Exhibit 99.01

KANA Board of Directors Changes Its Recommendation On New Funding; Board Advises
                Stockholders to Vote Against Proposed Financing

MENLO PARK, Calif.--(BUSINESS WIRE)--Jan. 14, 2002--KANA Software, Inc. (NASDAQ:
KANA), the leading provider of external-facing eCRM solutions, today announced
that its Board of Directors has voted to change its recommendation with respect
to its pending $38 million to $45 million preferred stock financing at $10 per
common-equivalent share, which has been presented to KANA's stockholders for
their approval at a meeting to be held on January 21, 2002, as described in
KANA's proxy statement dated December 28, 2001.

The Board of Directors, in the exercise of its fiduciary duties, has determined
that this transaction is no longer in the best interests of KANA and its
stockholders. Accordingly, the Board of Directors now recommends that
stockholders vote against the proposed financing.

The Board has reviewed KANA's current financial position and business
conditions, and determined that they have significantly improved since this
financing was announced. The Board considered KANA's preliminary results for the
fourth quarter of 2001, which were consistent with the company's expectations.
The Board also reviewed KANA's cash and liquidity position, and current sales
pipeline. Furthermore, holders of a significant number of KANA shares have
recently expressed concern to members of KANA's Board of Directors regarding the
significant discount to current market prices represented by the price to be
paid by the investors in the proposed financing and regarding the substantial
senior preferences and rights to be provided by the terms of the preferred
stock. The Board also considered the fact that KANA may be required to raise
additional funds in the first half of this year to provide additional working
capital and the fact that there can be no assurance that equity financing will
be available on terms more favorable than the proposed financing, or at all.
Taking into account all of these factors, KANA's Board believes that the
substantial dilution and preferred stock preferences that would be created by
the proposed financing would outweigh the benefits to be provided, and should
not be required by a financing under current conditions.

The change of recommendation by the KANA Board does not constitute a termination
of the stock purchase agreement between KANA and the investors, and the
stockholder meeting to vote on the proposed transaction remains scheduled for
January 21, 2002. If this transaction is approved by KANA's stockholders at the
meeting, the investors will be entitled to purchase between $38 million and $45
million of new convertible preferred stock of KANA, at a per common-equivalent
share price equal to the lesser of $10.00 or 66-2/3% of a ten day average
trading price prior to closing. If KANA's stockholders do not approve the
transaction, the investors will be entitled to receive two-year warrants to
purchase a total of approximately 386,000 shares of KANA common stock for $10.00
per share. The terms of the proposed financing and the warrants are set forth in
further detail in KANA's proxy statement dated December 28, 2001.

KANA will announce its fourth quarter and year-end 2001 results on January 22,
2002 and will host a conference call to discuss those results at 4:30 p.m.
EST/1:30 p.m. PST on January 22, 2002. Investors are invited to listen to KANA's
quarterly conference call on the investor relations




section of our Web site at www.kana.com. A replay of the Web cast will also be
available at www.kana.com for a week following the completion of the call.

Cautionary Note Regarding Forward-looking Statements Under the Private
Securities Litigation Reform Act of 1995: Information in this release that
involves the expectations or beliefs of KANA or its Board of Directors regarding
the future, are forward-looking statements that involve risks and uncertainties.
These statements include statements about KANA's expected financial position,
sales pipeline, profitability, growth and long-term success, its market
position, and opportunities in its market. All forward-looking statements
included in this release are based upon information available to KANA and its
Board of Directors as of the date of the release, which may likely change, and
we assume no obligation to update any such forward-looking statement. These
statements are not guarantees of future performance and actual results could
differ materially from our current expectations. Factors that could cause or
contribute to such differences include, but are not limited to: risks associated
with lack of market acceptance of KANA's products or services; inability to
obtain alternative financing on acceptable terms; inability to manage cash and
expenditures, and to expand sales; competition in our marketplace, including
introduction of new products or services, or reductions in prices, by
competitors; KANA's history of losses; and trends and uncertainties of slow and
uncertain economic conditions, particularly as they affect spending by our
prospective customers on eCRM and similar enterprise software products. In
addition, the trading price of KANA's stock may decline as a result of KANA's
financial performance, the termination of the proposed financing or a general
decline in the equity markets. KANA may be required to raise additional funds
during the first half of this year to provide additional working capital, and
there can be no assurance that such financing will be available on more
favorable terms than the proposed financing, or at all. These and other factors
are risks associated with our business that may affect our operating results are
discussed in KANA's filings with the Securities and Exchange Commission ("SEC"),
including our most recent annual report on Form 10-K and quarterly report on
Form 10-Q.

NOTE: KANA is a registered trademark, and KANA Software, KANA iCARE, KANA
Contact Center, KANA IQ, KANA ResponseIQ, KANA Response, KANA Marketing, KANA
iCARE Analytics and the KANA logo are trademarks of KANA Software, Inc. All
other company and product names may be trademarks of their respective owners.