model, but where are we, are there still bunch of big RFPs out there, I mean, how much longer
will you continue to expect the pipeline to continue to be pretty robust?
<A Mark Layton>: Okay. Its important as you evaluate the new business pipeline, and we
look at this a couple of ways. The first part of this is that, when we make a quote of $40 million,
recognize that all were taking is the first years annual fees that we expect to earn from the
client. So on the sites that are ramping, that would be a relatively modest perspective of what the
annual value might be in three years out for a particular client depending upon the success that
they have from a growth perspective. So thats the first thing, I think, thats exciting as a lot
these are new generation sites, may be there are rework of an existing site, but I would say for
the most part, a lot of them are early in their web commerce evolution, but theyre all for the
most part major brand names that are very, very prevalent in the demographic segment that theyre
focused.
So as an example you talk about Volcom, Volcom is a start-up site, they had a brand page before, it
was not web commerce enabled. Some people dont know the Volcom brand, but they are very present in
their demographic age set, which is typically younger much younger age set. So these are the
an example of the types of brands that were working with. So our pipeline is really full of those
kinds of deals, I would say, the average annual size that we have in our pipeline hasnt really
changed all that much, in terms of what we may have seen a year ago, but the quality, the names
that are in there are much better.
And then if you were taking that pipeline and saying, well, let me do a mathematical evaluation of
what a year two or a year three or a year four value of that pipeline might look like, thats where
I see the real excitement is, is in the potential of what years two to four might look like for
these clients, given where they are in the cycle and the kind of the attractiveness of the brand
itself.
<Q Mark Argento>: Got you. And I think Tom you had mentioned in the quarter that you had a
customer that came out of the that did not renew, could you quantify for us on an annual basis
what kind of run rate theyre doing?
<A Thomas Madden>: Okay. Okay. And this was a the client that we had previously
disclosed in our 10-Q informations earlier this year, excuse me, with the business-to-business
client relationship with a technology company, it previously represented a little bit over 10% of
our Service Fee revenues. So I think last years number was somewhere in the 12% range of our
Service Fee revenues for that client relationship.
<Q Mark Argento>: So you are still able to grow service fees 20 plus percent to slightly a
10% customer?
<A Thomas Madden>: Yes. We did have the client in place for one-month of the quarter. So
there was still some activity in this quarter that helped us, but still significant growth.
<Q Mark Argento>: Got it. Okay. And then just quickly eCOST, I mean, Mark, it sounds like
you guys are focused on making sure thats not a drag, is that a business you think you need to be
in long-term? I know there is some ancillary benefits, but if its taking too much time and energy
and focus, is that something that youd think about either divesting or figuring out a way to move
away from?
<A Mark Layton>: Well, I think you just come back to our commitment, were going to do
everything we can and its our objective to be certain that the drag as you say is not there for
2011, that is, I mean our eyes are open to all of the options that are there, but I think whats
important in this is that everybody understand the way that we are going to take the acumen and the
knowledge that we have in that business and we are evolving it into a product that our Services
segment can utilize being this eStore Retail Services piece. Add those components, which are
basically the operating knowledge of the business and a number of key people in that business area
and they have become very advantageous to our services offering, and so were certainly want to
maintain
10