Interland's Small-Business Leader Survey Shows the Majority Track Sales to Their Web Site, Depend on Business Email.

ATLANTA -- Business Leaders List Revenue Growth, Customer Retention and Expense Reduction as Top 2005 Business Priorities, and Cite Inflation, Trade Deficit and Energy Prices as Threats

Interland (Nasdaq:INLD), a leading provider of online sales and marketing services for small and medium-sized businesses, today announced the results of the Interland Spring 2005 Business Barometer, a nationwide survey of 1,032 leaders of small and medium-sized businesses. The detailed report, which reviews issues impacting small and medium businesses -- such as Social Security and tort reform -- can be downloaded at http://www.interland.com/about/news/.

The findings revealed that two out of three business leaders clearly believe that business Web sites influence overall sales, both on- and off-line. In addition, 94 percent say their businesses have Internet access, and seven out of 10 cite email as very or somewhat critical to their business.

When asked to name their top three 2005 business priorities, all tracked back to the bottom line, with 79 percent of business leaders naming revenue growth, 70 percent customer retention and 46 percent expense reduction. The group named rising inflation (44 percent), the current trade deficit and the collapse of the dollar's value (40 percent), and energy and other supply shortages (40 percent) as the top three immediate threats to the success of small and medium-sized U.S. businesses. Meanwhile, the group identified the top three greatest strengths of U.S. businesses as technological lead and strong productivity (49 percent), democratic government (46 percent) and a flexible economy and labor force (39 percent).

Specific to the impact of Web sites on business sales, 44 percent of those with Web sites said they generated from 1 to 25 percent of their 2004 revenues through online purchases or offline purchases that were influenced by their Web site. Additionally, nearly a quarter (24 percent) say 26 to 100 percent of their revenue was attributable to having a Web site.

The report showed that of the 24 percent of those businesses surveyed which are actively using e-commerce features (such as online payment transactions, online business forms or email requests) to sell through their Web site, 87 percent are receiving monthly revenue from their Web site. In fact, 42 percent say they derive more than a quarter of their monthly revenue from their Internet presence.

"This study shows that small and medium-sized businesses that are using the Internet to market their services and offerings are getting a clear return in top-line revenues for their investment," says Joel Kocher, CEO and Chairman of Interland. "Looking at the data carefully, you can start to see how tightly online tools and services are starting to fit with small-business priorities. For example, business email can be used to help up-sell and cross-sell, to help reinforce customer loyalty and to reduce business expenses. We are getting to the point in most small-business categories where it will soon be safe to say that if you're not online, you're not really serious about being in business."

The group was polled on business e-mail usage habits, and a dramatic 70 percent said e-mail is critical to their businesses. When asked how they use their business e-mail, 72 percent said to communicate with existing customers, 56 percent with partners and business associates, 53 percent with potential buyers, 36 percent with employees, 33 percent to get and request bids, and only 14 percent said they don't use e-mail in their business.

"Clearly, e-mail is a tool small business owners can't do without, and this reliance on online communications is helping to fuel the rise in the number of small businesses with Web sites," says author and small-business expert Kim T. Gordon, president of National Marketing Federation Inc.

The group of small-business owners surveyed was asked to select three marketing tools critical in driving business for their companies. Topping the list were community relations (55 percent), Web sites (47 percent), followed by public relations/media coverage (31 percent). "It makes sense that these three marketing tactics top the list, since they represent affordable, yet highly effective ways to grow your business," says Gordon. "They're also interrelated because if your community relations and PR are working, they're going to drive customers to your Web site to learn more about what your company has to offer. What's also truly eye-opening here is that more than half of the small businesses surveyed now have Web sites in place, and a full 96 percent of those say their online identity is critical to their success."

Other tools small-business owners cited included direct mail (26 percent), which just beat out the Yellow Pages (23 percent), followed by email marketing and newspaper advertising (both at 21 percent). Search engine keywords (18 percent), telephone marketing (10 percent) and outdoor advertising (10 percent) all broke the double-digit threshold. At the bottom of the list were magazine advertising, print coupons and radio advertising (all three at 6 percent each), and Web banner adverting (5 percent).

Other interesting data points show that only 22 percent of those surveyed think Congress will pass major Social Security reform in 2005 or 2006; however, 43 percent say the system is in crisis and needs to be fixed now. On the topic of tort reform, 45 percent were uncertain if it would benefit them, 33 percent said tort reform would benefit small and medium-sized businesses, and 22 percent said it would not. Surprisingly, two-thirds (66 percent) of small businesses admit they rarely or never evaluate the risk of getting sued when making business decisions.

About the Interland Spring 2005 Business Barometer

During April a total of 1,032 leaders of small and medium-sized businesses participated in this invitation-only, nationwide online survey of organizations with 500 or fewer employees. Company size ranged from less than $250,000 in revenue to more than $5 million, and 68 percent had been in business for five years or more. Fifty-three percent of respondents said they had a business Web site. Industry breakouts were as follows: 38 percent business services, 29 percent retail, 28 percent personal services and 5 percent non-profit. The margin of error for the survey is plus or minus 3 percent.

About Interland

Interland, Inc. (Nasdaq:INLD) is a leading online services and Web-hosting company dedicated to helping small and medium-sized businesses achieve success by providing the knowledge, services and tools to build, manage and promote businesses online. Interland offers a wide selection of online sales and marketing services, including standardized Web hosting, eCommerce, application hosting, and Web-site development, e-marketing and optimization tools. For more information about Interland, please visit www.interland.com, email [e-mail] or call 1-800-336-9883.

EDITOR'S NOTE:

Camera-ready charts and graphs of the findings from the Interland Spring 2005 Business Barometer are available by contacting Mike Neumeier by phone at 404-451-7832 or by email at [e-mail].