01.08.07
Conference call to discuss results

MENLO PARK, Calif.– KANA Software, Inc. (OTCBB: KANA.OB), a world leader in multi-channel customer service, today announced that the company expects total revenues for the fourth quarter of 2006 will be between $14.0 million and $14.2 million, an increase of approximately 23% year over year and 7% over the third quarter of 2006. Approximately $5.7 million is expected to be recognized as fourth quarter license revenue, a gain of 120% over last year and 30% above the third quarter.

The Company has cash and short-term investments of approximately $5.7 million at December 31, 2006, compared to $4.6 million at September 30, 2006.

“Our business was affected by a few sizeable license transactions that were not completed by quarter end,” said Michael Fields, CEO of KANA. “Although we are disappointed with not achieving our guidance, we did close a significant million-dollar plus transaction in the fourth quarter. We are also pleased to see sequential revenue improvement as well as improved transaction flow with an increased number of license transactions this quarter. It is clearly a challenge to manage the timing of some of the larger transactions. In the future, we plan to take a more conservative approach with respect to factoring in large transactions.”

“Overall, we continue to believe that we are well positioned given the strength of our products and partners, the market opportunity and the confidence that customers have in the value of KANA’s solutions. We are extremely pleased with the progress we made during 2006, including re-building the sales and sales management teams to capitalize on this opportunity in 2007,” Fields concluded.

Conference Call

KANA will host a conference call today, Monday, January 8, 2007 at 4:30 p.m. Eastern Standard Time (EST). The conference call is available via Web cast and can be accessed live, and after the call, at the Investor Relations section of KANA Software’s Web site at www.kana.com, or 617-786-2960 Passcode: 9863-5322. A replay of the Webcast will be available within 24 hours or by dialing 617-801-6888, Pin Number: 6092-1706.

KANA plans to release final results for the fourth quarter and year ended December 31, 2006 in February, and will announce the specific date and conference call information in the coming weeks.

All statements relating to the Company’s fourth quarter financial performance contained in this release are preliminary and may change based on the Company’s management and independent auditors completion of customary quarterly closing and review procedures.