Critical Path, Inc. Raises $33 Million in Second Round of Funding; Transaction Ranks as the Largest Single Equity Financing by a Private Internet Email Company.

SAN FRANCISCO--(BUSINESS WIRE)--Jan. 12, 1999--Critical Path, Inc., a leading provider of business-to-business email service solutions, today announced it has raised approximately $33 million in equity funding from key corporate customers, venture capital firms, and an investment bank.

Over the past 12 months, the company has raised a total of $42 million, to support its outsourced email services.

"The email outsourcing market is rapidly growing; we estimate that well over 100 million installed mailboxes are marketed by ISPs today," said Steve Robins, analyst, Yankee Group. "As ISPs seek to reduce their expenses and provide value-added services in a maturing and competitive market, they will increasingly turn to services such as those offered by Critical Path. The strong interest in Critical Path, particularly by major customers, underscores Critical Path's opportunity in this space."

Critical Path will use this capital infusion to continue its rapid global expansion, enhancing its Network Operations Center and opening new data centers in Europe and Asia. Additionally, the funding enables Critical Path to expand its sales and marketing, engineering, and management teams. The Major investors in the company's latest funding include:

-- E-TRADE (Nasdaq:EGRP)

-- U S WEST (NYSE:USW)

-- Network Solutions, Inc. (Nasdaq:NSOL)

-- CMG@Ventures (Nasdaq:CMGI)

-- Benchmark Capital

-- Mohr, Davidow Ventures

-- Attractor Investment Management Inc.

-- Hambrecht & Quist

"Working with Critical Path will enable U S WEST to quickly deploy additional capabilities and services that strengthen our core bundle of communications services and enable us to further integrate telephone service with 'Web tone,' the data equivalent of dial tone," explained James A. Smith, president and CEO of U S WEST Dex, the directory publishing and marketing arm of U S WEST. "In addition to offering our telephone customers voice messaging, we will be able to offer them top quality online messaging using Critical Path's email systems and expertise."

Key representatives from several investors already hold seats on Critical Path's Board of Directors: Christos M. Cotsakos of E-TRADE; George Zachary of Mohr, Davidow Ventures; and Kevin Harvey of Benchmark Capital. U S WEST's James Smith will join them on the Board.

"We are very proud of the commitment our customers and financial investors have demonstrated in supporting our business with this round of funding," added Doug Hickey, president and CEO of Critical Path. "This funding demonstrates a vote of confidence in our ability to provide a complete, scalable solution to our current and potential customers."

"Critical Path will maintain its commitment to development as the company evolves the role and importance of business critical messaging while helping to define the outsourced email market," said David Hayden, chairman and co-founder of Critical Path.

NOTE: Critical Path Scores Executive Coup with New CFO and CIO -- see separate announcement today.

About Critical Path, Inc.

Critical Path, Inc. is a privately held corporation founded in 1997. With a mission to "handle the world's email," the company has built an industry-leading global infrastructure with data centers connected to key Internet exchange points, and is currently under contract to host over five million mailboxes for telecommunications companies, ISPs, Web hosting companies, Web portals, and corporations. Critical Path is headquartered in San Francisco, California. For more information, please call Critical Path at 415/808-8800, or visit the Critical Path Web site at www.cp.net.

About the Investors

E-TRADE is a leading branded provider of online investing services for self-directed investors. The Company offers independent investors the convenience and control of automated stock, options, and mutual funds order placement at low commission rates. In addition, E

RADE has a suite of value-added products and services that can be
personalized, including portfolio tracking, Java-based charting and
quote applications, real-time stock quotes, Smart Alerts, market
commentary and analysis, news, investor community areas and other
information services. Customers can access E-TRADE, at www.etrade.com
on the Internet and through many other electronic channel and online
services. E-TRADE Securities, Inc. (member NASD/SIPC) and its parent
company E-TRADE Group, Inc. are headquartered in Palo Alto, Calif. For
more information about E-TRADE, please see www.etrade.com.
     U S WEST provides a full range of telecommunications services --
including wireline, wireless PCS, data networking, directory and
information services -- to more than 25 million customers nationally
and in 14 western and midwestern states. More information about U S
WEST can be found on the Internet at www.uswest.com.
     Network Solutions, Inc., founded in 1979, pioneered the
development of registering Web addresses ending in com, .net, .org,
and .edu. NSI also provides enterprise network consulting services,
focusing on network engineering, network security and network
management solutions for commercial customers. For more information,
see www.networksolutions.com.
     CMG@Ventures is a strategic investment and development firm with
a mission of identifying the most promising Internet companies and
helping them achieve their potential in the marketplace. @Ventures
specializes in early stage Internet companies in the specific areas of
content, community, commerce and enabling technologies. Companies in
the @Ventures portfolio include some of the Web's leading brands
including Lycos (Nasdaq:LCOS), GeoCities (Nasdaq:GCTY),
ThingWorld.com, and Raging Bull, among others. @Ventures is affiliated
with CMGI, Inc. (Nasdaq:CMGI) which combines operating companies with
strategic venture investments to create a broad and diverse set of
businesses delivering Internet solutions. For more information, please
see www.cmgi.com.
     Benchmark Capital is dedicated to being the leading early-stage
venture capital firm of the next millennium, with a mission to help
great entrepreneurs build major enterprises, thereby producing
outstanding returns. The company currently manages $250 million in
committed capital. More information about Benchmark Capital can be
found at www.benchmark.com.
     Mohr, Davidow Ventures is a Menlo Park, California based venture
capital firm committed to funding and building successful information
technology companies. The firm specializes in specific technology
markets, including e-commerce, the Internet, enterprise software,
networking, communications and semiconductors. For more information,
please see www.mdv.com.
     Attractor Investment Management, Inc., Attractor was founded by
Gigi Brisson and Harvey Allison in November 1996 and manages several
limited partnerships with assets of approximately $180 million. The
partnerships invest in both public and private technology companies
primarily in the Internet, enterprise software, and telecom sectors.
Former private investments which are now public companies include
VeriSign, USWeb, Terayon, and Net Dynamics (which was purchased by Sun
Microsystems). Several of Attractor's current private investments are
AdForce, Intraware, Marimba, Motive Software, Nuance Communications,
Sentient Networks, Simplex Solutions, Tickets.com, and Vignette.
Attractor's limited partners Marc Andreesson, Andy Bechtolsheim,
Halsey Minor, John Sidgmore and Mike Stonebraker sit on the company's
advisory board.
     Hambrecht & Quist, founded in 1968, is a full-service investment
bank focused on growth companies whose businesses are characterized by
innovation and structural change and operate in four primary areas:
technology, healthcare, services and branded consumer. The company is
headquartered in San Francisco, with principal offices in New York and
Boston as well as offices in Europe, Asia and southern California.
More information about Hambrecht & Quist can be found at
www.hamquist.com.

     Critical Path and the Critical Path logo are trademarks of
Critical Path Inc. All other trademarks are the property of their
holders.