Welcome to LoopNet’s earning conference call for the second quarter 2008. (Operator Instructions) I would now like to turn the call over to Erica Mannion, Investor Relations for LoopNet.

Thank you for joining us to discuss LoopNet's financial and operating results. With me today are Rich Boyle, Chief Executive Officer and Chairman, and Brent Stumme, Chief Financial Officer. Today Rich will begin with an overview of the business and overall corporate strategy continued by a summary of the company's second quarter performance and review of the marketplace. Brent will review the second quarter financial results and provide third quarter and fiscal year 2008 guidance. Before I turn the call over to Rich Boyle I would like to mention that the company will present at the Pacific Crest Technology Leadership Forum in Vail, Colorado on August 4th. The presentation will be available via webcast on LoopNet’s website. I would like to bring the following to your attention. On the call today you may hear forward-looking statements about events and circumstances that have not yet occurred. Actual outcomes and results may differ materially from the expectations contained in these statements due to a number of risks and uncertainties. Please refer to the company's recent SEC filings at the SEC's website at www.SEC.gov for detailed discussions of the relevant risks and uncertainties. The company undertakes no responsibility to update the information in this conference call under any circumstance. The press release distributed today that announced the company's results is available on the company's website at www.LoopNet.com in the Investor Relations section under Financial Press Releases. The current Report on Form 8-K furnished with respect to our press release is available on the company's website in the Investor Relations section under SEC filings and on the SEC's website. Now I will turn the call over to Rich Boyle, Chief Executive Officer and Chairman.

First let me welcome you all to the LoopNet second quarter 2008 earnings call. I’ll start today by discussing our second quarter performance including our perspective on the current market conditions in the commercial real estate industry that we serve and how they’re impacting our business. I will also provide an update on some of the strategic business initiatives we have under way as well as a few other topics. Then I’ll hand the call over to Brent Stumme, our Chief Financial Officer, to take you through our financial performance in greater detail and our guidance. First let me say a few words about the second quarter. Overall we had a very solid quarter despite commercial real estate market conditions that continue to be quite poor. Our revenues increased 29% on a year-over-year basis and profitability remained strong with adjusted EBITDA margins of 47%. Clearly we continue to demonstrate the strength of our business model even in this tough commercial real estate market. Those conditions in the commercial real estate market have been largely consistent with our expectations. As we have discussed since we reported our Q3 2007 results the market for investment properties has slowed dramatically driven primarily by the disruptions in the credit markets that began last year. The lack of available credit has continued to impact the level of demand side activity in the industry meaning fewer buyers are looking to buy buildings and those that are looking are seeking reduced prices. Sellers, on the other hand, have either not reduced prices much or are simply waiting for more favorable market conditions and not offering their properties for sale at all. The net result of this continues much as in the first quarter, transaction volumes that are below normal rates. Real Capital Analytics reports that sale transaction…

LoopNet’s revenue for the second quarter of 2008 was $22 million an increase of 29% from $17 million in the second quarter of 2007. The increase was due to higher average monthly prices for premium membership and continued growth of our non-premium membership products. On a year-over-year basis we experienced a 21% increase in the average monthly price of premium membership resulting in an average monthly price of $62.13. This increase was primarily the result of the shift to a volume based pricing structure for listers which we began to implement during Q3 of 2007. LoopNet’s adjusted EBITDA for the quarter was $10.4 million or 47.3% of revenues an increase of 26% from $8.2 million in the second quarter of 2007. The company has reported adjusted EBITDA which we define as EBITDA excluding stock-based compensation and litigation related costs because management uses it to monitor and assess the company’s performance and believes it is helpful to investors in understanding the company’s business. GAAP net income for the second quarter of 2008 was $4.5 million or $0.12 per diluted share compared to $5.1 million or $0.13 per diluted share in the second quarter of 2007. Non-GAAP net income which we define as net income before stock-based compensation and litigation related costs for the second quarter of 2008 was $6.1 million or $0.16 per diluted share compared to $5.6 million or $0.14 per diluted share in the second quarter of 2007. The effective tax rate for the second quarter of 2008 was 40.9% compared to 39.8% in the second quarter of 2007. As of June 30th, 2008 the company had $69.5 million of cash, cash equivalents and short term investments and no debt. Since the initial announcement of the stock repurchase program on February 5th, 2008 the company has repurchased 3,547,130 shares…

(Operator Instructions) Our first question comes from Jim Wilson – JMP Securities.

Can you give a little color on, just trying to think through revenue per customer, any other metric tat would give us some idea about what brokers are spending or how their spending habits are changing or if they’re changing given the market conditions?

I guess the way I would describe it, it really depends on the segment overall meaning specifically I would probably break it up initially to a couple of different groups, people that are traditionally coming on buy side representation engagements. So if you’re working on behalf of an investor looking to buy a building, that to us gets lumped in with the same behaviors of the investors themselves which are paying to use LoopNet and specifically that performance is very weak. On the other hand agents that are coming from the marketing side I think are increasingly looking to the online world as a better marketing venue and we’re seeing spend from that segment has been growing strongly on our platform, both in terms of number of listings and the average revenue per. We’re pretty pleased with the behavior there. The third segment though I would say if you look at the broker population overall I think given the challenging conditions right now, in particular I think there’s some firms that have trunk staff and new brokers breaking into the business right now I think are having a very hard time. The total population of growth is probably flat to down slightly right now. Those would have I think three very different behaviors in the industry overall and reflected on our platform. But if you look at the average revenue per customer particularly in the marketing segment it would be a positive trend for us.

Maybe just looking at it the same way as far as renewal rates and turnover rates, by customer type have they changed or how significantly different are they?

They haven’t really changed much. They’re right in the range that we had expected at the beginning of this year so they’ve changed from our long term norm if you go back before the credit crunch hit last year, the long term norm of 3% to 5%, still is elevated in the 4.5% to 6.5% range that we talked about for this year. We’re absolutely still seeing that. The largest component of the overall cancellation continues to be these transactional users that use us for one deal but where we’ve seen the elevated cancellation rate is primarily on the searching side, people looking for investment properties to buy that are just simply dropping out of the market right now because they’re not interested. We have seen a very small elevation on the marketing side. I think it’s primarily due to some amount of shrinkage of brokers that are active in the industry and a little bit of a defect that’s pretty minor from the pricing models [inaudible].

Our next question comes from Mitchell Bartlett – Craig-Hallum Capital Group LLC.

Maybe just expanding on that last point, could you detail the churn specific to, I know you don’t break these out, but specific to the lister and searcher site I’m going to ask the question anyway, as it maybe looks from Q1 going into Q2 both sides are up. You said that the marketing side was up and I think it was up in the first quarter as well, does it look basically the same between the two quarters?

It really hasn’t changed much. It does bounce around a little bit month to month since there’s some seasonality in our business but the patterns are entirely consistent and the majority of the increase in cancellations is absolutely coming on the searching side. There’s a relatively small increase that’s been on the marketing side.

So lister revenue is up but you can’t say the same about the total subscriptions. Is that fair to say?

Yes, we don’t break it out in details. The increase in revenue on the marketing side overall as a function of both price and subscriptions together has been a very strong grow.

On G&A expense, if I just hit that with the litigation expense that you detail it looked like a tremendous cost savings or performance. What are you doing on costs on headcounts, etc. in the organization to keep that number as low as it is?

When I look at G&A it was pretty much in line if you back out the litigation expense to Q1, it was about 15% of revenue, basically in line. We hired a few people in order to handle some of the SOX related stuff and that sort of thing but it’s pretty much in line with Q1.

Last question about REApplications, you said it performed pretty much in line. Can you detail anything more about the revenue and the performance than that?

I think when we initially acquired it back in April we had said we expected it to add just a little bit over $2 million in revenue.

Yes, $2 million for the year and they’re tracking reasonably well against that.

Our next question comes from Derek Brown – Cantor Fitzgerald & Co.

Two questions, the first is with respect to profile listing use. They increased about 11% year-over-year as you indicated and that’s obviously a pretty positive metric given your comments about the overall industry and churn within the buyer demographic of your site, how do you reconcile those two elements? The other question is from a macro perspective, the linearity of I guess of how the industry has performed as the quarter progressed and do you feel from a broad perspective how close do you think we are to the end of this cycle or are we just at the very, very, very beginning of it?

On the profile use metric I guess certainly we’re pleased to see it up 10%. That said it’s growing less quickly than for example the supply side of the marketplace is right now. We think it’s reflective of these headwinds on the searching side. I will say if you look at the profile view metric, some of that is coming from people on the leasing side of our system and that segment of the industry I think while starting to soften has not slowed down anywhere near as much as the investment sales side has. There’s a few factors and I guess we’re pleased to see it growing given the challenging conditions. The fact that it’s growth rate is lagging the rest of the overall marketplace we think is indicative of the industry conditions. It’s something that we clearly would love to see it growing more quickly but we’re not displeased by maintaining growth at all in the current investment sales side in particular current investment market. I think it’s kind of a mixed message frankly on the profiled use and where we do feel very comfortable is that if you look at the leads that we deliver on the properties that are marketed on LoopNet we still feel we’re way above the bar in terms of the value proposition and we think in terms of the cycle we’re in right now one thing that’s true is that the relative value of a lead in this market right now is probably going up because of the challenging marketing conditions. It’s not as good as we would like but we’re reasonably pleased with the overall result there. In terms of the long term cycle, I wish I could say what I guess we firmly believe is that the market is not going to get better during the course of 2008. We believe at this point that conditions are no better than they were at the beginning of the year. In fact the Real Capital Analytic’s report for example showed that Q2 invested sales transaction volume was actually down from Q1. Now there was a little bit of lumpiness there, June actually looked a little bit better than April and May, but I don’t think we feel like we can draw a trend line off one reasonably positive month in June. The market conditions that we saw in Q2 were slightly worse than in Q1 in fact and we see no reason at this point to expect them to get better this year. I think we’re at least looking out into sometime in 09 before they start to turn around.

Our next question comes from [Richard Deever – SunTrust Robinson Humphrey]. [Richard Deever: Quick question regarding pricing, been able to march along with the premium pricing in the mid-single digits sequentially for some time now. How much longer can that run and where do you see that pricing stabilizing?

I think in the very long term sense we look at it in terms of what brokers are spending to market their properties overall including in the offline world and we think the amount of money they spend to market properties in the offline world is still substantially higher than the online world. Our view is that that’s still migrating online and our ability to continue to capture a larger share of that total marketing spend still has a very long way to go. That said, our policy in the past has been when we make a pricing model change it takes us a full year to propagate that through and then we take stock of where we are and think about where we want to go next. The pricing model change that we made in Q4 of last year is still being rolled through our existing user base. At this point we don’t have any specific timeframe in mind for when any additional changes might be made. [Richard Deever: In terms of how the membership adoption of that, would that be pretty consistent each quarter or is it going to stabilize sometime in the third quarter or should we look at that happening at the end of the year?

If you think about when the existing customer base sees the new pricing schedule, I think it’s in the fourth quarter that we really start to lap what we did last year. The change effectively went live last year in October and so it’ll be October of this year that we have really lapped close to those existing customers. [Richard Deever: In terms of guidance coming off this quarter which was really solid, 47.5% guidance looks either conservative or light I guess depending on one’s perspective. Can you talk a little bit about that? Are you just taking a conservative stance given the macro environment?

I guess I think our view is that given the macro conditions right now which are frankly still quite poor we think it’s best to try to be pretty thoughtful about how we think that may manifest itself in our business. It’s definitely impacting premium membership as we discussed primarily on the searching side but it’s also impacting some of the other products. I think some of the non-recurring revenue items for example in our advertising line the segment of advertising dollars that used to come from commercial mortgage brokers is essentially gone. We definitely think there’s some challenges in the environment tat are going to continue and to some degree are a little bit unpredictable and we’re trying to be thoughtful about how we factor that into our guidance. [Richard Deever: In terms of the litigation, is this million one million number a good run rate or should we see that accelerating based on the ongoing litigation?

It’s unfortunately very unpredictable which is why feel like it’s just simply not something that we can very effectively guide to and the timing and the pace and the relative intensity at which the different legal events take place is frankly largely out of our control. So it’s a challenging thing for us to be able to forecast and it’s clearly an unfortunate way for us to have to spend time and shareholders’ money but given the circumstances we feel like it’s the right thing to do for the long term.

Our next question is a follow up question from Mitchell Bartlett – Craig-Hallum Capital Group LLC.

I was just hoping you could help us think through, so you spent close to $40 million in the first quarter and then just spent a little bit more in the second and then come back with another $50 million. What was the thinking on the buy back during that time? Why not complete the $50 million if you were headed towards another $50 million shortly thereafter and where are you at on that whole thought process?

It’s just a function of I think ongoing looking at different alternatives that we think we can seek to use our cash that would be in the shareholder value over the long term. During Q1 we executed I think about.

$39 million.

$39 million of the buy back. We did a little bit more of that in Q2.

It was actually Q3. Q3 we did a little bit more, Q2 we didn’t do anything.

So none in Q1, and we didn’t really do much in Q2. We’ve done a little more of the buy back since then and frankly from our point of view and in the discussions on an ongoing basis with our Board looking at where we think we may want to deploy that capital going forward. The additional authorization is something that gives us the flexibility to pursue that versus other uses of capital. I think at this point we’ll look at conditions and if they develop between now and the end of the year to decide how to deploy that.

At this time I’m showing no further questions in the queue. Ladies and gentlemen this does conclude today’s conference. Thank you for your participation and have wonderful day.

Thank you everyone.