Commtouch Reports That China Hosts 71% of Websites of Unsolicited Email in April; U.S. Second Place with 22%.

Business Editors/High-Tech Writers

MOUNTAIN VIEW, Calif.--(BUSINESS WIRE)--May 3, 2004

Commtouch (Nasdaq:CTCH)

-- 155 countries send spam, led by U.S., which disseminates 60.5%

of global spam total

Commtouch (Nasdaq:CTCH), the innovator of anti-spam solutions featuring Recurrent Pattern Detection (RPD)(TM) technology, today reported that the Commtouch Spam Detection Center and Lab found in the month of April that 71 percent of the URLs which appear in spam email are hosted in China. Most of the unsolicited messages sent over the Internet have one or more link (URL) in the message; spammers are setting those links to provide more information regarding the products/services they are trying to promote, or to allow users to buy the promoted products online. Commtouch found that in April, 71 percent of those URLs are hosted in China, and the United States was second, hosting just 22% of the spammer websites.

While China is hosting the most spammer websites, the United States continues to be the point of origin for the dissemination of spam, sending 60.5% of spam. The fact that 71% of spammers websites are hosted in China and 60.5% of the global spam is sent from the United States demonstrates that spam is a global problem and that spam is being sent from one country while another country is used as a hosted website to 'close the loop' of the spam transaction.

"The fact that most of the spammer websites are hosted in China adds layers of challenge and complexity to the enforcement of the U.S. CAN-SPAM law and other spam legislation," commented Avner Amram, executive vice president at Commtouch. "Legislators in the United States and in other countries will have to consider the global nature of spam when looking at how to deter or punish those involved in making the business of spam profitable -- be it the spammer or the companies whose products/services the spammers promote."

Commtouch reports that the top 10 countries in global distribution of spam websites in the month of April are:

China- 71%

U.S. - 22%

Brazil - 2.3%

South Korea - 1.8%

Russian Federation -1.5%

Canada - 0.6%

Pakistan - 0.24%

U.K. - 0.07%

Romania - 0.03%

Germany - 0.03%

France - 0.06%

"In the month of April, 88 countries hosted spammer websites, including countries such as: Iran, Zimbabwe, Bermuda, Liechtenstein, Azerbaijan," said Amram.

In regard to the global origin of spam in the month of April, Commtouch identified spam being sent from Internet Protocol (IP) addresses in 155 countries, with Hong Kong (separately from China) breaking in to the top 10 list of countries that send the most volume of spam email:

U.S. - 60.5%

China - 6.2%

South Korea - 4.9%

Canada - 4.3%

Brazil - 2.9%

France - 2%

Hong Kong - 1.7%

Spain - 1.7%

Japan - 1.2%

Netherlands - 1.2%

While Commtouch reports that it saw a record number of spam outbreaks in the month of April, the company also reports an increasing number of email messages complying with CAN-SPAM. Amram said that about 5% of all spam messages in April complied with CAN-SPAM requirements, an increase from 3% in March.

About Commtouch Spam Detection

Commtouch's spam detection center and RPD(TM) technology do not analyze content of messages, but automatically detect spam in every language seconds after the distribution of a spam attack regardless of whether the language is single byte or double byte, written left to right, right to left or up to down. Commtouch anti-spam solutions do not look at the text or the content of a message; rather they automatically identify certain recurrent patterns in email messages.

Commtouch's anti-spam approach is immune to spammer detection avoidance techniques and provides protection against spam sent in any language or in any message format.

For a full list of countries of spammer websites and countries of origin of spam please contact Michael Krems of KremsPR, [e-mail].

About Commtouch

Commtouch Software Ltd. is an innovator 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 being 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 - News). To learn more about Commtouch visit www.commtouch.com.

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.

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