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Commtouch Reports August Spam Trends: South Korea Emerges As New Global Leader of Spam

* South Korea takes the gold medal in hosting of spammer websites and silver in spam origination
* Average spam outbreaks surpasses 600,000 per day during August
* Viagra, now 24.17% of all spam messages, keeps the gold in August as most advertised product via spam

MOUNTAIN VIEW, CA, Sept. 1, 2004 -- Commtouch (NASDAQ: CTCH - News), the innovator of anti-spam solutions featuring Recurrent Pattern Detection (RPD) technology, announced today that the Commtouch Spam Detection Center analyzed hundreds of millions of spam messages in the month of August 2004 and found that for the first time the number of average daily spam outbreaks surpassed 600,000. Of global spam during August, 9.09% was CAN-SPAM compliant, constituting a slight drop in compliance compared to the previous month.
In August, 93.85% of the IP addresses from which spam originated were new and 98.7% of the URLs referenced in spam email were new. As for the physical location of spammer websites referenced in spam email, 71.28% of those were identical in July and August. Out of the total number of URLs referenced in spam messages, almost 47% were hosted in South Korea, which established itself in August as the new world leader in spam hosting and was second to the United States in spam distribution, sending 14.33% of all global spam. The number of websites referenced in spam that are hosted in China dropped to 31.75%, a steep decline from 73.58% just two months ago.

Although law enforcement authorities are making remarkable efforts to block and arrest spammers, spammers are not slowing down (yet) said Avner Amram, executive vice president at Commtouch. Spam volume and the number of spam outbreaks continue to increase, while compliance with CAN-SPAM remains constant in recent months at around 10%. This months statistics again suggest that spammers are slippery, changing almost entirely the origins of distribution and the referenced websites from month to month.

Origin of spam: U.S share of global spam drops to 41.56% from 60% two months ago

In the month of August, Commtouch detected that spam was sent from 170 countries, down slightly from 171 the previous month. (Note to editors: For a complete list of the countries in July and a complete list of the countries in August, send a request to media@commtouch.com). The volume of spam email originated primarily from the following countries:

1.	United States	41.567%
2.	South Korea	14.33%
3.	China	13.72%
4.	Brazil	4.03%
5.	Japan	3.22%
6.	Canada	2.75%
7.	Hong Kong	2.13%
8.	Mexico	1.75%
9.	Spain	1.42%
10.	Germany	1.30%

South Korea replaces China as leading host country of websites referenced in spam

Most spam that arrives in email boxes contains a URL to a web site. Forty-seven countries around the world are hosting spammer web sites. South Korea hosts almost 47% of websites referenced in spam email. Only two months ago, China hosted over 70% of those web sites. China is still a major host with 31.75% of referenced websites hosted there. Meanwhile, the number of spammer websites hosted in Brazil is growing exponentially; just three months ago the number was 2% and now it is 11.3%.

Below are the top countries hosting web sites referenced in spammer emails:

1.	South Korea	46.87%
2.	China	31.75%
3.	Brazil	11.36%
4.	United States	9.73%
5.	Canada	0.10%
6.	Argentina	0.06%
7.	Russian Federation	0.05%
8.	United Kingdom	0.01%
9.	Germany	0.01%
10.	Taiwan	0.01%
11.	Hong Kong	0.01%

The top 3 products pitched in August spam messages included drugs, software sales and mortgage/refinance

Compared to the first 6 months of 2004, the share of spam messages that advertise drugs, porn and casinos has increased: 37.67% in August for drugs compared with 29.53% at the end of June; 4.94% in August for porn compared with 3.1% at the end of June; and 1.72% for Casinos compared with 0.45% at the end of June.

Below is a list of the top 15 products advertised in spam messages during August:

1.	Drugs	37.67%
2.	Software sales	9.83%
3.	Mortgage/refinance	9.28%
4.	Shopping	7.67%
5.	Porn	4.94%
6.	Organ enlargement	4.39%
7.	Financial	4.28%
8.	Weight loss	2.33%
9.	Dating	1.94%
10.	Work from home/jobs	1.89%
11.	Vehicle warranties	1.86%
12.	Casinos	1.72%
13.	Beauty products/health	1.67%
14.	University degrees	1.56%
15.	Debt solutions	1.33%

For additional information regarding August month trends or commentary regarding content related to that which is presented in this press release, please contact krems@kremspr.com

About Commtouch

Commtouch Software Ltd. is a global developer and provider of proprietary anti-spam solutions featuring Recurrent Pattern Detection (RPD) 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. 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's solutions visit our web site at http://www.commtouch.com. IDC recently wrote about RPD as a unique and potent approach to fighting spam in the firm's white paper titled, "Choosing the Best Technology to Fight Spam."

Note: Commtouch is a registered trademark and RPD(TM) - Recurrent Pattern Detection is a trademark of Commtouch Software Ltd. Other terms and product names in this document may be trademarks of others.

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.

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