Exhibit 99.1

eGain Announces Financial Results for the Second Fiscal Quarter

Ended December 31, 2010

Increases revenue guidance for fiscal year 2011

Quarter Highlights

Mountain View, Calif. (February 07, 2011) – eGain Communications Corporation (OTC: EGAN.OB), a leading provider of customer service and contact center software, today announced financial results for the second fiscal quarter ended December 31, 2010.

Total revenue for the second quarter of fiscal year 2011 was $9.5 million, an increase of 14% from the comparable year-ago quarter. License revenue for the second quarter of fiscal year 2011 was $2.7 million, an increase of 6% from the comparable year-ago quarter. Recurring revenue for the second quarter of fiscal year 2011 was $5.2 million, an increase of 22% from the comparable year-ago quarter. Professional services revenue for the second quarter of fiscal year 2011 was $1.6 million, an increase of 4% from the comparable year-ago quarter.

Gross margin for the second quarter of fiscal year 2011 was 71%, compared to 69% in the comparable year-ago quarter. Total operating costs and expenses for the second quarter of fiscal year 2011 were $5.0 million, an increase of 16% from the comparable year-ago quarter.

Net income for the second quarter of fiscal year 2011 was $1.0 million, or $0.05 per share on a basic and $0.04 on a diluted basis, compared to a net income of $1.1 million, or $0.05 per share on a basic and $0.04 on a diluted basis for the comparable year-ago quarter. Net income for the second quarter of fiscal year 2011 included stock-based compensation expense of $50,000 and interest and tax expense of $331,000, compared to stock-based compensation expense of $77,000 and interest and tax expense of $373,000 from the comparable year-ago quarter.

Total revenue for the six months ended December 31, 2010 was $22.6 million, an increase of 39% from the same period last year. License revenue for the six months ended December 31, 2010 was $10.0 million, an increase of 125% from the same period last year. Recurring revenue for the six months ended December 31, 2010 was $9.7 million, an increase of 17% from the same period last year. Professional services revenue for the six months ended December 31, 2010 was $2.8 million, a decrease of 20% from the same period last year.

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Gross margin for the six months ended December 31, 2010 was 77%, compared to 69% in the same period last year. Total operating costs and expenses for the six months ended December 31, 2010 were $10.8 million, an increase of 23% from the same period last year.

Net income for the six months ended December 31, 2010 was $5.9 million, or $0.27 per share on a basic and $0.24 on a diluted basis, compared to a net income of $1.8 million, or $0.08 per share on a basic and diluted basis for the comparable year-ago quarter. Net income for the six months ended December 31, 2010 included stock-based compensation expense of $104,000 and interest and tax expense of $646,000, compared to stock-based compensation expense of $132,000 and interest and tax expense of $650,000 from the same period last year.

Total cash and cash equivalents were $12.2 million at December 31, 2010, compared to $5.7 million at June 30, 2010. Cash provided by operations was $7.3 million for the six months ended December 31, 2010, compared to cash provided by operations of $2.1 million for the same period last year. Days sales outstanding in receivables for the second quarter of fiscal year 2011 was 28 days, compared to 51 days for the comparable year-ago quarter. Deferred revenues totaled $7.0 million at December 31, 2010, compared to $5.1 million at June 30, 2010.

“We are pleased with our overall performance for the first half of this fiscal year,” said Ashu Roy, eGain CEO. “Our revenue, bookings, profits and cash flow are all up significantly over the same period last year. We remain optimistic about our future prospects, and plan to continue investing in the business with the intent to accelerate our revenue growth and increase our market share.”

Business Highlights

New Hosting and License Bookings¹

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New milestones, products and industry recognition

Customer Momentum

eGain continued to build new and expanded existing relationships with a wide range of enterprise customers during the second quarter of fiscal year 2011. Notable new or expanded customer relationships include:

Guidance

We are raising our revenue guidance for fiscal year 2011. For fiscal year 2011 we currently expect a year-over-year increase in total revenue of between 25% and 30% up from the previously provided range of between 20% and 25%. In addition, we currently expect to be profitable on an operating basis and generate positive cash flows from operations in fiscal year 2011 and plan to invest a significant portion of our anticipated top-line growth back into growing our distribution capability.

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About eGain Communications Corporation

eGain (OTCBB: EGAN.OB) is the leading provider of cloud and on-site customer interaction hub software. For over a decade, hundreds of the world’s largest companies have relied on eGain to transform their traditional call centers, help desks, and web customer service operations into multichannel customer interaction hubs (CIHs). Based on the Power of One™, the concept of one unified platform for multichannel customer interaction and knowledge management, eGain solutions improve customer experience, optimize service processes end to end, increase sales, and enhance contact center performance.

Headquartered in Mountain View, California, eGain has operating presence in North America, EMEA and APAC. To learn more about us, visit www.eGain.com or call our offices: +1-800-821-4358 (US), +44-(0)-1753-464646 (EMEA), or +91-(0)-20-6608-9200 (APAC). Also, follow us on Twitter at http://twitter.com/egain and Facebook at http://facebook.com/egain.

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Cautionary Note Regarding Forward-Looking Statements

All statements in this release that involve eGain’s forecasts (including the above stated guidance), beliefs, projections, expectations, including but not limited to our financial performance and guidance, plans to invest in our business and expectations regarding our products’ performance, are forward-looking statements within the meaning of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements, which are based on information available to eGain at the time of this release, are not guarantees of future results; rather, they are subject to risks and uncertainties that may cause actual results to differ materially from those set forth in this release. These risks include, but are not limited to, the uncertainty of demand for eGain products, including our guidance regarding bookings and revenue; our expectations related to our operations; our ability to invest resources to improve our products and continue to innovate; our partnerships; our future markets; and other risks detailed from time to time in the Company’s filings with the Securities and Exchange Commission, including the Company’s annual report on Form 10-K filed on September 23, 2010, and the Company’s quarterly reports on Form 10-Q. eGain assumes no obligation to update these forward-looking statements.

Note: eGain is a registered trademark, and the other eGain product and service names appearing in this release are trademarks or service marks, of eGain Communications Corp. All other company names and products are trademarks or registered trademarks of their respective companies.

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eGain Communications Corporation

Consolidated Balance Sheets

(in thousands)

(unaudited)

eGain Communications Corporation

Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)

(unaudited)