Kodak Expands VC Operations

The heyday of the Silicon Valley venture capitalists is over — few are
making much noise these days. But while many venture capitalists are
retrenching, Eastman Kodak Company is expanding its VC operations, first
launched in October 2000 in order to invest in early-stage technology with
the promise of expanding the infoimaging business.

The venerable film giant Wednesday said it has opened the new Kodak Venture
Group headquarters at 100 Century Court in San Jose. The new headquarters
houses five employees from the venture group in addition to the company’s
Developer Relations team and members of its Systems Concept Center — part
of Kodak’s Research and Development organization.

The Kodak Venture Group’s aim is to invest in companies with disruptive
technologies that can expand the infoimaging category — which Kodak claims
is a $225 billion industry, formed from the union of three imaging markets:
devices, infrastructure and services/media.

The latest beneficiary of Kodak’s VC arm is YesVideo Inc., which utilizes a
patent-pending scene detection and transfer technology to convert videotapes
into CDs, DVDs or content for the Web. Kodak Wednesday invested an
undisclosed sum in the San Jose-based firm, which currently offers its
services through participating retailers and by mail.

Under the terms of the agreement, Kodak and YesVideo will:

• Develop new products for sale through Kodak’s distribution channel
• Take advantage of the Kodak Picture CD and PhotoCD products to help
  merge digital photography and digital video applications
• Integrate Kodak Internet photofinishing services in existing YesVideo
  products.

“YesVideo’s technology simplifies the process of converting standard video
footage into CDs and DVDs, which will help drive new usage for pictures —
both still and moving,” said Ted Lewis, senior vice president, director
Digital Business Development, and head of the Kodak Venture Group. “This
investment will help fund the growth of YesVideo and enable the two
companies to leverage each other’s strengths to spur consumer use of these
products.”

Other recent Kodak Venture Group investments include DataPlay, a developer
of digital storage media for portable Internet appliances and consumer
electronic devices, and TurboSquid, a manager and distributor of digital
assets and content.

“The expansion of our Silicon Valley operations accelerates Kodak’s ability
to find and collaborate with innovative start-ups that are capitalizing on
the exciting opportunities created by the convergence of information
technology and imaging,” Lewis said.

The venture group is also looking within Kodak’s Research & Development
organization for technology that can aid its partners, such as its patented
Organic Light Emitting Diodes (OLED) technology, used in the development of
flat-panel displays.