Copernic Announces 2007 Fourth Quarter and Year-End Results

Market Wire, March, 2008

Copernic Inc., (the "Company"), (NASDAQ: CNIC), a leading software development company in the technology sector, specializing in internet, desktop and mobile search products, today reported its financial results for the fourth quarter and year ended December 31, 2007. Unless otherwise stated, all figures in this release are in US dollars.

Financial Highlights

- Revenue was $1.7 million for the fourth quarter 2007 compared to $3.6 million in the fourth quarter of 2006

- Revenue for the year ended December 31, 2007 was $8.1 million compared to $9.6 million in the same period in 2006

- Net loss of $11.0 million ($0.75 per share), including write-downs of $10.2 million in the fourth quarter 2007, compared to net earnings of $420,000 ($0.02 per share) in the fourth quarter 2006

- Net loss of $14.4 million ($0.99 per share) in 2007 compared to net loss of $4.3 million or ($0.30 per share) in 2006, excluding the write-downs of $10.2 million, net loss for 2007 was slightly lower than the previous year

- Excluding write-downs, full year 2007 operating expenses were $11.0 million, up from $10.3 million in 2006 due to continued focus on our product line extension strategy and

- Liquidities sufficient to meet normal operating requirements until end of 2008, were at $6.9 million as of December 31, 2007, compared to $8.0 million as of December 31, 2006

Recent Highlights

- Appointed Marc Ferland President and CEO of Copernic. Mr. Ferland has been a Director of the Company, since September 2007

- Launched upgrade of Copernic desktop search - in line with our product line extension strategy

- Expanded software distribution channels by adding resellers and distributors to our network

- Announced an agreement with Yellow Pages Group (TSX: YLO-UN) to supply local Canadian advertiser listings to the mamma.com search engine

"Copernic continues to work through rebuilding the Company and is clearly focused on the future," said Marc Ferland, Copernic's President and CEO. "Through the expansion and development of our product lines and cost improvements, we remain confident that the proper processes are in place to allow us to achieve our strategic goals."

Financial Results for the quarter ended December 31, 2007

Revenues in the fourth quarter of 2007 totalled $1,654,000, down from $3,566,000 in the fourth quarter of 2006.

Search advertising revenues in the fourth quarter 2007 were down as compared to 2006, declining from $2,504,000 to $1,432,000. As in previous quarters, the Company has faced increasing industry pressures affecting advertising rates. In working to alleviate these pressures, Copernic has been expanding partnerships, such as that with Yellow Pages Group, to supply local advertiser listings to the mamma.com search engine.

Graphic advertising revenues were stable quarter over quarter, but the total of $15,000 generated in the quarter ended December 31, 2007 was substantially down from the quarter ended December 31, 2006, in which revenues totalled $132,000.

Software licensing, customization and maintenance revenue was down from the fourth quarter of 2006, with the total for the quarter ended December 31, 2007 reaching $207,000 a decrease from $930,000 in the fourth quarter of 2006. The decrease is mainly attributed to a sale of one significant CDS license in Q4 2006 of $570K compared to no significant one in 2007 and two contracts for customized development and maintenance that were not renewed in 2007.

Gross Margin in the fourth quarter was 67%, compared to 74% in the same quarter in 2006 mainly due to reduced software licensing revenue where gross margin is typically higher.

Expenses in the fourth quarter, excluding write-downs, totalled $2,751,000; slightly up from $2,529,000 in the fourth quarter 2006. In the quarter, the Company recorded total write-downs of goodwill and intangible assets of $10,046,000 due to delays in execution and changes of market conditions of its software commercial deployment solutions, reduced media yearly revenue mainly due to slowdown in sponsored clicks and general decline in demand in pop-up campaigns. In addition, the Company recognized a write-down of $100,000 in an investment, net of a reversal for settlement costs.

Net loss in the fourth quarter 2007 was $10,990,000 ($0.75 per share), compared to a net earnings of $420,000 ($0.02 per share) in the fourth quarter 2006.

Liquidities totalled $6,872,000, which was a decrease of 795,000 over the previous quarter. Liquidities included restricted cash of $807,000, of which $347,000 became available in January 2008 and the remaining balance is expected to be also released in a few months.

Financial Results for the Full Year 2007

Revenues for the full year 2007 were $8,116,000, down from $9,596,000 in 2006, a decline of $1,480,000.

Search advertising revenues were up year over year in 2007, rising from $7,198,000 in 2006 to $7,247,000 in the current year.

Graphic advertising revenues continued to decline to $108,000 in 2007, down from $827,000 in 2006 and licensing, customization and maintenance revenues, declined to $761,000 in 2007 from $1,571,000 in 2006.