Online Shopping Sites Crawl to Christmas, Says Keynote

Improving Economy, Blizzard, Blackout, Earthquake, Heightened Terrorist Alerts Lead to ‘Perfect Online Shopping Storm’

Keynote Web Performance Report: Holiday Shopping Sites, Report Number Four

SAN MATEO, Calif., — Christmas Eve, 2003 – Keynote Systems (Nasdaq “KEYN”), The Internet Performance Authority®, reported today that major online shopping sites continued their crawl to Christmas Day displaying continuing inconsistent and slow performance for holiday shoppers attempting to purchase gifts on the Internet.

For the week beginning Monday, December 15 and ending Sunday, December 21, Keynote’s E-Commerce Transaction Index showed that the overall average response time for completing a transaction was a mediocre 14.77 seconds, while the success rate for completing a transaction was a poor 94.88 percent. The best performing sites on the index had an average response time of 7.52 seconds, and a success rate of 99.73 percent. The worst performing sites on the index had an average response time of 27.81 seconds, and a success rate of 86.47 percent. A transaction is defined as a Web site’s ability to allow a consumer to click through a number of pages and successfully make a purchase.

For the last four weeks beginning on Black Friday, the day after Thanksgiving and the traditional kick-off of the holiday shopping season until this past Sunday, many sites on the index have delivered average to below average performance overall for consumers attempting to purchase gifts online. The average response time for completing a transaction during this time period has ranged between 14 and 17 seconds, while the success rate for completing a transaction has ranged between 93 percent and 96 percent.

“This has truly been a case of the ‘perfect online holiday shopping storm.’ A confluence of factors have occurred this shopping season and some of the largest online retailers clearly were not prepared for the shopping onslaught,” said Roopak Patel, senior Internet analyst in Keynote’s Public Services group. “As we headed into the holiday shopping season the economy had shown increasing signs of life. The shifting economy coupled with consumers’ increasing comfort buying gifts online met with powerful unplanned events beginning shortly after Thanksgiving including a blizzard in the northeast, a blackout in San Francisco, an earthquake in central California and heightened terrorist alerts. These factors combined to drive record-breaking online shopping visitors and revenue, but disappointing online performance from some of the nation’s largest retailers.”

The Keynote E-Commerce Transaction Index is the retail industry’s first and only Web transaction performance benchmark index that measures the response time and success rate for executing a typical multi-step online retail transaction on 11 leading retail Web sites. The Index provides an excellent overall barometer for how successful leading online shopping sites are at providing customers an optimal quality of experience each and every time a customer goes to their Web site.

Index results for the top performers and the worst average for the week can be found at http://www.keynote.com/solutions/performance_indices/ecommerce/ecommerce.html. Complete results of the Index can be found on E-Commerce Times at http://www.ecommercetimes.com/ectpi/.

How the Index Works

The Keynote Consumer E-commerce Transaction Index, introduced in May, is composed of the most active e-commerce sites on the Web, as determined by industry experts and analyst reports, and is the only industry benchmark that compares and contrasts the performance of a similar six-step Web transaction by a consumer purchasing a similar item on each site.

The 11 companies that make up the index include: Amazon (Nasdaq: AMZN), Best Buy (NYSE: BBY), Costco (Nasdaq: COST), Eddie Bauer (OTC: SPGLA), JCPenney (NYSE: JCP), LL Bean , Office Depot (NYSE: ODP), Office Max (NYSE: OMX), Sears (NYSE: S), Target (NYSE: TGT) and Wal-Mart (NYSE: WMT). These companies receive significant revenues from online sales and a high volume of Web site visitors flock to them every day to complete transactions similar to the ones being measured. As such, they are the de facto benchmark against which retailers doing business on the Web should measure themselves.

The data used to create the index is taken from actual online retail transactions Keynote performs with remotely based “measurement computers.” Transactions are initiated and measured from 10 U.S. cities (Boston, San Francisco, Detroit, Washington, D.C., Los Angeles, New York, Chicago, Philadelphia, Houston and Dallas) on an hourly basis Monday to Sunday from 5:00 AM to 9:00 PM Pacific time.

To build and maintain its growing line of Web performance indices, Keynote uses its unparalleled global infrastructure of over 1,500 strategically and statistically located measurement, testing and diagnostic computers representing Internet performance from 50 metropolitan areas worldwide.

Information about all Keynote performance indices can be found at http://www.keynote.com/solutions/solutions_pm_performance_indices_tpl.html.

About Keynote

Founded in 1995, Keynote Systems, Inc., (Nasdaq “KEYN”), The Internet Performance Authority®, is the worldwide leader in Web performance measurement and management services that improve the quality of e-business. Keynote’s services enable corporate enterprises to monitor, benchmark, test, diagnose and optimize their e-business systems both inside and outside the firewall. Approximately 2,200 corporate IT departments and 17,000 individual subscribers rely on the company's easy-to-use and cost-effective services to increase revenues and reduce downtime costs, without requiring additional complex and costly software implementations.

Keynote Systems, Inc. is headquartered in San Mateo, California and can be reached at www.keynote.com or by phone in the U.S. at 650-403-2400.

Keynote, The Internet Performance Authority and Perspective are registered trademarks of Keynote Systems, Inc. Other trademarks are the property of their respective owners. © 2003 Keynote Systems, Inc.