Magic Software Signs Deal With MiTAC to Deliver Revolutionary, Online Three-Dimensional Shopping Mall

IRVINE, Calif. - Magic Software Enterprises (Nasdaq:MGIC - news), a leading provider of e-commerce, CRM and other business applications and technology, Tuesday announced that it has signed a deal to deliver MiTAC Europe Ltd. ("MiTAC") a new online shopping mall for its ECLand initiative.

The virtual shopping site, to be built and powered using Magic eMerchant(TM), Magic's award-winning e-commerce solution, will provide consumers easy access to a wide range of mall-type stores through a three-dimensional interface that helps simulate a true store-to-store mall shopping experience for the visitor. It is a site that MiTAC expects will revolutionize the design and convenience of online shopping sites.

In selecting Magic eMerchant to power the site, MiTAC was looking for an application that could be easily and rapidly customized, and integrate seamlessly with both its existing front- and back-office systems.

In addition, given the complexity and breadth of the shopping site, MiTAC also required a solution that could process thousands of transactions per hour and promise the highest levels of security. After considering Intershop, IBM and Excelerator, to name just a few Magic competitors, MiTAC chose Magic eMerchant.

"While all of the products we looked at might be able to handle the job eventually, we wanted a solution that would enable ECLand to be up and running in just two short months. We also needed an application that could integrate transparently with our existing ERP systems," said Paul Miller, general manager of ECLand.

"And we needed a system that would be flexible enough to change and grow with our requirements over time. Magic's solution was the only one to meet all of those demands in the required timeframe."

ECLand's virtual mall will provide all of the benefits of a real shopping center, including allowing Web users to browse around any number of virtual stores to buy goods ranging from electronic gadgets to clothes. In addition, it will incorporate several on-screen user-friendly innovations designed to avoid some of the accessibility problems often associated with online buying.

And, it will have several information points at various key areas within the shopping center to enable browsers to call up stores and product listings, as well as a map of the entire shopping center and a search facility for specific inquiries.

"Magic is looking forward to the challenge of working with MiTAC to develop and deploy this truly innovative new online shopping mall," said Jack Dunietz, chief executive officer of Magic. "It is the type of challenge where Magic excels in terms of its unparalleled time- to-market, and the functionality and ease of integration of its products."

About Magic eMerchant

Magic eMerchant is Magic's customizable e-commerce platform that combines an industrial strength e-commerce solution with a powerful virtual order center. It is designed to enable companies to move their businesses into the world of e-commerce more rapidly than any other solution on the market.

In addition, Magic eMerchant delivers enterprise-level processing power and security along with rapid integration with existing front- and back-end corporate systems. It can process literally thousands of transactions per hour. Magic eMerchant runs on most commercially available platforms, including Linux.

About Magic Software

Magic Software Enterprises, a member of the Formula Group (Nasdaq: FORTY - news), develops, markets and supports software development and deployment technology that enables enterprises to accelerate the process of building and deploying applications that can be rapidly customized and integrated with existing systems.

Magic technology, applications and professional services are available through a global network of subsidiaries, distributors and Magic solutions partners in approximately 50 countries. The company's U.S. subsidiary is located at 1642 Kaiser Ave., Irvine, Calif. 92614, telephone 949/250-1718, fax 949/250-7404, http://www.magic-sw.com.

The Formula Group is an international information technology company principally engaged, through its subsidiaries and affiliates, in providing software consulting services, developing proprietary software products and providing computer-based solutions.

About MiTAC Europe Ltd.

MiTAC Europe is a subsidiary of MiTAC International Corp., a leading global manufacturer of award-winning personal computers recognized for their excellence in quality. Ranked as one of the fastest growing and largest computer companies in Taiwan, MiTAC International boasts an enviable design-to-delivery business model consisting of e-centric engineering, manufacturing and service.

Except for the historical information contained herein, the matters discussed in this news release include forward-looking statements that may involve a number of risks and uncertainties. Actual results may vary significantly based upon a number of factors including, but not limited to, risks in product and technology development, market acceptance of new products and continuing product demand, the impact of competitive products and pricing, changing economic conditions, both here and abroad, release and sales of new products by strategic resellers and customers, and other risk factors detailed in the company's most recent annual report and other filings with the Securities and Exchange Commission.

Contact:
Magic Software Enterprises, Irvine
Katharine Hanley, 949/250-1718 (ext. 220)
e-mail: khanley@magic-sw.com