Good afternoon. My name is Jason and I will be your conference operator today. At this time, I would like to welcome everyone to the LivePerson First Quarter 2009 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks there will be a question-and-answer session. (Operator instructions) Thank you. Mr. Bixby, you may begin your teleconference.

Alright. Thank you very much. Before we begin I would like to remind our listeners that during this conference call, comments that we make regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. The statements we make are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. The internal projections and beliefs upon which we base our expectations today may change over time and we undertake no obligation to inform you if they do. Results that we report today should not be considered as an indication of future performance. Changes in economic, business, competitive, technological, regulatory and other factors could cause LivePerson's actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today. For more detailed information about these factors, and other risks that may impact our business, please review the reports and documents filed from time-to-time by LivePerson with the Securities and Exchange Commission. Also, please note that on the call today we will discuss some non-GAAP financial measures in talking about the Company's financial performance. We report our GAAP results as well as provide a reconciliation of these non-GAAP measures to GAAP financial measures in our earnings release. You can obtain a copy of our earnings release by visiting the Investor Relations section of our Web site. Now I would like to turn the call over to LivePerson's Chief Executive Officer, Robert LoCascio.

Thanks, Tim. Good afternoon, everyone and thank you for joining us. During the first quarter of 2009 we generated $19.9 million in revenue, (inaudible) from a year ago and up 2% sequentially as compared to the fourth quarter of 2008, which was at the high end of our guidance range. EBITDA per share came in at $0.11, well above our guidance range of $0.05 per share to $0.06 per share. EPS was $0.03 and also exceeded our guidance range of zero to $0.01 per share. Tim will provide you more detail on the financials shortly. During Q1 we signed 33 new enterprise customers, including companies like Patagonia, Sky Italia, and Thomas Cook along with hundreds of small business customers. Within our customer base, we currently serve five of Business Week's top 10 most innovative companies, the top five U.S. telecommunication Web sites, eight of the Fortune 25, five of the top 10 commercial banks, four of the top seven computer software companies, five of the top seven hardware companies, Fortune 500s. We are very pleased with our Q1 results from each business unit, especially given the challenging macroeconomic environment. It is a testament to the underlying strength of our teams, our product lines and overall business model. Within our business operations, enterprise revenue was flat sequentially and represents solid gross revenue that countered the somewhat higher attrition we experienced in the fourth quarter and grew 20% as compared to the prior year, while our small business group revenue increased 4% sequentially and 22% from the prior year. We believe that our overall addressable market remains large. And according to our estimates we currently serve more than 300 of approximately 3,000 potential enterprise customers and more than 7,000 of approximately 200,000 small business customers. There is a large untapped online opportunity.…

Thanks, Rob. We posted sequential revenue growth overall of 2% in the first quarter. This is a good result especially given the overall economy. And especially the pressure we are seeing on financial institutions. We are still seeing some very strong performance in both of those areas. We also performed extremely well in expense management, gross margin improvement as well as generating cash flow from operations. EBITDA per share ended quite strong at $0.11 per share. This was well ahead of our guidance and was driven by several factors that we will discuss in a moment. EPS was $0.03 a share; also well ahead of our guidance, which was between zero and $0.01 a share. During the first quarter we signed 33 new enterprise deals, again a very strong showing. We signed 11 new names. This was our best tally on this metric in the last two years. The second quarter is also off to a good start on this same metric. Pricing held relatively well, as the average annual revenue per deal was about $50,000. This is a little bit lower on average, but the decrease was driven not by pressure on pricing, but just a higher proportion of deals done at lower prices. Most quarters we have one very large deal that tends to support and raise that number. This was not the case in the first quarter and so we feel that those metrics in Q1 are outliers and that we are quite confident about returning to historical norm rates, hopefully, in the remainder of 2009. Q2 has started pretty well on all of these metrics. We added several new clients, as Rob mentioned, including Patagonia, Sky Italia, Thomas Cook in the UK. We also added one of the top four U.S. banks to our very strong…

(Operator instructions) Your first question comes from the line of Richard Baldry of Canaccord Adams. Richard Baldry – Canaccord Adams: Thanks. Congrats on a really strong quarter at the bottom line. I'm curious if you could talk a little bit about the split between the sales deals or sales oriented deals versus service oriented deals? And then maybe a little bit about the line items. It looks like on the cost side going forward, you would see a little bit of leverage on sales and marketing, but you would actually delever on both G&A and R&D while with a sequential growth at the top line it might seem like that could be an overly conservative assumption. So are there some sort of one-time things that allow those to go under, maybe a little more specifically line by line that would help us understand why that would happen? Thanks.

So on the first question in terms of the activity between sales and service, so just a reminder that I think that's important is that there is quite a bit of business that we do today that is somewhat of a combination of sales and service, whether it's proactive service or whether we're in both types of operations within a specific account. So it's not a hard and fast line, but nonetheless, there is usually a driver when we do a deal, either sales or service. And the decision-maker is usually focused on more on one than the other. In the quarter, we saw about 90% of the new business, so whether it was a new customer, new deal or expansion within existing customer, that body of business about 90% of that was really sales driven, about 10% service driven. And that was in terms of revenue. In terms of deals, a number of deals, its pretty close, about 85% sales and 15% for service. On the second question, I think, yes, it's important to note that we are very pleased with the bottom-line in the first quarter. There were several things that came in, in our favor that pushed us to the top end of our range. And then there were a couple of things that pushed us above the top end of the range that while we are certainly aware that they can happen, we don't bake them into the guidance. So I would say $0.02 of the overage. So our top end of our guidance was $0.06. We did $0.11. That's about a $0.05 difference. $0.02 of that I think is we would not expect to recur although it's possible. And that's just a reduction in overall expense related to accruals related to personnel. That's things like…

And then on CBS, we basically went from about 100 to 1,600 a day, and it's come back down. But the cool thing is that we are also seeing a lot more experts in a lot of different categories, we got like gardening experts, more programmers, business experts. Even on May 14, we are doing a whole online career fair, where we will have like 10 experts from 7 to 11 at night; they will do a whole chat and talk to people about online careers. So, we are seeing a lot of stuff even outside the core categories of personal advice. So, you have that. And it is amazing in a recessionary time that business is growing and it's a consumer business and it continues to grow. Richard Baldry – Canaccord Adams: Last question might be a look on the balance sheet, just sort of now that you're back generating cash pretty substantially from the operations, and things look pretty solid, would you like to revisit the buyback program while your shares appear undervalued? Thanks a lot.

We definitely are interested in that. We actually extended the buyback for another year. So it was originally in place for 18 months, expired in March, so it's now reinvigorated for another 12 months. We bought a little bit at the beginning of this quarter. And I think we agree with you that as we get sort of more visibility into the ability to generate cash in next quarter or two, it's definitely still of interest. There is 4 million left to go in the existing plan. So that will be first to go and we have bought historically at right around anywhere from $1.70 up to the $2.90 range on average. So we think those levels have been attractive in the past. Richard Baldry – Canaccord Adams: Thanks. Congrats.

Thank you.

Brad Whitt – Broadpoint AmTech: Hey, guys, thanks for taking my questions. Just to follow-up on the last question, Rob, a little bit on the consumer side, how should we think about that business? I think at one point it was about a $3 million a quarter run rate. Are we back to that level now? And what gives you confidence that you can grow it to 6% to 8% sequentially of the 4% I think you said you did this quarter?

Yes, I think we are going to continue the growth there. We are guiding what I think we can do, based on what we know right now. We had a very good April and so that sort of sets a good tone. The interesting thing about the business is there is a lifetime value. Customers stay with us from 12 months to 15 months. So once we see them chat once we know they will come in on a certain way during 12 months to 15 months. So as we increase our conversions in Q1 coming into Q2 we already have sort of a backup of people already registered and have started to chat in Q1. And that revenue will continue to come in on Q2. So we feel good about that and April look like another good month. And then we are continuing to expand our spending, but in a profitable way and we are getting more and more, and I think better CPMs and so we got some good things going on the affiliate side so all that together makes us feel confident about Q2. Brad Whitt – Broadpoint AmTech: Okay, and, Tim, on the gross margin front I think you said lower personnel costs. Can you elaborate on that? Did you reduce headcount there?

Yes, there is two pieces here. We have a team that supports the network infrastructure and a team sort of helpdesk support for both enterprise and SMB. So those costs were lower. Headcount control is probably the smallest driver. Lower cost due to the exchange rate in Israel is a somewhat larger impact. So that the sheer dollar cost of the same group of people was less. And then our accrual rate based on our bonus plan, our incentive structure was quite a bit lower in the first quarter as we do the reset for the year. And so that was really what I was referring to something is, is not something you're going to see every quarter. But that's more of an annual adjustment as we review the annual incentive plan. Brad Whitt – Broadpoint AmTech: Okay. Also the R&D ticked down quite a bit too. Same type of scenario there?

Yes, less of an impact on a total dollar basis, but similar driver there. Those are the two larger groups in terms of headcount and they have a significant presence within our Israeli operation. Brad Whitt – Broadpoint AmTech: Rob, I haven't heard much talk on voice lately. Is there much interest in that lately?

On the consumer side or B2B side? Brad Whitt – Broadpoint AmTech: I know you said you are doing some testing I think on the consumer side. Maybe you can get an update there, but yes, definitely on the enterprise side as well.

On the consumer side we started testing about six weeks ago a voice platform. And so a certain amount of our traffic off of our SEM buys off of Google is seeing that. So I don't really have enough data yet, because it's only been six weeks, but my gut is telling me that most likely we will offer the voice and chat channel together, because there are some consumers who just prefer to use voice to talk to the experts. We are seeing that. So we would most likely just continue and offer that beyond the test. But next quarter I can come back with some real conversion metrics and stuff like that.

On the enterprise side, I would call it definitely opportunistic. It's very interesting, but to a subset of our biggest customers. So what they tend to do sort of two interesting examples, like one is one of our travel, online travel aggregators uses it for specific types of sales. So when they are doing more generic sales, chat works well. But when they are doing either a real focused promotion with a more specific travel type of package, they have chosen to route that to voice. So they're using LivePerson for that. On the technology side, we've got a large sort of a Fortune 10 player that is a customer of ours that uses it more for lead generation. So those are the kinds of examples where we really focus it opportunistically. And then in terms of sheer numbers, SMB is, within the customer base we got 7,000 customers. 20% of those are using, that's a pretty rapidly growing percentage, are using multiple channels. And that means knowledge base, e-mail and voice. And voice is really the most interesting one to them after chat. Brad Whitt – Broadpoint AmTech: Okay, that's helpful. Thanks for taking my questions guys.

(Operator instructions) The next question comes from the line of Nathan Schneiderman of Roth Capital Partners. Nathan Schneiderman – Roth Capital Partners: Hi, Rob and Tim. Thanks very much for taking my questions. I wanted to drill down a little more on the consumer business profitability. And I was just curious if you could share with us your current run rate? Is the business at this point currently profitable or do you still have work to go to get there?

In Q2, it'll be flipping to cash flow positive. So during this quarter it will turn. Nathan Schneiderman – Roth Capital Partners: And would you see improving levels of profitability for that business going forward or do you think it's just going to stay at a fairly low level? And if you see improvement, what sort of margin contribution do you think the business can grow to or how much improvement would you expect to see on an annual basis going forward?

On the profitability, right now, our focus is to stay disciplined and stay cash flow positive. That's one of the things we put in, in Q1. And we did certain things to do that and we want to maintain that. What the level of profitability is, we have to see as we go out into the future quarters because it's just opportunistic. So if we can get a good CPM and buy more traffic we know we can (inaudible) we will do it. And because we are focused on the core categories, it gives us a lot more confidence in getting a real return on our money. But we will remain in that cash flow positive. We are not giving any real margins. The gross margins on the consumer business are near 80%. And because we are just going cash flow positive, there is no real operating margin yet to give you. But the target could be like our other businesses. Nathan Schneiderman – Roth Capital Partners: A question related to the pay-for-performance offering. I was just curious is this offering proving to be more profitable than standard arrangements? And if so, what's the magnitude of the differences?

It's actually fairly close in terms of profitability. There is a couple of key differences that impact that. One is they tend to be larger revenue run rates, because we really focus on larger opportunities, the RMR, the recurring monthly revenue tends to be higher. The partner that we work with gets a share of the revenue and so that's distinct from our standard deals. But we also can rely on them to support some of the efforts versus us doing most of the work ourselves. And then the final thing I would say is they can grow to scale faster than a typical deal. So the net of all that is that within 6 months to 12 months they tend to look fairly similar on a margin basis. So as we go from say 10% to 15% revenue, I wouldn't expect a material impact on our overall gross margin or our operating margin from those. Nathan Schneiderman – Roth Capital Partners: Okay. And then you did say that the enterprise business was flat sequentially. And I was wondering if there were any special dynamics there. Do you feel that was a macro impact or just how deals queued up or just what are your thoughts there? And anything you can say about the enterprise business thus far in April?

Nathan Schneiderman – Roth Capital Partners: Okay. Thanks very much.

Thanks, Nathan.

There are currently no further questions.

Thank you.

Thank you.

Ladies and gentlemen, that concludes today's teleconference. You may now disconnect.