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Aether Systems Announces Formation of Aether Capital By Roy Mark August 15, 2000 Aether Systems, Inc. (Nasdaq: AETH) is forming Aether Capital, a new division of the company focusing on the placement and management of investments in companies building wireless and mobile computing products and systems. To launch Aether Capital, Aether plans an initial investment of $125 million. Currently, the Owings Mills, Md.-based Aether is the sole investor in Aether Capital, but the company anticipates that other investors will participate in Aether Capital on terms to be determined. The new division will manage Aether's existing investment portfolio, which includes holdings in many emerging companies in the wireless data industry including OmniSky Corp., Novatel Wireless, Inc. and ePhones. Aether Capital plans to make strategic investments in growth companies, targeting those with synergistic technologies, a demonstrated competitive advantage in their industry, proven leadership and the potential to become clients of or partners with Aether. Wayne Jackson, former chief strategy officer of Aether, will become managing director of Aether Capital. Among Jackson's goals are to become a champion of portfolio interests within Aether and a facilitator of cooperation between portfolio companies. "Aether has the infrastructure and expertise to effectively support the needs of emerging wireless data companies," Jackson said. "Aether has invested in other companies that complement its business strategy in the past, but the creation of Aether Capital will allow us to begin a more targeted outreach and support effort. By partnering with Aether, companies can leverage our leading capabilities including our software platforms, our network operations center and other resources. We will continue to seek out companies with rich technology, outstanding leadership and opportunities for partnership." Aether has already begun executing on the strategy that Aether Capital will now adopt. In the last three months alone, Aether has invested more than $40 million in companies playing an active role in the growth of the wireless data industry. Recent investments include $20 million in wireless modem manufacturer Novatel; $10 million in Data Critical Corp., a provider of wireless systems for communication critical healthcare data; $8 million in ePhones, a leading provider of e-tailing services for companies selling wireless products and services; and $5.6 million in VeriStar, a leader in biometric identification for cardless, paperless electronic payments. In addition, Aether has helped create several leading wireless data companies. Along with 3Com Corp., Aether was an initial investor in OmniSky, the wireless Internet service provider that recently filed a registration statement for its own public offering. Aether formed Sila Communications, a venture with Reuters to provide wireless data services in Europe; Inciscent, a venture with Metrocall, Inc. and PSINet Inc. to provide wireless data services to the small office/home office marketplace; and MindSurf, a venture with Sylvan Learning Systems, Inc. to provide mobile computing applications in the K-12 education marketplace. Aether develops and delivers wireless data services across a variety of industries and market segments in the United States and internationally. The company maintains a Web site at http://www.aethersystems.com.