FORM 6-K

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

REPORT OF FOREIGN ISSUER

PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): OCTOBER 27, 1999

COMMTOUCH SOFTWARE LTD.
(TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH)

6 Hazoran Street, Poleg Industrial Park, Netanya 42504, Israel
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)

Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.

Form 20-F [X] Form 40-F [ ]

Indicate by check mark whether the registrant by furnishing the

information contained in this Form is also thereby furnishing the information to the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of 1934.

Yes [ ] No [X]


COMMTOUCH SOFTWARE LTD.
FORM 6-K

INDEX

PART I. OTHER INFORMATION

Item 14. Exhibit 99

Exhibit        Description of Document
-------        -----------------------
  99           October 27, 1999 Press Release: "Commtouch And
               Microsoft Enter Into Distribution And Service
               Agreement"

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

COMMTOUCH SOFTWARE, LTD.
(Registrant)

Date: November 4, 1999

By   /s/ JAMES E. COLLINS
   -----------------------------
James E. Collins
Chief Financial Officer

1

EXHIBIT INDEX

Exhibit        Description of Document
-------        -----------------------
  99           October 27, 1999 Press Release: "Commtouch And
               Microsoft Enter Into Distribution And Service
               Agreement"


EXHIBIT 99

Editorial Contact:
Chris McCarthy
Public Relations Director
CommTouch Software, Inc.
408/845-9903-408/839-5665
cmc@commtouch.com

COMMTOUCH AND MICROSOFT ENTER INTO DISTRIBUTION AND SERVICE AGREEMENT

COMMTOUCH TO PROVIDE BRANDED EMAIL FOR SELECTED MSN PARTNERS AND INTERNATIONAL MARKETS; MSN MESSENGER AND MICROSOFT PASSPORT TO BE OFFERED TO COMMTOUCH CUSTOMERS

Santa Clara, CA (October 27, 1999) Commtouch Software Inc. (Nasdaq: CTCH), a leading global provider of outsourced email for businesses and consumers, has signed an agreement with Microsoft Corporation (Nasdaq: MSFT). Microsoft will utilize the Commtouch Custom Mail(TM) service to provide private label web-based email solutions for select MSN partners and international markets. In addition, Commtouch will provide MSN Messenger Service and Microsoft Passport to its customers while building upon its Windows NT expertise by supporting future MSN messaging technologies.

The Commtouch Custom Mail solution, built on the Windows NT platform and other Microsoft technologies, will provide reliable and scalable communication services to key MSN partners and international markets. "The selection of Commtouch as the outsource email provider to select MSN partners and international markets underscores Commtouch's leadership position as the provider of choice to the largest and most sophisticated online companies around the world," said Gideon Mantel, Commtouch CEO. "We are looking forward to further enhancing our relationship with Microsoft by integrating other state-of-the-art Microsoft products like MSN Messenger Service and Microsoft Passport and providing these services to our network of users." In connection with the agreement, Commtouch Software Ltd. has granted Microsoft a warrant, exercisable until December 29, 1999, to purchase 707,964 of Commtouch's Ordinary Shares at an exercise price of $28.25 per share for an aggregate exercise price of $20,000,000.

About CommTouch

Commtouch (Nasdaq: CTCH) is a leading provider of outsourced email and messaging services for corporations and consumers worldwide. Commtouch provides its customers a truly comprehensive turnkey email service, together with options for premium communications services and direct marketing opportunities. Additional Company information may be obtained by visiting www.commtouch.com.

(c) 1999 CommTouch Software, Ltd. All rights reserved. CommTouch is a registered trademark of CommTouch Software, Ltd. Terms and product names in this document may be trademarks of others.