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May 11, 2009

Internap reports net loss in Q1

Total revenues of $63.92m

By CBR Staff Writer

Internap Network Services, a provider of internet business solutions, has reported a net loss of $6.61m, or diluted loss per share of $0.13, for the first quarter ended March 31, 2009, compared to a net income of $739,000, or diluted earnings per share of $0.01, for the same quarter of 2008.

For the first quarter of fiscal 2009, total revenues were $63.92m, compared to $62.05m for the same quarter of 2008. Loss from operations was $6.35m, compared to an income from operations of $608,000 for the same quarter of 2008.

In the first quarter, Internap deployed 23,000 square feet in company-controlled facilities in Boston and New York, completing a 40,000 square foot data center expansion plan announced in June 2007. IP and CDN services revenue declined 8.1% and 17.9%, respectively, versus the first quarter of 2008, largely due to competitive pressure and related sales price erosion.

Eric Cooney, president and chief executive officer of Internap Network Services, said: Our data center services segment demonstrated significant growth and expanding margins, however our IP and CDN segments continued a trend of declining revenue and profitability. Thus, we implemented the previously announced cost reduction plan as a first step towards reversing this trend.

We remain committed to our three business lines, IP, data center and content delivery network services and are taking the steps necessary to simplify and focus these units on delivering long-term profitable growth.

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