ChannelWave Expands Market Leadership and Is Positioned for Profitability Following Strong Q1 and Q2.

ALISO VIEJO, Calif. -- Competitive Wins and Product and Service Innovation Help Channel Management and Commerce Leader to Double Growth

ChannelWave, Inc., the leader in channel management and commerce solutions and managed services, today announced that the company's results in the first two quarters of 2004 were its strongest and most profitable to date. Building on the momentum of the December 2003 merger of ChannelWave Software, Inc. and Aqueduct, Inc., the combined company has increased bookings by 300 percent and revenues by 70 percent.

These results include more than 10 competitive wins over Digital River in e-commerce and Click Commerce in channel management - reflecting ChannelWave's product innovation, service leadership, unmatched flexibility and lower total cost of ownership, which are helping an increasing base of high-tech, manufacturing, financial services, automotive and telecommunications leaders increase their sales revenues and margins across channels.

During the first and second quarters, ChannelWave won a substantial number of new clients for its Commerce On-Demand solution, including Lexmark, NEC-Mitsubishi, Keystone Automotive, Socket Communications, ATI, Comtrol, Rhinotek, Rincon, M7 and others. The company also agreed to major renewals and expansions with Logitech, Netgear, Toshiba Europe, Tapwave and HP (supporting software and peripherals commerce sites for HP's Enterprise, SMB and Government customers).

ChannelWave strengthened its channel management leadership position by expanding in the financial services and automotive industries. ChannelWave was selected by ABN AMRO's InterFirst Wholesale Mortgage Lending Division, one of the nation's top wholesale lenders, to provide a centralized platform to drive more growth and profitability through its mortgage broker, construction and correspondent lending partners. ChannelWave was also selected by Hyundai Motor America to provide an enhanced Web-based Partner Relationship Management (PRM) solution that gives Hyundai dealers and repair technicians real-time access to complete, up-to-date vehicle service and repair information.

ChannelWave also deployed global multi-channel PRM solutions for Maxtor Corporation, Arrow Electronics, Wyse Technologies and Xpedite. Maxtor's solution, which has been rolled out across the EMEA and Asia-Pacific regions, is being connected with the company's existing ChannelWave e-commerce solutions to provide the company with an "integrated, global command and control center that provides unprecedented visibility and strategic capabilities into all of our sales channels," according to Stephen DiFranco, vice president of corporate marketing and branding at Maxtor.

Additional milestones during the first two quarters of 2004:

--Financial: The company turned cash-flow positive and anticipates continued profitability for the second half of 2004.

--International Growth: ChannelWave expanded its company infrastructure in Europe and opened a full-service EMEA commerce store for Toshiba, with pan-European shipping capabilities, and is expanding commerce operations with several other clients in Europe. ChannelWave's PRM solution is now available in 10 languages across the globe.

--Product: ChannelWave released version 6.1 of its channel management solution, which includes enhanced CRM and reporting functions for managing account and customer information through direct and indirect channels and easier configuration. New features in ChannelWave's Commerce Manager are helping clients increase online sales and improve the customer shopping experience, including enhanced promotions and coupons, new merchandising tools, enhanced B2B functionality and expanded sales reporting.

--Clients: ChannelWave maintained its record of fast, low-cost service delivery for new clients and expanded commerce agreements with HP, Logitech, Netgear, Maxtor and more than two dozen other clients. The company also upgraded PRM solutions for Verizon, FrontRange Solutions and Premiere Conferencing. More than 100 people attended ChannelWave's annual Inner Circle conference for clients and partners in April.

--Services: ChannelWave is helping commerce clients grow same-store sales by 10-50 percent through enhanced, customized merchandising services, including competitive pricing, email campaigns, promotional links, rebates, search engine optimization, affiliate marketing, links to traffic partners, third-party products and enhanced Web design.

--Business Development: ChannelWave signed a strategic partnership with New Vista Group, which provides integrated customer and channel strategy consulting to financial services firms.

--Recognition: ChannelWave received a rating of "Promising" in the Partner Relationship Management MarketScope published by Gartner, Inc., which noted: "ChannelWave possesses strong partner life cycle and opportunity management functionality and has gone on the offensive by merging with Aqueduct, a sell-side commerce managed-service provider."

"Our fast growth, strong financial results and exceptional execution demonstrate ChannelWave's unique ability to support the multi-channel strategies of businesses across a wide range of vertical and geographic markets," said Rob Hagen, Chairman and CEO of ChannelWave. "With a business model that delivers faster time-to-value than competing solutions, we are helping clients increase sales and margins, improve visibility and expand their competitive advantage across all of their partner and customer channels."

About ChannelWave

ChannelWave, Inc. helps businesses solve their most important demand chain business problems - from developing channels to creating demand, managing and closing sales opportunities, managing contracts and pricing, transacting and fulfilling orders and managing customer service, warranties and returns. The company's multi-channel CRM solutions and managed services enable businesses to sell and support their products and services directly online or through dealer, VAR and retail channels. ChannelWave is helping more than 100 high-tech, manufacturing, financial services, automotive and telecommunications clients, including AT&T, BEA Systems, HP, Kia Motors, Logitech, PTC, Research in Motion, Sony, Toshiba and Verizon, increase sales and margins by building stronger connections to their channels and customers. The company is headquartered in Aliso Viejo, CA, and has an office in Cambridge, MA and regional sales offices across the United States. More information is available at www.channelwave.com or by calling [phone].

ChannelWave is a registered trademark of ChannelWave, Inc. All other logos, company and product names may be trademarks or registered trademarks of their respective owners.