RESEARCH TRIANGLE PARK, N.C.
Jan. 17, 2007
Smart Online Inc. (OTCBB: SOLN), a leading provider of Software-as-a-Service ("SaaS") for the small business market, today announced a partnership with FoodLogiQ, LLC to develop branded food safety compliance systems for industry associations.

Recently, the regulatory environment of the food industry in the United States has become stricter. Regulations already in place include the Food and Drug Administrations' Bioterrorism Act of 2002, requiring "one-up, one-down" traceability and the 2002 Farm Bill, which includes Country of Origin Labeling (COOL). USDA's Bovine Export Verification Program requires source and age verification for beef exports to Japan. The fresh produce industry is calling for new regulations in the first quarter of 2007.

The partnership will incorporate FoodLogiQ food industry traceability and compliance functionality into Smart Online's business application suite. FoodLogiQ and Smart Online expect the new application will help farmers, food manufacturers, grocers and restaurants meet their business needs and their compliance needs at the same time. The application will be customized to provide industry associations anonymous, aggregate data to confirm their memberships' level of compliance. Through the application, FoodLogiQ will be able to, on behalf of the industry association, schedule and record audit results from the associations' members to help assure compliance to label claims of quality and safety.

Associations can select from the following list of applications to customize their solution:

-- Industry Association label claim management

-- Food Defense computer based training

-- Premises and account management

-- Product and animal traceability

-- Source and age verification

-- Animal and plant health

-- Pathogen testing

-- Industry reporting

-- Compliance document management

-- Human resource management

-- Patriot Act database screening

-- Audit scheduling

-- Integrated calendars

-- Contact management

-- Accounting

-- Integration with Enterprise Resource Planning systems

"Our small farmers ensure we have ample supplies of food, so Smart Online and FoodLogiQ will work to customize a cost effective method for traceability that will assist with the safety and security of our food supply chain," said Michael Nouri, president & CEO, Smart Online Inc. "The private label capabilities allow this solution to be offered in the 'look' and 'feel' of the trusted brand for food associations, state agencies, and vendors who are involved with the agriculture industry."

"With over two million farmers, thirty thousand food manufacturers and five hundred thousand food service establishments in the United States, there is a need for a cost effective, scalable solution designed to bring a higher level of confidence to the quality and security of our food supply. We feel this system is part of that solution," said Andrew Kennedy, president, FoodLogiQ, LLC.

About Smart Online, Inc.

Smart Online Inc. (OTCBB: SOLN), a pioneer of Web-native applications, offers a private-label syndicated online business platform that enables Web delivery of applications and services used to start and manage small businesses. In 1999, Smart Online converted its business applications to a Software-as-a-Service (SaaS) Web delivery model. Today, the company markets its Web-based business applications to corporations via the private-labeling of its syndicated software services. These companies private-label and add to their Web sites Smart Online's applications to enable their business customers to run their businesses more efficiently and without the upfront capital typically required for traditional business software and IT resources. To learn more go to http://www.smartonline.com.

About FoodLogiQ, LLC.

FoodLogiQ links the people in the world's food supply from the consumer to the grower. FoodLogiQ web-based workflow, compliance and traceability systems are used by individuals, companies and industry associations to help defend the food supply from intentional harm and communicate branded Food Quality and Safety. To learn more go to http://www.foodlogiq.com

Smart Online, the Smart Online logo, and OneBiz are trademarks and/or registered trademarks of Smart Online Inc. in the United States. Other marks belong to their respective owners.

Forward-Looking Statements

Statements in this press release that are "forward-looking statements," are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of many factors, including, but not limited to, delays in development schedules, changes in market conditions or government mandates, product announcements by other companies and customer perception of the value of our enhanced products. For further information regarding risks and uncertainties associated with Smart Online's business, please refer to the Risk Factors Section of Smart Online's SEC filings, including, but not limited to, its Annual Report on Form 10-K for the year ended December 31, 2005 and Quarterly Reports on Form 10-Q, copies of which may be obtained on the Web site of the Securities and Exchange Commission. All forward-looking statements in this press release are based on information available to Smart Online on the date hereof. Smart Online undertakes no duty to update any forward-looking statement or to conform the statement to actual results or changes in Smart Online's expectations.

CONTACT: Media:
Smart Online, Inc.
Thomas Furr, 919-765-5000
tfurr@smartonline.com
or
Investors:
Lippert/Heilshorn & Associates
Jody Burfening, 212-838-3777
jburfening@lhai.com

SOURCE: Smart Online Inc.