Good evening. My name is David and I will be your conference operator today. At this time, I would like to welcome everyone to the LivePerson First Quarter 2011 Financial Results Conference Call. All lines have been placed on mute to prevent any background noise. After the speakers' remarks, there will be a question-and-answer session. (Operator Instructions) Thank you. I would now like to present your presenters, Robert LoCascio, Chief Executive Officer and Tim Bixby, President and Chief Financial Officer. Mr. Bixby, you may begin your conference.

All right. Thanks very much. Before we begin, I would like to remind listeners that during this conference call, comments that we make regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. These statements are made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Internal projections and beliefs upon which we base our expectations today may change over time and we undertake no obligation to inform you if they do. The results that we report today should not be considered as indication of future performance. Changes in economic business, competitive, technological, regulatory and other factors could cause LivePerson's actual results to differ materially from those expressed or implied by the projections or forward-looking statements made today. For more detailed information about these factors and other risks that may impact our business, please review reports and documents filed from time to time by LivePerson with the Securities and Exchange Commission. Also, please note that on the call today, we will discuss some non-GAAP financial measures and talking about the company’s financial performance. We report our GAAP results as well as provide a reconciliation of these non-GAAP measures to GAAP financial measures in our earnings release. You can obtain a copy of our earnings release by visiting the investor relation section of our website. And now, I’d like to turn the call over to LivePerson’s Chief Executive Officer, Robert LoCascio.

Thanks, Tim. Good afternoon, everyone and thank you for joining us. I'm happy to report that our business had a very strong quarter. We generated $30.4 million in revenue, which is a 1% increase from the prior quarter and a 20% increase from the prior year. Earnings came in better than our guidance with a record EBITDA of $0.16 per share and adjusted net income of $0.09 per share. Before I review the details of our ongoing operations and new areas of potential growth, I want to update you on our overall strategy. 2010 was a transformation year for LivePerson as we reexamined our products, processes and values. The entire company came together to identify our core values and establish a common mission that would guide our decisions and strengthen our value proposition in the marketplace. Our mission is to create meaningful connections between businesses and their online customers. This is something we have been doing since the company was founded and is one of the main drivers of our success. Today, our proprietary [ph] chat helps 8,500 companies make meaningful connections with their customers in a way that delivers significant value to their business by increasing conversion rates on their website and dramatically increasing customer satisfaction rates. Our success to date has been driven by our leadership in intelligent real-time chat, which were created by combining chat with a sophisticated behavioral targeting engine. Last year, we began to invest in ways to leverage our leadership in intelligent chat and expand it into new products. Our behavior then processes enormous amount of data near 100% of the visitors on our customers' website. Though, we process and analyze all of this traffic, chat is typically used by less than 2% of these visitors. We have the opportunity to engage in much…

Thank you so much Rob for the kind words as well. And I would also like it take the opportunity to welcome Dan Murphy to the team, so welcome aboard, Dan. I am happy to report as Rob did as well, we delivered strong performance in the first quarter hitting our revenue expectations and exceeding our profit guidance. We expanded our developer network and made a good progress against our now product launch timeline. Revenue in the quarter increased 20%as compared to the prior year in what is traditionally the slowest growth quarter due to seasonality for LivePerson. Our EBITDA margin expanded fully 200 basis points as compared to the fourth quarter, which is great progress and more than 400 basis point versus a year ago to more than 28%, demonstrating the continuing opportunity for leverage that we have in our cost structure. Customer retention continues to be strong at more than 93% for enterprise accounts, up time again exceeded four nines, 99.99% plus while small business attrition rates improved in the quarter. First quarter revenue increased 1% sequentially to $30.4 million. EBITDA per share for the quarter was $0.16, which is the new high for the company as Rob mentioned. This is an increase of 33% as compared to 12% per share in the first quarter one year ago. First quarter EPS is $0.06 a share up $0.02 per share from the first quarter of 2010 and adjusted net income was likewise up $0.02 per share as compared to a year ago. Revenue from our business operations as Rob mentioned was 22% higher than the first quarter a year ago and a 2% sequential increase. While revenue from our consumer operations was $3.7 million in line with the prior quarter and up 6% versus the prior year quarter. Bookings…

(Operator Instructions) Your first question comes from the line of Richard Baldry. Richard Baldry – Signal Hill Group LLC: Thanks. I was hoping you could expand a little bit on the Beta program for the LP marketer so the types of customers that are the early signed on, what types of scale you think those Betas [ph] will come and sort of, what they're targeting are looking out for, positive results out of those things. Just any more of the Beta, flush it around that. Thanks.

Yeah. There's one big financial software company, big retail company, so it's kind of fits what our general segments are right now and until we go live which we haven't gone live yet. We’ll go live in this quarter with them, I don't have many details on how big they can be, so we just need to get through the Beta [ph], the first part is just sign them up and we're seeing some good traction there across all the segments so. Richard Baldry – Signal Hill Group LLC: Thanks.

Your next question comes from the line of Nathan Schneiderman. Nathan Schneiderman – Roth Capital: Hi, Rob and Tim. Thanks for taking my questions and Dan welcome aboard.

Thank you. Nathan Schneiderman – Roth Capital: I thought actually I’ll just throw one out to Dan. Maybe you could speak with us about your decision to come to the company and what do you see as the biggest maybe low hanging fruit opportunities on the strategic side, as well as the financial side. And to what extent were you involved in the guidance for this quarter?

That’s funny. We told Dan we’re like Dan, don’t talk on the call. Nathan Schneiderman – Roth Capital: I am sorry.

He’s ready to go so –

As far as guidance absolutely none. You know, as far as low hanging fruit I think it's way too early for me to even offer up an opinion, but as far as my backgrounds Thomson Financial Marketing Technology Solutions introductor and you know the things that got me excited about joining are the people, the opportunity and the direction that the business is going. So I’m looking forward to joining Rob and the team and it should be fun. Nathan Schneiderman – Roth Capital: Okay. Welcome aboard. Back to Rob, I guess assuming that you – you do about the mid-point of the guidance you’ve laid out for the second quarter that would be about $62.5 million – $62 million for the first half the year, I am curious is that slightly below what you had envisioned back when you originally gave guidance for the full year about three months ago or – or not? And I am just wondering if perhaps we miss modeled the business or the business is off to a little slower start at the beginning of the year than we thought because the guide is a little below consensus on revenue for Q2.

Yes it’s sort of like the way we always see the business, which is a little bit lower in the first half and you know things pick up in the second half. So, it’s pretty much within the range. So, you know, that’s how we look at it right now. Nathan Schneiderman – Roth Capital: Okay. A question on the Verizon relationship, in particular, and there was a disclosure in the press release that you had some existing customer business with Verizon. I was just curious if that was incremental to the discussion you had last quarter, and maybe if you could speak to kind of the nature of the increased business there and is it P for P or is it something else?

Yes. It was an upsell. You know, we’re looking at expanding in the pay-for-performance area with them right now, but, you know, we are – we think obviously they’re a very big customer, very big telco but it was just an upsell from last quarter. So they are doing well right now. Nathan Schneiderman – Roth Capital: Okay. Thank you very much.

And your next question comes from the line of Richard Fetyko. Richard Fetyko – Merriman Curham Ford: Good evening, guys. Just to expand on the prior calls conversation regarding guidance. You know at $6.2 million bookings in the fourth quarter I would have thought at that combined with some strong bookings in the prior quarter would have, at some point, flown through the first half 2011 revenue and it doesn’t seem like a big lift in some of the growth rates or – or at least in dollar terms certainly. I am just curious if there is a bigger lag between bookings and billings than historically or your tranche seems to be stable so you are not churning off more customers or revenues than in the past. So I am just curious if there is anything changed there and the bookings level in the first quarter seems a little weakfish relative to the last seven quarters seems lower since basically the prior six quarters. Just curious if – I mean I know there is some lumpiness in the bookings, but do you expect the bookings to ramp up higher considering you’ve added more sales people in the last 12-months?

So I’ll take a shot at several of those. In terms of the guidance shake-out for the course of the year I think it’s similar what we have seen in prior years which is a stronger second half than the first half and it’s sort of holding steady. A couple of notes on the bookings and the guidance and how they interact, so our bookings, as you recall, only represents enterprise and mid-market booked agreements, booked contracts that are contractual. PFP is not captured as part of that because that’s performance driven. Small business is not captured there because that kind of ebbs and flows within the course of business, but is not long-term contractually driven. And then the consumer business, what we are seeing is, though year-on-year growth is quite steady we are sort of seeing that flat to slightly up in Q1 and Q2, and so the net of all that is I think is you get this what appears to be slightly, you know, lesser increase going into the second quarter, but none of those are really anomalies. It’s more of just how – sort of the nature of how our bookings are captured between the different revenue streams. Enterprise attrition I think was – it was fairly low in Q4, a little bit higher in Q1. That provides a little bit of an offset. And then the overall bookings transition, I think, a couple deals especially the largest deal we did in Q4 better moved to Q1 we would be here talking about, you know, $5 million average booking rate, which I think is quite strong. So you’re right in that the lumpiness can drive the quarters around a little bit. Richard Fetyko – Merriman Curham Ford: Thanks. If we sort of look at the full year guidance of $133 million to $136 million in revenues, I mean is there – considering the first half the year what could happen or needs to happen for you to hit the high end of the revenue guidance?

I think the variance in the range is really driven by the usual upside performers. So, if we are able to generate from new products and revenue right now we’re really not banking on that. We don’t have that any of that baked into the guidance that would certainly push us towards the higher end of the range. PFP performance is always a potential for more variable up performance in Q3 and Q4, and we are modeling the consumer business essentially flat to slightly up for the year, and so if we replicate prior years where we have seen, you know, 5% to 15% sequential growth in that business that would definitely push us to the top end of that range. There’s definitely three or four levers that would move us to the top. Richard Fetyko – Merriman Curham Ford: Got you. Thanks, guys.

And your next question comes from the line of Brad Whitt. Brad Whitt – Gleacher & Company: Hey guys. Tim, you commented on this, but can you just give us – remind us of your definition of bookings?

Yeah. Bookings are contracts that are signed, which means our enterprise customers and our mid-market customers sign long-term agreements, one-year terms or greater, and we annualize the monthly recurring revenue represented in those deals. And we include both upsells, incremental revenue from an upsell, as well as a 100% of the revenue from a new – a new deal. If we have a recurring revenue renewal where there’s no upsell, no incremental revenue, we would count that as zero in the bookings number. Brad Whitt – Gleacher & Company: Okay. I think that’s – that’s a big difference from a lot of companies because you’re not counting just a regular renewal – if there’s no upsell involved.

Yes. There are – there are some companies that will count that but because – we don’t. Brad Whitt – Gleacher & Company: Okay.

Yes. We don’t. Brad Whitt – Gleacher & Company: Okay. Can you give us some more color looking all these accounts receivable, looks like it’s up 55% year-over-year and almost 20% sequentially, which is obviously much faster than your revenue growth. Can you help us understand that a little better?

Yes. Quarter to quarter it’s – you know we had a significant drop from Q3 to Q4, so, I think again if we normalize it, it is – it is certainly increased as two things have increased. One, a greater proportion of our revenue driven by large sort of blue chip enterprise accounts as well as by pay-for-performance. So larger companies pay us a lot more money. We’ve got two customers of $5 million a year, one of those $10 million a year. On the downside, they pay more slowly and we have longer collection terms – longer receivable terms with those customers. Pay-for-performance is the second item because we book – recognize pay-for-performance revenue net of costs that go through to the labor partners, our receivables can overstate what that number is, and as pay-for-performance has grown that number has gone up. So the number has increased, it’s increased for reasons that are good and tied to the growth of the business and are not tied to any greater concern about the collectability of those receivables. Brad Whitt – Gleacher & Company: Okay. And just so – clear the – so these three large customers, one that – two of them that are $5 million run rate and one that’s $10 million customer, are you paying – are those being billed monthly or –

Yes. Brad Whitt – Gleacher & Company: Okay. And then getting back to the – to the revenue acceleration that’s kind of built into the guidance for the second half of the year on a percentage basis it should be comparable what you did last year, but the actual revenue amount would obviously be more because you’re working up a larger base. What is it that’s going to be different in the second half of this year versus last year that’s going to give you that incrementally more revenue? I think – is there more pay-for-performance customers?

Yes. I think there’s just – there’s kind of more of everything. So more pay-for-performance customers, a couple more that sort of fall into that high-end category where our largest customers are PFP customer. We’ve got a couple who now – couple more who sort of fall into that category of potential high growers. We’ve got more business coming from new geographical territories, so more opportunity coming in Western Europe and the Asia-Pacific region. That’s new as compared to a year or two years ago. We’ve got an established mid-market team that’s been in place for a year. A year ago, that team was just getting up and running and was quite, was just getting out of the gate and getting warmed up. And we have an opportunity with some of the newer products, although we’re not taking that into the guidance, but that certainly is helping with conversations with larger customers, and so there’s some sort of overflow value of that as we go out and try to drive more business in the second half. Brad Whitt – Gleacher & Company: Okay. Thanks for taking my questions. I appreciate it.

Thanks, Brad.

And your next question comes from the line of Mike Latimore. Mike Latimore – Northland Securities: Hi. Good evening. What was the final sales headcount at the end of the quarter?

I’m sorry? You broke up a little bit there. Mike Latimore – Northland Securities: What was the final sales headcount at the end of the quarter?

In terms of the reps it’s unchanged versus last quarter. So it – five mid-market reps and 23 accounting executives and private [ph] candidates. Mike Latimore – Northland Securities: Okay. And is part of the investments over the next three quarters, are you looking to add more to that headcount?

Yes. Those – both of those headcount lines should increase to now at the end of the year, yes. Mike Latimore – Northland Securities: And I guess just on the – the bookings growth, again, you know we’re talking kind of 15% bookings growth that you normalize over a couple quarters. You know, it’s a fair amount sort of below the – I think the sales headcount growth – can you help me understand what’s the, sort of, how you think about you know sales headcount growth versus bookings growth?

Well, it’s – again, because bookings only represents a subset of the business, you know, it’s not always going to track exactly, but as new reps sort of ramp up and get the full productivity we would expect those numbers to fall more in line. We are focused on PFP customers in that our largest deal in Q4 was a customer who now may become a strong PFP customer. So I don’t know that, you know, in any give quarter you will see it exactly map to the sales capacity or the growth in the sales team, but directionally, you know, in the second half we should see them track more closely. Mike Latimore – Northland Securities: Okay. And then just o on the Verizon addition in the quarter, you know, expanded biz with Verizon, I guess you mentioned around pay-for-performance. I think on the last earnings call you had talked about Verizon in the pay-for-performance realm, are you launching with a new product there or what – can you help me understand the expansion on pay- for-performance there because you had talked about that in the last quarter as well in your guidance?

We’re going after their normal wireless business and then they also have iPhones and other stuff. So we’re just taking the core business what they do today. Mike Latimore – Northland Securities: Great. And then on the – in terms of the head of sales, I know, you’re looking for some potentially new head of sales. You know I guess any thoughts on the timeframe for that?

We have a – a firm that’s been doing the search and they’re just starting. So, you know, you hope to get it within 90 days, maybe a little longer, but we are just starting the process. So we’ll know shortly. Mike Latimore – Northland Securities: Great. This is my last question. I know you’re coming out with your couponing service later this year. When will you have something around mobile couponing?

You know, once we get the – we’re looking at mobile across all the products. So we have mobile chat already and so we’re already starting to look at it. I would think this year we would, you know, look to have some sort of offering, but the first thing we want to do is just get the core part out which is just the on-site part and then we will look at the mobile pieces to because most – I think when you look at it our biggest opportunity is still within the website. Our customers are only generating 1%, 2% conversion of their overall traffic, so there is still a huge amount of opportunity within going after website, traffic before you even touch mobile, so. Mike Latimore – Northland Securities: Got it. Great. Thanks a lot.

(Operator Instructions). Your next question comes from the line of Craig Nankervis. Craig Nankervis – First Analysis: Thank you very much. Really, most of my questions have been asked. I guess, just to go back over a couple items on the DSO side. I mean, this is an area that you had specifically been focused on addressing, though, it went the other direction than hoped. Do we just sort of infer for that – infer from that that it's really very hard to – for you to control that, what is the conclusion on that?

I think the conclusion is, we should – now, that we've got customers that are getting up into over $5 million and we're getting a fair amount of them. I think we should conclude that, maybe, the new normal is a little higher than the old past where we are much more than mid-market small business focused, which is for instance, if you're small business customer you don't pay us, we actually can – we'll pop up the win and shut you down. But if you are late and you're a very large customer, we're not going to pop up onto your operator screens, if you don't pay us we're going to shut you down. Craig Nankervis – First Analysis: Right.

So, because it's just normal terms of service and they're late and everything, so, I think as we get larger customers, we should assume DSOs may go up more towards the industry average than what we've seen in the past, where it's more of a mid-market small business. That's my guess, but that's the focus now. Craig Nankervis – First Analysis: Okay. And then just to sort of – can you talk about – well, on the bookings involved and the fact that you had the head of sales sort of leave in the same quarter where we get a little bit lighter bookings, we thought. Can you just talk about where the organization is with the existing sales leadership and the transition there sort of operating without the head of sales? Is there any color that might be reasonable to give us a little insight about the whole sales management side of the organization?

Yeah. First of all, I don't think the bookings number is a reflection of the sales leadership, so and as we have seen in the past, quarter-by-quarter things go up a little bit, they go down a little bit. And, so, I know we're always heroes when things go up and we're not heroes as things go down, but it's-quarter-by-quarter view, so we don't see it as a huge problem and it's definitely not related to any leadership issues. There has only been four guys that have run the sales teams tactically. There is a head of North America, with actually a head of east and a head of west, in North America, there was head of EMEA [ph] who’s been with us five years, head of North America has been with us for close to five years. We have had a small business. He has been with us for about seven. He just took that over two years ago. So those guys actually run the day to day of that and then we have a head of mid-market, who used to be our head of marketing and he's been at that role since we fired it up close to two years ago. So those guys run it day to day and the previous head of sales is more looking at strategic opportunities and looking global and International expansion, stuff like that. So, I wouldn't infer anything of the bookings being, something related to a problem in sales. Craig Nankervis – First Analysis: Thank you for that color and that's all I have.

And your next question comes from the line of Jeff Van Rhee. Jeff Van Rhee – Craig-Hallum Capital: Great. Thanks. Just a couple of questions. Maybe, in terms of the revenue guidance, maybe you just touched on here. I know you had said in the last call, very minimal expectations doped in for the new product. At the smallest levels, was there any change in terms of what you built into the guidance this year from those new products?

Not yet. I mean, we want to see a little bit more activity and if I could take a step back for a second, is talking about the new products. Even on the board level, we're – when we run through with the board a couple week ago, I think we're really excited here for a couple of reasons and maybe I can talk a little high level. One is up until last – the end of last year, we were simply focused on delivering chat as a product and in a very short period of time, we architected our entire software to become a platform, which was a major piece of technology that we did last year and very quickly we're starting to monetize. And I think the interesting part about it is, we went out into the world and we said, we've got this platform, we heard a guy from Salesforce.com who was over at AppExchange and he quickly got out there and people heard about us and we already have 14, 15 deals that are paid on products that never existed, as of a quarter ago. So, I think that's real exciting. The second part is, we internally, we really are fostering a much more – a different culture of innovation and someone who just, basically is a small business, professional services person came up with an idea for taking Google analytics because he saw a lot of small business customers use Google analytics and said, what if we imported that data into our system, would that provide a better source of data kind with our behavioral data and found yes, it did. It increased quick through rates. So that came out of nowhere and they sold – how many of those did they sell in the quarter, Tim?

About 15 of those?

15 of those in the quarter, in one quarter. And then, obviously, we have LP market that's coming out. So, I think the important part of this call, is the foot from being a chat company to being putting a platform for intelligence engagement. I'm hoping to hit the high end of the range and we would like to go beyond that. That was the goal. That was the goal. And I think we've shown in a very short period of time that we've got new stuff coming you have, although that didn't exist three months ago. So that's the part we're excited about here right now and I just want to align the people on the call and the shareholders with that, too. And I think will provide a bigger future. Jeff Van Rhee – Craig-Hallum Capital: That's fair. As you touched on the bookings number captures part of the revenue flow but not all of it, but it's the part that at least, with some reasonable ability to measure. As you guys think about the year on the bookings front and you compare it to the revenue growth rate, how should we think about it? Is it safe to be thinking of bookings that we can see essentially tracking in line with revenue growth for the year?

Well, I think you have to combine the bookings with the revenue guidance. The reason, we give revenue guidance and the reason our record on revenue guidance is quite strong, is because we are giving you everything we can, around those pieces that aren’t measured as well. So we're giving you what we can see in trend lines for small business, in consumer operations and PFP. So, I think you have to sort of kind of triangulate between those two, but our revenue guidance is definitely the stronger support in Q3 and Q4, because we can – you can kind of see where we expect bookings to be. Jeff Van Rhee – Craig-Hallum Capital: Okay. Two other last questions on the G&A front. Tim, I think you mentioned that there were some non-headcount related expenses that pushed up, obviously, the hiring has gone a little slow but what were the non – the headcount related things that pushed?

In two areas. So in G&A, we've upped our investment levels in sort of training and support and for both existing in new employees. Those programs and expenses are – didn't start on January 1, but they are kind of getting up and running late in Q1, will flow for the least of the year. So that's sort of a general overhead expense that didn't hit fully in Q1. And then in the sales and marketing area, some of the advertising tradeshow type areas, we came in a little bit under budget in that category as well and then the rest were pretty small items. Jeff Van Rhee – Craig-Hallum Capital: Okay. And then the last one, just on the sales headcount, talks on where you within the year direct repays?

Right now, we are kind of in line with our regional goal, which I think was – we can see two or three in each of mid-market and enterprise. So that would put us probably, four or five by year end, but that's when we definitely look and measure each month and each quarter, as we go through the year to see where we think that number should go but right now that's what I would see at year end. Jeff Van Rhee – Craig-Hallum Capital: Okay. Thank you.

(Operator Instructions). And there are no further questions. Do you have any closing comments?

Yeah. Thank you for being on the call and I will see you with Dan, on the Q2 call. Thank you.