Iowa Department of Education Selects N2H2's Bess Internet Filtering Service for Its Schools; Service Extends Local Controls for Safe, Productive Internet Access.

Business Editors, Technology Writers

SEATTLE--(BUSINESS WIRE)--July 17, 2000

The Iowa Department of Education has selected N2H2's Bess(R) Internet Filtering Service for all 15 of the state's Area Educational Agencies (AEA), representing Iowa's 541,000 students.

N2H2, Inc. (Nasdaq:NTWO) is a leading Internet infrastructure company specializing in filtering, Internet management, and content delivery services.

Iowa's AEAs are linked to the Iowa Communications Network, which expands Iowa's educational services through digital communication. N2H2 will provide a Bess Internet Filtering Service server at each AEA, and make its filtering available to schools through the sponsor-supported Bess Partner Program (BPP). Schools then receive filtering free of charge from their local AEA. The relationship between the Iowa Department of Education and N2H2 follows the recent passage of a state bill providing $50,000 to cover the cost of server installation.

"N2H2's Bess Internet Filtering Service supports our bill's goal to give Iowa students a safe, drug-free, violence-free Web learning environment," said Iowa State Representative Rosemary Thomson, sponsor of the bill. "The Internet is a wonderful tool for students, but it has many pitfalls. For schools using Bess, teachers and parents can be assured that their kids aren't exposed to harmful and inappropriate content that has no place in the classroom, including bomb-making, drug-making, hate/discrimination and unmonitored chat rooms."

"We're pleased to add Iowa to the growing list of statewide networks relying on N2H2's proven filtering solution to give schools local control over their students' Internet experience," said Peter Nickerson, N2H2's president and CEO. "In conjunction with our recently introduced N2H2 ResourceBar, Iowa students now have safe, productive Internet access plus unlimited access to top-quality Internet resources." Among N2H2's roster of state clients are Ohio, Wisconsin, Arkansas and Tennessee.

All Bess Internet Filtering Service users receive single-click access through the N2H2 ResourceBar (available from every Web page served) to Microsoft Encarta(R) Online Deluxe(R) Encyclopedia and N2H2's SearchpolisSM Education Resource Center (http://www.searchpolis.com). This opportunity is free to schools signing up for Bess by September 30, 2000, for the 2000-01 school year.

About N2H2, Inc.

N2H2, Inc., (Nasdaq:NTWO) is a leading Internet infrastructure company specializing in filtering, Internet management, and content delivery services for work, home and school. The company reviews and categorizes Web content and delivers it with integrated Internet products and services through a global interactive network. N2H2 serves the following markets:

-- Enterprise -- provides filtering and related services that

allow businesses to manage Web usage in the workplace to

reduce potential liability, improve bandwidth efficiency, and

give employees access to a more productive Internet

-- Education -- provides schools with filtering services and

information resources, creating a safer and more productive

Internet for students and educators

-- Consumer -- provides home users customizable filtering tools

and content services to make the Internet appropriate for each

member of the family

Founded in 1995, N2H2 has more than 12 million users and a network of more than 1,500 filtering-enabled servers in the U.S., Canada, Australia, UK, Germany, Japan, Chile, Mexico, India, and Bermuda. Additional information about the company, which is based in Seattle, Washington, is available at http://www.n2h2.com or by calling 206/336-1501 or 800/971-2622.

Except for the historical information contained herein, this press release contains forward-looking statements. Such forward-looking statements are subject to various known and unknown risks and uncertainties and are therefore not a guarantee of future performance. The potential risks and uncertainties which could cause actual growth and results to differ materially include but are not limited to, the volatile and competitive nature of the Internet filtering industry, changes in domestic and international market conditions, the success of the company's brand development systems efforts, and customer acceptance of the company's services, products and fee structures. Further information on the factors and risks that could affect N2H2's business, financial condition and results of operations are included under the Risk Factor's Sections of N2H2's public filings with the Securities and Exchange Commission, including the Annual Report on Form 10-K (Commission File No. 0-26825), that are available at http://www.sec.gov. Readers are cautioned not to place undue reliance on these forward-looking statements that speak only as of the date of this release. N2H2 undertakes no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date of this release or to reflect the occurrence of anticipated events.