DALLAS, November 15, 2004 — Internet America, Inc. (OTCBB: GEEK) today announced results for its first fiscal quarter ending September 30, 2004. Highlights of the first quarter include the completion of two acquisitions of Internet services companies, with the resultant first quarterly increase in subscribers since the 3rd fiscal quarter 2000, and the launch of Internet America’s wireless Internet product offerings. EBITDA 1 (earnings before interest, taxes, depreciation and amortization) for the first quarter was $294,000.

For the first fiscal quarter, Internet America reported revenue of $2.5 million compared to $3.4 million a year ago. The Company recorded net income of $238,000, or $0.02 per share, for the fiscal first quarter ending September 30, 2004 compared to net income of $337,000, or $0.03 per share a year ago. Internet America’s subscriber count was 58,023 September 30, 2004, compared to 57,493 as of June 30, 2004.

“This quarter’s results were highlighted by the company hitting several important milestones,” said Billy Ladin, President and Chief Executive Officer of Internet America. The first milestone was to begin execution of our new acquisition strategy to acquire Internet Services companies in the Texas market. We acquired two companies in the quarter ending September 30 th, and an additional one at the end of October. We are continuing that strategy in the current quarter as we move forward with our plan. The second milestone was to launch our wireless service offerings, which started in the recently finished quarter, and is picking up steam as we move through the current quarter. The impact of hitting these two milestones allowed us to see the first quarterly increase in subscriber counts since the third quarter of fiscal 2000.”

Ladin continued, “While hitting these milestones, we have been able to maintain profitability and a strong cash position. We have continued to implement our new growth strategy around acquisitions and providing wireless Internet services, and have seen some early successes in finding the right Internet services companies to acquire and in acquiring or developing the right wireless infrastructure.”

“In addition, we have continued our focus on building a world-class Board of Directors. This month the Board elected David W. Hanna, an industry veteran in the technology and Wireless industries, to become the Company’s Chairman of the Board. We will continue to work on improving the management team and Board to ensure that the Company has the necessary resources to execute our new plan.”

Internet America is a leading Internet service provider primarily serving the Texas market. Based in Dallas, Internet America offers businesses and individuals a wide array of Internet services including broadband Internet delivered wirelessly and over DSL, dedicated high-speed access, web hosting, and dial-up Internet access. Internet America provides customers a wide range of related value-added services, including Fax2email, online backup and storage solutions, parental control software, and global roaming solutions. Internet America focuses on the speed and quality of its Internet services and its commitment to providing excellent customer care. Additional information on Internet America is available on the Company’s web site at www.internetamerica.com.

This press release may contain forward-looking statements relating to future business expectations. These statements, specifically including management’s beliefs, expectations and goals, are subject to many uncertainties that exist in Internet America’s operations and business environment. Business plans may change and actual results may differ materially as a result of a number of risk factors. These risk factors include, without limitation, that the Company (1) will not introduce new applications and products or the applications and products introduced by the Company will not be accepted by current and/or new customers, (2) will not be able to consummate additional acquisitions, (3) will not continue to achieve operating efficiencies, and (4) will be adversely affected by dependence on network infrastructure, telecommunications carriers and other suppliers, by regulatory changes and by general competitive, economic and business conditions. These risk factors are not intended to represent a complete list of all risks and uncertainties in the Company’s business and should be read in conjunction with the more detailed cautionary statements included in the Company’s most recent SEC filings.

Internet America, Inc.

(OTC BB: GEEK)

Unaudited Financial Summary

(in thousands, except per share data and subscriber count)

                                                                  Three Months Ended 
                                                                                     9/30/04                9/30/03
 Subscribers                                                                58,000                  73,000                             
Internet services revenue                                         $2,480                  $3,434                             
Other revenue                                                                    21                           2 
Total revenue                                                                2,501                    3,436
Connectivity and operations                                      1,378                   1,846
Sales & marketing                                                            159                        39
General & administrative                                                670                   1,113
EBITDA^[1]                                                                       294                      438
Depreciation                                                                     (64)                   (110)
Interest income, net                                                            8                          9 
Net income                                                                     $238                    $337 
Basic income per share                                                $0.02                   $0.03
Weighted average shares – basic                     10,462,903            10,380,373
Fully diluted income per share                                    $0.02                   $0.03 
Weighted average shares – fully diluted          10,469,461            10,411,566

Reconciliation of net income (a GAAP measure) to EBITDA (a Non-GAAP measure)
(in thousands)                                                                                 

                                                       Three Months Ended
                                                                        09/30/04         09/30/03
Net income                                                            $238              $337 
Add:
Depreciation                                                             64                110 
Interest (income) expense, net                              (8)                  (9)
EBITDA¹                                                               $294              $438

                                                                                                             Three Months Ended
                                                                                                           9/30/04                   9/30/03
Current assets                                                                                   $2,064                    $2,724
Property and equipment, net                                                               469                         312
Other assets                                                                                        4,818                      4,381
Total assets                                                                                       $7,351                    $7,417
Current liabilities                                                                               $2,939                    $4,289
Long-term debt                                                                                       168                          ---
Long-term capital lease obligations                                                      42                           ---
Total liabilities                                                                                     3,149                      4,289
Total stockholders’ equity                                                                4,202                      3,128
Total liabilities and stockholders’ equity                                      $7,351                     $7,417