson, Hutchison 3G,RoyalSunAlliance, Sun Microsystems and public sector agencies includingthe US Department of Defense, NASA and the US Department of Energy, aswell as the UK Government's Department of Trade and Industry andnumerous agencies responsible for homeland security relatedfunctions.

Strategic reseller and OEM partners include leading companies suchas ATG, BEA, Business Objects, Computer Associates, Hewlett Packard,IBM Global Services, Vignette, EDS and Sybase. Dremedia, is a divisionof Autonomy.

Founded on Autonomy’s unique Intelligent Data Operating Layer(IDOL), Dremedia provides a technology platform that automaticallyanalyzes, understands, and manipulates video and audio content.Dremedia's customers include leading media and communications companiessuch as: the BBC, CNN, Quantel, VTR Group, Autocue and Telecom Italia.Autonomy has offices worldwide and is on the Web atwww.autonomy.com.

About Virage

Established in 1995, Virage (Nasdaq-SCM: VRGE) is a leading providerof video and rich media communication software for video production,Internet publishing and webcasting. Virage builds integrated rich mediabusiness solutions for corporations, media and entertainment companies,universities and government agencies worldwide.

Virage solutions include VS Production for streamlining ofprofessional video workflow, VS Publishing for developing content intocompelling Internet programming and VS Webcasting for planning andproducing interactive, live and on-demand webcasts.

The company has more than 400 customers and more than 125 partners.Virage customers include Cisco Systems, Empire Blue Cross Blue Shield,Harvard University, NASCAR, Oracle Corporation, Pfizer, the UnitedStates Senate, Xerox and many more. As of March 31, 2003, Virage hadnet assets of $13.7 million, and incurred a net loss of $18.1 millionfor the year ended March 31, 2003. Headquartered in San Mateo,California, Virage has offices throughout the United States andEurope.

For more information about the company, its products, and customers,please visit www.virage.com.