EXHIBIT 99.1



[INTERNET AMERICA LOGO]



|                               |  |             
|------------------------------ |  | ------------
|CONTACT                        |  |             
|                              
|Internet America, Inc.         |  | May 17, 2004
|214.861.2582                   |  |             
|investor.relations@airmail.net |  |             



INTERNET AMERICA
REPORTS THIRD QUARTER RESULTS



DALLAS, May 17, 2004 
Internet America, Inc. (OTCBB: GEEK) today announced results for its third fiscal quarter ended March 31, 2004.



Internet America recorded a net loss of $(104,000) for the quarter, or $(0.01) per share, compared to net income of $536,000, or $0.05 per share for the
same quarter in the prior year. The Company reported revenue of $2.8 million for the quarter compared to $4.2 million a year ago. Internet Americas subscriber count was approximately 65,000 at March 31, 2004.



During the quarter ending March 31, 2004 the settlement of a lawsuit and the
fees directly associated with the prosecution and settlement of that suit totaled approximately $525,000. Part of these settlement expenses were offset during the quarter by a one-time gain of approximately $300,000 from a sales tax refund and
interest income associated with that refund.



William E. Ladin,
President and Chief Executive Officer of Internet America commented, The quarter ending March 31, 2004 was challenging. Our subscriber attrition, which was 9.2% for the three months December 31, 2003, was reduced to 5.8% for the three months
ended March 31, 2004. We believe this improvement was due to our increased marketing and advertising efforts and our introduction of a number of new products. This positive trend has continued through today. While we are not able to predict exactly
when we will stop losing customers and return to growth on a net basis, we believe that we are making progress in that direction. We intend to introduce new products this month and in June 2004 that we believe will contribute to subscriber
increases. Additionally, we are examining a number of new broadband products, including wireless broadband and broadband over power lines.



Ladin continued At this time, the companys focus is on subscriber base growth and revenue growth through the recent introduction of several
new products and the expected near-term introduction of more new products. The Company has initiated marketing campaigns that



---

introduce and support these products and are designed to grow our subscriber base. We will continue to provide the high
quality connectivity and customer service that our customers expect, but believe that we must emphasize new applications and products that make our connectivity more useful to our customers. In that regard, we expect to continue to follow our user
density strategy by focusing on markets where we have established branding rather than new markets.



Internet America is a leading Internet service provider primarily serving the Texas market. Based in Dallas, Internet America offers businesses and
individuals a full range of Internet services, including dedicated high-speed access, dial-up access, DSL and web hosting. Internet America focuses on the speed and quality of its Internet services, products that make connectivity more useful and a
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 increase revenues or improve EBITDA, profitability or product margins, (2) will not retain or grow its customer base, including
its DSL and commercial services customers, (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
|                                                                             |  | 03/31/04           |            |   | 03/31/03
|Subscribers                                                                  |  |                    | 65,000     |   |          |   | 103,000   
|                                                                             |  |                   
|Internet services revenue                                                    |  | $                  | 2,827      |   |          | $ | 4,183     
|Other revenue                                                                |  |                    | 5          |   |          |   | 9         
|                                                                             |  |                    |            |   |          |   |           
|Total revenue                                                                |  |                    | 2,832      |   |          |   | 4,192     
|                                                                             |  |                   
|Connectivity and operations                                                  |  |                    | 1,343      |   |          |   | 1,983     
|Sales & marketing                                                            |  |                    | 313        |   |          |   | 119       
|General & administrative                                                     |  |                    | 1,284      |   |          |   | 1,282     
|                                                                             |  |                    |            |   |          |   |           
|                                                                             |  |                   
|EBITDA1                                                                      |  |                    | (108       | ) |          |   | 808       
|                                                                             |  |                   
|Depreciation                                                                 |  |                    | 67         |   |          |   | 129       
|Interest (income) expense, net                                               |  |                    | (71        | ) |          |   | 143       
|                                                                             |  |                    |            |   |          |   |           
|                                                                             |  |                   
|Net (loss) income                                                            |  | $                  | (104       | ) |          | $ | 536       
|                                                                             |  |                   
|Basic (loss) income per share                                                |  | $                  | (0.01      | ) |          | $ | 0.05      
|Weighted average shares  basic                                              |  |                    | 10,418,944 |   |          |   | 10,291,305
|                                                                             |  |                   
|Fully diluted (loss) income per share                                        |  | $                  | (0.01      | ) |          | $ | 0.05      
|Weighted average shares  fully diluted                                      |  |                    | 10,418,944 |   |          |   | 10,295,645
|                                                                            
|Reconciliation of net income (a GAAP measure) to EBITDA (a Non-GAAP measure)
|(in thousands)                                                               |  |                    |            |   |          |   |           
|                                                                             | 
|                                                                             |  | Three Months Ended
|                                                                             |  | 03/31/04           |            |   | 03/31/03
|Net income                                                                   |  | $                  | (104       | ) |          | $ | 536       
|Add:                                                                         |  |                    |            |   |          |   |           
|Depreciation                                                                 |  |                    | 67         |   |          |   | 129       
|Interest (income) expense, net                                               |  |                    | (71        | ) |          |   | 143       
|                                                                             |  |                    |            |   |          |   |           
|EBITDA                                                                       |  | $                  | (108       | ) |          | $ | 808       





---

1EBITDA: Earnings before Interest (Income) Expense, Taxes and Depreciation and Amortization. EBITDA is not a measurement of financial performance under generally accepted accounting principles (GAAP) and should not be considered an alternative to net
income as a measure of performance. Management has consistently used EBITDA on a historical basis as a measurement of the Companys current operating cash income because it is commonly used in the industry and we believe it is useful
information for investors.



---

|                                           |  |                   |       |          |   |       
|------------------------------------------ |  | ----------------- | ----- | -------- | - | ------
|                                           |  | Fiscal Year Ended
|                                           |  | 03/31/04          |       | 03/31/03
|Current assets                             |  | $                 | 2,460 |          | $ | 5,795 
|Property and equipment, net                |  |                   | 176   |          |   | 465   
|Other assets                               |  |                   | 4,361 |          |   | 4,399 
|                                           |  |                   |       |          |   |       
|Total assets                               |  | $                 | 6,997 |          | $ | 10,659
|                                           |  |                  
|Current liabilities                        |  | $                 | 3,518 |          | $ | 5,064 
|Accrued lawsuit                            |  |                   |      |          |   | 3,300 
|                                           |  |                   |       |          |   |       
|Total liabilities                          |  |                   | 3,518 |          |   | 8,364 
|Total stockholders equity                 |  |                   | 3,479 |          |   | 2,295 
|                                           |  |                   |       |          |   |       
|Total liabilities and stockholders equity |  | $                 | 6,997 |          | $ | 10,659



# # #