HiChina Enhances Email Defense Services With Commtouch Anti-Spam and Zero-Hour Virus Outbreak Protection.

Leading Managed and Hosting Service Provider in China

MOUNTAIN VIEW, Calif. & BEIJING -- Commtouch and HiChina today announced that they have entered into a licensing agreement to incorporate Commtouch's Anti-Spam and Zero-Hour Virus Outbreak Protection technology into HiChina's managed service offering.

HiChina was the first hosting company in China, and is currently one of its largest, with over 16% of the Chinese market in domain names, and having registered over 300,000 domain names, according to Webhosting.info, an organization that tracks domain registrars. Through their managed service offering, HiChina provides messaging services -- including anti-spam and anti-virus -- to hundreds of thousands of mailboxes of enterprise and small-to-medium business users. HiChina provides various types of web services for different customer requirements, including eBay, Toyota, Nescafe, China Unicom, China Construction Bank, China Telecom and many other celebrated enterprises. HiChina is also the top company in .cn domain name registration in China.

"As founding members of the Anti-Spam and Internet Associations in China, it was of paramount importance to find the best technology to block unwanted messages from our customers' inboxes," said Zhanyong Zhang, Product Director of HiChina. "Over the course of several months, we tested various competing solutions and determined that Commtouch provided the best spam and malware detection by a significant margin above the rest."

Commtouch's solutions are based on patented Recurrent Pattern Detection (RPD[TM]) technology, which is immune to spammer's ever-changing camouflage techniques, including image-based spam. RPD technology is language-agnostic, so it excels at filtering messages in Asian double-byte languages, which language and content-based filters cannot typically handle.

"It has taken months of hard work to start penetrating the Chinese market, and we are pleased to have signed with HiChina, our second important deal with a leading Chinese firm," said Ronni Zehavi, Commtouch Vice President of Business Development. "We expect more Chinese licensing agreements in the future due to our focus on this significant market."

HiChina has already rolled out the Commtouch service to their current managed service customer base, and any new customers who sign up will automatically receive the advanced email defense service with Commtouch technology.

More information about the managed service offering (in Chinese) is available at http://www.net.cn/static/mail/groupmail.asp.

About HiChina

Founded in 1996 and funded by American based IDG Venture Capital and Newbridge Capital, HiChina is the flagship in the Chinese Internet service industry. HiChina is engaged in the development of e-infrastructure with advanced technologies in high performance virtual servers and e-commerce platforms to help corporate clients set up their own websites with minimal investment. HiChina has taken the lead in passing the certification of international quality standard (ISO9001:2000). It has been recognized as an accredited registrar by both ICANN and CNNIC, which are the highest Internet administrative organizations worldwide and nationwide.

About Commtouch

Commtouch Software Ltd. (NASDAQ:CTCH) is dedicated to protecting and preserving the integrity of the world's most important communications tool -- e-mail. Commtouch has over 15 years of experience developing messaging software and is a global developer and provider of proprietary anti-spam and Zero-Hour virus protection solutions. Using core technologies including RPD (Recurrent Pattern Detection[TM]), the Commtouch Detection Center analyzes billions of email messages per month to identify new spam and malware outbreaks within minutes of their introduction into the Internet. Integrated by more than 50 OEM partners, Commtouch technology protects thousands of organizations, with over 50 million users in over 100 countries. Commtouch is headquartered in Netanya, Israel, and has a subsidiary in Mountain View, Calif. For more information, see: www.commtouch.com. The site includes the Commtouch online lab detailing spam statistics and charts.

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; the ability of our OEM partners to successfully penetrate markets with products integrated with Commtouch technology; a slower than expected acceptance rate for real time AV solutions in general and the Commtouch Zero-Hour(TM) Virus Protection product in particular; availability of qualified staff for expansion; technological difficulties and resource constraints encountered in developing new products; and the failure of Commtouch to meet The Nasdaq Capital Market's listing standards in the future, as well as those risks described in the text of this press release and 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, RPD and Zero-Hour are trademarks, and Commtouch is a registered trademark, of Commtouch Software Ltd. U.S. Patent No. 6,330,590 is owned by Commtouch.