$25 Billion In Web Business Potentially Lost Due To Poor Web Performance: Zona Research Study Based on Keynote Data; Consumer Retail Sites Have Slowed Under Heavy Graphics.

Business Editors/High Tech Writers

SAN MATEO, Calif.--(BUSINESS WIRE)--May 3, 2001

In its "Need for Speed II" report, based in part on measurements provided by Keynote Systems (Nasdaq:KEYN), the Internet Performance Authority(R), Zona Research has calculated that nearly one out of two online buying attempts made by consumers on dial-up and mid-band (DSL and cable) connections are abandoned, equaling more than $25 billion in potential lost business due to poor Web performance. Click here to view the paper in its entirety: http://www.keynote.com/downloads/Zona_Need_For_Speed.pdf

In its new 2001 report, an update of the original "Need for Speed" published in July, 1999, Zona Research focuses on the economic impact of Web performance and abandonment of multi-page transactions, based on Web site and transaction performance data from the Keynote Broker Trading Index(TM), and the Keynote Retail Benchmark(TM), as well as other Keynote data. The report concludes that transactional latencies will eventually become the dominant factor in Web site abandonment, particularly as still-prevalent dial-up modems are replaced by higher-speed connections.

Zona Research also reveals the effect on performance of Web page design and page assembly at the server. The $25 billion in lost Web business includes over $21 billion per year lost when users abandon a site due to excessive delays in Web page transmission. $4 billion, or 7.9 percent, of the revenue loss was found to be due to transmission errors caused by the Internet infrastructure, still a significant factor in site abandonment.

In its report, Zona Research adapts a multi-page cumulative abandonment concept developed for Web load testing by Alberto Savoia, chief technologist for Keynote's KeyReadiness(TM) load testing service. Savoia's Law states that users abandon sites based upon demerits, or 'dissatisfiers,' accumulated as users wait beyond their patience threshold.

From its review of Keynote's measurement data, Zona Research concludes that consumer Web sites, particularly retail sites, have actually increased latency times, or user wait, by over 20% over the past year. "It is clear that retailers are much more concerned about delivering fancy graphics and dynamic banner ads to Internet buyers than they are with delivering acceptable performance levels to potential buyers," said the report. Online brokerages, on the other hand, have made their sites more responsive.

Zona Research also found billions of dollars in site abandonment potentially lost due to performance variation in local geography and backbone differences. The performance of a set of Web transactions as measured by Keynote's Transaction Perspective(TM) service from 10 U.S. cities varied by 16 to 83 percent over the fastest path, amounting to between $7.4 and $11.0 billion in site abandonment.

Finally, the Zona Research report observes that the $25 billion in abandoned revenue is not necessarily lost forever, but represents potential sales for Web sites that can deliver a high-performing user experience. The report claims, "While retailers should definitely view pieces of that $25 billion as potential lost revenue due to their own poor performance, they can also view it as the total cross-industry potential for picking up revenue from competitors with clumsier Web sites than their own."

"Web user dissatisfaction and abandonment due to accumulated Web page delays is costing Web sites a lot of business," said Savoia. "A blazingly-fast home page is only part of the performance equation. Our dissatisfactions and abandonment models clearly show that there is a significant risk of losing a user on every single page in a multi-page transaction. Web site administrators and IT need to be particularly concerned about performance under heavier loads. In most of the load tests conducted by our Web site scalability testing group, we see that small increases in page response time lead to significant increases in user dissatisfaction and abandonment."

About Keynote

Keynote Systems (Nasdaq:KEYN), The Internet Performance Authority(R), is the worldwide leader in Internet performance services that improve the quality of e-Business. Approximately 3,000 corporate IT departments, Web hosting companies and Internet service and content delivery providers around the world have implemented the company's easy-to-use and cost-effective services to benchmark and manage the performance of their Web sites. Keynote was founded in 1995 and is headquartered in San Mateo, California. The company can be reached at www.keynote.com or by phone in the U.S. at 650/522-1000.

Note to Editors: To request further information about Keynote or an interview, press should call the Keynote media relations hotline at 650/522-1234. To submit an inquiry or to be added to Keynote's press release distribution list, send an email to [e-mail].

The Internet Performance Authority, KeyReadiness, Keynote Broker Trading Index, Keynote Retail Benchmark and Perspective are either trademarks or registered trademarks of Keynote in the United States and/or other countries. The names of actual companies and products mentioned herein may be the trademarks of their respective owners.