Commtouch Reports September Spam Trends: The Return of China, Phishing.

MOUNTAIN VIEW, Calif. -- Commtouch (Nasdaq:CTCHC):

--China heads list of spam hosting countries

--U.S., U.K., Brazil and Romania lead world in sending phishing and fraud emails

--Hurricanes take the wind out of spammers' sails

Commtouch(R) (Nasdaq:CTCHC), the innovator of anti-spam solutions featuring Recurrent Pattern Detection (RPD)(TM) technology, announced today that the Commtouch Spam Detection Center analyzed hundreds of millions of spam messages in the month of September 2004 and found that in the first 3 weeks of the month the amount of spam was less than the amount for the first three weeks in August, which was a record month for spam outbreaks. Also, Commtouch detected in September that facilities in China reclaimed the dubious distinction of hosting the majority of websites referenced in spam email (67.01%), an increase from the previous month in which hosting facilities in South Korea, at 47%, held the top spot on this list.

Of global spam during September, 8.87% was CAN-SPAM compliant, constituting a slight drop in compliance compared to the previous month of 9.09%

Commtouch reported that during the month of September, 11% less spam was sent from the United States than during the previous month. Nonetheless, the United States retained its leadership role in September, with 34.70% of spam email originating from U.S. sources.

"We attribute the drop in spam to two main events which occurred during September," said Avner Amram, executive vice president at Commtouch. "The first is the actions that the FTC took against spammers in the first 2 weeks of the month. The second is the Hurricanes which stormed through Florida, home to many of the spammers."

Commtouch also reported that in September the top three phishing decoys -- in which emails are sent masquerading as those from well-known companies or recognizable brands -- were Citibank, eBay and PayPal. The top countries from which phishing emails originated during September included:

For Citibank (NYSE:C) "phishers": Brazil (27.48%), United States (24.35%), South Korea (8.85%), China (7.35%), United Kingdom (3.63%), Spain (2.31%), India (1.90%), France (1.90%), Mexico (1.77%)

For eBay (NASDAQ: EBAY) "phishers": U.S. (76.22%), United Kingdom (6.36%), Romania (4.24%), South Korea (3.40%), Australia (2.12%), Denmark (2.12%), Canada (1.70%), Germany (1.27%), Indonesia (1.27%)

For PayPal "phishers": US (74.61%), UK (10.60%), Canada (2.77%), South Korea (2.64%), Italy (1.33%), Colombia (1.33%), Venezuela (1.32%), Taiwan (1.32%)

Origin of spam: U.S still leads the world

In the month of September, Commtouch detected that spam was sent from 166 countries. The volume of spam email originated primarily from sources in the following countries:

1.  United States                34.70%
       2.  South Korea                  21.88%
       3.  China                        13.25%
       4.  Japan                        4.15%
       5.  Canada                       2.91%
       6.  Brazil                       2.77%
       7.  Taiwan                       1.95%
       8.  Spain                        1.96%
       9.  Hong Kong                    1.71%
      10.  France                       1.65%

China is the main host of spammer websites

Most spam that arrives in email boxes contains a URL to a web site. Commtouch detected in September that facilities in 45 countries were hosting spammer web sites. Facilities in China hosted almost 67.01% of websites referenced in spam email.

Below are the top countries that hosted websites referenced in spammer emails during September:

1.  China                        67.901%
       2.  South Korea                  11.83%
       3.  United States                10.86%
       4.  Brazil                       9.48%
       5.  Argentina                    0.21%
       6.  Canada                       0.09%
       7.  Sweden                       0.03%
       8.  Taiwan                       0.01%
       9.  Germany                      0.01%
      10.  Hong Kong                    0.01%
      11.  Turkey                       0.01%

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. 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:CTCHC). To learn more about Commtouch visit http://www.commtouch.com/. IDC recently wrote about RPD as a unique and potent approach to fighting spam in the firm's white paper titled, "Choosing the Best Technology to Fight Spam." http://www.commtouch.com/analysts_and_publications.shtml

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 the non-occurrence of any of the company's prospective future events, the threat of or actual delisting of Commtouch shares by The Nasdaq SmallCap Market, the acceleration of the payment date of convertible notes due to a delisting by Nasdaq; 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.

Recurrent Pattern Detection is a trademark and Commtouch is a registered trademark of Commtouch Software Ltd.