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The Billion-Dollar Question: The Impact of Web Site Performance on E-Commerce
by Tom Kuegler
Published on February 8, 2005

Web site performance is a critical and underappreciated component of Web marketing and e-commerce.

It doesn't matter how well you design and market your site unless it delivers. An analysis of performance data from Keynote Systems and Symphoniq Corporation showed that performance problems could be costing almost $1 billion in lost e-commerce revenues.

Furthermore, a comparison of the statistics from these two companies reveals that the current standard of performance measurement, "synthetic" transaction monitoring, may be understating the impact of performance issues.

Synthetic transaction monitoring—the process of using scripted transactions to periodically simulate end-users performing business transactions, such as logging in, searching and purchasing—creates a false sense of security for leading online merchants.

The Magnitude of Soft Downtime

Downtime gets a lot of attention. As one of my clients commented, "My job is to keep our company's name out of the papers. When we go down, we make the front page of the Wall Street Journal."

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Yet, despite the publicity that "hard" downtime receives, its impact may be dwarfed by the "soft" downtime of poor performance. Who hasn't abandoned a Web site because of slow page loads? Yet, according to standard measures of availability, those incidents don't count.

In 2001, Zona Research reported that 30% of surfers would abandon a Web site if it took more than eight seconds to load, creating the widely quoted "eight-second" standard.

Four years have cut that safety margin in half.

"The wait becomes frustrating for most Internet users after about four seconds," said Mark Ehr, an analyst with Enterprise Management Associates, according to an article in Internet Retailer. "Patience is waning as more shoppers become accustomed to quicker broadband connections."

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