said by Intermix Media:

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The Company has recently been advised by the Internet Bureau of the Office of the New York Attorney General ( the “NY AG” ) that it is considering commencing an action against the Company for unlawful and deceptive acts and practices associated with distribution of toolbar, redirect and contextual ad serving applications ( “downloads” ). The NY AG asserts that the Company and/or third parties distributed downloads that were installed by users without sufficient notice or consent and in a manner that made it difficult to locate and remove the programs. The NY AG, in the event of litigation, would be seeking disgorgement of profits, civil penalties and other remedies. While the Company respectfully disagrees with the assertions of the NY AG, the Company is committed to resolving the matter as soon as practicable. The Company’s download applications and business, part of its Network segment, were created by past leadership. The Company has been in the process of scaling down its download business, which does not represent a material component of the Company’s fiscal year 2006 forecasts contained in the Company’s current report on Form 8-K filed concurrently herewith. The Company’s estimate of the financial impact of the NY AG matter is included in the Company’s forecasts, although no assurance can be given that the financial impact of the matter will be confined to the Company’s expectations.

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