Digital Island Reports First Quarter Results

Digital Island (http://www.digitalisland.com) announced the results for the first fiscal quarter ended December 31, 1999. Revenues for the quarter were $7.6 million, a 54% increase over revenues of $4.9 million for the quarter ended September 30, 1999, and a 449% increase over revenues of $1.4 million in the same quarter of the prior year.

The loss for the three months ended December 31, 1999 was $22.3 million beforeamortization of goodwill and other intangible assets related to the mergerwith Sandpiper Networks, Inc., or $0.61 per share, compared with a net lossfor the quarter ended September 30, 1999 of $22.0 million, or $0.62 per share,and net loss of $5.9 million, or $2.53 per share, for the same quarter of theprior year. The net loss for the three months ended December 31, 1999 was$24.0 million, including amortization of goodwill and other intangible assetsrelated to the merger with Sandpiper Networks, Inc., or $0.65 per share.

"The quarter just ended has been the most important and exciting period inDigital Island's history," said Ruann F. Ernst, chairman and CEO of DigitalIsland. "We have not only experienced strong revenue and customer growth, buthave also expanded the size and reach of our e-Business Delivery Network, andcontinued to increase the breadth and capabilities of our service offeringsthrough key acquisitions and partnerships. With leading customers such asAOL, Blue Mountain Arts, Cisco, E*Trade, ft.com, Intuit and MasterCard, oure-Business Delivery Network has quickly become a critical part of the Internetinfrastructure. With a fully integrated set of content delivery, hosting,network and application services, Digital Island offers a solution setcomprehensive and flexible enough to meet the evolving demands of globale-Business."

Digital Island's customer base increased 54% to 169 during the quarter, says the company.

Completed just before the close of the quarter, Digital Island merged with Sandpiper Networks.