Welcome to LoopNet Inc.’s fourth quarter and year-end conference call. This is the property of LoopNet, and any recording, reproduction, or transmission of this conference call without the express written permission of LoopNet is strictly forbidden. This call is being recorded. You may listen to a webcast replay of this call by going to the Investor Relations section of LoopNet's website. I would now like to turn the call over to Erica Mannion, Investor Relations for LoopNet. Please go ahead, ma'am.

Thank you. Good afternoon. Thank you for joining us to discuss LoopNet's financial and operating results. With me today are Rich Boyle, Chief Executive Officer and Chairman; and Brent Stumme, Chief Financial Officer. Today, Rich will begin with an overview of the business and the overall corporate strategy, continued by a summary of the company's fourth quarter performance and review of the marketplace. Brent will review the fourth quarter financial results and provide first quarter and fiscal year 2008 guidance. Before I turn the call over to Rich Boyle, I would like to mention that the company will participate in the following investment banking conferences during the first quarter, each of which will be available via webcast on LoopNet's website: Thomas Weisel Partners Annual Technology, Telecom, & Internet Conference in San Francisco on February 6th, and Jefferies Fourth Annual Internet Conference in New York City on February 27th. I would like to bring the following to your attention. On the call today, you may hear forward-looking statements about events and circumstances that have not yet occurred. Actual outcomes and results may differ materially from the expectations contained in these statements, due to a number of risks and uncertainties. Please refer to the company's recent SEC filing at the SEC's website at www.sec.gov for detailed discussions of the relevant risks and uncertainties. The company undertakes no responsibility to update the information in this conference call under any circumstance. The press release distributed today that announced the company's results is available on the company's website at www.loopnet.com in the Investor Relations section under Financial Press Releases. The current report on Form 8-K, furnished with respect to our press release, is available on the company's website in the Investor Relations section under SEC Filings and on the SEC's website. Now, I will turn the call over to Rich Boyle, Chief Executive Officer and Chairman.

Thank you, Erica. Welcome, everyone to LoopNet's earnings call to report fourth quarter and full year 2007 results. I am pleased to report that the fourth quarter was another strong one for the company. For the full year 2007, we grew revenue to $70.7 million and adjusted EBITDA to $34 million, both of which were 46% increases as compared to 2006. Revenue for the fourth quarter was $19.6 million, which is an increase of 41% from the fourth quarter of 2006. Adjusted EBITDA for the quarter was $9.4 million, up 40% from the fourth quarter of 2006. These strong financial results were driven by the ongoing growth and activity on our marketplaces and our continued monetization of that activity. We have continued making progress in bringing the marketing and searching activities in the commercial real estate industry online and onto our marketplace, despite some challenging industry conditions. At the end of the third quarter, we discussed how the credit crunch and fears of a potential recession were impacting the commercial real estate industry. The trends that we saw developing in Q3 continued during Q4. In the investment sales side of the industry, the turmoil in the credit markets has dramatically impacted the volume of transactions closed. Real Capital Analytics reports that closings of deals valued at $5 million and up were down from 22% to 16% during the fourth quarter of '07, as compared to the same period in '06 depending on asset types. The lack of closed transactions does not directly affect our business, as we are used for marketing and searching for offerings, not as a transaction closing platform. However, the credit crunch has created a situation where buyers are essentially sitting on the sidelines, waiting for conditions to stabilize, and waiting to see if expectations regarding pricing…

Thank you, Rich. LoopNet's revenue for the fourth quarter was $19.6 million, an increase of 41% from $13.8 million in the fourth quarter of 2006. The increase was due to higher average monthly prices for premium membership, an increase in the number of our premium members, and continued growth of our non-premium membership products. On a year-over-year basis, we experienced an 18% increase in the average monthly price of premium membership, resulting in an average monthly price of $56. This increase was the result of the price increases that were implemented in Q2 of 2007 for premium members who use our service to list and search for properties and the shift to a volume-based pricing structure for listers, which we began to implement in Q3 of 2007. LoopNet's adjusted EBITDA for the quarter was $9.4 million or 48% of revenues, an increase of 40% from $6.7 million in the fourth quarter of 2006. The company has reported adjusted EBITDA, which we define as EBITDA excluding stock-based compensation, because management uses it to monitor and assess the company's performance and believes that it's helpful to investors in understanding the company's business. Net income for the fourth quarter of 2007 was $5.7 million or $0.14 per diluted share, compared to $5.3 million or $0.13 per diluted share in the fourth quarter of 2006. The effective tax rate for the fourth quarter of 2007 was 38.1% compared to 25.8% in the fourth quarter of 2006. The lower rate in the fourth quarter of 2006 was due to a favorable tax credit. The fourth quarter of 2007 results include $0.02 per share of stock-based compensation, net of tax benefit, compared to $0.01 per share in the fourth quarter of 2006. As of December 31, 2007, the company had $107.9 million of cash, cash equivalence,…

(Operator Instructions) Our first question will come from Derek Brown of Cantor Fitzgerald.

Thank you. Question in terms of your approach to marketing. The number of registered users and the growth in that front has obviously slowed quite a bit. How are you looking to counterbalance that? Are you changing marketing tactics? Or are you just simply pulling back on marketing spend at all? Are you pressing the accelerator down on that front to let the market know where you guys are right now? How do you guys think about that in this kind of a market?

There's a couple ways. I mean, on the registered user front it perhaps slowed a bit, but not too much. I think the year-over-year growth was probably about 45%. I think the activity level during Q4 from a profile view point of view, there's a seasonal weakness that we see and that we have seen, where we think there's a slow down of the industry on the buy side, investors looking for properties to buy. That said, I mean when we look at where we get registered users, we get such a large component of them organically that it's really not a question of having to take our foot off the accelerator or to otherwise optimize. On the page serve side we do watch it how we drive those on a page serve side, track the spend per and the revenue per on a user-by-user basis. So we feel very comfortable about the incremental value of the registered user coming on versus what we spend to acquire them. There are some discretionary areas where we have the flexibility depending on what time in the quarter it is to ease off a bit. An example would be during the Christmas holiday season we just don't see a lot of activity in our system, so we don't spend a lot on marketing. But those are very tactical. From a strategic point of view, we really haven't changed our view at all that we're in the early stages of aggregating overall activity and we're going to continue to drive that aggregation as a top priority. We're very comfortable about our ability to manage that profitably. As we said earlier, the margin's pulling back a point or two during this year to 45% is a tradeoff that we're willing to make because we're going to continue to make the investments to drive growth.

With respect to the pricing changes that you guys have implemented over the last several quarters, given where the market conditions currently stand, are you doing any second guessing of having raised prices or considering rolling any of those back right now?

No, I mean the pricing model change is really putting more control in the hands of our users to decide where they want to spend their marketing dollars on a per listing basis, and tangibly tying the results they get on a per listing basis per month, and we're very happy with how that transition is going, and the market conditions are not impacting that at all. The market conditions we talked about are really impacting the searching side where we have not changed our pricing model. So we're very comfortable with the pricing model that we're using on the marketing side, and in fact, you know, we've got some good historical examples of in a relatively slow market we think it creates a good environment for us to go to an agent who's marketing properties, show them how online marketing is a more effective and cost efficient tool as compared to their alternative. So we're not inclined at all to change the model we've put in place. We think it's going very well.

Great, thank you.

And our next question comes from Steve Weinstein of Pacific Crest.

Thank you very much. Just looking at your '08 guidance and understanding the pricing dynamic that's taking place in the product, it seems to me that just the price increase alone in the product would put you in your revenue targets for the full year. So I'm wondering if you're expecting any growth in the premium numbers in 2008, or if there's any change? Do you think that might actually end up down year-over-year?

To understand the dynamic and we talked a little bit about this, or at least I tried to going through my script, we're seeing a very different dynamic on the searching side or the marketing side of the system right now, Steve. The searching side, there's a challenging industry set of conditions out there about investors that are sitting on the sidelines, waiting to see what happens to the financial markets before they decide about buying properties, and that's definitely creating some headwinds for us. In contrast, the marketing side is growing really well. When you net those two out, on the marketing side, as you look at growth in listings and growth in revenue per listing, it's probably true at the end of the day the majority of the growth this year is coming from increased revenue per subscriber as opposed to increased subscriber count. But that's being driven more by the marketing side in the revenue-per-listing type of metrics.

The members that are listing product, given the new pricing schedule, are going to be paying a lot more than the folks who are just viewing or potentially buying product. So I assume you're expecting a fairly material increase in ARPU compared to what we've seen over the last couple of years. Is that fair to say?

Well, it's been going up a little bit, yeah, but it's definitely--

Wouldn't the mix shift make it a more dramatic change on a year-over-year basis, because you're adding more at the high end and taking out some from the low end?

No, I don't think so. I mean, we have a lot of users who have many listings on the system, and so the average revenue per listing, you know, I mentioned earlier was up about 20% on a year-over-year basis, and we're still in the process of rolling out the variable pricing model. So those types of changes are still propagating through, but when you look at it on a per listing basis, which is how the agents think of marketing their properties, it's not a very dramatic change at the end of the day. When you compare it to what they're spending, for example, the hundreds or even thousands of dollars they might spend in print media advertising, it's a very small marketing fee as compared to their offline alternatives.

Okay, thanks a lot.

All right, our next question comes from Jim Wilson of JMP Securities.

Richard, as you looked at your outlook for the subscription turnover rate monthly, do you expect a difference? Are you seeing a difference in the marketers versus the searchers that you would build into that overall expectation?

Yes, and we have included that in that expectation. So if you actually look at it on a segment-by-segment basis, you know, the cancellation rate in the searcher population has gone up considerably since last September when the credit crunch really hit the market. And as I said earlier, I mean the phenomena there is literally people that just simply said, I'm going to wait and see what happens before I make a decision to look for a property to buy. And so we still see some of them on as free users, but they're just simply not using the paid service, which is typically what they do when they're in the specific act of looking for a property to buy. And as they sit on the sidelines right now, we've seen a higher rate of them canceling out. So the primary growth in that cancellation rate is absolutely coming form the searcher side. There's a very small elevation that's on the marketing side but it's not the driver. The driver is very much the searching side, but when we look at that cancellation rate that I talked about for the full year of 2008, expecting it to be in the 4.5% to 6.5% range as compared to 3% to 5% that it's been historically, that is a blended rate taking all that into account.

Yeah, no, that's what I assumed. I was just wondering if you were willing to differentiate the rate between the two.

No, we're probably not going to break it out. We track about eight different segments internally and the blended rate is what we're reporting external for the company.

Is there anything in the way of, from a marketing standpoint, anything on a larger firm basis or anything that might be out there, you're working on negotiating? I know you have obviously contracts in place with the major brokerage firms. But in this environment, is there anything on a more material basis you might look to put together to bring more marketers on board at a more aggressive pace?

We're always looking for ways to accelerate the growth on both sides of the business, and definitely in these market conditions it's certainly shifting to a set of circumstances where agents on the marketing side are going to be looking for better ways to market their properties. We certainly have an open dialogue with a lot of the big firms. That said, the reality in the kind of industry segment that we primarily serve is the vast majority of marketing agents on LoopNet are small, independent brokers, and the vast majority of the marketing decisions are made by the independent agents that are marketing a specific property. We love to look for ways to accelerate the growth in our business, but there's no magic bullet. It's a lot of just aggregating independent, small brokers onto the platform over time.

Okay, all right, thanks.

Sure.

That was our last question. Ladies and gentlemen, thank you for your participation on this call. You may disconnect at this time.