COMMTOUCH SOFTWR LTD (CTCH)

[midastouch017]

Business Updates

The company:

1. Achieved its tenth consecutive quarter of revenue growth in the
fourth quarter of 2005, and sees this trend continuing in the
first quarter of 2006.

2. Expects operational expenses to drop in the first quarter of
2006 compared to the fourth quarter of 2005.

3. Has been experiencing a high rate of renewal business,
especially with its OEM partners, which is a key element to
continued growth for the company.

4. Sees strong demand continuing for messaging security products,
with global interest in the company's products remaining high.
The company will continue to sign new OEM partners during 2006.

Dubi