Keynote Announces Retail Industry’s First Web Transaction Index

Improves Transaction Experience of Online Retail Customers; New Benchmark Leverage’s Keynote’s Experience, Data Accuracy, Measurement Infrastructure

San Mateo, Calif., May 5, 2003 – Keynote Systems (Nasdaq: KEYN), the leader in Web performance monitoring, management and testing services announced a natural extension to its benchmarking brand with the introduction today of The Keynote Consumer E-Commerce Transaction Index, the retail industry’s first Web transaction performance benchmarking index for optimizing the experience of its online customers. The Keynote Consumer E-Commerce Transaction Index provides customers with a new and ideal method for evaluating and improving Web transaction performance relative to direct competitors in their market space, rather than simply to a cross-section of general business sites.

The benchmarking index represents the most active e-commerce sites on the Web as determined by industry experts and analyst reports and, for the first time, gives retailers doing business on the Web access to a useful and cost effective tool that provides real time, 24/7 visibility into the performance of online transactions allowing them to meet internal Web performance objectives and compare and contrast their online performance to that of competitors.

Keynote also announced today a new e-Banking Transaction Index and new Best Practices for Total Performance Management (TPM), new solution sets targeted at retail and financial services, (see separate press releases), that include one of the transaction indices. The new products represent Keynote’s focus on bringing industry-specific Web performance solutions for competitive advantage to its growing base of retail and financial services customers, longtime customer strongholds for Keynote.

About the Keynote Consumer e-Commerce Index

The Keynote Consumer e-Commerce Index accurately measures the performance and availability of Web transactions that represent a typical consumer purchasing a popular product at the most active e-commerce sites on the Web today.

The knowledge gained from the index data can help companies compare the performance of their e-commerce transactions to competitors, trend the performance of their vertical relative to other e-commerce verticals, establish realistic internal and external objectives for Web transactions, improve the end-to-end performance of their Web site, and most importantly reduce lost revenue due to failed or poor performing Web site transactions.

The companies selected for inclusion in the Consumer E-Commerce index were ranked in the top percentile of all e-commerce companies based on visitor traffic, online revenues and consumer interest. Each Web transaction measured is representative of the sequence of steps that a consumer would perform on each company’s Web site leading up to the purchase of a product or item. The product or item selected in the transaction represents a popular item that a consumer would purchase on that particular Web site. The number and type of steps that are measured in each transaction uses a consistent methodology. This allows retailers to compare themselves directly to competitors in their own market, while drawing general conclusions from additional sites that drive significant revenues from Web sales.

The 16 companies that make up the index include: Amazon (Nasdaq: AMZN), Ebay (Nasdaq: EBAY), Yahoo Shopping (Nasdaq: YHOO), Barnes & Noble (NYSE: BKS), Best Buy (NYSE: BBY), Office Depot (NYSE: ODP), Staples (Nasdaq: SPLS), Office Max (NYSE: OMX), Target (NYSE: TGT), Wal-Mart (NYSE: WMT), JCPenney NYSE: JCP), Sears (NYSE: S), Nordstrom (NYSE: JWN), Neiman Marcus (NYSE: NMG.A, NMG.B), LLBean and Eddie Bauer (OTC: SPGLA). 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 companies against which retailers doing business on the Web should measure themselves.

As companies begin to attribute a larger part of their revenue to online sales, the importance of understanding the performance of typical revenue generating user actions on their Web sites becomes increasingly important. Poor transactional performance can drive customers right into the hands of competitors. Companies that consider their e-commerce strategy as a significant growth part of their business need to be absolutely certain that the data they receive about performance is not only accurate, timely and delivered from multiple locations around the globe, but also specific to their business.

Forrester Research predicts that online retail sales will account for eight percent of all retail sales by 2007 – up from no more than 1.5% in the second quarter of 2002. An online retailing report released by eMarketer estimates that online consumer sales will grow to $155.6 billion by 2005, more than doubling from 75.1 billion at the end of 2002. These dramatic growth numbers underscore the need for retailers to understand and improve the online customer experience.

“Keynote is experienced at providing industry-specific benchmarking data to meet the challenge of vertical segments whose livelihood is directly correlated with the ability of customers to successfully conduct revenue generating transactions on a Web site,” said Carol Carpenter, director of product management for Keynote. “The launch of The Keynote Consumer E-Commerce Transaction Index supports Keynote’s continued commitment to providing accurate and actionable data that helps business accelerate the growth of their online sales.”

As the leader in Web performance benchmarking, Keynote recognizes the value of continuing to expand the ways in which its customers can gain specific competitive, bottom line intelligence from its data by which they can measure themselves and achieve higher levels of customer retention and acquisition. The Consumer E-Commerce Transaction Index is designed to give companies the information they need to acquire and retain customers, increase revenues and reduce costs by delivering a high quality of service and customer satisfaction.

The launch of the Consumer E-Commerce Transaction Index underscores Keynote’s leadership position as the benchmarking leader with over 80% market share and is part of Keynote’s “Total Performance Management” strategy for indexing, monitoring, diagnosing and testing the end-to-end performance of e-business applications and systems.

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

How The Keynote Consumer E-Commerce Transaction Index Works Each transaction is measured using the following six components: