Commtouch Reports Record Amount of Spam in May, With 69% of Global Email Being Spam; 9.5% of Spam Messages Complied with CAN-SPAM Regulations in May.

Business Editors/High-Tech Writers

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--June 1, 2004

Commtouch(R) (Nasdaq:CTCH), (http://www.commtouch.com) the innovator of industrial-strength anti-spam solutions featuring Recurrent Pattern Detection (RPD) (TM) technology, today reported that its detection center detected that the amount of spam has surged the last 3 months, with each month marking a record-breaking amount of spam messages and spam outbreaks over the Internet. In May, 69% of global emails were spam messages.

Commtouch Executive Vice President Avner Amram noted that there is evidence that compliance with CAN-SPAM is increasing every month, with 9.5% of the spam messages having complied with CAN-SPAM regulations in May.

"Ironically, CAN-SPAM might be a reason for the increase in the volume of spam in recent months," said Amram. "CAN-SPAM requires that a sender of spam comply with a few simple rules in order to send a spam message. Therefore, if a spammer complies, its message is considered as spam by end users, but is legitimate by law. This might encourage more people to join the spam business, which proves to be very profitable and with very low barriers to entry."

Amram contends that the increase in volume of spam together with the fact that more spam complies with CAN-SPAM indicates email recipients are not using the 'opt-out link', which appears in a message that complies with CAN-SPAM. "A reason for the possible low usage of the opt-out link is that until CAN-SPAM, email recipients perceived the opt-out link as a tool to actually hurt them -- being one way spammers verify that their email address is active," said Amram.

Commtouch Detection Center and the Commtouch RPD technology use real-time analysis of Internet traffic, therefore they detect spam during the first few minutes in which a spam outbreak is being distributed throughout the Internet. Spammers tricks and innovations are identified immediately and have no impact on spam detection level and accuracy.

About Commtouch

Commtouch Software Ltd. is a global developer and provider of proprietary anti-spam solutions featuring Recurrent Pattern Detection (RPD) (TM) technology. Its mission is to protect and preserve the integrity of the world's most important communications tool -- email. The company's core technologies reflect its 13 years of experience as a leading vendor of email software applications and provider of global messaging services. Commtouch's patent-pending technologies are employed in solutions that are sold through channels and resellers. In addition, Commtouch anti-spam technologies are incorporated in software applications of security and messaging OEMs (examples including BlueCat Networks, HotBar, Sybari and Waterford Technologies). Commtouch is headquartered in Netanya, Israel and its subsidiary, Commtouch Inc., is based in Mountain View, CA. The company was founded in 1991 and has been publicly traded since 1999 (Nasdaq:CTCH). To learn more about Commtouch's solutions visit our web site at http://www.commtouch.com.

Note: Commtouch(R) is a registered trademark and RPD(TM) -- Recurrent Pattern Detection is a trademark of Commtouch Software Ltd. Other terms and product names in this document may be trademarks of others.

This press release contains forward-looking statements, including projections about our business, within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. For example, statements in the future tense, and statements including words such as "expect", "plan", "estimate", anticipate", or "believe" are forward-looking statements. These statements are based on information available to us at the time of the release; we assume no obligation to update any of them. The statements in this release are not guarantees of future performance and actual results could differ materially from our current expectations as a result of numerous factors, including business conditions and growth or deterioration in the Internet market, commerce and the general economy both domestic as well as international; fewer than expected new-partner relationships; competitive factors including pricing pressures; technological developments, and products offered by competitors; availability of qualified staff for expansion; and technological difficulties and resource constraints encountered in developing new products as well as those risks described in the company's Annual Reports on Form 20-F and reports on Form 6-K, which are available through www.sec.gov.