Mercado Software Has Banner 2006 - Poised to Leverage Global E-Commerce Growth.

Mercado's Revenues Tripled over Previous Year; Installed Base More Than Doubled.

PALM SPRINGS, Calif. -- Mercado today announced that 2006 was its best year ever - having more than tripled revenues over 2005. Mercado also more than doubled its installed base in 2006, adding retail brands such as REI, Hanna Andersson, Charming Shoppes, and Blacks Leisure Group to the roster of retailers using Mercado's leading search and merchandising solutions to increase conversions, average order value, and customer satisfaction on their e-commerce sites.

Mercado attributes this growth to a number of factors including the growth in e-commerce spending, which according to ComScore Networks, last year increased by 24% in the United States. The European e-commerce market, where Mercado is quickly establishing a firm hold, is growing dramatically. According to Forrester, online retail revenues will grow 250% in the next five years (Europe's eCommerce Forecast: 2006 to 2011, Forrester Research, June 2006).

In addition to significant market growth including strong SaaS adoption, Corey Leibow, Mercado's president and CEO, credits Mercado's e-commerce focus, great technology, strong partners, and dedication to customer advocacy for the company's success:

"We're very proud of our accomplishments in 2006 and equally proud of the success our customers experienced in their e-commerce channel," said Leibow. "Businesses of all sizes are realizing the role site search and merchandising play in successful online selling - and are demanding the tools to do it easily and effectively. As a result, we're seeing more demand and adoption than ever - and Mercado's dedication to e-commerce is paying off."

Mercado also made significant R&D strides in 2006, which culminated in the recent launch of Mercado 4.0 and deployment of Metrics Driven Merchandising(TM) among several online retailers. In addition, 2006 saw Mercado establish key partnerships with e-commerce "ecosystem" vendors such as Bazaarvoice, Coremetrics, Omniture, PowerReviews, and YourAmigo.

Hanna Andersson (www.hannaandersson.com), a leading retailer of quality family apparel, chose to partner with Mercado in the fourth quarter of 2006. "The Mercado solution - its merchandising functionality and underlying technology - was a favorite of both our business and IT teams," according to Alison Polenz, VP of Marketing at Hanna Andersson. "We look forward to a long partnership with Mercado."

"2006 showed Mercado's growth continuing to accelerate," reported Susan Aldrich, analyst and Senior Vice President at the Patricia Seybold Group, in Search Product and Company Update, February 1, 2007. "We see Mercado continuing to deepen and broaden its solutions for online commerce, especially in marketing and merchandising capabilities, presenting a challenge to e-commerce search vendors in the United States and abroad."

About Mercado Software

Mercado is the leading e-commerce search & merchandising solution specialist for multi-channel retail and B2B organizations. By enabling a superior buying experience and equipping business managers with a powerful platform on which to execute merchandising strategies, online businesses can aggressively grow revenue and foster customer loyalty. Sears Holdings Corp., Guess?, Inc., Williams-Sonoma Inc., OfficeMax, Macy's, ShopNBC, Delightful Deliveries, and Organize.com are some of the companies benefiting from Mercado's solutions. For more information about Mercado Software, please visit www.mercado.com or call [phone].