REDWOOD CITY AND SANTA BARBARA, Calif., (August 9, 2000) -- Phone.com, Inc. (NASDAQ: PHCM), a leading provider of wireless Internet infrastructure and application software, and Software.com, Inc. (NASDAQ: SWCM), a leading provider of Internet infrastructure software for wireline and wireless service providers, today announced they will merge to create a global powerhouse that will provide a broad range of carrier-class software to wireless and wireline carriers, portals and Internet service providers. The merged company will be led by the exiting Cisco Systems Executive Vice President Donald J. Listwin as President and Chief Executive Officer, Alain Rossmann as Executive Vice President and Chairman of the Board of Directors, and John L. MacFarlane as Executive Vice President.

Under the terms of the definitive merger agreement unanimously approved by the Boards of Directors of both companies, shareholders of Phone.com and Software.com will each own approximately 50 percent of the combined company. Each Software.com shareholder will be entitled to receive 1.6105 Phone.com shares for each of their shares of Software.com.
The merger is expected to be accounted for as a pooling of interests and is intended to be tax-free to shareholders of both companies.

The merged company will be the premier provider of highly scalable infrastructure and application software enabling the delivery of email, voicemail, unified messaging, directory, and wireless Internet access for IP-based networks. The combined company expects to benefit from significant cross-sell and up-sell opportunities through its existing relationships with more than 140 major communications service providers worldwide. The combined global customer base includes the industry’s largest service providers: AT&T, SprintPCS, Nextel, Verizon Wireless, British Telecom, KDDI, Telecom Italia, Excite@Home, PSINet, Telstra, Telcell, GTE.net Services, Time Warner’s Road Runner, Telefonica, Deutsche Telekom, Mannesmann, and BellSouth. On a pro forma combined basis through June 30, 2000, the companies reported trailing twelve-month revenues of over $146 million, $94 million of deferred revenue and cash, cash equivalents and short term investments position of over $500 million, creating a powerful platform for further growth.

Donald J. Listwin, who will be President and Chief Executive Officer, will join the merged company from Cisco Systems, where he has led service provider and consumer lines of business and has been responsible for developing Cisco’s Internet technology and services for telecommunications companies. Alain Rossmann, Chairman and Chief Executive Officer of Phone.com, will be Executive Vice President and Chairman of the Board of Directors of the combined company. John L. MacFarlane, Chief Executive Officer of Software.com, will serve as Executive Vice President of the combined company, and Alan J. Black, Chief Financial Officer of Phone.com, will be Chief Financial Officer of the merged company. The Board of Directors of the merged company will consist of Listwin, Rossmann, MacFarlane, Reed E. Hundt, Senior Advisor at McKinsey & Company, Inc. and former Chairman of the Federal Communications Commission, Bernard Puckett, former Senior Vice President of IBM Corporation, and Roger Evans, General Partner of Greylock Limited Partners. The Company will be headquartered in Redwood City, California.

“I am thrilled by the opportunity to join forces with Alain and John to lead this powerful combined company,” said Donald J. Listwin. “This strategic merger brings together two dynamic and innovative companies with tremendous track records for providing reliable, highly-scalable infrastructure software to communication providers worldwide. Together, Phone.com and Software.com create a powerfully positioned global software company poised to drive and benefit from the unification of service offerings by IP-based communications service providers.”

“We are extremely excited to be joining forces with Software.com in this compelling strategic combination and to have Don join us at the merged company,” said Alain Rossmann. “Don brings a tremendous track record for driving growth at Cisco and more than 20 years of experience in the networking industry. With his vision and experience, Don is the ideal person to grow and expand the business of the merged company. The merged company will be strongly positioned to capitalize on the explosive growth of the wireless Internet.”

“With highly complementary customers, product lines and business models, we will leverage significant cross-sell and up-sell opportunities over a broad portfolio of software products, including unified messaging, mobile mail, directory services, wireless Internet access gateways, voice processing, synchronization and instant messaging,” said John L. MacFarlane. “Our customers will benefit from the combined company’s IP-based infrastructure, unified platform and its unparalleled ability to operate across all standards. Additionally, by bringing together the industry’s top talent under one roof, we will have an unmatched ability to innovate and bring new products to market.”

“BT is leading the unification of communication services. The combined company is uniquely positioned to provide the products, applications and services to capture this new market,” said Kent Thexton, President of BT Global Mobile Internet. “We do business with each of these companies today. We look forward to working with the merged company to build the future of communication services.”

Mr. Tadashi Onodera, Executive Vice President of DDI Corporation, stated, “Japan’s wireless Internet market is the fastest growing in the world. The merged company’s unique ability to provide carrier-class, highly scalable software is instrumental to succeeding in this market.”

The transaction is expected to close by calendar year-end 2000 subject to approval of Phone.com and Software.com shareholders and customary closing conditions including obtaining necessary regulatory approvals. The name of the combined company will be announced at that time.

In connection with approving the transaction, the Board of Directors of each company also adopted a Stockholder Rights Plan in which rights will be distributed as a dividend at the rate of one Right for each share of common stock of each company held by stockholders of record as of the close of business on August 18, 2000, with respect to Phone.com and August 24, 2000 with respect to Software.com. Under the Stockholder Rights Plan adopted by each company, the Rights generally will be exercisable only if a person or group acquires beneficial ownership of 15 percent or more of the company's common stock or commences a tender or exchange offer upon consummation of which such person or group would beneficially own 15 percent or more of the company's common stock.

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