Network Expansion Continues, Free ISP Market Drives Growth

Lowell, MA - February 23, 2000 - ZipLink, Inc. (Nasdaq: ZIPL), a wholesale Internet connectivity provider in the United States and Canada, today announced financial and operating results for the fourth quarter and year ended December 31, 1999.

Revenues in the fourth quarter of 1999 increased 73% from last year's fourth quarter to $3.5 million. Revenues from WebTV Networks, Inc. comprised 62% of 1999 fourth quarter revenues, compared with 74% of 1998 fourth quarter revenues. Operating loss for the fourth quarter of 1999 was $4.2 million compared to $1.8 million in the comparable quarter of 1998. Net loss was $4.0 million, or $0.31 per share, for the 1999 fourth quarter compared to $2.2 million, or $0.27 per pro forma share, for the 1998 fourth quarter.

Revenues for 1999 increased 79% to $12.7 million from $7.1 million in 1998. Operating loss in 1999 was $9.3 million compared to $7.0 million last year. Net loss for 1999 was $9.3 million, or $0.86 per share, compared to a net loss of $8.4 million, or $1.03 per pro forma share, in 1998.

Christopher Jenkins, President, commented, "Fourth quarter revenues were modestly higher than third quarter revenues, highlighted by a 12% sequential increase in revenues from our wholesale access customers. This growth was due primarily to the continued expansion of our ZipDial program, especially our penetration of the free and subsidized Internet access markets. At year end, we had approximately 500 ISP customers for ZipDial. Looking ahead, we expect continued revenue growth from our current ZipDial customer base, but also anticipate significant opportunities among larger ISP's, CLEC's, and emerging models, such as bundled Internet access. We are experiencing increasing interest from some larger prospects that recognize the value of our wholesale access and, as such, we intend to focus our resources and sales efforts primarily in these areas. ZipLink remains one of the few pure-play wholesale providers and, as the market continues to develop, we believe we are firmly positioned to leverage the strength of our national backbone and accelerate our growth."

Mr. Jenkins added, "The free ISP market continued to drive increased traffic to our network. During the fourth quarter, over 260,000 new users of our free access providers accessed the Internet through ZipLink's network. ZipLink is extremely well positioned to capitalize on the accelerating momentum for free access through our partnerships with several leading providers, including 1stUp.com, the provider for AltaVista and Excite@Home; NetZero; and Spinway.com, which powers the free Internet service offered by the venture between Kmart's BlueLight.com and Yahoo! Inc. The free ISP models are quickly gaining acceptance, which we believe should generate greater demand for ZipLink's national wholesale connectivity."

Mr. Jenkins continued, "We are pleased to report that all 16 cities from our 1999 expansion plan are operational and accepting traffic. ZipLink's extensive national network currently covers approximately 85% of the top 50 metropolitan areas in the U.S. and we expect this number to reach more than 95% in the third quarter of 2000. We are also very encouraged by our port capacity, which now stands at over 50,000 ports installed, more than triple our capacity from the end of the third quarter. Whether through the free access providers or traditional ISP's, ZipLink's expanded capacity should enable us to capture a larger share of the growing wholesale market."

Consistent with ZipLink's expansion strategy, the Company recently entered the Canadian market through the acquisition of closely-held Interhop Network Services Inc. of Toronto. Interhop, with over 100 points of presence (POPs), has been renamed "ZipLink Canada," and is overseen by former Interhop President, David Granic. Jenkins commented, "We intend to further extend our presence in Canada in response to the positive reaction we have received from our customers."

Mr. Jenkins concluded, "We are extremely excited about ZipLink's prospects -- network expansion plans are on track; we continue to extend our geographic reach; we are partnering with an increasing number of free access providers; ZipDial is gaining traction; and we are well positioned to support the expanding ISP market. Looking ahead, we anticipate a larger portion of our revenues to be derived from the free and subsidized markets, thus continuing to place less dependence on our largest customer, WebTV."

About ZipLink
Headquartered in Lowell, Massachusetts, ZipLink is a provider of wholesale Internet connectivity solutions in the United States and Canada for the Business-to-Business marketplace, including Internet Service Providers, Web Appliance Vendors, PC Manufacturers and Distributors, and e-Businesses. Utilizing a state-of-the-art Asynchronous Transfer Mode network, ZipLink is a significant provider of national dial-up and Digital Subscriber Line services for an expanding base of customers. For more information, visit the company's Web site at http://www.ziplink.com.