SEATTLE, WA, May 23, 2005 -- Insightful Corporation (NASDAQ:IFUL), a leading provider of software solutions for analysis of numeric and text data, today announced that the US Department of Defense (DoD) awarded Insightful's InFact(R) Text Analysis Business Division two contracts to develop enhanced solutions for information search and discovery. The two contracts are valued at a total of approximately $800,000.

One of the premier natural language-based text search and analysis applications in the world today, InFact provides a complete and effective suite of search and reporting software designed to enable intelligence analysts to interactively search, quantify, and perform analysis of hundreds of thousands of relationships among individuals, organizations, geographical locations, monetary amounts, and other transactions within minutes. With InFact, intelligence analysts can perform relationship searches that can uncover the cause-and-effect patterns that are critical for intelligence decision-making. These new contracts will support Insightful's ongoing efforts to tailor InFact's linguistic capability to meet the needs of the intelligence community.

The first contract, awarded by the Office of the Secretary of Defense in January 2005, will be monitored by the Army Research Institute (ARI). The goal of the contract is to enable intelligence decision makers to analyze growing databases of text data in an effective, unbiased, and systematic fashion. Currently, analysts rely on standard search technologies to assess large heterogeneous data sources, such as collections of intercepted messages or intelligence reports. With InFact, military intelligence analysts would be able to move beyond the keyword search, entity recognition, and human categorization approaches used by consumer search technologies.

The second contract, awarded by the US Army Corps of Engineers in December 2004, aims to develop a system for detecting references to geographical locations in text and displaying the result of a search on a map display.

Because InFact is designed to understand the complexity of natural language and offers the capability to conduct comprehensive, interactive relationship searches, it can provide the ability to quickly correlate relationships and facts across millions of documents.

InFact fills an important gap in the text analysis market for intelligence. The recent release of InFact 3.0 combines the power of interactive relationship search with the flexibility of a search engine. Four federal intelligence agencies have licensed InFact to assist in searching and analyzing large amounts of intelligence traffic data.

"We are delighted that we have received these contracts as a result of our fundamental breakthroughs in technology, continued validation, and growing adoption of InFact in the intelligence space," said Giovanni Marchisio, director of research and development for emerging products at Insightful. "The DoD has been looking for an effective text-to-data solution for many years and has become increasingly selective in their awards. They have identified mission-critical solutions in areas where Insightful has a demonstrated leading edge and a number of key patents, like distributed indexing, relationship extraction, and semantic modeling. These contracts support our ongoing efforts to enhance InFact, a market-leading relationship search product, and make it available for both commercial and defense applications."

ABOUT INFACT

InFact provides natural language-based text search and analysis technology that enables professional analysts and researchers, who have long been frustrated by the inaccuracy and limitations of keyword search and early generation natural language processing search, to accurately uncover facts and relationships within text documents. InFact 3.0 delivers an interactive text query language that enables users to execute custom, flexible, and complex searches from a simple Web interface (much like familiar Internet search tools).

Because InFact is designed to fully understand the grammar, syntax, semantics, and linguistic structure of every sentence it reads, its powerful and expressive query syntax can be used to search for very specific relationships, actions, or facts, thereby enabling very precise and accurate searching and increasing analyst productivity and the quality of intelligence retrieved from text documents.

InFact transcends text search as the world has known it over the past two decades. Existing search engines see documents as "bags of keywords" stripped of context or sentence structure. A keyword approach to search and retrieval of text data strips language of context. All information about dependencies, actions, and word relationships is lost. By contrast, InFact uses a multilevel approach that uses grammar, semantics, and syntax to capture actions and facts from documents. InFact parses the structure of each sentence, understanding the sentence components, such as which words are nouns and which are verbs. Combinations of nouns, verbs, and other sentence components connote relationships, actions, or facts and are stored in a searchable database structure. And, unlike other search tools that have attempted to utilize natural language processing to move beyond keyword search, InFact's indexing is automatic and doesn't require the time and expense of a hand-entered knowledge base (list of terms), manually "meta-tagged" documents, or laboriously prepared rule books.

Because of the potential significance of this technology to the federal government, Insightful has been awarded several research grants over the years, including those discussed in this press release and the press release dated May 16, 2005, for a U.S. Air Force contract awarded in December 2004 and an NIH contract awarded in February 2005, to fund the development of InFact. The receipt of funds under these research grants is recorded as an offset to research and development costs rather than revenues.

ABOUT INSIGHTFUL

Insightful Corporation (NASDAQ:IFUL) provides enterprises with scalable data analysis solutions that drive better decisions faster by revealing patterns, trends, and relationships. The company is a leading supplier of software and services for statistical data analysis, data mining, and knowledge access enabling clients to gain intelligence from numeric and text data.

Insightful products include S-PLUS(R), Insightful Miner(TM), S-PLUS(R) Server, and InFact(R). Insightful consulting services provide specialized expertise and proven processes for the design, development, and deployment of customized solutions. The company has been delivering industry-leading, high-ROI solutions to thousands of companies in financial services, life sciences, biotechnology, telecommunications, manufacturing, plus government and research institutions.

Headquartered in Seattle, Insightful has offices in New York City, North Carolina, France, Switzerland, and the United Kingdom, with distributors around the world. For more information, visit www.insightful.com, email info@insightful.com or call 1-800-569-0123.

Note to Investors -- Forward-Looking Statements

This press release contains forward-looking statements, including statements about expected outcomes from government research grants; the capabilities of InFact; InFact product features; the capabilities of competing products now or in the past; and customer acceptance of our software products. Forward-looking statements are based on the judgment and opinions of management at the time the statements are made. Inaccurate assumptions and known and unknown risks and uncertainties can affect the accuracy of forward-looking statements. Actual results could differ materially from those expressed or implied by the forward-looking statements for a number of reasons, including, without limitation, the risks associated with government funding decisions, errors or defects in our software; the risks associated with our ability to compete in the markets we serve; and the risks associated with market demand and customer acceptance of our products. More detailed information regarding these and other factors that could affect actual results is set forth in our filings with the Securities and Exchange Commission, including our most recent Quarterly Report on Form 10-QSB. You should not unduly rely on these forward-looking statements, which apply only as of the date of this release. We undertake no obligation to update publicly any forward-looking statements to reflect new information, events, or circumstances after the date of this release or to reflect the occurrence of anticipated events.

Insightful Corporation
Judy McOstrich, 206-283-8802, x356
jmcostrich@insightful.com