AVG Acquires Exploit Prevention Labs, Developer of LinkScanner Safe Surfing Technology

LinkScanner technology will protect 60+ million users of AVG security products against malicious web sites and drive-by downloads

Brno, Czech Republic – December 5, 2007 – AVG today announced the acquisition of Exploit Prevention Labs, a pioneering developer of safe surfing technology that protects Internet users against malicious web sites and drive-by downloaded exploits. Terms of the acquisition were not disclosed. The deal is expected to be finalized by December 31st 2007.

“Unsafe hyperlinks and the poisoning of legitimate websites represent one of the biggest threats facing computer users since the advent of viruses,” said J.R. Smith, CEO of AVG. “The research and technology behind Exploit Prevention Labs’ LinkScanner product family will enable us to provide our 60-plus million users with access to the most complete protection against internet security threats. Our combined operations will give us the dual advantages of fast reaction and deep research capabilities over other vendors attempting to address this space.”

The acquisition will allow AVG to leapfrog the safe surfing initiatives of other anti-virus vendors, who have focused on database-driven approaches that are incompatible with the dynamic, elusive nature of these threats. Exploit Prevention Labs' experience has shown that real-time analysis is the most reliable method of protecting users against fast-moving Web 2.0-style attacks by cybercriminals.

“Web exploits are a dynamic problem that requires a real-time solution,” said Roger Thompson, co-founder and CTO of Exploit Prevention Labs. “In today’s Web 2.0 world of user-generated content and hyperlinked-everything, a web page can be safe one minute and dangerous the next. LinkScanner technology provides definitive real-time threat protection at the time that matters most - when the user clicks the link.”

The need for real-time solutions and fast reaction times has been particularly clearly demonstrated over the past few weeks with the exploiting of Alicia Keys’ and other musicians’ MySpace pages and the infective banner ads that appeared on major sports information sites.

AVG is World’s Fourth Largest Anti-Virus Vendor

AVG has grown rapidly over the last few years to become the world’s fourth largest vendor of anti-virus software measured by installed user base. Much of the company’s growth can be attributed to the frustration of Internet users with the traditional “big three” anti-virus products, which they view has having become bloated, slow and resource-intensive. The high-performance AVG product range, by contrast, is optimized to provide superior anti-malware protection while minimizing the impact on a computer’s performance. Like the AVG products, the LinkScanner family is extremely lightweight in terms of system resource usage.

“Since our initial investment in 2005, Intel Capital has provided technical assistance and introduced customers to AVG,” said Marcin Hejka, investment director for Eastern Europe. “We are pleased to see their continuing success as an Internet security leader and congratulate the company on this acquisition.”

Corporate Integration Plans

Most of Exploit Prevention Labs’ 18 employees - including key executives Roger Thompson, Greg Mosher and Chris Weltzien - will join AVG. Roger Thompson becomes Chief Research Officer (CRO), Greg Mosher becomes VP of Engineering, and Chris Weltzien becomes VP of Business Development.

Short-term product integration plans include adding LinkScanner technology to AVG Anti-Virus Free and offering LinkScanner Online, a free on-demand URL scanning service, directly from the AVG web site. AVG also expects to maintain LinkScanner Pro, Exploit Prevention Labs’ flagship product, as a standalone offering.

AVG and Exploit Prevention Labs will combine their threat research operations, providing research centers on three continents (North America, Australia, and Europe) offering AVG users the benefit of around-the-clock malware research 365 days a year.

Understanding the Exploit Threat

Exploits are the digital equivalent of letter bombs - they are packages of drive-by-downloaded software code that contain any number of different types of malware such as rootkits and password-stealing keyloggers.

Cybercriminals create or acquire and distribute these exploits to steal users’ digital assets such as bank account log-ins, credit card numbers, brokerage account information and social security numbers. Unlike traditional virus writers who write malcode for thrills and bragging rights, the cybercriminals behind exploits are out to make a profit.

Internet users become infected by exploits simply by visiting poisoned web pages, including trusted and legitimate web sites that have been hacked by cybercriminals. Exploits are silent - the user often has no clue their computer has been infected; often, the first sign of infection is when the victim notices mysterious activity in financial accounts.

These threats are termed exploits because they exploit vulnerabilities in software products – most commonly operating systems and browsers, but increasingly also affecting media applications like QuickTime and utilities like WinZip. Microsoft’s “patch Tuesday” monthly security updates are now routinely followed by “exploit Wednesdays”, underscoring the need for agility by security vendors to effectively protect users.

To learn more about exploits, visit the Exploit Prevention Labs Threat Center at www.explabs.com/ss/threatcenter.asp.

About Exploit Prevention Labs

Founded by information security veterans Bob Bales and Roger Thompson in 2005, Exploit Prevention Labs developed the LinkScanner family of safe surfing software and services. LinkScanner Pro, LinkScanner Lite and LinkScanner Online provide patent-pending protection against malicious web sites and web-based exploits during the critical risk window between the announcement of security vulnerability and the provision of a patch by the vendor. A Software Development Kit (SDK) is also available to enable third party vendors to incorporate Exploit Prevention Labs’ technology in their own applications and services. More information about Exploit Prevention Labs and LinkScanner may be found on the company’s website at www.explabs.com.

Exploit Prevention Labs was financed by private angel investors, some of whom previously invested in Bob Bales’ pioneering anti-spyware developer, PestPatrol (PestPatrol was acquired in 2004 by CA, formerly known as Computer Associates). Updata Advisors, Inc. represented XPL as its financial advisor in both the CA and AVG transactions.

About AVG

Founded in 1991 and headquartered in Brno, Czech Republic, AVG(www.avg.com) is a leading developer of anti-virus, firewall protection and Internet security solutions for consumers and SMBs. AVG is one of the fastest growing companies in the industry with more than 60 million protected users around the world. The company has regional offices in North America and the United Kingdom, and employs some of the world’s leading experts in internet security, specifically in the areas of virus analysis and detection, software development, and security research. The company’s award-winning products are distributed globally through its 12,000 resellers and the internet as well as via AVG Anti-Virus Software Developer’s Kit (SDK) to interested partners.

AVG investors include Intel Corp.’s venture arm Intel Capital (http://www.intel.com/capital/) based in the US, Enterprise Investors (http://www.ei.com.pl/english/index.php) of Poland, and Benson Oak (http://www.bensonoak.com/en/praxe.html) of the Czech Republic.

About Enterprise Investors

Enterprise Investors (EI) is one of the largest firms managing private equity funds in Central and Eastern Europe. Since 1990 the company has raised six funds totaling €1.6 billion. To date, they have invested €1 billion in 106 companies across many sectors in Poland and other Central and Eastern European countries. Private equity funds managed by Enterprise Investors have invested €150 million in 17 IT and telecom deals. EI funds have exited 90 investments with total proceeds of over €1.3 billion. To find out more about EI please visit www.ei.com.pl.

About Benson Oak

Benson Oak is an investment banking firm based in Prague and with activities in Central and Eastern Europe. Benson Oak has assisted clients in raising debt and equity capital, and in executing mergers and acquisitions transactions on more than 75 transactions amounting to in excess of EUR 6 billion. Benson Oak Capital (BOC), a Dutch-based entity, provides equity financing for buyouts, expansion capital and special opportunities in the Czech and Slovak Republics. BOC first entered Grisoft in 2001, became 100% owner in 2004 and sold 65% to Enterprise Investors and Intel Capital in 2005. Too find out more about Benson Oak please visit www.bensonoak.com

About Intel Capital

Intel Capital, Intel Corp.’s global investment arm, makes equity investments in innovative technology start-ups and companies worldwide. Intel Capital invests in a broad range of companies offering hardware, software and services targeting enterprise, home, mobility, health, consumer Internet, semiconductor manufacturing, and cleantech.

Since 1991, Intel Capital has invested more than US$6 billion in approximately 1,000 companies in more than 40 countries. In that timeframe, about 157 portfolio companies have gone public on various exchanges around the world and another 187 have been acquired by other companies. In 2006, Intel Capital invested about US$1.07 billion in 163 deals with approximately 60 percent of funds (excluding Clearwire) invested outside the United States. For more information on Intel Capital and its differentiated advantages, visit www.intelcapital.com.

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