Good morning everyone and welcome to the Travelzoo second quarter 2010 financial results conference call. At this time all participants have been placed in a listen-only mode and the floor will be open for questions following the presentation. Today’s call is being recorded. It is now my pleasure to turn the floor over to your host, Chris Loughlin, Travelzoo Chief Executive Officer. Sir, you may begin.

Thank you, operator. Good morning and thank you all for joining us today for Travelzoo’s second quarter 2010 financial results conference call. I am Chris Loughlin, Chief Executive Officer. With me today is Wayne Lee, the company’s Chief Financial Officer.

Good morning everyone, welcome to our conference call.

Before we begin, Wayne will walk you through today’s format.

I would first like to remind you that all statements made during this conference call and presented in our slides that are not statements of historical facts constitute forward-looking statements, and are made pursuant to the Safe Harbor provisions of the Private Securities Litigation Reform Act of 1995. Actual results could vary materially from those contained in the forward-looking statements. Factors that could cause actual results to differ materially from those in the forward-looking statements are described in our Forms 10-K and 10-Q and other periodic filings with the SEC. Please note that this call is being webcast from our Investor Relations website at www.travelzoo.com/earnings. Please refer to our website for important information including our earnings press release issued earlier this morning, along with the slides that accompany today’s prepared remarks. An archived recording of this conference call will be available on the Travelzoo Investor Relations website at www.travelzoo.com/ir, beginning approximately 90 minutes after the conclusion of this call. For the format of today’s call, Chris will review management’s prepared presentation, and we will then conclude with a question-and-answer session. If you will now please now open our management’s presentation, which is available at www.travelzoo.com/earnings, I will now turn the call over to Chris.

Thank you, Wayne. Our presentation will fall into two parts today. First, I will talk about our financial performance, and second, I will provide an update on our growth strategy. So let’s to turn to slide 4. I would like to highlight our key performance metrics for Q2 2010. We are quite pleased that our revenues grew by 19% to $28.1 million. Our earnings per share doubled from $0.10 to $0.20. Subscribers grew to 18.3 million. The next slide provides more detail on our operating income. Operating income for the company in Q2 2010 was $5.9 million. That consists of operating income of $6.7 million in North America and an operating loss in Europe of $800,000. Our income tax expense was $2.7 million resulting in our net income from continuing operations of $3.2 million. Our effective tax rate in Q2 2010 was 46%. As you can see in the chart here, these are all significant improvements on Q2 2009. Turning to slide 6, we see our revenues by segment. Revenues in North America grew by 12% year-on-year, maintaining a growth rate we had seen in previous quarters. In Europe, revenues increased 49% year-on-year and in local currency terms, they increased 55%. In Q2 2010, we experienced a series of macro events that affected our performance in Europe, including the ash cloud, airline strikes, postponed travel demand due to the World Cup and the great prices. These events hampered our advertiser confidence. On slide 7, you can see that our operating income increased year-over-year from $3.4 million to $5.9 million despite an increase in salaries and employees expenses due primarily to higher headcount and greater investment in Fly.com marketing. Slide 8 and 9 give us more insight into our operating expenses. First, here on slide 8 we can see that operating…

Thank you. The floor is now open for question. (Operator Instructions) Our question comes from Ed Woo from Wedbush, your question please.

Chris, welcome aboard and congratulations on the first quarter. My question is what is the overall outlook for Europe right now? I know you mentioned that you already had the euro weakening and issues with the countries in Europe. What do you think the outlook is for the back half and you can see the rapid acceleration of subscribers continuing for the next couple of quarters?

So, what happened there in Europe? You know the biggest impact we saw was indeed the World Cup. All four of those countries that we operate in were in the World Cup and as soon as each country popped out the other side, then all of a sudden everyone started focusing again on selling travel. The ash cloud was disrupted, the British Airways say it was disruptive and then the Greek crisis definitely had an impact on the European cycle. In the week after England came out of the World Cup, we had a record week in the UK top 20, so that was positive. I would say that the situation, I can’t predict whether there will be another volcano erupting or any of these events, but certainly I can’t imagine that there will be as many disruptions in the third quarter as it were in the second. It was almost just one after the other. With respect to building our audience, we see no reason why we should slow down our momentum in audience growth. We are adding a fare click in the UK, and you see there in the UK we are indeed profitable. So, we can do it at a profit as well, not just at loss.

And has the average user of Fly.com happy to see that you guys added multi-city functionality into that. Do you want to have any comments about what your status is on Fly.com and where do you see it going in the next couple of quarters?

So we are very pleased with Fly.com. In Q2 we had, in North America we had 4.9 million searches. Sorry, we had 6.25 million searches, up from 4.9 million searches in the prior year. That’s a 30% increase year-over-year, so very pleased with that. You might have seen the TV advertising that we ran for Fly.com, so we experimented there. The great opportunity with Fly.com is further integration with the Travelzoo brand. We do have in North America 12 million subscribers, worldwide 20 million subscribers, and more the subscribers we can introduce to Fly.com, the more traffic we can get. The other thing that you get overtime with any business that we saw that in the UK, we’re seeing it with Fly.com is as each quarter progresses, each year progresses, the efficiency and the monetization you can get more product, improves. We really do see that in every business. It’s not a surprise, we all learned out of business schools too. Most businesses take three years to really hit the inflexion point, but we are making tremendous progress there and we are very excited.

Chris, welcome aboard and nice quarter. I guess first off, I noticed recently in July you guys re-launched the US homepage for Travelzoo, and I’m just curious if you can give any comments on the effects of the (inaudible) by the first one in five or six, seven years?

When you say launch, it’s been a work in progress for just under a year and we got the US homepage and the [site life] about a month ago, the UK and the rest of Germany and the rest of the markets will go in the next few months. The primary reason was in fact with our advertisers, giving them a place to showcase their properties, their crew ships in maybe a slightly more appealing light. The old site functioned very well. It was very popular with our subscribers. The new site seems to have been received very well by subscribers. But where you see the most positive comments coming is from the travel industry and the fact that now on the homepage you’ve got these large photos and I can show you what it looks like inside Virgin America that makes a big difference. So, that’s where the positive response has been. In respect to traffic, I mean traffic remains relatively constant. There is no fundamental change to the usage on the site. So, it was a good change, and I think in turn I think everyone kind of feels positive about it too.

And I think the site looks great and I’m just curious if bringing up the question would really reflect the economics of the business in terms of the ability to showcase more inventory or anything like that, but it sounds like it’s related to just improving the user experience right now?

Right now [it is bound] for the user experience. I mean you do see on that homepage that we’ve got a space dedicated to entertainment. We had a very successful entertainment and local yields business up over the last three to four years, and so having the opportunity to show you those deals in a dedicated space, we’ll have obviously a positive impact and it does open up some inventory, but that wasn’t the primary motivation. It was really, it was about stepping up into the next phase of the business. The only thing we’ve got a top brand here, a brand that our subscribers love, our advertisers respect and we’ve got an opportunity like Starbucks had, maybe 15 to 20 years ago to build this global brand, and that website now represents our brand aspirations as the old site, while again it functions very well and it did the job and the information you got was absolutely correct. It didn’t necessarily represent our brand aspirations.

Thank you. Our next question comes from the line of Noah Steinberg from G2 Investment Partners. Your question, please.

I just had a question on media prices in Europe due to the World Cup and other events. Did you see any change there, it seems like you are able to keep down your sub-acquisition expense in Europe, while at the same time increasing your subs pretty nicely?

Yeah, if you look at Q2, I mean it usually follows like this in Europe. Q1, certainly in January you get very low media prices because consumer goods pull out and travel companies are still gearing up. Q2, it starts to move up certainly for quality travel space because you are moving closer to the summer holiday period. And then, towards the backend of the year consumer goods come in and prices go up. So, that has not changed, and if you look at those CPAs year-on-year, they are relatively consistent over Q2 in Europe.

Okay. And the other question I had was regarding earnings per share, you have increased it nicely. It increased sequentially over the last, I think it’s now four quarters. Can you continue increasing it over the course of the year?

I mean at least we have a stated goal that right at the end of the presentation that is a strong focus for management. Our intention is to continue with this good progress, and of course we will work hard towards that goal.

Thank you. I will now turn the program back to Mr. Loughlin.

Thank you ladies and gentlemen for joining us today. If there are no further questions, we will now end the conference call. And thanks again and please feel free to contact me directly at the office here in New York if you do have any further questions. Take care.

Thank you ladies and gentlemen. This concludes today’s teleconference. You may disconnect your lines at this time and have a nice day.