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GuruNet Corporation (AMEX: GRU), a leading reference search engine, today announced its financial results for the first quarter of 2005, the first quarter since the Company changed its business model and released Answers.com, on January 3, 2005. The Company, through its Answers.com site, generates fees primarily from ads placed alongside its topic entries. Prior to the launch of Answers.com, the Company's primary means of generating revenue was from the subscription fees it charged for the use of its GuruNet premium product.

"We're pleased with our progress this year putting our company and flagship product, Answers.com, on the map," said Bob Rosenschein, GuruNet's founder and CEO. "We started by building up end-user traffic. In March, we implemented Google AdSense, and have begun to see ad revenues from these ads."

Revenues for the first quarter of 2005 were $175,633, compared to $19,631, for the same period in 2004, and compared to $76,245, in the fourth quarter of 2004. The net loss in the first quarter of 2005 was $1,504,924, compared to a net loss of $1,692,712, for the same period in 2004, and compared to a net loss in the fourth quarter of 2004 of $855,131. Net cash used in operations in the first quarter of 2005, and for the same period in 2004, was $964,401 and $806,551, respectively. The primary reasons for the difference between the net loss and the net cash used in operations in the first quarter of 2005 is that $386,000 of operating expenses were the result of a non-cash charge for stock-based compensation expense, and various changes in our operating assets and liabilities.

Revenues in the first quarter of 2005 resulted from advertising revenues of approximately $107,000, recognition of subscription license revenue (from subscriptions initiated prior to 2005) of approximately $50,000, revenue from partners with whom we market co-branded products of approximately $14,000 and other revenue of $5,000. Prior to January 3, 2005, our primary source of revenue was selling subscriptions to the GuruNet product, the forerunner to Answers.com. "The launch of Answers.com, from a revenue perspective, was a multi-tiered process," said Steven Steinberg, GuruNet's CFO. "From launch date until the middle of January, we ran public service announcements on Answers.com and did not display any paid advertising. In the middle of January we began using and testing various advertising network providers. We reached an important milestone on February 28, 2005, when we began using Google's contextual AdSense advertising on our Answers.com information pages, as well as integrating Google search, with paid search advertising, into Answers.com. As a result of the multi-tiered launch, our January and February 2005 advertising revenue was approximately $16,000, while March 2005 advertising revenue was approximately $91,000."

In the first quarter of 2005, the Company also increased its liquidity and capital resources by entering into an agreement with certain holders of warrants that were issued by the Company in 2004, in connection with a bridge financing, pursuant to which such holders exercised an aggregate of 1,871,783 Bridge Warrants. As a result, the Company raised approximately $12,225,000, net of costs relating to the exercise. Further, the Company raised additional amounts, in excess of $1 million, from other exercises of options and warrants during the quarter.

About GuruNet
GuruNet Corporation (AMEX: GRU) operates Answers.com, a leading reference engine, http://www.answers.com. Founded in 1999 by Bob Rosenschein, GuruNet Corporation (http://www.gurunet.com) provides patented technology and software tools to access concise information on demand. For additional information, visit http://www.gurunet.com.