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Online Holiday Shopping Sites Straining Under the Load

However No Significant Impact from Northeast Blizzard

SAN MATEO, Calif., - December 10, 2003 - Keynote Systems (Nasdaq "KEYN"),
The Internet Performance Authority®, reported today that major online
shopping sites continued to show performance problems as holiday shoppers
tried to play high tech Santa Claus during the second full weekend of
holiday shopping. The Keynote E-Commerce Transaction Performance Index
dipped at times during the week to as low as 80% success rate, meaning that
consumers could only complete eight out of ten transactions. The overall
’success rate’ for the week, dipped to a six week low as well, coming in at
93.68 percent. A transaction is defined as the Web site’s ability to allow a
consumer to click through a number of pages and successfully make a
purchase.

Although several large retail sites presented performance problems during
the entire past weekend (Friday, Saturday and Sunday), there were no
discernable differences for measurements taken from Keynote computers
located in the Northeast as shoppers stranded indoors by the blizzard hit
the Web to shop. Several large sites had much greater fluctuation in
performance as well as the success rate for completing online transactions.
While Saturday numbers were relatively stable, Sunday’s performance had much
greater variability from site to site.

According to Forrester Research consumers are expected to spend $12.2
billion online this year in the Thanksgiving to Christmas period, up 42
percent from last year and about 75 percent of online sales are expected to
go to "multi-channel" retailers- that is those with brick and mortar stores.
If inclement weather is a factor in how many consumers are driven to the
Web, a loss of up to 20 percent of all transactions could translate into
enormous revenue losses.

"Although the East Coast storm over the weekend did not appear to impact
Internet performance from that region, the fact that more shoppers were
driven to the Web by the weather means that there is a potential for greater
lost revenue if transactions fail," said Roopak Patel, senior analyst in
Keynote’s Public Services group. "Recent studies show that as many as 50
percent of consumers research gift purchases online before buying them
through the store or store catalogue and 30 percent buy in-store at the same
retailer whose Web site they used for research. That research, which is
multi-page, also constitutes a transaction and poor performance of a Web
site could also threaten revenue."

During the week of December 1 the Index showed that consumers could only
complete a transaction 93.68 percent of the time and response time came in
at 14.6 seconds, slightly above the week of November 24, which included the
heavy Thanksgiving shopping weekend.

As a means of comparison, the average success rate for the four weeks
previous ranged from 94.49 percent to 96.68 percent.

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 13 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.

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 13 companies that make up the index include: Amazon (Nasdaq: AMZN), Best
Buy (NYSE: BBY), Costco (Nasdaq: COST), E-Bay (Nasdaq: EBAY), Eddie Bauer
(OTC: SPGLA), JCPenney NYSE: JCP), LL Bean , Nordstrom (NYSE: JWN), Office
Depot (NYSE: ODP), Office Max (NYSE: OMX), Sears (NYSE: S), Target (NYSE:
TGT) and Wal-Mart (NYSE: WMT). These companies receive a significant
majority of their revenue 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.

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