Good afternoon and welcome to the third quarter 2008 comScore, Incorporated earnings conference call. My name is Shaquana and I will be your facilitator for today. At this time, all participants are in a listen-only mode. (Operator Instruction). I would like to the turn the call over to your host for today, Mr. John Green, Chief Financial Officer.

Hello everyone, this is actually Magid Abraham. I want to welcome everybody to this conference call. We have two announcements that we have issued this afternoon. One of them is related to a major, new service or enhancement to out Media Metrix service. It’s called comScore Extended Web and this has been published on PR Newswire and is also available on our website and we sent it to our mailing list, which I believe most of you on. The earnings release, unfortunately PR Newswire has been having some trouble with it and I’m told it will be out in five minutes, but it has been on our website for the last fifteen to twenty minutes or so. And it has also been e-mailed. So for those that want to grab it from our website and read it, you are more than welcome to do so. We expect that PR Newswire will carry it live in a couple of minutes now. And while we are doing that I want to ask John to read the introduction and the Safe Harbor statement.

Good afternoon everybody. Welcome to comScore's earnings call for our third quarter 2008. Before we begin, please allow me to read the following statement to inform you of certain Safe Harbor provisions under the Private Securities Litigation Reform Act of 1995. During the course of today's presentation, as well as any discussions and question and answer periods to follow, represents that the company may make forward looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21-E of the Securities Exchange Act of 1934 regarding future events or financial performance of the company that involve risks and uncertainties, including without limitation, the expected strength of comScore's business, customer growth and clients' demand for comScore's products, the future quality of client relationships that result in renewal rates, expected results in profitability of comScore's acquisition of eMetrix, and forecasts of future financial performance, including related growth rates and assumptions for the second half and the full year of 2008. Such statements are only predictions based on management's current expectations. Actual events or results could differ materially from those predictions due to a number of risks and uncertainties, including those enumerated in the documents comScore files from time to time with the SEC. Those documents specifically include, but are not limited to, comScore's Form 8-K filed earlier today relating to the subject matter of this earnings call, comScore's Form 10-K for the year ended December 31, 2007, and comScore's Form 10-Q for the quarter ended June 30, 2008. These filings may contain and identify important factors that could cause actual results to differ materially from those contained in our projections or forward looking statements. We caution you not to place undue reliance on any forward looking statements included in these presentations which speak only as of the date of these presentations. comScore does not undertake any obligation to publicly update any forward looking statements to reflect new information after today's call or to reflect the occurrence of anticipated events. I will now turn the call over to Magid.

Thanks to those of you who are joining us today on this call. In the face of a challenging economic environment comScore had a very successful third quarter highlighted by strong revenue growth and better than expected profitability. Our third quarter revenue of $30.7 million was up 37% year-over-year and 7% sequentially, which was at the top end of our guidance range. Had the dollar remained at the same level as at the end of Q2 our revenue would have been $30.9 million, which is up 38% from last year. Our strong growth is being driven by the continued expansion of our existing customer relationships and a growing number of customers aligning with comScore to maximize the impact of their websites and advertising dollars. During the quarter we saw strong growth from both new and existing customers on a year-over-year and sequential basis. Combined with a high level of executive and effective expense management, we were able to deliver profitability that was at the top and/or above our guided ranges for each profitability metric. GAAP EPS for comScore’s third quarter was $0.02 per share, at the high end of our guidance range of $0.01 to $0.02. the $0.02 GAAP EPS includes a write-down of $450,000 in the value of our auction rate securities, which amounts to $0.015 per share. EPS on a non-GAAP basis was $0.19 per share compared to our prior guidance of $0.13 to $0.14 and our adjusted EBITDA was $7.2 million, also above the top end of our guidance range of $5.4 million to $5.7 million. Needless to say, we are very pleased with this profit performance. We are also pleased with this performance, particularly given the macroeconomic backdrop, considering the fact that the market environment deteriorated considerably during the last month of the third quarter due…

ComScore’s third quarter revenue was $30.7 million, which is up 37% year-over-year and 7% sequentially. Within total revenue, revenue from subscription customers was $25.7 million, up 44% year-over-year and representing 84% of our total revenue. This large and growing base of revenue provides comScore with visibility into future revenue and the ability to manage our expense and investment profile to deliver targeted levels of profitability. Revenue from project customers was $5.0 million, up 10% year-over-year and representing the remaining 16% of our total revenue. From a detailed perspective, revenue contribution from both existing and new customers was strong in the quarter with revenue from existing customers at $25.8 million, up 35% year-over-year, and revenue from new customers was $4.9 million, up 49%. We believe this reflects an appreciation of the value proposition and return on investment that we bring to our customers. International trends continue to be strong as well and grew 86% year-over-year to $4.6 million with 15% of revenue in the third quarter generated from outside the U.S. compared with 11% a year ago. Turning to our profitability, third quarter 2008 GAAP income before taxes was $1.8 million compared to $3.9 million in the third quarter of 2007. GAAP net income was approximately $600,000 compared to $3.8 million in the third quarter of 2007. Reflected in GAAP net income for the third quarter of 2008 is the normalized effective rate of 68%, including a cash tax rate of 18%. The normalized effective tax rate was negatively impacted by current year net losses incurred by certain eMetrix international subsidiaries for which the full benefit is not realized by other comScore subsidiaries, plus a moratorium that the State of California has placed through 2009 on utilizing NOLs. GAAP EPS was $0.02 in the third quarter based on 30.4 million fully…

(Operator Instructions) Your first question comes from Youssef Squali - Jefferies & Co. Youssef Squali - Jefferies & Co.: My first question is about deferred revenues. These were down slightly quarter-on-quarter. Is this simply because the pace of subscriber growth slowed down or because you lost some smaller customers.

It’s primarily the reflection of Citadel not being renewed on an exclusive basis. One can also anticipate that deferred revenue gradually will move in line with what our revenue growth is. Youssef Squali - Jefferies & Co.: Of the 32 new customers that you signed in the third quarter, can you say how many of these were subscribers and break out how many were for the core [inaudible] versus the eMetrix?

It was primarily on the subscription side as well as a number of new customers in eMetrix. We are also very encouraged that the average selling price was well above whatever attrition we experienced from smaller companies. Youssef Squali - Jefferies & Co.: Can you update us on the percentage of you subscriber base that is under multi-year contract?

It’s now 32%.

And that’s again a reflection of the Citadel agreement which was a five-year agreement. Now that dollar amount is lower. So excluding Citadel that percentage actually has gone up. Youssef Squali - Jefferies & Co.: So this is 32% a percentage of revenue or is it a percentage of the subscriber base?

That’s 32% of our overall subscription revenue base.

Your next question comes from Troy Mastin - William Blair & Company. Troy Mastin - William Blair & Company : First I wanted to ask about the fourth quarter guidance and what sort of booking activity is anticipated in the guidance versus where you stood in the third quarter or where things were last year.

We don’t provide bookings activity. And I think that we have kind of shed light in terms of where we see the market conditions, that we have modified our full-year revenue guidance accordingly. Troy Mastin - William Blair & Company : Is it fair to assume you are anticipating a slowdown in new customer additions on a revenue basis versus where you’ve been recently?

Again, we have identified it’s on the project side and related to the [inaudible] consolidation the [inaudible] that we are refining our revenue guidance for the fourth quarter. Troy Mastin - William Blair & Company : So if it is bookings-related or new acquisition-related it would be solely from the financial vertical?

That’s where it’s primarily from.

But for the projects that we typically get at the end of the year due to left-over budgets, that will be across the board because we think that most companies are going to take everything off the table that is left over in fourth quarter money. Troy Mastin - William Blair & Company : And on those three items you identified, projects, currency, and the financial vertical, it sounds like that’s in the order of magnitude of impact, is that correct?

Roughly.

Yes. Troy Mastin - William Blair & Company : And if those are the only three things affecting the fourth quarter guidance production, then it sounds like the 90% of your business that is not related to the financial services vertical, excluding projects, has so far been relatively unaffected by the environment. Is that a fair statement?

Well, you know, it is a difficult environment. As we have said before, we have not really noticed a strong impact on it. I would say the this notion of a couple of dozen clients that we did not have in the customer accounts but we would characterize as pending renewals, that’s sort of a more recent phenomenon that is really driven by companies scrutinizing more what contracts they sign and having more approval processes and all of that. And there are always puts and takes in our business. Bu the fundamentals are that those are the areas that we think the majority of the economic impact would be localized. Troy Mastin - William Blair & Company : And then how should we think about a moderation in your growth rate in the context of what is primarily a subscription model? I think you sort of lose momentum and it takes time for these factors to work their way completely into your growth rate, so if you think through the three forces affecting the fourth quarter, if they carry into next year, how long does it take until we kind of normalize to a new growth level, if my question makes sense.

On the project side you typically have, on a project side that has shelf life of about four months, on the subscription side clearly has a shelf life of about a year. So those would be the factors. You know, compensating for that is that we, this extended web offering that we are making, clearly it is a new offering that will tap into additional budgets and so I would say under normal circumstances that would have been, I would be very excited about the potential that that brings. Because if you think about it, companies may have dozens of advertising packages and those advertising packages for every one of them they would pay a fee for reporting on them. There are dozens and dozens of companies that we cannot measure right now, given sort of this distributed nature of the Web that we will be able to measure with the extended web service. And so it would open the door for a number of either new customers or existing customers that have these kind of capabilities that will subscribe to this new service. We just launched it. I don’t know if you had a chance to read the press release, but as you can see, there is some very enthusiastic response to it and how quickly that is going to translate into revenue is something I am not going to hazard a guess on. But fundamentally I think it is something that strengthens our competitive position. We are the only ones that are offering it in the market place. It brings more value to customers. It makes the planning of media more concrete. And it is something that is very important for us. I would say almost as close to a game changer as we can get with a new product introduction. Troy Mastin - William Blair & Company : You announced the new mobile panel that you secured through a partnership with millions of panelists. Can you give us some idea of what type of partner this is, if there is a cost associated with getting access to these panelists.

We are actually getting paid for capturing this data but unfortunately I cannot, there are some confidentiality issues related to this agreement that we expect to be lifted sometime, hopefully in November, in which case we will be able to talk more about it. Troy Mastin - William Blair & Company : Can you tell us if that data is yours to resell or if that would remain with the partner?

There is an agreement that is being negotiated about our ability to resell this data with obviously a revenue share but fundamentally, we are being paid for the building and the gathering of the system and the reporting infrastructure. And then incremental revenue beyond that will be generated and we are still in the negotiation process as far as what the revenue share is.

Your next question comes from Jason Helfstein - Oppenheimer & Co. Jason Helfstein - Oppenheimer & Co.: On the margin guidance, it’s 24 for the fourth quarter versus 24 last year. Can you talk about what costs are weighing on margins and are these temporary or permanent costs and does this have to do with a new project launch. And secondly, can you get any of that lost project revenue for the fourth quarter to become part of subscription revenues next year when you renew agreements?

We are continuing to invest in the business, in those initiatives that we have outlined earlier this year in terms of expanding overseas and into new products and into eMetrix, so that’s all reflected in our fourth quarter guidance and we anticipate that that’s going to yield very attractive revenue in 2009 and beyond. So that’s the one point. And then in terms of its [inaudible] the project revenue that has been a big source of subscription revenue growth and so what we are anticipating is that if budgets are constrained at year end we certainly anticipate that we will realize that some of that project revenue will go into 2009 and then similar to what we have been able to realize in the past, convert a lot of that of into subscription revenue agreements.

Your next question comes from Analyst for Mark May - Needham & Company. Analyst for Mark May - Needham & Company: What number of subscribers did you end with in the quarter? And what was the organic growth rate? If you ex out eMetrix.

We’re just fiving total customer account and so the total customer account was 1,136. Analyst for Mark May - Needham & Company: And the organic growth rate ex eMetrix?

That’s something that we are not breaking out separately, we’re just reporting consolidated results. Analyst for Mark May - Needham & Company: You mentioned you lost some of the smaller customers. I was wondering, in addition the macroeconomic environment whether this had something to do with the competitive landscape where lower cost providers are starting to take share?

No, we have not lost any competitive face-off situations. Analyst for Mark May - Needham & Company: Given that you are expecting a slower ramp in the institutional investors and financial sector, selling to those verticals, when do you expect to be able to make up for the loss of the Citadel contract?

You tell us when the stock will improve and we will tell you when that is going to happen. It’s really hard to make a forecast on that before getting some visibility on the equity markets. Analyst for Mark May - Needham & Company: You had mentioned that you had generated some interest before from potential clients. Have you lost any of those, is that why you are slowing down your ramp or is there something else?

Well, we have a couple of large contracts that are still in discussion. I think some of the more what I would call retail contracts, some of them have slowed down or being deferred. Frankly, I’m not optimistic that we are going to be in a position of getting into that again before people are investing in anything. Analyst for Mark May - Needham & Company: How dramatic do you think the drop off in project revenues will be in the fourth quarter?

Relative to what we were expecting, we think it’s about $800,000.

Your next question comes from William Morrison – Thinkpanmure.

I was wondering if you could talk a little more about your expectations for customer adds going forward? Historically you’ve guided to somewhere around 40 to 50 in customer adds a quarter. Do you expect the levels to maintain around where they were this quarter or bounce back to that level over the next few quarters? Just where are your expectations on that customer adds? And then secondly, can you talk a bit more about the types of customers that weren’t renewing, the smaller customers? Were they publishers, advertisers, or agencies?

We are highly confident that the number of new customer adds will continue to be strong and as we said earlier, it is 107 new customers that we added here. I think as far as the net customer add, I think it is going to be affected by how many customers don’t get funding or go out of business and that’s really hard to forecast. And then the second thing is if the delayed approval cycles extend beyond the end of the year, then we may see some of the same phenomenon that we saw here. In other words, some of the customers that have been delayed from Q3 will turn up in Q4 but then the customers that would be expected to sign up in Q4 would sign up in Q1. Now I want to say that some of these delays, by the way, don’t really have a revenue impact or that much of a revenue impact and the reason is that when a client customer expires, let’s say if it expires in September, they have the right to September data which would be issued in October. And the next data level that they would be getting would be in October which would be issued in November. So customers have the ability of continuing to get the data even though there is technically a gap of one month in terms of when they sign. Our ability to take revenue on that that is still preserved because we are delivering the same number of monthly data. Now you asked if there is a pattern to some of these customer drop-offs. It tends to be fairly even. I would say the one area that it seems to be sort of proportionally slightly higher than the rest is in some of the start-up mobile companies that are dependent on mobile monitorization, which is slower in coming. So some of these companies are retrenching. But again, in terms of absolute numbers it is a very small number.

What percent of revenue in the quarter was from the big four, Yahoo, Google, Microsoft, and AOL? And can you remind us when those, I believe you are on multi-year contracts with most or all of them, could you remind us when those renewals are up?

Microsoft is approximately 12% of total revenue and we don’t give out statistics for the others because the fact that Microsoft is about 10%. The only one. In terms of the top 20 it was about 38% of total revenue on a year-to-date basis.

That’s a decrease in concentration from 42% from the quarter.

And when is the Microsoft renewal up?

It was renewed.

It was renewed this past year?

It was renewed in July or August.

On a multi-year?

Usually Microsoft has a one-year cycle. They don’t sign multi-year agreements.

Your next question comes from Analyst for Jeetil Patel - Deutsche Bank Securities.

Quick question on the contract pricing. I think you talked about a little bit of prolonged renewal process on the contracts. Can you talk about what type of push back are you seeing and how October trends are tracking right now?

We don’t see anything significantly different in October than we have seen. In our core business we really don’t have any anxiety in terms of renewals and we’re constantly adding value to our clients so we are always striving to increase our revenue from existing clients. By the way, the increase in revenue from existing clients this quarter was up 35%. So that’s again a reflection of our ability to increase the relationships and to be able to raise prices and upsell. So that is something we are very pleased with and it is not a dynamic that we, at this point, of course no one can forecast where things will exactly end up, but at this point it is not something that we are that worried about.

A bigger chunk of your contract renewals I think is in the back half of this year. Is there any push back on pricing, any term dynamics that you have seen a higher level of other than just the timing of the closing of the contracts?

Nothing unusual.

Have you assessed the profile of the nature of you 1,136 customers that you have, have you done any work assessing the profile and the risk profile of any more of these customers sort of going out of business or shutting down or things of that nature?

We have one statistic which is that the customers that have contracts with us of less than $25,000, they represent 4% of our revenue base.

Your next question comes from Heath Terry - Friedman, Billings, Ramsey & Co. Heath Terry - Friedman, Billings, Ramsey & Co.: Can you give us an update on your certification efforts around data quality and what kind of initiatives are in place as you continue to work on the data quality front as far as securing that kind of certification and then also just continuing to kind of reassure customers?

As far as the MRC certification is concerned we have a five-phase process. We have completed two of them and we’re starting the third phase. As we said from the very beginning the MRC accreditation process is a process that is actually is actually not controlled by comScore and we expect that two years, so another year is a realistic time frame for it but it could take longer. There have been cases that have taken, the worst case I think has been 12 years. Not, that said, we also have undergone a review by the Advertising Research Foundation and we have seen a draft of the final review, which we expect to be published in the next 30 days or so. So we think that’s one element of excellent validation that will be good. That doesn’t diminish in any way our commitment to work with the MRC. I think we are proceeding on parallel tracks and committed to transparency. We have also come up with a number of ways to tighten up the accuracy of our projections. We have come up with some methodology that would leverage the availability of sensitive data on certain websites that would allow us to improve the projections of our website. Needless to say this is an area that is very important for us and we will continue making progress on it. In our extended web measurement service, one of the options that will be available to people is to be able to beacon every page. We are doing that already on videos and we are reporting the actual number of streams that we are seeing every time a user anywhere is running that video.

Your next question comes from Sandeep Aggarwal - Collins Stewart.

Given that when you acquired eMetrix the market was very different so I wanted to ask how is eMetrix meeting your internal goals in terms of gross sales as well as the margin ramp up. And secondly, as we run into global weakness, how does it impact your international ramp up, especially in many geographies where you are highly under-penetrated?

Well, as we stand today we are not second-guessing our eMetrix acquisition. In fact, I am very glad that we made it. I think we need to keep in mind that, I’m not sure exactly what the stats are, 3 billion cell phones or so compared to less than 1 billion PCs. In many countries, like in India, that’s going to be the main source of access to the Web. Certainly access outside the U.S. is very important. I think Android, in addition to the iPhone, have been game changers in terms of access. So we really wanted to be on the high ground and we achieved that on the high ground. From that standpoint I think this was a very important acquisition for us and we were glad we made it. I also think that some of the contracts that we talked about in terms tracking the behavior of millions of subscribers, that is something that has a good potential of expanding into many more countries and in a way it will accelerate our international expansion. It is somewhat early to tell whether the economy is going to have an impact on that. But as far as we see there is just an acceleration of demand for that. As far as how eMetrix has lived to our expectations, I think we had two elements to the eMetrix plan. One element was that we inherited a cost structure that was in the $18.0 million to $20 million range. We had to whack the heck out of it and we did. And we had said that we expect that eMetrix would be break even to EBITDA positive at the end of the year and we expect that to be the case in December. So I think that we are meeting those…

Your next question comes from Analyst for Mark May - Needham & Company. Analyst for Mark May - Needham & Company: Excluding Citadel, would deferred revenue have been up about $1.5 million given that the Citadel contract was about $3.0 million a year?

Between $1.0 million and $1.5 million. Analyst for Mark May - Needham & Company: In terms of, I guess you divide your sales force into kind of hunters and farmers. I was wondering what the current numbers are and what the projections for the end of the year are.

We have 118 quota carrying sales people in total and so we’re still basically on track in terms of our goal that we set at the beginning of the year of adding an additional 30 to base comScore. And then on top of that we also had about 14 eMetrix sales people that came on board.

There are no further questions.

Thank you very much. We look forward to the next call.

This concludes today’s conference call.