Avistar Investor Relations

Avistar Communications Announces Business Update

SAN MATEO, CA - November 8, 2007 - Avistar Communications Corporation (NASDAQ: AVSR), a provider of unified visual communications solutions, today announced the following business update:

Earlier today Avistar announced that we received a letter from The Nasdaq Stock Market identifying a "continued listing" compliance issue with Avistar's participation on The Nasdaq Capital Market. This continued listing issue is something we, our directors and our shareholders should be concerned about - but not something that should diminish our efforts to continue the reorganization and refocus of Avistar into the vibrant, world-class company we expect to emerge over the next 12-15 months. Our confidence comes primarily from three data points that, given both the absence of analyst coverage and the resulting lack of trading volume and liquidity in our stock, we believe represent a disconnect between our performance and our market capitalization.

These three fundamental points are as follows:

Financial Performance: For the past three years, our combined revenue and income from settlement and licensing activities have grown at a cumulative annual rate of over 50%, and we have moved from a loss of over $8.0 million in 2006 to a profit of $0.8 million for the nine months ended September 30, 2007. We anticipate profitability in 2008 and a continuation of our historical growth in revenue and settlement and licensing proceeds. Undoubtedly, there are risks, but we believe that Avistar has very positive prospects. To better position our company for success in 2008, we have reduced Avistar's operating expenses significantly over the past three months. Many of the structural changes that we have put in place will not be fully recognized or reflected in our financial results until the beginning of 2008. With a new executive leadership team, expanded product portfolio and broadened "go-to-market" strategy, we believe Avistar is being positioned for strong future performance.

Intellectual Property Value: Avistar currently owns an impressive intellectual property portfolio created out of extensive research and development efforts over a number of years, and codified in part in 76 U.S. and foreign patents. These patents have generated approximately $50 million of settlement and licensing proceeds for Avistar, exceeding the current market capitalization of the company. Our July 2007 earnings announcement reported the results of an analysis commissioned by Avistar and developed by Ocean Tomo, LLC, a leading appraisal and services firm with specialized expertise in valuing patents. Ocean Tomo's analysis indicated that the potential net present value of monetizing Avistar's intellectual property was between $350 million and $500 million. Accordingly, there is a substantial delta between this intellectual property valuation and the market capitalization of the company. It will be the task of Avistar's executive team in 2008 to reconcile these two numbers.

Turn-around status: We view Avistar as a turnaround in progress. Despite significant value and opportunity, the operational and execution model previously deployed by Avistar has not met expectations. Our technology and intellectual property are sound. However, we believe our organizational capacity to engage our market has in the past fallen short. With our new leadership and revamped management team, we have significantly improved, and continue to improve, our go-to-market strategy, efficiency, and cost management. We are looking to continue these improvements in the fourth quarter in order to position our company for a successful 2008. Multiple projects are on-going and on-schedule, generating: significant cost reductions across the company including the re-alignment of executive management and leadership; the implementation of real, transparent processes; the execution of a clear, focused go-to-market strategy around licensing of technology and the expansion of distribution
channels; the implementation of low cost engineering capacity offshore; and in multiple other areas, aligning IP and technology value to effective, clear, measurable and compelling market opportunity.

Looking ahead, the primary challenges for the company are to execute on the strategy that aligns our market capitalization to its true value, establish a broader profile in the analyst community and continue our annual financial growth performance. We believe the company has great potential, aligned to an impressive market opportunity, combined with an enviable portfolio of intellectual property.

In an effort to maintain shareholder and market awareness of Avistar, we will be implementing a monthly business update program for the company. This communication program will focus on Avistar's progress in achieving its business goals and will involve monthly press releases and web site blog, focused on the growth and financial development of the company. Please go to www.avistar.com for more information.

Cautionary Note Regarding Forward Looking Statements

Statements made in this news release that are not purely historical, including but not limited to statements regarding the transformation of Avistar into a vibrant world-class company, anticipated profitability in 2008, continuation of historical growth in revenue and income from settlement and licensing activities, Avistar's prospects, the recognition and impact of Avistar's structural changes, the positioning of Avistar for strong future performance, the results of the Ocean Tomo analysis, the potential net present value of monetizing Avistar's intellectual property, the size of Avistar's market opportunity, the characterization of Avistar as a turnaround in process, and improvements in Avistar's go-to-market strategy, efficiency, cost management and strategy, are forward-looking statements within the meaning of Section 21E of the Securities Exchange Act. Such statements are subject to risks and uncertainties that could cause actual results to differ materially, including such
factors, among others, as the expense and uncertainty associated with changes to Avistar's organizational structure and business model, the lengthy sales cycles and volatility associated with Avistar's sales and licensing activities, challenges associated with achieving market acceptance of video collaboration products in general and Avistar's products in particular, intense competition in the market for video collaboration and unified communications products from a wide range of providers, the time, expense and uncertainty associated with the enforcement, licensing or sale of Avistar's intellectual property rights, the qualifications and assumptions set forth in the Ocean Tomo report and the absence of any third party willing to pay all or part of the value ascribed to Avistar's intellectual property by the Ocean Tomo report. As a result of these and other factors, we expect to experience significant fluctuations in our revenue and operating results, and there can be no
assurance that we will become or remain profitable in the future, or that our future results will meet expectations. These and other risk factors are discussed in our Annual Report on Form 10-K and Quarterly Reports on Form 10-Q filed with the Securities and Exchange Commission from time to time. We disclaim any intent or obligation to update these forward-looking statements.

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Avistar Communications Announces Business Update