Critical Path Closes FaxNet Acquisition; Advanced Internet Messaging Pioneer Moves Quickly Towards Fulfillment Of Unified Messaging Vision.

SAN FRANCISCO--(BUSINESS WIRE)--Dec. 7, 1999--

Critical Path, Inc. (Nasdaq:CPTH), a leading provider of business-to-business Internet messaging and collaboration solutions for corporations, Internet service providers (ISPs), Web hosting companies and Web portals, today announced it has successfully closed the acquisition of FaxNet, a leading outsource supplier of carrier-class enhanced fax and integrated messaging solutions.

Critical Path announced a definitive acquisition agreement to acquire FaxNet on November 3, 1999.

FaxNet brings a key component to Critical Path's unified messaging strategy and positions Critical Path to capitalize on the growth potential in the advanced Internet email and messaging service market. According to IDC, the Internet fax market was approximately $50 million in 1998 and is expected to grow to $2.0 billion by 2002. Moreover, estimates indicate that the unified messaging market will grow to $2.3 billion in 2002.

"The acquisition of FaxNet significantly enhances Critical Path's ability to meet the growing demands of our diverse customer base and to offer the most comprehensive Internet messaging solutions available today," said Doug Hickey, Critical Path's president and CEO.

"FaxNet's unparalleled market position, customer base and leading-edge technology adds another layer of value to Critical Path's messaging platform. By integrating FaxNet's carrier-class Internet fax services with our email solutions, Critical Path will offer customers the ultimate in flexibility, functionality and choice."

Founded in 1995, FaxNet is one of the largest providers of Internet fax and messaging solutions, and has developed one of the broadest suites of carrier-class, enhanced fax messaging services. FaxNet has built a premier customer base of high volume customers by providing branded, private-label, turnkey solutions for companies such as Ameritech, Bell Atlantic, BellSouth, U S West, Time Warner's Road Runner, Ariba, Media One Group, and Telecom Argentina. FaxNet's email to fax services offer a broad use -- including, enterprise, production and e-commerce applications -- and more file types than any other service in the market today. In addition, foreign font support is built-in, providing true international document support.

Expanded Services to Meet Customer Needs

The prevalence of the Internet is driving the need for more Internet-based communication services. As a means to support the growing demands of its broad customer base, Critical Path is developing a full spectrum of Internet messaging solutions to complement its core email solutions. Faxnet's Internet fax solution is a very efficient, robust and reliable service, and can manage virtually any faxing need.

Critical Path believes services such as Internet fax, unified messaging and guaranteed delivery will extend the company's relationships with current customers, attract new customers, differentiate Critical Path in the Internet messaging market and provide Critical Path with additional revenue streams. These services also will allow Critical Path to expand its addressable market through a "midsource" strategy. This strategy enables corporate, ISPs, Web hosts and Web portals to selectively outsource value-added services and take advantage of new messaging technologies without altering their existing IT infrastructure.

Outsourcing and midsourcing applications provide many benefits to customers such as access to the most advanced email and messaging systems available, while reducing the typical infrastructure and support costs, faster time to market, and scalability to meet business growth, giving businesses and ISPs of all sizes an alternative to purchasing, deploying and managing messaging applications internally.

About Critical Path, Inc.

Critical Path, Inc. (Nasdaq:CPTH) is a leading provider of business-to-business Internet messaging and collaboration solutions for corporations, Internet service providers (ISPs), Web hosting companies, and Web portals. Critical Path has built an industry-leading global infrastructure with data centers connected to key Internet exchange points, and currently reaches millions of end-users through its customer relationships. Critical Path provides reliable, secure, and scalable email, and a flexible suite of enhanced messaging services to partners such as E

RADE, CompuServe, Network
Solutions, U S West, Sprint, and ICQ. Critical Path is headquartered
in San Francisco, California, with offices in locations nationwide and
in Germany and the UK. More information on Critical Path can be found
at www.cp.net.

     Note to Editors: Critical Path and the Critical Path logo are the
trademarks of Critical Path, Inc. All other trademarks are the
property of their holders.

     This press release contains forward-looking statements. These
statements may be identified by the use of words such as "believes,"
"expects," "anticipates," "intends," and "plans." Actual results may
differ materially from those anticipated in these forward-looking
statements. These forward-looking statements are based on current
expectations that are subject to risks and uncertainties, including
those relating to the possible inability to complete the acquisition
as scheduled or at all. These risks and uncertainties include those
that exist with Critical Path's and FaxNet's respective business
operations. These risks and uncertainties also include those that
relate to the proposed acquisition including risks that integration of
the operations, technologies and products of the combined companies
might not occur as anticipated, that management attention might be
diverted from day-to-day business activities of both companies during
the period through the closing and thereafter, and that greater than
normal employee turnover might occur prior to and after the closing.
Whether or not the proposed acquisition closes, actual results of
Critical Path, including Critical Path's results of operations, may
differ materially from historical results. For a more detailed
description of the risks related to Critical Path, please refer to
Critical Path's prospectus dated June 1, 1999, which has been filed
with the SEC.