Hi,

I�d like to apologize to those merchants we support who have been experiencing some intermittent disruptions in service. At this time, we believe we are supporting all customers with all services without incident. We deeply regret the performance difficulty and wanted to take some time now that we can take focus off of our corrective actions to explain further what occurred.

First, at no time were the Vendio servers disrupted. Your data was always secure, back-end processes (e.g. scheduled listings posted to eBay) were occurring, and the vast majority of both buyers and sellers were regularly interacting with our services, including viewing images, checking out items, and creating new inventory and eBay items.

Unfortunately, people in certain geographies were unable to reach our servers through the complex series of connections that make up the internet. It was somewhat like when a cell phone call drops. Your phone works, and the phone of your friend you are dialing works, but the network doesn�t complete the call. Similarly, your computers and our computers were working, but some of you weren�t connecting to us and our servers.

The reasons behind these dropped connections originally stem from some Internet Protocol (IP) maintenance work at our collocation facility that required a collective coordination of them, us, and the various network ISPs that support internet traffic. When one of the network ISPs failed to perform their actions correctly in a timely fashion, we experienced disruption. These issues were extremely difficult to isolate. They were intermittent, generally never impacted more than a small single digit percentage of users, and were generally originating in systems we don�t directly control. While it can�t compare to the frustration of those of you negatively impacted, we also had a frustrated group working around the clock in three offices alongside our partners to coordinate corrective action. The dedication they had to restoring your service can not be described in words.

As part of the corrective action, we have removed the network ISP that was causing difficulty while our collocation facility works with them to correct their issues. We�ll continue to evaluate their ability to route Vendio traffic while we consider whether they have a place supporting our ability to support you. During this disruption, we also identified some improvements that could make our response to these disruptions more fault tolerant. We have enabled these improvements as well, thereby minimizing any likelihood for future disruption.

In the longer term, we have also made a significant investment in networking equipment to expand our growing services. This new equipment is currently being provisioned as part of our work integrating the Vendio and Andale services. These systems currently support some of our less critical services to ensure they are completely ready to support our core sales management platform. We expect to be taking full advantage of these new systems for all Vendio services within the next 60 days.

Again, we apologize for any disruptions some of you may have encountered. We will continue working tirelessly to ensure we have returned to the stability those of you who have been with us for so long have come to expect of us. As always, we consider it a pleasure to see your businesses grow and are greatly appreciative you have selected us to assist that growth.

Sincerely,
Michael Effle, EVP Sales Management and the entire Vendio Team