Welcome to the LoopNet Incorporated earnings conference call for the second quarter of 2009. The date of this call is July 29, 2009. This call is the property of LoopNet Incorporated, and any recording, reproduction or transmission of this conference call without the expressed prior written consent of LoopNet Incorporated is strictly prohibited. This call is being recorded. You may listen to the webcast replay of this call by going to the Investor Relations section of LoopNet’s website. The webcast will be available on the company’s website until July 31, 2009. I will now turn the call over to Derek Brown, VP, Investor Relations and Corporate Planning. Please proceed.

Good afternoon. Thank you for joining us to discuss LoopNet, Inc’s financial and operating results for the second quarter of 2009. 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 overall corporate strategy, continued by a summary of the company’s second quarter performance and review of the marketplace. Brent will review the second quarter financial results and provide third quarter 2009 guidance. On August 10th, LoopNet were presented the Pacific Crest Technology Leadership Forum in Vail, Colorado. A webcast of this presentation will be available on the Investor Relations section of LoopNet’s website. I would now 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 does not intend to update the forward-looking statements in this conference call, which is based on information available to us as of the date of this call. The press release distributed today that announced the company’s result 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. You will also hear discussion of non-GAAP financial measures. Reconciliations of these non-GAAP measures to the most comparable GAAP financial measures are contained in the press release distributed today and available on the Investor Relations section of the company’s website. Now I will turn the call over to Rich Boyle, Chief Executive Officer and Chairman.

Thank you, Derek. I’d like to welcome all of you to the LoopNet second quarter 2009 earnings call. On our call today, we will discuss our recent quarterly performance and share with you our perspective on current conditions in the commercial real estate industry, as well as the impact they are having on our business. We will also provide updates on a number of other ongoing initiatives of the company including our recent strategic financing. Following my prepared remarks and those of Brent Stumme, our Chief Financial Officer, we would be opening the line for your questions. With that, why don’t we get started with our discussion? During the quarter we extended our track record of solid execution by successfully driving our business ahead of the targets we set three months ago, despite an extraordinarily challenging macro environment. Revenue for the quarter was $19.2 million compared to our guidance of $18.8 million to $19.1 million. Adjusted EBITDA was $8.2 million compared to our guidance of $7.2 million to $7.5 million. Our adjusted EBITDA margin for the quarter was 42.6% at the higher end of our stated target range for this year of high 30’s to low 40’s on a percentage basis. We believe that these better than expected results when viewed in the context of the substantial headwinds facing our industry, highlight the sound foundation of our underlying business model and reflect favorably on the ability of our team to execute. Not only do we continue to outperform the industry as a whole, but we remain confident in our ability to capture the large opportunity in our core business and believe we are well positioned to capitalize on this industry cycle to our long term advantage. As has been the case since the third quarter of 2007, conditions in the…

Thank you, Rich. LoopNet’s revenue for the second quarter of 2009 was $19.2 million compared to $22 million in the second quarter of 2008, our guidance of $18.8 million to $19.1 million. The decline in revenue was primarily due to lower premium member subscribers and lower advertising revenue as we build the challenging market environment that Rich just highlighted. The net adjusted EBITDA for the quarter was $8.2 million or 42.6% of revenues compared to $10.4 million in the second quarter of 2008, and our guidance of $7.2 million to $7.5 million. The company has reported adjusted EBITDA, which we defined as EBITDA excluding stock-based compensation and litigation related cost because management used it to monitor and accept the company’s performance and believed that it’s helpful to investors in understanding the company’s business. Net income applicable to common stockholders for the second quarter of 2009 was $1.8 million or $0.04 per diluted share compared to $4.5 million or $0.12 per diluted share in the second quarter of 2008. Non-GAAP net income was redefined as net income excluding stock-based compensation. Litigation related cost for the second quarter of 2009 was $4.4 million or $0.10 per diluted share compared to $6.1 million or $0.16 per diluted share in the second quarter of 2008, and our guidance of $0.08 to $0.09 per diluted shares. As of June 30, 2009, the company had a $120 million of cash, cash equivalents and short term investments and no debt. Now I would like to review some of our key operating metrics. The number of registered members which includes both basic and premium members grew to 3,588,271 during the second quarter of 2009, a 21% increase over the second quarter of 2008. The number of premium members as of the end of the second quarter of 2009…

(Operator Instructions) Your first question comes from John Blackledge - Credit Suisse.

Thank you. Thanks for taking my call. Just a couple of questions, so you guys have $120 million in cash or about $3 per share after the capital injection, just, Rich, if you can just talk about what you might do by the end of the year with that cash or if anything at all, I know you alluded to it a little bit, so that would be one question. The other would be I think you just said average cancellation rate was 6.8% per month. So, is that a new metric that you guys are introducing and if you can just talk to what it was in the first quarter and maybe what it was in 2008? Thanks.

Sure, so in terms of what do we with the cash, I mean the two preferred avenues of putting that to use are what we discussed in the call, we don’t have specific M&A targets that we are willing to talk about at this point, but one would be looking at some acquisitions that we think expand the range of services we provide to our customers or expand the scale of our marketplace. We have been active acquirers in the past and are certainly actively evaluating number of things right now. So something that we’re very focused on and hope to be successful in, but we are part of what is, the timing issues have to do with a very disciplined bunch in terms of how we go about that. So, there are a number of things we are looking at and that we hope to bring the fruition, but nothing that we are ready to announce at this time. Then in addition to that, we have on an ongoing basis been making investments in the business on an organic sense and we are going to continue to do that as well. There’s a number of things going on this year in terms of aggregating more for lease spaces would be an example of areas where are building not just tools, but investing in business processes and executing up the scale of that to try to grow the overall marketplace. So, we’ll continue to drive in some of those organic investments as well. Then, thirdly, we have in the Xceligent case made a strategic investment where we made some minority stakes was found in acquisition at this point, but it’s a business partner that we’ve been end up with a very close relationship with that we think benefits both businesses. So, we’ll continue to look at all those avenues and yes, we think the strong balance sheet with 120 million in cash and no debt is a real strength of the business that we can leverage to our advantage in this cycle. In terms of the cancellation rate, maybe I’ll let Brent to comment on where we are with that.

Yes, so you did hear, right. Our cancellation rate during the quarter was 6.8%. If you go back and look at 2007 and 2008, our cancellation rate has kind of been in the 4.5% to 6% range. So it’s firstly common on at each call, but in Q4 2008 it actually went above that range, it was just slightly over 7% so we did mention that and then in Q1 it was 7.1% so Q2 came in slightly less than Q1.

Your next question comes from Jim Wilson - JMP Securities.

I guess first question on G&A and obviously you’ve increased in Q2 as soon as far as the guidance and I know you talk about further investing in the business. Could you just give a little color on that and thoughts on where you are spending money internally and a little bit of direction on that line items?

Yes, Jim this is Brent. So, the most of the increase that you have seen in G&A in Q2 was all because of the litigation costs. If you actually strip out the litigation G&A is down about 300,000 from Q1. But I think as Rich mentioned $2.3 million in the quarter and in Q1 it was about $1.1 million.

Okay. Well, that may as I then assume that’s similar numbers built in your Q3 guidance and is that the right way to look at it?

No, because the guidance that we have given has actually exclude the litigation costs just because it’s too hard to predict the timing of it and lot of it depends on how quickly the courts move on certain things. So, the guidance that we have given actually excludes the litigation cost.

That’s been the consistent policy since the beginning on this Jim its been that way since the end of ‘07.

All right. Okay. Then, just the other questions on pricings there, just working on the model here, I guess any real change on the pricing or trying to look fairly stable compared to Q1, but your percentage of the total premium members seem to be about the same between listers and viewers, but any real change or any real change in the pricing or any mix shift?

No, I would say it’s fairly consistent. I mean, we are seeing a little bit of movement around on the searching side of the system for example, there is a lower price point in searchers and as we’re starting to see with things that beep on the searching side maybe begin with a little bit of interest, there is a little bit of mix shift there. We’ve also seen, and this has really been over the course of the last year, I think we’ve commented on this a number of times. In one of the market segments that has been, I think most severely kind of squeezed out of the market over the last year, is what I would call the low volume crossover listers that maybe do a little bit of residential, a little of commercial in the kind of low-end property for sale market. Those are people who would tend to have one or two listings at a time and they are just not getting business right now. If you look at it on dollars per listing basis, they tend to be good customers for us. So, it’s moving around a little bit, meaning both the overall compression in listings as well as the mix shift a bit recently toward searching is pushing down prices a little bit on that side.

I mean they are kind of minor tweaks on the fringe; the general character from Q1 to Q2 didn’t change very much.

Your next question comes from Steve Weinstein - Pacific Crest.

Two things. One, so in your prepared remarks you talked about maybe a trend towards a transaction volumes improving sequentially and I would assume your business is more transactional based than asset price base. So, I would think that it will be a positive indication for you, but you’re still guiding towards a sequential decline in Q3. So, I’m wondering if you think there is some sort of lag time between when we would see transaction improve and when it would start to impact your business, if you can give any color or framework around that. Then, just kind of a follow-up question, the last question here, your last comments. This was the first time in a while where I guess, you reported the kind of average monthly pricing did actually drop a little bit from quarter-to-quarter. Any more color you can put around that would be great and if you think that’s likely to continue if we reach some near term?

Yes, so in terms of the overall cycle and how it’s impacting our guidance. I think, first of all, what we saw in the RCA data that we sided, that had a sequential uptick in volume. There was a 4% increase from Q1 of ‘09 to Q2 of ‘09 over the base line, though is that it’s running it about 10% of the volume it was a few years ago. So, on the one end it’s a little bit of a bright spot and that it appears to have quick declining and may be went slightly favorable. We have not assumed that that is a sharp V-type change in the market and I think as it affects our guidance, the fundamental assumptions we are working from is that volume stays really, really low for the near term. So, we’d love to be surprised on the upside, but I think the fundamental issue for there for us in that scenario is that where we’ve been saying for quite some time now as there is still a pretty big pricing gap and the credit markets are still pretty disrupted. So, I think we are happy to see volume quit going down and may be go up a little, but really see a substantial recovery, we think prices have to go down another 20% or so and the financing markets need to be a little bit more robust then they are at the moment. So, we have not assumed that happens in contemplating our guidance for the next quarter. I think we’d be thrilled if it does. The way we expect it to play out in our platform is really as prices approach this market clearing level, we think we will see search activity in our system pick up in advance of reported…

Your next question comes from John Crowther - Craig-Hallum.

Quick question here, sorry if I missed this number, but then a little bit of a commentary around it. Could you speak to the year-over-year increase or kind of a quarter-over-quarter increase in leasing searches and kind of unique leasing members and kind of the trends there?

Yes, sure. I mean the primary number we breakout is actually on a listings basis where the total number of for lease spaces being marketed on the platform is up, I think it was about 28%.

28%.

On a year-over-year basis. The average profile view for listing is actually down a bit on year-over-year basis. The dynamic during the market is really kind of two things. I think our marketplace reflects the broader activity in the overall offline rule and fairly accurately here. So, on the marketing side of the world vacancy rates are going up and what that means in terms of our platform is there is more space that’s sitting around vacant. If you own a building and you’re sitting on vacant space, you’re very motivated to get a broker to market it for you. So, it’s a very good environment in terms of picking up more listings on the for lease side of the world. In fact, we’re seeing strong growth on the listing side of our for lease marketplaces, a reflection of that. On the other hand, when you think about the demand side of the world, although it’s sort of macro economic indicators, unemployment is up so businesses don’t need expansion space. Certainly in sectors like retail, businesses are just really not expanding much at all. So the consumption of space, people looking on the demand side for new space to let is actually quite low right now, the demand activity is pretty muted. The leasing industry is a little less volatile than the sales side in that. The average duration of a lease might be five to seven years, so there is natural retention flow of businesses whose lease are expiring. Even in a market like this they may not be taking net new space but they have an opportunity to upgrade to nicer space or lower cost. So there is a baseline of leasing activity that you still see in the market. Net absorption, I think as we said on the call is negative, pretty much everywhere. So if you look at the overall space, more is coming on the market than is being consumed by people renewing leases. So that’s kind of a characterization, great environment to pickup a lot of supply and we think we’re both doing that successfully in our existing platform as well as looking at some investments to try to accelerate that. It’s a tough environment to pickup demand because demand is so muted, but we think that our marketing platform, which delivers is by far the biggest online audience looking at stuff, becomes disproportionately valuable to the listers in a market like this. So, we’ve been pretty pleased with our overall performance even in a market where its somewhat challenging in terms of leasing transaction volume.

(Operator Instructions) Sir, you have no questions at this time.

All right. Well, thank you everyone. I guess that ends the call for this quarter. We’ll look forward to updating you again next quarter.

Ladies and gentlemen, thank you for your participation in today’s conference. This concludes the presentation. You may now disconnect. Good day.