LERNOUT & HAUSPIE TAPS NEW TRANSLATION SERVICES MARKET OVER THE INTERNET

L&H Successfully Completes Internet Translation Project in Multiple Languages; L&H iTranslator™ Services Integrated into the Linguistic Services Division

Burlington, MA – January 26, 1999 – Lernout & Hauspie (NASDAQ: LHSPF; EASDAQ: LHSP) (L&H™), a worldwide market leader in speech and linguistic technologies, products and services, today announced plans to integrate its multilingual Internet service offerings into its Linguistic Division, a group that currently provides a variety of translation and linguistic tools and services, primarily to large corporations. The integration is expected to provide customers with more comprehensive translation offerings and to increase the division’s market opportunity by adding small to mid-sized companies in a variety of vertical markets. These services are expected to be available from the Internet in March.

L&H also announced that it has completed development of the Internet translation project in 14 language pairs. With the completion of this project, known as the L&H iTranslator family of products, L&H has met the milestones set forth under its agreement with the Brussels Translation Group (BTG) ahead of schedule. The BTG is a private group that has invested in L&H’s development efforts for Internet translation services. L&H iTranslator has received positive recognition among industry analysts and the media and is currently in trial use with WorldBlaze and Uni-verse.com, among others.

"We expect that the L&H iTranslator offerings will match the demands of professionals looking for a high quality, timely, multi-lingual solution," stated Florita Mendez, president of L&H’s Linguistic Services Division. "The combination of the L&H iTranslator technology with L&H’s vast network of professional translators and breadth of linguistic tools enables L&H to offer a multi-lingual solution that is more cost-effective and comprehensive than the competition."

The Brussels Translation Group

L&H entered into a software development and commercial licensing agreement in June of 1997 with the Brussels Translation Group, an organization funded by private investors based in Belgium. The agreement provided L&H with funding to develop Internet translation services in 14 language pairs in exchange for a percentage of L&H’s revenues realized in the sale or other commercial deployment of these services. The agreement was for a period of two years, with requirements to meet intermittent milestones but was completed ahead of schedule in 13 months.

"The rapid, successful completion of our milestones in the BTG agreement points to the tremendous advantages of this type of investment model," said Gaston Bastiaens, president and CEO of L&H. "With the BTG agreement, we were able to obtain the funds needed to quickly develop and bring to market Internet translation services in multiple languages. As a result, our investors, our company, and our customers reap benefits."

The languages supported by the Internet translation services include: translations from English to and from Arabic, French, German, Italian, Japanese, Korean, Portugese and Spanish; French/German bi-directional translation; Italian to and from French and Spanish; Japanese/Chinese bi-directional; Russian /German bi-directional; Italian/German bi-directional and English/Chinese bi-directional translation.

About L&H

Lernout & Hauspie Speech Products (L&H) is a global leader in advanced speech and language solutions for computers, automobiles, telecommunications, embedded products, consumer goods and the Internet. The company is making the speech user interface (SUI) the keystone of simple, convenient interaction between humans and technology, and is using advanced translation technology to break down cultural barriers. L&H’s products and services originate in four basic areas: automatic speech recognition (ASR), text-to-speech (TTS), digital speech and music compression (SMC) and text-to-text (translation). For more information, please visit Lernout & Hauspie Web site at www.lhs.com.

This news release contains forward-looking statements. Such forward-looking statements, include, without limitation, that the products’ features will perform as stated herein and that L&H will be able to commercially release the products on schedule, that the products will be successful in the market. Readers are cautioned that such forward-looking statements are subject to material and adverse change and involve risks and uncertainties, including, without limitation, risks associated with rapid technological change, product development and introduction and competition. The statements contained herein speak only as of the date of this release. L&H expressly disclaims any obligation or undertaking to release publicly any updates or revisions to any such statement to reflect any change in L&H’s expectations or any change in events, conditions or circumstances on which any such statement is based.

All product names and trademarks mentioned herein are trademarks of L&H or their respective owners.

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