Thank you. Ladies and gentlemen, at this time we will begin the question-and-answer session. (Operator Instructions) Your questions will be polled in the order that they are received. Please stand by while we poll for your questions. The first question is from Mike Onghai from Ibis Capital Management. Please go ahead.

Hi. My number one question is, have you looked into using Bing, Microsoft Bing, as a possible replacement to Google? Number two, have you ever thought of opening up your applications like a Facebook [ph] where third party developers can leverage your user base and developing apps like on Facebook or in YouTube? And (inaudible) three questions.

First of all, about the Yahoo or Bing, we can’t disclose any details regarding discussions we’re having with the other companies at this point. And with regard to API, currently we don’t have any plans for opening API. But we do have plans of making IncrediMail compatible with popular application such as Facebook, YouTube, Twitter, et cetera, and we started working on it already.

Okay. Thank you.

The next question is from Victor Halford [ph] of Halford Capital [ph]. Please go ahead. Victor Halford – Halford Capital: Hi, guys. Actually good results despite the tough environment [ph].

Thank you. Victor Halford – Halford Capital: Question, I’m – I'm trying to understand what you’re trying – what you're saying about the issues with Google. I really don’t understand. I’m not sure other people understand because there hasn't been much debate [ph]. Can you elaborate and tell us what are the potential problems with Google in the second half of 2010?

Yes. We have been told by Google that there may be a change of policy around how partners may offer the change of homepage and default [ph] provider. We still don’t know even if one such chance will take place, but we have been told by Google that they are considering this matter. Google has very different ideas that are not formulary specific. And they're still saying there may be no change. It is our understanding that even if there are changes, they won’t affect us before the end of 2010. Other than that, we really don’t know too much. Victor Halford – Halford Capital: I mean what does this big change do to discourage what’s [ph] currently being done? And users are using your products, how is it going to make a difference? Do you know?

We still don’t know because they just informed us they are considering doing changes in the policy. But they didn’t say anything specific. They said that they're considering all kinds of things, but we really can’t tell what could be the possible change right now.

But you came with this announcement today, and especially think that this can be a negative change. But you don’t know if it's negative or not.

What we do know is that the change is around the reset of the homepage and default search provider. This is obviously something that has a lot to do with adding new users who are search assets. So if they will do any change around that, then this could have an effect on us. But we really don’t know if there will be any change there. In regards we know that around, the way that we offer our users the homepage and default search provider that are powered by Google. Victor Halford – Halford Capital: Okay. So the proposed change will make this page as what? I mean, what will be the difference?

We really don’t know. They just said they are considering changes around the way people, the partners offer the settings, the homepage and default search provider. We really don’t know more than that. Victor Halford – Halford Capital: It is a shame that there – there is a – you have a very good results today and they were overshadowed by this. And certainly, which can be insignificant basically. But you warned us, in a way, that it sounds very uncertain and vague. This created much more uncertainty than maybe there is in my view.

Well, we want us to give our investors as much visibility as we have in order to be fully transparent. This is why we announced it. Victor Halford – Halford Capital: Well, it should have been done probably a different way. But thank you.

We told you what we know.

The next question is from Colin Gillis of BGC Financial. Please go ahead. Colin Gillis – BGC Financial: Yes. Hello, everybody.

Hi, Colin. Colin Gillis – BGC Financial: Just focusing back on the business, setting the Google partnership aside, what were the chances of monetization that you saw in the quarter?

Well, as we have seen in previous quarters, we saw our search revenues growing. They were growing from whether the increase in inquiry or the increased monetization of these queries, and as well as the fact that we are increasing our registered download. So we saw those revenues going up. And we also saw spending of the trend with regard to our product sales. So as far as monetization goes, actually going – coming towards the end of 2009, we actually – we saw very positive results. Colin Gillis – BGC Financial: Do you have any color as to how you monetize versus other publishing partners at Google. And just from my analysis, it looks like you are a significant customer to Google, and that you monetize quite well. Yacov Kaufman Well, from what we understand, we monetize quite well. And that’s because of what Ofer mentioned earlier, we have a very premium user base. And these are good users. And I'm certain just like they are good for us (inaudible) so what’s good for us is good for Google. More than that, you will have to ask Google. Colin Gillis – BGC Financial: Okay. Excellent results for the year.

The next question from Bill Gibson of Wailuku Capital Advisors. Please go ahead. Bill Gibson – Wailuku Capital Advisors: Hi. Now, you signed a new contract with Google in July of 2009 extending two years. Do these potential changes impact results before the expiration of that contract ?

That contract was for two years. It had all kinds of possibilities for upgrades, changes in policies, renewals, et cetera. Once of those terminations or renewals were – in the first anniversary, there would be an opportunity to re-discuss certain terms. And in fact, that is what is being thought of. But as Ofer said earlier, regardless, it is our understanding that whatever changes are made, they would first, if at all, would have an effect at the end of 2010, regardless. Bill Gibson – Wailuku Capital Advisors: Okay. Thank you. And is the source potentially for them to change then your dividend policy?

Well as you mentioned earlier, the company is very cash flow positive in 2009. And on our analysis currently of 2010, we tend to remain so. We also have a significant cash reserve. So in the mean time, we tend to be incentive [ph] – continue our dividend policy. And what we know specific to this, we have to (inaudible) we definitely plan on continuing our dividend policy. Bill Gibson – Wailuku Capital Advisors: Okay. And in terms of your monthly queries, is the trend improving each month this quarter? Or I mean just going by your guidance, it looks like we're still seeing improving numbers.

If you look quarter-to-quarter, it's growing slowly, but growing. Bill Gibson – Wailuku Capital Advisors: Okay. Good. Thank you.

Next question is from Michael Prouting of 10K Capital. Please go ahead. Michael Prouting – 10K Capital: Good morning. And thanks for holding the call this morning.

Good morning. Michael Prouting – 10K Capital: I have a couple of questions. Firstly, I'm wondering why your guidance of year-over-year revenue growth from the first quarter is somewhat lower than what you've experienced in the past few quarters.

Well, our guidance with regards to the first quarter of 2010 comes right after significant growth within 2009. When you look back at our numbers in 2008, you can see that there was tremendous growth within the year. And in fact, as a percentage, it's difficult growth to sustain. That being said, we still maintain that we’ll be able to grow by some 10% year-over-year in the first quarter of 2010. Michael Prouting – 10K Capital: Okay. And I also happen to notice that given the cash you have in the balance sheet, if you look at the company on an evaluation basis ex-cash, you are actually trading at less than four times earnings. I’m wonder if you’ve given any thought trying to monetize the value of the company, either through some more global partnering deal or potentially even selling the company?

We can't comment on that right now. Michael Prouting – 10K Capital: Obviously, there will have to be something under consideration given the current evaluation?

We have not – nothing to report at this day. If we had something to report, obviously, we would have done it. Michael Prouting – 10K Capital: Okay. And then the final question I had, I’m just curious in terms of, while I guess there’s no more you can really tell us right now in terms of what changes Google's proposing. I am curious that when you were notified by Google that they might seek to change things in some kind of way?

Well, we actually have been hearing the ball changes at some time. They're obviously a couple of months. I'm just trying to get specific on what and when, with the answers changing along the way. I think it – I can imagine it has been frustrating process. Even today, it is our understanding as we said, that if and when there’s a decision regarding the change, it will not affect us before the end of 2010. Michael Prouting – 10K Capital: Okay. And I’ll just have one on – another quick time question. I don't suppose then you have any indication as when you might get clarification from Google in terms of what changes, if any, they might be contemplating?

Not at this time, no. Michael Prouting – 10K Capital: Okay. Thanks.

Thank you. Do you have a mobile strategy? That is one, and number two, about your affiliate, what exactly are you planning to do with that? Are you planning to put some links from your software so that people can buy stuff or if it's data [ph] or what kind of email they are reading and you can sit back there and an affiliate (inaudible) so those are the two questions, and then I have follow-up questions after that.

Can you repeat the second part of the question please?

You said something about having affiliate revenues.

Yes. Okay.

Is it something where you're going to – different Google mail has ads around your – when I read my Google mail, I will have ads beside it based on what I’m reading. Do you have something like that?

First of all, around mobile, we don't have any current plans of doing anything with around mobile because I think we've said before, we don't believe that we have any advantages or a competitive advantage there. So we don't have any plans around mobile currently. And around affiliates, what we mean when we say affiliate is actually using a – the very large and premium user base that we have – we have a lot of the unique visitors in all of our MyStart pages, and when we say affiliates, it means all kinds of promotion to the popular site (inaudible) all kinds of affiliates from bringing them a sale or a lease. So this is something that we already started and we want to put more emphasis into.

Okay. And how about monetizing the emails that people read kind of like Google mail?

This is something that we've been thinking about for quite some time, and obviously it is tempting. But we feel that if – we also have some risk around it for a company our size to do something like that. Remember all the negative press that Gmail got before it started, and this is Google, and still, Google is a web-based email and we are a client. And our world is a little more complicated when you start looking into what people are writing and putting relevant advertising, et cetera. So we believe that we should be more – should not take that risk and not do that, although we probably could have derived [ph] revenues out of it.

Finally, this – have you thought about a buyback instead of dividends?

We would have to wait and consider everything. And what is happening recently, obviously is something that we need to consider. And we did that in the past, we’ll obviously consider everything at the right time.

And with regards to your decision with not opening up your API, was this after you guys analyzed it in terms of benefits and cost analysis of that, or is it something that did not come to your (inaudible) discussions?

We had some discussions and we thought that we’d rather put our focus elsewhere at this time. We did some kind of a basic analysis. And there are other things that we want to pursue at this time.

Have you looked into social gaming within your user base?

We don't have a partnership with an overall media for providing our IncrediGames platform. And because we ourselves are not into the gaming industry, we're not going to think about developing something ourselves. But we constantly look at new solutions. And if we will see something interesting enough, we’ll try it and do some tests to see how it works for us.

And finally, if you get (inaudible) from Google or whatever that notice before or after you're trying to finalize [ph] headlines in the media and the newspapers.

Well, China has been on the headlines for a long while. We can't know exactly what was happening within Google. All we know about China is what you see in the headlines as well as us.

I’m just wondering about the timing of your notice from them. Because I imagine at this point, with all these things about China, they have a bigger place to worry. They have more problems to worry about than with you guys.

As far as ourselves, there have been big discussions going on now for as you said couple of months.

All right. Thank you.

The next question is from Daniel Zest [ph] of Zest Capital [ph]. Please go ahead. Daniel Zest – Zest Capital: All right. I'm sorry to belabor this, but can you tell us just the Google discussions include totally removing them from your user base and/or totally removing the revenue share, or are they of another nature?

I’m sorry. Can you repeat that question? Daniel Zest – Zest Capital: The question is, are the discussions with Goggle related to totally removing themselves from your sites and user bases, and totally removing the revenue share with you? Or are they of different nature?

The answer is no. Daniel Zest – Zest Capital: Okay. So you don't expect that they will totally cut off your revenue share or remove themselves?

Correct. Daniel Zest – Zest Capital: Great. The other question is can you be profitable with the changes in a worst-case scenario with Google?

No.

It's difficult to predict exactly what’s going to happen, but we currently are very profitable. Daniel Zest – Zest Capital: Well I know that, but how can you do without Google or with a scaled down Google?

Again, it’s difficult to predict. As Ofer said, right now, we're not contemplating doing without Google, and there are alternatives out there. So there’s no sense in just going ahead and saying, , "What’s it going to be if there’s nothing?" We have a good relationship with Google, we'll continue to focus on other alternatives out there. Daniel Zest – Zest Capital: Thank you.

The next question is from Jeff Summers [ph]. Please go ahead.

Yes. First question is about clarification on your comment about the dividend. You said it would be based on your results from the second half of the year. Were you referring to 2009 for an upcoming dividend based on 2009 results, or you were just referring to whatever happens in the second half of 2010, which you’ve indicated you don't really have any good vision on?

As you said, I was referring to the second half of 2009. And with regards to 2010, we’ll take it as it comes.

Okay. And then getting back to Google quickly, I’m assuming, because you put out this announcement that these change could somehow impact your revenue or revenue sharing deal with them, do you have any reason to believe that that for some more reason they did, they eliminate or reduced it substantially, that you couldn't come up with a similar deal like you currently have with the alternatives like Bing or Yahoo!?

It’s hard to tell. There are many other search providers. Some have relationship with Google, some don't. We are talking to some of them but the honest true thing is it’s still too early for us to tell.

Okay. But you can tell that maybe their comments or their arrangements, whatever their current deals are, I guess you could tell us if they’re currently similar to the way Google does it. Have they put out any feelers to their customers indicating that they may change their method of revenue sharing or whatever this consideration is. Or as far as you know, they would stay with their current practices?

What we hear from Google that this is a market-wide possible policy change. And as I said, it’s a very dynamic market. There are other search players, and it’s been very difficult for us to predict at this stage.

Okay. Thank you.

The next question is a follow-up question from Michael Prouting of 10K Capital. Please go ahead. Michael Prouting – 10K Capital: I’ve got a non-Google question. I’m wondering if you can just give us any color in terms of new products that you might be contemplating launching in the current year. Thanks.

Yes. First of all, as we have mentioned before, we have rolled out IncrediMail Version 2. And we’re very pleased with the results, both for the registration growth and other parameters that we’re constantly looking at. Second, we recently introduced another product called PhotoMail Maker, which lets you add all kinds of personal photos into your email background, and it does it in a very nice way. And right now, it is part of IncrediMail. And we are already have a version working that also works with Facebook and Flickr. So you’ll able to get your personal photos in Facebook and Flicker. So this is something that we're already working internally, and we will release out very soon. Other than that, as we said, we've rolled out a higher version for AIM, AOL Messenger, and we're working on HiYo for Facebook, which should also come out relatively soon. Michael Prouting – 10K Capital: All right. Good. Thanks.

The next question is from Russell Lastry [ph] of Curitai Capital [ph]. Please go ahead. Russell Lastry – Curitai Capital: Good morning. Two questions, how many total users do you have and what was the growth sequentially year-over-year? And second question is, what percent of the total revenues that IncrediMail generates are tied to Google AdSense?

Sorry, can you repeat the second question? Russell Lastry – Curitai Capital: What percent of your total revenues are tied to Google related or advertising related to the Google searches?

Well, I’ll answer the second question. I’ll leave the first question to Ofer. With regard to the Google AdSense, about 68% of our revenues come from Google.

Regarding active users, we have, to-date, close to 12 million active users in comparison to 11.4 million or so in the prior time last year. Russell Lastry – Curitai Capital: And what was it last quarter?

I’m sorry. I don't have these numbers in front of me. Russell Lastry – Curitai Capital: Okay. Thank you.

A web based mail client, do you plan to add something like that?

That wasn't clear. Can you repeat the question please?

No, the answer is that we don't, again don't think that we have any competitive advantage there. And we don't want to get directly into competition with the Gmail, Hotmail, and Yahoo Mail, et cetera, which are very powerful. We do not, even today and never before, we never supplied email addresses. And we're in the business of providing client to work with you current and existing email address. . So we believe that this is the area we should still continue to focus on.

Next question is a follow-up question from Daniel Zest of Zest Capital. Please go ahead. Daniel Zest – Zest Capital: Hi. Can you discuss your active user base a little bit more? Do you expect it to grow from here and staff it?

As we mentioned, our active users currently is close to 12 million users around the world. And we have close to 17 million unique visitors a month in our MyStart pages, which already we've said that we have started doing some affiliate revenues, and we're planning to grow this business more. And can you be more specific about other metrics? Daniel Zest – Zest Capital: Just general traffic and looking forward, are your programs – are you happy with your programs for adding active users in the future? I mean, is it going to be 12 million next year? Or can you grow it above that, Yacov?

Well, we obviously believe and hope, and are doing our best to grow this number. And as we said, IncrediMail Version 2, we saw a good trend after we rolled it out, and we see our active users and new registered users growing because of the launch of IncrediMail Version 2. And the fact that we're doing things around like the HiYo support for Facebook and IncrediMail – for Facebook, which makes us also think that we can increase this number further. Daniel Zest – Zest Capital: Thank you. And then one more follow-up on strategic outlook, I mean, where – where do you guys want to be in three years? Are you Are you actively seeking alternatives like merging, acquisitions, things like that? Or is that something that you'll look at it as it comes along? Are you actively looking at strategic alternatives?

As you can see, these are very volatile times. And we're taking every time we're looking at the current situation in doing what's best for the next year or so. We believe that planning more than a year Internet time is sometimes is something, which is very difficult because things are changing very rapidly. We have a very firm plans for the coming year and believe that this plan will grow our numbers. But we do not make plans for two or three years because we think that this market is too volatile. Daniel Zest – Zest Capital: Thank you.

Hi. Do you have a demographic breakout of your users in terms of gender and age?

It really depends on the products. For IncrediMail, it's roughly about the same in male and female. And the average age is – I think that we saw that around 70% is over – is above 40, about 30 to 40. And with HiYo, again, the male, female is around the same, maybe slightly more female. And the average age is closer to 20 or so. But for Magentic, the demographics are quite similar to IncrediMail.

Okay. Thank you.

(Operator Instructions) Please stand by while we poll for more questions. There are no further questions at this time. Before I ask Mr. Adler to go ahead with his closing statements, I'd like to remind participants that a replay of this call will be available in three hours on the company’s web site at www.incredimail.com. Mr. Adler, would you like to make your concluding statement?

Yes. I wanted to conclude by saying that I can appreciate what Victor [ph] said in what we were not very clear about the Google issue. Frankly, we wanted the market to understand that something might happen to our core assets even if we can't specify what will happen. We struggled with how to handle this issue, and opt to favor saying something rather than hoping – than hoping nothing will happen. And thank you very much all for participating.

Thank you. This concludes the IncrediMail's fourth quarter and year-end 2009 results conference call. Thank you for your participation. You may go ahead and disconnect.