• Revenue of $64.4 million, an increase of 3.3 percent compared with the second quarter of 2008;
• Adjusted EBITDA¹ of $6.8 million compared with $5.4 million in the second quarter of 2008;
• Adjusted EBITDA¹ margin of 10.5 percent compared with 8.7 percent in the second quarter of 2008;
• Recognizes non-cash charge to intangible assets of $55.6 million primarily attributable to CDN assets;
• Announces $50 million company-controlled data center expansion plan.

Internap Network Services Corporation (NASDAQ: INAP), a global provider of fast and reliable end-to-end Internet business solutions, today reported second quarter 2009 financial results, delivering revenue and adjusted EBITDA growth. Internap also announced that it is committing $50 million over the next 18 months in incremental capital investment to grow its data center presence in key markets. This expansion will be internally funded through cash generated from operations and cash-on-hand.

“Over the past several months we’ve developed our strategy, begun strengthening our management team, reduced operating costs and begun driving operational excellence. This quarter, we took the first step towards delivering long-term profitable growth as revenue and our EBITDA increased,” said Eric Cooney, President and Chief Executive Officer of Internap. “The next major step in our strategic plan sees the Company continuing our history of growing our data center business, as we commit an additional $50 million investment to expand our position in this high-growth market.”

In the second quarter of 2009, Internap determined that it would segregate its CDN services segment and consolidate these financials within its IP services and Data center services segments. This revised segment reporting is reflective of the management structure, the integration of the CDN assets within our IP network and the integration of the CDN customer support function. Further, the dual-segment reporting provides appropriate focus on the business segments driving near-term growth.

The decision to consolidate segments required acceleration of the Company’s annual impairment test of goodwill and other intangible assets. This test resulted in a $55.6 million non-cash charge, the majority of which was attributable to the Company’s CDN assets. Historical period results with the revised segment reporting can be found in a supplementary data schedule on Internap’s Website at http://ir.internap.com/results.cfm.

Second quarter 2009 revenue increased 3.3 percent year-over-year to $64.4 million. Compared with the first quarter of 2009, revenue rose 0.7 percent. Internap’s Data center services segment drove both the year-over-year and sequential increases in total revenue. IP services revenue declined 7.3 percent compared with the second quarter 2008 and was essentially flat compared with the first quarter of 2009.

GAAP net loss for the second quarter of 2009 was $(60.6) million, or $(1.22) per diluted share compared with GAAP net loss of $(3.2) million or $(0.07) per diluted share for the second quarter of 2008. In addition to non-cash goodwill and other intangible impairment charges included in this quarter’s results, the Company recognized non-cash restructuring costs of $2.2 million relating to changes in sublease assumptions on real-estate held for lease and a cost reduction program that was announced in the first quarter of 2009. Normalized net loss⁽¹⁾ and normalized net loss per diluted share⁽¹⁾, which exclude the impact of impairment charges, other non-recurring items, and stock-based compensation, was $(1.5) million, or $(0.03) per diluted share in the second quarter of 2009.

Total segment gross profit¹ was $27.8 million, a decrease of 3.6 percent compared with the second quarter of 2008. Sequentially, segment gross profit¹ declined 1.6 percent. Total segment gross margin¹ was 43.2 percent in the second quarter of 2009, a decrease of 310 basis points from 46.3 percent in the second quarter of 2008. Compared with the first quarter 2009, total segment gross margin¹ declined 100 basis points. The addition of 7,000 square feet of built-out data center space in the quarter was the primary driver for the gross margin declines.

Second quarter 2009 adjusted EBITDA was $6.8 million, an increase of $1.4 million over the second quarter of 2008. Sequentially, adjusted EBITDA¹ increased $2.2 million. Adjusted EBITDA margin¹ increased 180 basis points year-over-year to 10.5 percent. Compared with the first quarter of 2009, adjusted EBITDA margin¹ increased 330 basis points. Lower cash operating costs more than offset lower total segment gross profits both year-over-year and sequentially.

Internap’s balance of cash and short-term investments totaled $54.5 million at June 30, 2009 compared with $55.5 million at the end of the first quarter of 2009. Total debt, including capital lease obligations was $23.3 million at the end of the second quarter of 2009, approximately flat with the outstanding balance at March 31, 2009.

Internap had 3,118 customers under contract as of June 30, 2009, a net decrease of 56 compared with the number under contract at the end of the first quarter of 2009.

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¹ Presentation of non-GAAP information and reconciliations to GAAP information contained in this press release are provided in the tables below entitled "Reconciliation of Net (Loss) Income to Adjusted EBITDA," "Reconciliation of Net (Loss) Income and Basic and Diluted Net (Loss) Income Per Share to Normalized Net (Loss) Income and Basic and Diluted Normalized Net (Loss) Income Per Share" and "Segment Gross Profit and Segment Gross Margin." This information is also available on Internap’s Web site under the Investor Services heading.

Conference Call Information:

Internap's second quarter 2009 conference call will be held today at 5:00 p.m. EST. Participants may access the call by dialing 877-545-1490. International callers should dial 719-325-4864. Listeners may also connect to the simultaneous webcast available from the investor relations section of the company’s web site at http://ir.internap.com/events.cfm. A replay of the call will be accessible from Wednesday, August 5, 2009 at 8 p.m. EDT through Wednesday, August 12, 2009 at 888-203-1112 using the replay code 4990802. International callers can access the archived event at 719-457-0820 with the same code.

About Internap

Internap is a leading Internet solutions company that provides The Ultimate Online Experience™ by managing, delivering and distributing applications and content with 100 percent performance and reliability. With a global platform of data centers, managed Internet services and a content delivery network (CDN), Internap frees its customers to innovate their business, improve service levels, and lower the cost of IT operations. More than 3,000 companies across the globe trust Internap to help them achieve their Internet business goals. For more information, visit www.internap.com.

Internap "Safe Harbor" Statement

This press release may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Because such statements are not guarantees of future performance and involve risks and uncertainties, there are important factors that could cause Internap’s actual results to differ materially from those in the forward-looking statements. These statements include Internap’s ability to achieve or sustain profitability; its ability to expand margins and drive higher returns on investment; its ability to respond successfully to technological change and the severe economic downturn, which has required it to continue to lower the cost of its products; the availability of services from Internet network service providers or network service providers providing network access loops and local loops on favorable terms, or at all; failure of third party suppliers to deliver their products and services on favorable terms, or at all; failures in its network operations centers, data centers, network access points or computer systems; provide or improve Internet infrastructure services to our customers; and its ability to protect its intellectual property, as well as other factors discussed in Internap’s filings with the Securities and Exchange Commission. Internap undertakes no obligation to revise or update any forward-looking statement for any reason.

INTERNAP NETWORK SERVICES CORPORATION
NON-GAAP (ADJUSTED) FINANCIAL MEASURES

In addition to providing financial measurements based on generally accepted accounting principles in the United States of America (GAAP), Internap has historically provided additional financial measures that are not prepared in accordance with GAAP (non-GAAP), including adjusted EBITDA, normalized net loss, normalized diluted shares, segment gross profit and segment gross margin. The most directly comparable GAAP equivalent to adjusted EBITDA and normalized net loss is net loss. The most directly comparable GAAP equivalent to normalized diluted shares is diluted common shares outstanding. Segment gross profit is disclosed in the notes to our financial statements.

We define non-GAAP measures as follows:

Reconciliations of our non-GAAP financial measures to the most directly comparable financial measure are detailed in the reconciliations of GAAP to non-GAAP measures below. We believe that presentation of these non-GAAP financial measures provides useful information to investors regarding our results of operations.

We believe that excluding depreciation and amortization as well as impairments and restructuring to calculate adjusted EBITDA provides supplemental information and an alternative presentation that is useful to investors’ understanding of the Internap’s core operating results and trends. Not only are depreciation and amortization expenses based on historical costs of assets that may have little bearing on present or future replacement costs, but also they are based on management estimates of remaining useful lives. Impairments and restructuring reflects our goodwill and other intangible assets impairment recorded during the three months ended June 30, 2009 as well as the recent and significant deterioration in the real estate market which caused us to increase our restructuring liability for the three months ended June 30, 2009, and our reduction in workforce for the three months ended March 31, 2009. Internap believes that these impairment and restructuring charges were unique costs that we do not expect to recur on a regular basis, and consequently, we do not consider these charges as a normal component of expenses related to current and ongoing operations.

Similarly, we believe that excluding the effects of stock-based compensation from non-GAAP financial measures provides supplemental information and an alternative presentation useful to investors’ understanding of Internap’s core operating results and trends. Investors have indicated that they consider financial measures of our results of operations excluding stock-based compensation expense as important supplemental information useful to their understanding of our historical results and estimating our future results.

We also believe that, in excluding the effects of stock-based compensation, our non-GAAP financial measures provide investors with transparency into what management uses to measure and forecast our results of operations, to compare on a consistent basis our results of operations for the current period to that of prior periods, to compare our results of operations on a more consistent basis against that of other companies, in making financial and operating decisions and to establish certain management compensation.

INTERNAP NETWORK SERVICES CORPORATION
NON-GAAP (ADJUSTED) FINANCIAL MEASURES - (continued)

Stock-based compensation is an important part of total compensation, especially from the perspective of employees. We believe, however, that supplementing GAAP net loss and net loss per share information by providing normalized net loss and normalized net loss per share, excluding the effect of impairments and restructuring and stock-based compensation expense in all periods, is useful to investors because it enables additional and more meaningful period-to-period comparisons. We consider normalized diluted shares to be another important indicator of our overall performance because it eliminates the effect of non-cash items.

Adjusted EBITDA is not a measure of liquidity calculated in accordance with GAAP, and should be viewed as a supplement to — not a substitute for — our results of operations presented on the basis of GAAP. Adjusted EBITDA does not purport to represent cash flow provided by, or used in, operating activities as defined by GAAP. Our statement of cash flows presents our cash flow activity in accordance with GAAP. Furthermore, adjusted EBITDA is not necessarily comparable to similarly-titled measures reported by other companies.

We believe adjusted EBITDA is used by and is useful to investors and other users of our financial statements in evaluating our operating performance because it provides them with an additional tool to compare business performance across companies and across periods. We believe that:

Our presentation of segment gross profit and segment gross margin excludes depreciation, amortization and direct costs of customer support in order to allow investors to see the business through the eyes of management. Direct costs of network, sales and services is viewed by management as generally non-controllable, external costs and the margin of revenues in excess of these direct costs is regularly monitored by management. Similarly, we view the costs of customer support to also be an important component of costs of revenues but believe that the costs of customer support to be within our control and to some degree discretionary as we can adjust those costs by hiring and terminating employees.

Segment gross margin is an important metric to our investors and analysts, as we have regularly discussed and disclosed the effects of third party vendors’ pricing declines and the corresponding effect on our revenues. The presentation of segment gross margin highlights the impact of the pricing declines and allows investors and analysts to evaluate our revenue generation performance relative to direct costs of network, sales and services. Conversely, we have much greater latitude in controlling the compensation component of costs of revenues, represented by customer support, and we analyze this component separately from the direct external costs.

Depreciation and amortization have also been excluded from segment gross profit and segment gross margin because, as noted above, they are based on estimated useful lives of tangible and intangible assets. Further, depreciation and amortization are based on historical costs incurred to build out our deployed network and the historical costs of these assets may not be indicative of current or future capital expenditures.

INTERNAP NETWORK SERVICES CORPORATION
NON-GAAP (ADJUSTED) FINANCIAL MEASURES - (continued)

Although we believe, for the foregoing reasons, that our presentation of non-GAAP financial measures provides useful supplemental information to investors regarding our results of operations, our non-GAAP financial measures should only be considered in addition to, and not as a substitute for, or superior to, any measure of financial performance prepared in accordance with GAAP.

Use of non-GAAP financial measures is subject to inherent limitations because they do not include all the expenses that must be included under GAAP and because they involve the exercise of judgment of which charges should properly be excluded from the non-GAAP financial measure. Management accounts for these limitations by not relying exclusively on non-GAAP financial measures, but only using such information to supplement GAAP financial measures. Our non-GAAP financial measures may not be the same non-GAAP measures, and may not be calculated in the same manner, as those used by other companies.

Internap
Press Contact:
Lisa Black, 978-887-2771
internap@calysto.com
or
Investor Contact:
Andrew McBath, 404-865-7198
amcbath@internap.com