[November 3, 1999]

Critical Path To Acquire Leading IP Fax Provider; Acquisition Provides Strategic Unified Messaging Technology

Critical Path, Inc., a provider of business-to-business Internet messaging solutions for corporations, Web portals, Web hosts and ISPs, announced it has signed a definitive acquisition agreement to acquire FaxNet, a leading outsource supplier of carrier-class enhanced fax and integrated messaging solutions.

The acquisition will provide a key component of Critical Path's unified messaging strategy and reinforces Critical Path's leadership in quickly bringing to market the most complete spectrum of messaging solutions offering 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. By providing branded, private-label, turnkey solutions FaxNet has built a premier customer base of high volume customers including leading telecommunications companies such as Ameritech, Bell Atlantic, BellSouth, US West, Time Warner's Road Runner, Ariba, Media One Group, and Qwest and Telecom Argentina.

FaxNet's services support more file types than any other service in the market today, and include Microsoft Word, Excel, PowerPoint, Publisher, Visis, Adobe PDF, Postscript Level 2, and graphics formats: TIFF, JPEG and GIF. FaxNet 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.

"FaxNet has a proven track record of providing carrier-class Internet fax services on a worldwide basis," said Doug Hickey, Critical Path's president and CEO. "Their business model of monthly recurring revenue streams and dedication to developing world-class Internet fax and messaging solutions complements Critical Path's business model and vision. FaxNet's unparalleled market position and customer base, their leading-edge technology, and their strong management team will greatly enhance Critical Path's ability to capitalize on the exceptional growth potential in the advanced Internet email and messaging service market."

"FaxNet is joining Critical Path at the forefront of the rapidly developing Internet messaging revolution," said Keith Cooper president and CEO of FaxNet. "By combining the respective strengths of both company's, Critical Path significantly enhances its ability to meet the growing demands of its diverse customer base and to offer the most comprehensive Internet messaging solutions available today."

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.

Services such as unified messaging, Internet fax and guaranteed delivery provide Critical Path with additional revenue streams, extend Critical Path's relationships with current customers and attract new customers. 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, analysts estimate the unified messaging market will grow to $2.3 billion in 2002.

These services also 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.

In September 1999, FaxNet introduced "Fax Ramp", an e-commerce onramp solution that enables the seamless integration of fax and other messaging while leveraging the power of the Internet. FaxNet currently offers this solution to e-commerce providers Ariba, DealStream, and others. Services that utilize this e-commerce onramp include:

FaxMission Enterprise Onramp -- This service allows entire enterprises and large-scale businesses to send faxes via FaxNet's onramp with no investment in hardware or software. It's the only "complete outsource" solution available that provides cost-effective faxing to handle any fax volume and scale with growing enterprises. Onramp works with all e-mail systems, including Microsoft Exchange and Lotus Notes and supports all major applications including Microsoft Office and Lotus Smartsuite. The service also includes powerful custom cover pages, global authentication, enterprise billing by department and location and user-based Web status and e-mail confirmation.

FaxMission E-mail-to-Fax -- This service enables end-users to send fax documents from any e-mail address. Users log on to their e-mail provider and write messages and/or attach documents that are routed to FaxNet servers via a specialized e-mail address. Once FaxNet server receives the e-mail, it opens, prints, and forwards the file to the destination fax number.

FaxMission Web Fax -- Designed to allow service providers, portals, and Internet content providers with the ability to implement web-hosted fax services, Web Fax sends documents via a designated Web page. Users access the Web page and write messages and/or attach documents that are routed to FaxNet servers. The server then renders and delivers the messages to destination fax numbers. In addition, Web Fax supports the most common Web development environments today, including Microsoft ASP, ColdFusion, and CGI applications. Web applications can be modified in minutes for fax messaging.

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