HOUSTON, November 16, 2009 - Internet America, Inc. (OTCBB: GEEK) today announced results for the fiscal first quarter ended September 30, 2009. Wireless broadband Internet revenue increased by $75,000 to $1,116,000, compared to $1,041,000, as of September 30, 2008. The Company’s wireless broadband Internet subscriber count increased slightly to 8,100 as of September 30, 2009, compared to 7,900 as of September 30, 2008. The increase in revenue was primarily due to customers migrating to upgraded service levels upon completion of infrastructure upgrades in certain areas as well as purchasing additional services during the quarter ended September 30, 2009 and to a lesser extent due to an increase in subscribers. Presently stable revenues derived from wireless broadband Internet subscribers were offset by a decrease in other types of Internet service revenues of $232,000 due to the anticipated decline of dial-up Internet service customers from Internet America’s legacy dial-up Internet operations. This decline contributed to decreases in total subscriber count of 2,600, or 9.0%, to 26,400 as of September 30, 2009 and in total revenues for the quarter ended September 30, 2009 of $1.8 million compared to $2.0 million in fiscal 2008.

The Company’s net loss was $522,000, or $0.03 per share, for the quarter ended September 30, 2009 compared to a net loss of $311,000, or $0.02 per share, for the same quarter of the previous year. The net loss for the quarter ended September 30, 2009 included non-recurring charges of $120,000 in connection with its application for a grant under the ARRA to expand access to broadband into areas in Southeast Texas adjacent to existing operations. EBITDA loss (earnings before interest, taxes, depreciation and amortization) adjusted for grant application expenses, increased by $135,000, to $140,000 for the quarter ended September 30, 2009 compared to $5,000 for the first quarter a year ago. The increase in the EBITDA loss is primarily attributable to continued decline in total revenues partially offset by reduced expenses including personnel costs which is attributed to efficiencies gained from quality process initiatives.

Internet America is a leading Internet service provider serving the Texas market. Based in Houston, 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 Fax-2-Email, 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 http://www.internetamerica.com.

Use of Non-GAAP Financial Measures

In this press release, the Company refers to a non-GAAP financial measure called EBITDA because of management’s belief that this measure is a financial indicator of the Company’s ability to internally generate operating funds. Management also believes that this non-GAAP financial measure is useful information to investors because it is widely used by professional research analysts in the valuation and investment recommendations of companies in the Company’s peer group. EBITDA should not be considered an alternative to net income, as defined by GAAP.

Forward Looking Statements

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 risks include, without limitation, that (1) we will not be able to increase our rural customer base at the expected rate, (2) we will not improve EBITDA, profitability or product margins, (3) we will not receive grant funding sought after in our application to the Broadband Technology Opportunity Program to expand our wireless infrastructure to additional unserved and underserved areas available under The American Recovery and Reinvestment Act, (4) we will not expand our coverage in public-private partnerships with state or local governments, utility providers, or other entities seeking to participate in grant programs or those partnerships may not be successful, (5) Internet revenue in high-speed broadband will continue to increase at a slower pace than the decrease in other Internet services resulting in greater operating losses in future periods, (6) financing will not be available to us if and as needed, (7) we will not be competitive with existing or new competitors, (8) we will not keep up with industry pricing or technological developments impacting the Internet, (9) we will be adversely affected by dependence on network infrastructure, telecommunications providers and other vendors or by regulatory changes, (10) service interruptions or impediments could harm our business, (11) we may be accused of infringing upon the intellectual property rights of third parties, which is costly to defend and could limit our ability to use certain technologies in the future, (12) government regulations could force us to change our business practices, (13) we may be unable to hire and retain qualified personnel, including our key executive officers, (14) future acquisitions of wireless broadband Internet customers and infrastructure may not be available on attractive terms and if available we may not successfully integrate those acquisitions into our operations, (15) provisions in our certificate of incorporation, bylaws and shareholder rights plan could limit our share price and delay a change of management, and (16) our stock price has been volatile historically and may continue to be volatile. . This list is intended to identify certain of the principal factors that could cause actual results to differ materially from those described in the forward-looking statements included elsewhere herein. These factors are not intended to represent a complete list of all risks and uncertainties inherent in our business, and should be read in conjunction with the more detailed cautionary statements included in our other publicly filed reports and documents.

                       Internet America, Inc.
                     Unaudited Financial Summary
       (in thousands, except per share data and subscriber count)

Statement of Operations Data:
                                                           Quarter Ended
                                                     9/30/2009    9/30/2008

Wireless Broadband Internet Subscribers                  8,100        7,900

Total Subscribers                                       26,400       29,000

Revenue:
  Internet Services                                  $   1,798    $   1,955
  Other                                                     38           50
      Total Revenue                                      1,836        2,005

Operating Costs & Expenses:
  Connectivity & Operations                              1,320        1,351
  Sales & Marketing                                         78           70
  General & Administrative                                 701          588
  Provision for (Recoveries of) Bad Debt                    (3)           1
  Depreciation & Amortization                              247          296 
       Operating Loss                                     (507)        (301)

       EBITDA (Loss)                                      (260)          (5)

  Interest Expense, Net                                    (15)         (10)
  Minority Interest in Loss of Consolidated Subsidiary       -            - 
       Net Loss                                      $    (522)   $    (311)

  Basic & Diluted Income (Loss) Per Share            $   (0.03)   $   (0.02)
  Weighted Average Basic & Diluted Shares               16,646       16,857 


Reconciliation of Net Loss (a GAAP Measure) to EBITDA (a Non-GAAP Measure)

                                                           Quarter Ended
                                                     9/30/2009    9/30/2008

  Net Loss                                           $    (522)   $    (311)
  Add:
  Depreciation & Amortization                              247          296
  Interest Expense                                          15           10
  Minority Interest in Loss of Consolidated Subsidiary       -            - 
  EBITDA (Loss)                                      $    (260)   $      (5)


Balance Sheet Data:
                                                           Periods Ending
                                                     9/30/2009    9/30/2008

  Current Assets                                     $   2,641    $   4,633
  Property & Equipment, Net                              2,109        2,190
  Other Assets, Net                                      3,053        4,752
       Total Assets                                  $   7,803    $  11,575

  Current Liabilities                                $   2,477    $   2,548
  Long-Term Liabilities                                  1,097        1,171
  Total Stockholders' Equity                             4,229        7,820
       Total Liabilities & Stockholders' Equity      $   7,803    $  11,575