Sitestar Acquires Assets of Magnolia Internet Services

LYNCHBURG, VA -- (MARKET WIRE) -- January 29, 2007 -- Sitestar Corporation (OTCBB: SYTE), a provider of residential and business Internet access, web hosting and value-added products and services, announced today that it has purchased the customers and assets of Magnolia Internet Services, an Arkansas-based Internet Service Provider (ISP). The deal represents Sitestar's continued commitment to disciplined growth through strategic acquisitions in target markets and the company's focus on increasing shareholder value.

Located in South Arkansas and founded in 1997, Magnolia Internet has grown its base of dial-up, Digital Subscriber Line (DSL) and web hosting customers to include both residential and business accounts. Sitestar has begun migrating the Magnolia Internet customers to its own reliable network and highly efficient customer infrastructure. The company will leverage its economies of scale business model to achieve robust profit margins and expects to increase customer retention by delivering higher levels of service and customer support.

"The Magnolia Internet deal neatly dovetails with our strategy to acquire the assets or customers of the seller and transition them to the Sitestar platform," said Frank R. Erhartic, Jr., CEO for Sitestar. "Given our size and business processes, we're able to realize greater cost savings than most ISPs, so we can generate a faster and stronger return on investment. We have established a repeatable process whereby we are identifying, qualifying and negotiating deals to grow our customer base and revenues. Most importantly, we're looking out for our shareholders by staying disciplined and buying smart."

Magnolia Internet customers will benefit from extended customer support hours and have access to value-added products and services. "On behalf of everyone at Sitestar, we welcome the new Magnolia Internet customers," said Mr. Erhartic.

Safe Harbor for Forward-Looking Statements

This press release contains forward-looking statements that are based on management's expectations, estimates, projections and assumptions. The Company assumes no obligation except as required by law to update the forward-looking statements contained in this press release as a result of new information or future events or developments. These forward-looking statements generally can be identified by words such as "believes," "expects," "projects," "anticipates," "foresees," "forecasts," "estimates," "should" or other words or phrases of similar import. Forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements are not guarantees of future performance and involve certain risks and uncertainties, which are difficult to predict. Therefore, actual future results and trends may differ materially from what is forecast in forward-looking statements due to a variety of factors, including and without limitation, as found in the Company's reports filed with the Securities and Exchange Commission.

About Sitestar

Sitestar (www.sitestar.com) is an Internet and computer solutions provider that offers narrow-band (dial-up) services and broadband Internet access services (ISDN, DSL, satellite, cable and wireless), Web hosting and design, and other value-added services including web acceleration, spam and virus filtering as well as spyware protection. Headquartered in Lynchburg, Virginia, Sitestar maintains multiple sites of operation and provides services to customers throughout the U.S. and Canada, with concentrations of customers in the Mid-Atlantic and Rocky Mountain regions in the U.S. and in Ontario, Canada. With a focus on competitive pricing, reliability, service and speed, Sitestar delivers customer value.

Contact Information: Contact: Frank R. Erhartic, Jr. 434-239-4272 Email Contact