Good afternoon. My name is Eli, and I will be your conference operator today. At this time, I would like to welcome everyone to the LivePerson third 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. I would now like to turn the call over to Tim Bixby. Sir, you may begin your conference.

These statements 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 overtime, 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 Website. And 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. We are excited to report that during the third quarter of 2009, we generated revenue of $22.3 million, up 15% from a year ago, and up 8% sequentially as compared to the second quarter of 2009. EBITDA per share came in at $0.12, above our guidance range of $0.08 to $0.09 per share, EPS was $0.05, and also exceeded our guidance range of $0.01 to $0.02 per share. Tim will provide more detail on that shortly. We are pleased with our third quarter results from each business unit, especially given the challenging macroeconomic environment. It's a testament to the underlying strength of our teams, the relevance of our products intake on our environment and the leverage in our business model. Within our business operations, enterprise revenue was up 11% sequentially and grew 15% as compared to the prior year, while our small business group’s revenue increased 4% sequentially and 14% from the prior year. We are pleased to see that the second half of this year is shaping up to be very strong for our B2B product lines. The macroeconomic pressure on retailers and their offline businesses seems to be forcing them to be more aggressive with their online investments, and LivePerson continues to be the direct beneficiary of this trend as we signed two of the largest retailers in the US during the quarter. While our revenue split continues to be dominated by financial services, telecommunications, and technology companies, we have begun to see stronger pipeline activity interest in both the retail and the healthcare verticals. Retail has fairly established for us, representing about 50% of our enterprise revenue, but the increased interest in our success in signing very large retailers recently is a very positive sign for…

All right. As Rob said, the third quarter was very strong. Revenue increased 8% sequentially to $22.3 million, as a result from a 3% sequential growth rate in the second quarter. EBITDA per share reached $0.12, well above our guidance range of $0.08 to $0.09, EPS was $0.05 a share, also well above our guidance range of $0.01 to $0.02 per share. Within our enterprise group, we signed 43 enterprise deals in the quarter, again a very strong showing up from 40 in the prior quarter. And we have said of new deals, we signed 13 new names, new customers, almost double the count from the prior quarter, and pricing in terms of annualized revenue per dealer ASP was up significantly, from $65,000 in the second quarter to about $95,000 in the third quarter. New deal pricing, that is deals to brand new customers, was again also very strong at an average of $175,000 in Q3, this was up 50% as compared to the prior quarter. We believe the cause of this is attributable to larger companies becoming more responsive to our online conversion results and the documented outcomes we can provide to them. As a result, they are willing to commit to higher investments from day one of LivePerson deployment, rather than increasing investment more gradually overtime. While we don’t expect this very high average deal price in the quarter to become the absolute norm going forward, this still is a very strong sign for the existing pipeline and is reflected in this quarter’s performance. From a product perspective, during the quarter, we were benchmarked from a prospective enterprise customer for performance against the direct competitor of ours. The test results showed that our performance on page load time speeds in a real world deployment and this is a…

(Operator instructions) And your first question comes from the line of Nathan Schneiderman. Nathan Schneiderman – Roth Capital Partners LLC: Hi Rob and Tim, thanks very much for taking my questions. Congratulation, nice job on the quarter, great results. Handful of questions for you, the consumer business finally cash flow positive every single quarter, which is excellent news. Do you believe that, that business will remain cash flow positive on a monthly basis going forward, and then can you share with your medium-term and longer-term views on operating margin for this business, where do you think it logically goes to?

Yes, we want to keep it, I think we turned a quarter on in Q3 every month generating cash and we want to maintain that going forward. So, yes, we will continue on generating cash in growing that business. And the operating margins are pretty much equal to the operating margins the quarter, so in the 70s percent gross margins. So, we are going to maintain and we are not adding a tremendous amount of headcount right now to the business. So, we will just sort of continue growing it out, and we are doing I think really well on the marketing side right now and getting real traction in the market. Nathan Schneiderman – Roth Capital Partners LLC: Your gross margin, it sounds like will be similar to your main business, but what do you think on the operating margin side for the consumer business group?

It will fund it near, you know, keep it cash flow positive, but it’s – see what they did operating margins, because we wanted he taking the money and putting it back into the business and growing the business where we see opportunities. So, I would just say single digits for now. Nathan Schneiderman – Roth Capital Partners LLC: Okay. And then, overall on operating margin, you had obviously excellent results at close to 24% pro forma, I think that may have been the best results I have ever seen, at least (inaudible) what are your thoughts on operating margin from here as you continue to see the revenue increase sequentially, do you continue to get some sequential improvements in operating margin, or will investments take that down somewhat?

We have begun to, I think using headcount is a good proxy, as we have begun to expand our investment in people. That’s obviously where you are making long-term commitments as opposed to shorter-term sales and marketing investments. So, we have begun that process and we see headcount expanding going forward in areas where there is ROI, where there is people building products. So, you are going to see it in sales and marketing and product and R&D. So, we will still expect to get leverage out of the cost of goods line and we will bit of leverage on the G&A line. So, I think in terms of how all of that will net out in the margins, I would expect slightly less improvement over the next couple of quarters than we have seen in the past couple of quarters, because we have seen some nice surges in that as a result of revenue growth and fairly flat spending. But that being said, our business, if you get strong continued revenue growth, it does show up in the margins. Nathan Schneiderman – Roth Capital Partners LLC: Okay. Great. And final question for you, in recent quarters, you have given us the number of customers contributing at least a million annually, and I believe it was 10 last quarter. I was curious if you could give us an update there. Thanks very much.

There’s 11, so we have added one more over the 1 million mark. Nathan Schneiderman – Roth Capital Partners LLC: Okay. Thank you.

You bet.

Your next question comes from the line of Richard Fetyko. Richard Fetyko – Merriman Curhan Ford & Co.: Good evening guys.

Hi Richard. Richard Fetyko – Merriman Curhan Ford & Co.: I was curious with respect to the strong bookings you have seen in the third quarter, if any of that is sort of catch-up sales, that were pushed out in the first half of ’09, do you get the sense of that potentially the case or not? And then, Tim, what’s the impact of a weaker dollar, a fair amount of your expenses are in Shekel, so curious if you could review that for us as well?

So, on the first one, I think we are – we looked at bookings as an indicator of future quarters, and if you sort of look at actual books quarter one, two and three, and then expect it for Q4, you see a fairly steady improvement and that suggests to us that it’s a relatively small amount of catch-up in the numbers. So, it’s a little early to see into Q1 at this point, I am not giving guidance for next year till the next call. But so far, all the indications are we are back to a more normalized bookings rate, and that it’s not dramatic and I guess it’s not the catch-up I guess as you may call it. On the exchange rates, we are very close right now, a little bit better than our planned exchange rate. So, in the first two quarters of this year, we were fairly favorable, meaning the exchange rate moved in our favor and gave us a little bit of a tailwind. In the third quarter, it was a very limited effect, so no negative impact but not a dramatic positive impact. And that’s what we see so far in the fourth quarter as well. Richard Fetyko – Merriman Curhan Ford & Co.: Great. And on other one, with respect to source of new revenue, I understand that you are seeing the existing customers sign up for new deals, but are you seeing actually existing customers also add additional seats, because there was some attrition right earlier this year and late last year with respect to that, you know, sort of seat attrition, are you seeing them, we are seeing the attrition decline, are you seeing your customers actually add seats to the deployments that they have existing in place?

Yes, definitely. To hit these levels of sequential growth rates, we have to see growth from existing customers and that’s why a significant proportion comes from those existing customers, and that’s exactly what they are doing. They are expanding seats in existing deployments, or they are adding new deployments either in new product lines or new territories, sometimes it’s territories domestically, sometimes, it’s across the globe, but in both cases, it’s quite a bit of growth from existing customers. Another thing we have seen more frequently or some more frequently in the third quarter a larger proportion of our growth came from pay-for-performance performing at a high level. So, at a little less than half of the growth in the quarter came from pay-for-performance deals where as we expect, if we perform better faster, revenues goes up better faster, and that’s really the goal of being in the pay-for-performance market. And then we also saw in terms of over-hedge or activity based fees, those are also quite high in the quarter as well, and the net of all those pushed us above our expected guidance range. Richard Fetyko – Merriman Curhan Ford & Co.: Got it. All right, thanks.

Your next question is from the line of Brad Whitt. Brad Whitt – Broadpoint AmTech: Hi guys, thanks for taking my questions. Looking at the two big retail deals, Rob, you said you had in the quarter, just curious whether you started recognizing revenue in the third quarter, or whether that should come in future quarters?

That comes in future quarters. Brad Whitt – Broadpoint AmTech: Okay. And also I was curious about the healthcare vertical, if you can give us any more color how healthcare customers might use your product?

Healthcare is an interesting one. It’s a combination of both information and actual transactions. So, if you ate an apple, it’s primarily, I am asking about the product and buying a product. With healthcare as often is not, it will be just, I want to contact these entities and get information about my coverage, my potential coverage, healthcare options, those kinds of things. So, it’s an interesting combination of both sort of sales and service learning, it’s just these companies are facing much more online activity, people are much more comfortable, and in many cases more comfortable being anonymous and getting information about medical issues and very personal issues anonymously rather than on phone. So, there is in some cases a chat preference. These companies are getting more comfortable with the security. They know Citibank, Bank of America and companies like that look us and are confident in our security, and so these companies, it has to satisfy HIPAA and other pretty extreme regulations, are getting much more comfortable that our hosted solution works well, and that’s why we are seeing some new names in this area. Brad Whitt – Broadpoint AmTech: Okay. And just I am clear on, I mean, this was a rather large sequential increase in revenue for you guys this quarter, is there some – you mentioned revenue share being half of the, I don’t know if that was half of the increase or half of the upside, maybe you can get some clarification on that, but is there some one-time items in there that we should not expect to repeat, or is this potentially something that we would see going forward?

No, there is no real one-time events in there, things, again because of our model, some of this began to click in Q2, but you just don’t see it in the recognized revenue until Q3. And so, that’s why I think we captured much of the upside, but not a 100% in our guidance. Our pipeline and activity and activity to date in the fourth quarter, all very strong indicators that it was not a one-off. Our guidance and expectations as always is takes into account possible plusses and possible minuses in Q4. And so, that’s why our guidance is a little less than the actual in Q3, but in terms of what we saw at this point of last quarter, it’s very much in line with what we are seeing quarter-to-date this quarter. Brad Whitt – Broadpoint AmTech: Okay. Great. Thanks for taking my questions.

Thanks Whitt.

Your next question is from the line of Mike Ratamore [ph].

Good evening, a very nice quarter. On the consumer business, Tim, did you say that the main reason it grew was the experts are charging higher fees, was that the main reason?

There’s three pieces to the revenue line to sort of drive it. There’s the actual amount of activity, so whether it’s minutes or sessions that’s volume. There is the price that the expert charges to the consumer and that’s set and determined by the expert, although there are things we can do to influence that and support that. And then the third is the proportion of the feedback received and we obviously set that price, that proportion of commission that we keep, and that is we raised that in February, and have not raised materially since then. So, all three of those are contributing. So, volume, price and then the fee structure that we charge. The primary driver in the third quarter has been the price that the experts have charged. So, that was a more stronger driver than the other two in the third quarter.

So, that becomes a specific vertical as more pronounced. I think you talked that they were slow this quarter, because of less tutoring, or was there another vertical that kind of kicked in here?

On the personal category, (inaudible) the health and wellness categories and the Java programming category, so are just driving more traffic. Sometimes, we are driving more traffic so there is lot more demand. Demand, it could push the experts to move up pricing against that demand, because their time is basically how much time they want to put into it and I think a lot of people were in chat with them to opt their pricing accordingly. So, a little bit of that.

Okay. And then, what do you expect the headcount to be by year-end, end of the fourth quarter?

It will be, we don’t have a hard metric forecast on this, but based on our plans right now, I can see adding in the range of 15 and probably, and probably we have an aggressive goal and it takes a little longer to hire people. So, that’s probably at the top end of the range.

I think they will definitely have – it will be certainly possible if they both grow at the same rate, and within the same ranges, not exactly every quarter together, but in line with each other. What we are seeing now is a little bit bigger gap between the two than we have seen in the past and that I believe is because the small business attrition rates are recovering a little more slowly than the enterprise attrition rate. I think that’s just a lot of pressure still on small businesses to do anything, to get loans, to fund money, to hire people, all of those things and it’s going to take a little bit longer I think for those to recover to their historical rates.

But the market size on the small businesses you are talking about, let’s say, it could be 200,000 or 300,000 in small businesses that are potential targets for us where in the enterprise, it’s about 3,000 customers. So, I really believe the small business has a fairly significant opportunity to grow greater than it is and we are going to actually fund some more headcount in there and we are going to be focusing on what we call mid-market segment. So, we are going to start split out small business from mid market and break the team so they will have more focus, because we think there’s a lot of deal flow in those areas. So, I think next year, we should see a lot more trajectory in this part of our business.

Great. And just last question, in terms of the number of customers that want to click-to-chat and click-to-call at the same time, have you seen that sort of percent or percent of pipeline change much out here?

It hasn’t moved significantly. Usually a customer has a preference of one versus the other, but we always work to provide both. Many times it’s used click-to-call and click-to-chat as an escalation path, chat being the initial communication methodology then escalating into voice if it’s a higher value customer. But not a big shift in what we have seen over the past several quarters.

Yes, and I think ultimately, although we have click-to-call in our product lines and email knowledge base, we always need with chat just because from our cost perspective, the business gets leverage on the operator, so they can chat with one or three people simultaneously versus when it goes to a call, you are not going to get any real skip. So, although click-to-call, I think was more fashionable I feel like, the last two years, but I think when the buyers come down to it, they have 800 numbers, and so they can utilize all the 800 numbers, but it doesn’t get the real efficiency like chat does.

Okay. Thank you.

Your next question is from the John Hickman. John Hickman – MDB Capital Group: Hi, can you hear me?

Hi John. John Hickman – MDB Capital Group: Hi, could you talk, you know, the consumer, it looks like the consumer side kind of really fagged this quarter, can you talk about the competitive environment in that sector, other expert sites or where all their people get. I guess you could go Website by Website, but do you run into other competitors, do you?

John Hickman – MDB Capital Group: Okay. And then, are you seeing anything new on not the consumer side, but the enterprise side, doing a new competition or anything that’s different this quarter than any other time?

I think we continue to just execute it and I think we own a lot of the chat market and whether it’s small business or it seems very large, especially the large implementation. I think it’s very hard for companies that have included chat as a check the box to compete where we made that a strategic implementation. We made it strategic to our marketing department, and this is something we set out to do four years ago, and I think we have executed really well on making chat going from being a very tactical use for support to being a strategic use for our marketing department to drive sales. And I think we are just clearly showing that, where it’s a real product in itself it’s a real business, and that allows us to continue to gain momentum over the guys we just have in there as a feature. John Hickman – MDB Capital Group: Okay. Thanks.

Your next question is from Craig Nankervis. Craig Nankervis – First Analysis: Yes, thank you. Good afternoon and congratulations on a nice quarter. A handful of questions, on the geometrics, you know, we had a spike here and you talked them maybe not necessarily being sustainable, would you think that some of these geometrics will fall sequentially here in the current quarter, maybe we start there?

So, a couple of notes just on the kinds of metrics that we report on. So, average deal size overall for the enterprise has tracked historically in mid-60s. It went as low as 50 in the first quarter, which was a tough quarter and then in Q3, it was 95. So, pretty dramatic uptick. And if you go back even further, you will see deal sizes again in sort of 60 to 70 range. So, I think what we are seeing is almost with our question to return to those historically, you know, the steady historical rates. The 95, I think we have only exceeded once in three years, and so that’s why we are not quite prepared to say that, that’s the new standard going forward. But we are certainly well above where we have been for several quarters and almost back to historical norms. Craig Nankervis – First Analysis: The split between your bookings, your enterprise books, I think for a while has significantly favored the sales side, but we had a little bit more proportion this time on the customer service, this 75 and 25, is there any commentary about that, do you think this is maybe how your pipeline is starting to play out and you might see more of that type of split or any comment on that?

I think again, it’s in a reasonable historical range. I don’t think it indicates any long-term shift in the business. I think it’s more in contrast always on Q4 and Q1, which I think which is really dramatically unique quarters from just about every measure, and that really drove things much more in proportion towards the sales deals, which is a very high ROI and in Q4, people are very focused on maximizing revenue on their Website, customer service is more of a long-term focus decision for these companies. So, I would expect the split to sort of stay in that range whether it’s 25% customer service, 20, 30, that range I think is sort of the normal you should expect. Craig Nankervis – First Analysis: Okay. And on your investment and headcount adds, and you really not have added net adds year-to-date at least through Q3, can you just talk about that a little bit in terms of not adding in Q3 and now you are going to add in Q4, was there a particular reason that you held off in Q3?

No, nothing has shifted, there is a lag time between when you decide to make hires and you start to make hires obviously. So, these decisions that were made probably beginning in late Q2 to begin to make hires, letting people feel more free to invest money. People are seeing the opportunity, the folks who were closest to the revenue opportunities are really the folks who drive this. They bring in recommendations, they say, I can use people here, and that’s how these things change. That’s a very different thing when we heard six months ago from the same folks. So, it’s not a black and white decision you make, but it has been gradually moving more towards the bias of increasing over the past three or four months. Outside of sales, it’s slightly different, because it’s not a direct ROI, but we have product opportunities where most of the skills we have announced, but there are places we see opportunities where we have to bring in new skills. So, that’s where we will be investing in incremental headcount within our product and R&D groups. Craig Nankervis – First Analysis:

I think they continue to be strong. So, I think we spoke about it a quarter ago, because it was a pretty dramatic shift after two or three quarters of a tougher pipeline environment, and that’s why we really wanted to call it our last quarter and say, look, this is real, you can see it, and we want to make sure people understand that. I don’t think we are returning back to anything that is less attractive. We are seeing plenty of opportunities now. Craig Nankervis – First Analysis: Okay. And then lastly, is there any color on your data warehouse data or any commentary around that, are you disclosing it all when you might have that commercially available, just anything on that subject?

Craig Nankervis – First Analysis: And is it in beta now, are you willing to say that or –?

Yes. I think the technical side is on, like I said, it’s on sort of the – we don’t start a beta or alpha, because it’s just technology, and we have built it to the customers as product shed. So, it’s kind of pretty – I would say pretty alpha, sort of between alpha and beta. Craig Nankervis – First Analysis: Thank you very much.

Your next question is from Richard Fetyko. Richard Fetyko – Merriman Curhan Ford & Co.:

Yes. I think there’s a focus right now on the R&D side on sort of two things. One is the data and the assets of the data that we capture right now, and everything around the data warehouse is something that we are, I think interested in, that’s why we made a fairly large investment over the last two years. So, we, for those of you may or may not, we capture a lot of consumer behavior data. So, when you go to one of our customer Websites, we do a lot of tracking around what you are purchasing, where you came from, where you are going, how much you spent, and that data has a lot of value to it. And so, we are going to start to in the future looking how to pick that data and make a real asset out of it. And we capture right now, we are monitoring about 800 million visitors a month, and we generate about 8 million transcripts of chat a month, which is pretty extraordinary in the amount of data we are capturing. So, like one telco alone, we capture about 25 gigs a day in data. So, there is an asset there. The other thing we are doing is we are working on really our technology and opening up our technology so that our customers are partners can use these assets like data and the transcripts and do a lot more with them. So, we haven’t sort of outlined a product strategy externally yet, and we are working on it internally, but I think in 2010, you guys should look for things around data, around content, more around the analytics areas, and so that will have sort of a push, because our customers find a lot of value in our products in that area, coupled with the chat obviously. Richard Fetyko – Merriman Curhan Ford & Co.: Thanks, and then actually a follow-up for Tim, the CapEx, low end of the CapEx guidance of 7 million would imply I think around 3 million in the fourth quarter, is that right and if so, what’s that related to?

Yes. That continues to be related to co-location, primarily DI at this point, most of the large investments are done in terms of primary, whereas now starting to see increased hardware purchases just for normal growth. So, where we have few quarters of a couple of percentage points of sequential growth, we didn’t have to expand capacity at all, but I think it gets back into a – the other way, see the enterprise group grow 11% a quarter. If you replicate that a couple of quarters in a row, then you are buying a little bit of gear to support that growth. So, most of it will go towards that in Q4. Richard Fetyko – Merriman Curhan Ford & Co.:

Thank you.

Once again, ladies and gentlemen, if you would like to ask a question, press star then the number one on your telephone keypad. Your next question is from the line of Richard Snidely [ph].

I think that was best to me, Rich Sniderman [ph]. Just a real quick one. Last quarter, you gave us the sequential growth in bookings, the percentage growth and I was wondering if you could share that with us this quarter?

Sequential growth in bookings, bear with me a second. Yes, last quarter, we gave about 50% growth. This quarter, that comparable number is about 55%. And that really corresponds to the metrics we gave on average deal size and 43 new deals.

Okay. 55% sequentially, thanks very much.

You bet.

I am showing no further questions at this time.

Thanks for the call. We will pop up a video again on YouTube in a little bit under Myliveperson, so we did a little commentary last time, and we will do that again, so look for that, and look forward to seeing you guys in the new year. Thank you.

This does conclude today’s conference call. You may now disconnect.