<Q Alex Silverman>: Do you know whether everything is being stopped or just the
<A Mark Layton>: Well, we have not had any reports of transactional e-mail is being
stopped. So, e-mails that confirm orders or shipment confirmations, things like that are flowing.
Those do come from a different IP address, so but those are not being stopped. Its basically
all of our promotional e-mails that are being impacted and its not everyone. I mean, weve still
got a good flow to corporate going on. The big issue really is with Google, Gmail, Yahoo!, Hotmail
are the two major areas right now that we have seen changes in their algorithms that have impacted
our ability to deliver.
<Q Alex Silverman>: Okay. I mean, the reason I asked that question is, Ive received
e-mails in the past from e-tailers who have said, youre not receiving our promotions. Please go
into your spam box and mark our e-mails as Not Spam.
<A Mark Layton>: Thats correct. And were undertaking similar techniques and were not a
spammer. I mean, there is the word spam is used loosely to describe maybe e-mails that people
dont want, but frankly what I see right now is the actions being taken by these major ISPs is
really akin to your mailman standing in front of your mailbox going through your mail and saying,
Well, you dont want this. You dont want this, and you dont want this and throwing it in the
garbage before he puts the rest of it in your box.
Most of these people have subscribed to our e-mails in one fashion or another or everybody has. I
mean, theyve had to have opted into our programs in order to receive e-mails. So theyve made a
conscious decision at one point in time to be able to receive our e-mail, and yet an ISP is
stepping in the middle of it and saying, Well, no. They dont really want that.
So, theres a lot more to be learned on this and its an ever-evolving space. I cant say that the
changes that were made recently impacted everybody. Ive got to believe that others are
experiencing issues that are there. The biggest challenge for us is, is that we had evolved to
where probably more than 90% of our marketing activity was e-mail-based and so, the impact on us
was significant in terms of our marketing activity now that we have, because we just got limited to
being able to deliver the message. So, thus weve opened up these other channels again.
<Q Alex Silverman>: Makes sense. In terms sorry, just to switch back to the pipeline.
Can you give us a sense a rough number, how much of whats in the pipeline are folks that are
new to the web and really new to e-tailing and how much of it is going after a competitive win?
<A Mike Willoughby>: Well, I dont have an exact percentage, but my feel is that a good
percentage may be 25% or so of the pipeline is made up folks that do not currently have their own
direct-to-consumer initiative. And I think that, you can safely put most of the CPG opportunity in
that category. And so, while those are some very large companies they may not be large annual
estimated revenue portion of the pipeline because it was starting from zero, the first full year
run rates going to be much less than their total potential. So, Ill throw a 25% number out there
just as a rough estimate of that and answer that...
<Q Alex Silverman>: Okay. I asked the question because, I mean its pretty well known
that one of your well, your largest competitor has some pretty major client renewals coming up
in the next year.
<A Mike Willoughby>: They do, including some of their sort of long-term, tenured core
category sporting goods type clients. We do see them in a lot of deals that were working on
whether its a competitive situation or somebody who is doing eCommerce for the first time. And
were very happy with the win rate that weve got to this point and we think we still are very
positive and optimistic looking forward with the differentiation we have versus them. So, not a
concern. And then I guess