Webb Interactive Services, Inc. Reports Second Quarter Results for Fiscal 2004

Business Wire, July 27, 2004

DENVER -- Webb Interactive Services, Inc. (OTCBB:WEBB), a developer and marketer of real-time communications software and instant messaging (IM) solutions through its 43%-owned subsidiary, Jabber, Inc., today announced financial results for both Webb and Jabber, Inc. for the second quarter period, ended June 30, 2004.

As a result of a $7.2 million strategic financing transaction in March, 2003, with Intel Capital, Intel's strategic investing arm, and France Telecom Technology Investissements, the technology investment vehicle of France Telecom, Webb's ownership stake in Jabber, Inc. is now reflected as a minority interest of 43%. As such, Webb has ceased consolidating Jabber, Inc.'s results of operations and financial position with its own, and now reports its investment in Jabber, Inc. using the equity method of accounting. Jabber, Inc.'s results of operations and its financial position are reported separately.

For the three months ended June 30, 2004, Webb's net loss was $759,807, or $0.03 loss per share, compared with a net loss of $890,680, or $0.04 loss per share, reported for the same three month period in 2003. For the six months ended June 30, 2004, Webb's net loss was $1,138,905, or $0.04 loss per share, compared with a net loss of $1,991,768, or $0.09 loss per share.

Highlights from Jabber, Inc.'s fiscal performance for the three and six month periods ended June 30, 2004 were:

--Net revenues increased 4% to $2,214,916 for the 2004 six-month period compared to net revenues of $2,131,388 for the 2003 period even though revenues in the 2nd Q ended June 30, 2004 declined from the same period a year ago;

--For the 2004 six-month period, net losses were $1,749,085 compared to net losses of $3,645,349 reported for the 2003 period, which included a $1.6 million non-cash charge booked in connection with the March 2003 financing transaction with Webb, France Telecom and Intel Capital;

--Closed 19 contracts during the quarter, more than half of which were with new customers and recruited a new sales and marketing team.

"Jabber, Inc.'s revenues in the second quarter were disappointing compared to last year and to this year's expectations but the shortfall was largely due to a significant contract being delayed to Q3 and to vacancies in the sales group that were remedied in early June with the hiring of Paul Guerin as Senior Vice President of Sales and Marketing. Although the sales pipeline continues to show strength, the timing of closing and recognizing revenue from the largest among these prospective customers remains an uncertain science. As a result, Jabber, Inc. management has reduced its sales forecast for the year to approximately $6.5 to $7.0 million from $9.0 million--again, not because of a pessimistic outlook but, rather, uncertainty around the timing of closing deals," said Bill Cullen, Webb CEO.

Added Cullen, "Jabber, Inc. has secured significant contracts from numerous blue chip companies so far this year and the prospects for more successes seem close at hand. Just recently, Jabber, Inc. announced that Arcelor, the world's largest steel maker and EBS, the world's largest foreign exchange broker, have embarked on significant commitments to Jabber Inc. within the past few weeks which, all tolled, represent more than 4 million deployed seat licenses. Recent product enhancements include enterprise-class wireless clients for the BlackBerry (RIM), PocketPC, SmartPhone, Symbian, and J2ME platforms. Jabber Inc.'s forthcoming product release, codenamed Gemini, that is due out in the third quarter, represents a huge leap forward in real-time business intelligence and collaboration capabilities and holds the prospects of delivering significant competitive implications to our EIM-specific product offerings in the months to come."

FINANCIAL SUMMARY   (Unaudited)

                          For The Three          As Of and For The
                          Months Ended           Six Months Ended
                            June 30,                 June 30,
                     ----------------------- -------------------------
 Webb Interactive
   Services, Inc.       2004        2003        2004         2003
-------------------- ----------- ----------- ------------ ------------
Loss from operations  $(182,537)  $(321,032)   $(387,261) $(1,534,570)
Net loss              $(759,807)  $(890,680) $(1,138,905) $(1,991,768)
Net loss per share,
 basic and diluted       $(0.03)     $(0.04)      $(0.04)      $(0.09)
Weighted average
 shares outstanding  25,433,552  22,745,090   25,402,571   22,428,388


 Jabber, Inc.
-------------
Net revenues           $601,965    $964,321   $2,214,916   $2,131,338
Loss from
 operations         $(1,339,663)$(1,354,182) $(1,748,758) $(2,037,845)
Net loss            $(1,338,948)$(1,351,047) $(1,749,085) $(3,645,349)

The Company will host a teleconference this afternoon beginning at 4:15 P.M. Eastern, and invites all interested parties to join management in a discussion regarding the Company's financial results, corporate progression and other meaningful developments. The conference call can be accessed via telephone by dialing toll free 1-877-331-9770. For those unable to participate at that time, a replay of the webcast will be available for 90 days at www.webb.meetingone/recordings8773319770webb_IR1.asx