Ladies and gentlemen, thank you for standing by. Welcome to the Perion Third quarter 2014 Financial Results Conference Call. All participants are in listen-only mode. Following management’s formal presentation, instructions will be given for the question and answer session. For operator assistance during the conference, please press *0. As a reminder this conference is being recorded. With us today from Perion are Josef Mandelbaum, CEO and Yacov Kaufman, CFO. I would now like to turn the call over to Deborah Margalit, Director of Investor Relations. Deborah please begin...

Thank you, and we appreciate the attention of everyone who is joining us today. On today’s call, management will be reviewing the financial results and business highlights of the third quarter ended September 30, 2014. The press release detailing the results is available on the Company’s website at www.perion.com. Before we begin, I’d like to read the following Safe Harbor Statement: Today’s discussion will include forward-looking statements. These statements reflect the Company’s current views with respect to future events. These forward-looking statements involve known and unknown risks, uncertainties and other factors, including those discussed under the heading “Risk Factors” and elsewhere in the Company’s annual report on form 20-F, and the report on Form 6-K filed with the SEC on September 23, 2014, that may cause actual results, performance or achievements to be materially different from any future results, performances or achievements anticipated or implied by these forward-looking statements. The Company does not undertake to revise any forward-looking statements to reflect future events or circumstances. In addition, and as in prior quarters, the results reported today will be analyzed on a non-GAAP basis, which management believes better conveys the operational state of the business. We have provided a detailed reconciliation of non-GAAP measures to their comparable GAAP measures in our earnings release, which is available on our website, and has also been filed on Form 6-K. With that, I’ll turn the call over to Josef Mandelbaum, Chief Executive Officer. Josef…

Thank you Deborah and good morning everyone. Welcome to our 2014, Third Quarter earnings call. This morning I would like to briefly review our Third Quarter results, discuss our strategy going forward for our search monetization business and conclude my remarks with an update on our mobile business. Yacov will review our financial results in more detail and we will then open the call to your questions. To start, our Third Quarter results are in line with our expectations and guidance despite a very challenging market backdrop. For the quarter we delivered $87.4 million of revenues and $33.9 million of EBITDA, with earnings per share of38 cents. Overall, the changing market and deteriorating practices of the search distribution business, have created an inflection point for our company. We have decided to be more selective in choosing our partners, executing a controlled transition to a higher quality, more transparent, albeit smaller, search monetization business. This will also enable us to accelerate our strategy and focus on leveraging our core competencies to provide cross-platform monetization solutions for publishers and marketing solutions for advertisers. We remain confident that continued execution and focus on this strategy will lead to a healthier, less volatile and more valuable business. As discussed on the second quarter call, we have been experiencing headwinds from many sides of the download search ecosystem, including; new guidelines, browser changes, and competitive practices, that we have chosen not to follow. Taking these ongoing challenges into account, we proactively pulled back on our marketing spend in the Third Quarter, and are continuing to do so in the Fourth Quarter. In addition, we implemented a reorganization of our search business, which included a head count reduction and other cost saving measures. The goal is to align our costs to lower future search revenues, maintaining…

Thank you Josef. As we stated in our press release, the acquisition of ClientConnect was viewed by US GAAP as a reverse merger, and as such, our 2014 performance is being compared to that of ClientConnect in 2013. It goes without saying, that the growth seen, that I will further elaborate on, is to a great extent, and sometimes entirely due to the 2013 Perion performance, not included in the ClientConnect business for that year. Revenue for Perion this quarter was $87.4 million, increasing $5.8 million, or 7%, compared to $81.6 million at Client Connect in the third quarter last year. In the third quarter of 2014, non-GAAP revenues include $1.1 million of Perion’s deferred product revenues, which were deducted in accordance with US GAAP as a result of the acquisition. In the third quarter of 2013, non-GAAP revenues included $0.6 million of revenues which in the GAAP report were associated with discontinued operations. In the third quarter of 2014, and as indicated last quarter, we were more selective in engaging our marketing partners, and as a result, we reduced investment in customer acquisition by 40%, to $30 million, representing 34% of revenues, as compared to $49.8 million, or 61% of revenues in the third quarter of 2013 by ClientConnect. This reduction impacted the growth and revenues this quarter and will contribute to lowering revenues in the coming quarters. As we transition the company, investing and developing our proprietary mobile and marketing solutions, R&D expenses continue to increase year over year and were $10.1 million, or 12% of revenues, compared to $9.2 million, or 11% of revenues in the third quarter of 2013 at ClientConnect. Looking forward, we intend to further increase our investment in developing new products for new platforms, enabling us to rapidly create revenues on these platforms.…

Yes, sir, thank you. (Operator Instructions) And we will take our first question from Kerry Rice with Needham. Kerry Rice – Needham & Company, LLC: Thank you. Josef, maybe if you can provide a little more color, maybe stepping back to last quarter and you're talking about the headwinds and those extending into 2015. Can you provide some details on that, is it primarily the impact around Chrome that you're – that you highlighted last year or is there still some of the technical issues that you – that are impacting search? And then follow-up question is just can you talk a little bit more or can you give us some details around what revenue Grow or your mobile initiatives contributed in the quarter? Thank you.

Thanks for joining the call, Kerry. So – excuse me, everybody, I have a cold. Yeah, so first of all (inaudible) so it was a one-time thing, we fixed it and then it was done. The headwinds we referred to, I mentioned briefly, are really coming from three sources. First is browser changes, Chrome being the most significant browser changes, that are, as you know, making it more difficult in terms of conversion and the download because the new (inaudible) it's too much, it's almost like a double (inaudible). And the way they execute it is you have an extension, it goes in. The default is "do not enable" and then you have to click "enable," so usually the enable button is in the right side and Chrome put it on the left side and I'm assuming they did it to make sure that the consumer really knows what they are doing. As you would expect, that has a dramatic impact on conversions and I think the real issue is working through how to adjust to that and hopefully at the time I'm very confident this will happen (inaudible) addressed. So that's just one aspect, browser changes. The second is new guidelines and (inaudible) antivirus companies we have noticed images that in the past probably five or six months have certainly increased the detection of some of our projects; they're not viruses, they're not malware, no one in the industry (inaudible) but the antivirus companies have certainly increased the detection which again conversion, if you're starting to get the theme, the more your conversion, your accepted lifetime value or your accepted payout, depending on which side you are of the equation, certainly gets [hit] (ph). Second – and the third thing is there are competitive practices out there that –…

Yeah, sure. I think we mentioned this specifically that there is – there were some technical issues that caused us to lose on a one-time basis some of our existing payout, or existing revenue. That's what we mentioned and that was not recoverable because it was gone. But on a new install basis we did fix technical fix that was going forward and then as we motioned, we (inaudible) is a really close (inaudible) so in Q2, we certainly had some technical issues that hurt (inaudible) our revenues and profitability in Q2, not significantly, but we hurt it. When we moved it – we also moved the (inaudible). But the bigger issue was that the headwinds that I mentioned really made us cut down on our marketing spend and go do the reductions we did today. Kerry Rice – Needham & Company, LLC: That's helpful, thank you.

And we'll take our next question from Dan Kurnos with the Benchmark Company. Daniel L. Kurnos – The Benchmark Company: Yeah, great, good morning, thanks for taking my questions. Or good afternoon for you guys. Just a quick housekeeping question first, maybe for Yacov, just can you split out between product and other – what the product revenue was in the quarter?

Certainly. In the third quarter our product revenues were about $5.1 million and in the other advertising was about $9 million. Daniel L. Kurnos – The Benchmark Company: Great, thanks. Josef, let's go back to search for a second because I do want to get into some of these headwinds and to talk about more specifically what's actually going on in the market here. it sounds like – the [DLA] (ph) market seems to have stabilized at least from what we have heard a little bit particularly on the B2C front, although we did hear that Google did limit inventory slots, which I think is probably still causing a little bit of a headwind. But maybe of more concern, I just wanted to get – ask a quick question of you guys, if Conduit has any exposure to the content market because we know that Google has been making some unofficial changes with regards to their SEM arbitrage policies and I was curious if Bing was considering following Google down that rabbit hole.

Daniel L. Kurnos – The Benchmark Company: Yeah, I was definitely referring to your business, I was just curious on the content side. These are unofficial changes Google has made on the SEM arbitrage side that seem to be filtering through to portal sites right now or content-rich sites as they – not necessarily even related to the Panda or Penguin changes but (inaudible) things that are in the pipe but it sounds like that's not an area of exposure to you so I'll follow up then on – look, it sounds like Yahoo, who has been a good partner to many particularly on the mobile side, made some pretty public comments, it sounds like they are getting more aggressive in the B2B market. I know that they have been taking some share there and we have also heard from [IEC] (ph) that the B2B market is probably going to compress through the second half – or through the first half of next year. So I just – I want to get your sense on the core business, on the color going forward, the search outlook and core search Grow without mobile?

That's a – so the answer I think is in the short term, I'm probably doing (inaudible) I don't think it's going to grow into the second half of 2015 as well. Yahoo is in the marketplace and others. I think mobile itself remains challenging because obviously Android and Apple being the two largest by far operating system suppliers obviously have existing contracts with Google and therefore it's difficult to make that a business model today in the mobile ecosystem. I'm sure that over time that will eventually happen but today for someone like us it's really not an area of focus. We're looking at alternative monetization to search in the mobile space and not search in the mobile space. With regards to overall Yahoo in the marketplace and market share as you mentioned, Yahoo is a partner of ours as well, we are the only one in the marketplace that has a deal with Bing. We think that's a competitive advantage of ours and we have an excellent partnership and a good partnership with them. And we therefore will work with Yahoo and we still have to do with Google as you mentioned. Clearly Bing is a competitive advantage of ours. However, as I mentioned, that doesn't take away from the headwinds. Your search partnership is great, but if your conversion goes down, I don't care who your search partner. The economics of the (inaudible) business model work through most of our partners is about spending money on buying some downloads for their products and they're happy to give that money (inaudible) doing it and if they can't they don't spend the money. In which case we don't – we're helping them but if my lifetime value is lower, I'm going to lower my payouts, which is what Yacov…

So it's a great question. I think I'm going to go back and answer the question just a little bit (inaudible) just to hopefully put it in context. (Inaudible) the core competencies of our business is focused on two areas; one we want to help people monetize and we've done that for years through search monetization, understanding optimization and so on and so forth. But what we've less talked about and what we're realizing really is a core competency and asset is that what we've bought – and we still buy $200 plus million of media buying and we are one of the few companies that knows how to measure [LPB] (ph) on a cohort analysis across multiple platforms and networks and measure ROI and on a cash by cash basis. That we decided, and when it comes to mobile to focus on that side of our business and expertise and not the former. And the reason is because today, at least right now, search is not a viable monetization for us in mobile. When you look to advertising we think it is and we'll get there but it's a very crowded space. And when we looked at it we decided we want to (inaudible) we want to be focused, we thought that pain points of advertising and publishing who were trying to get downloads or installs for their business and their products and their apps it's a really complicated world out there without uniformity of any kind, whether it's (inaudible) mobile, this and that network, the changes. And in doing a lot of research we realized that a lot of the advertisers had the problem and we decided our initial focus on mobile is to focus on that. And as to the business model there is really one of…

Yeah, we (inaudible) previously. We've had some start and stops in that business. We've – we originally tried to (inaudible) it up on the – during the data-driven advertising and growing the [RTD] (ph) market and we had some general success there. But as you know there are a lot of companies out there. It's a tough market, we're looking at the data we have, it did increase conversion and yield but we didn't feel it was enough to build a big business off of when it came to scaling. What we did find though is that there's a lot of companies who are in the ecosystem, whether they're download companies or portals that really don't optimize their inventory based on what they have today, whether that's just optimization based on the data they have or optimizing their own inventories just by paying closer attention to it. And we started really working on that (inaudible) and in that we've actually found some good success where because we are doing at our own networks, which we are (inaudible) and we've done a very good job of ratcheting up the CPMs – actually that's just the wrong word – extracting higher CPMs because of this optimization. We're now taking the exact skill set and we have already started launching to other people so who have inventory that's not related to search, our search. And we think that's a big opportunity, as we look through the market it's an ignored part of the market as we think we have a unique expertise to excel in because we know the market and we certainly understand the types of advertising and the type of advertisers that want to go there and the publishers (inaudible). So I think next year we'll see that grow and hopefully we think it's an area of investments as we look going forward. Daniel L. Kurnos – The Benchmark Company: Terrific, thanks for all the color, Josef, really appreciate it.

Thank you. Thank, Dan.

And we'll take our next question from Jason Helfstein with Oppenheimer. Jason Helfstein – Oppenheimer & Company: Hi. Josef, can you talk a bit more about the acquisition strategy you alluded to and could you be specific on some of the acquisitions you're looking at, the pace of acquisitions, i.e., one a year, how do you think about it, and the ability to integrate it, or just do you have $100 million, is that five small acquisitions, one large acquisition, maybe talk about strategically what you want to accomplish with the acquisitions given your comments around mobile, you believe we'll monetize more on the mobile display side. There's obviously a lot going on programmatically, I think people are still struggling to figure out how to integrate programmatic with mobile, and so maybe just talk in detail about some (inaudible). Thanks.

Sure, thanks Jason. Yes, basically, the way we look at acquisitions, I don't have an answer if it's a $100 million acquisition or $200 million or $50 million. What we're focusing on is acquiring companies that are synergistic and add value over the long term to create something that's unique and meaningful. And we're going to focus on two areas. So let's talk about mobile first. In the mobile we agree programmatic is a key aspect of it, both whether it's display or video – we think they're two exciting areas, video on the desktop is also interesting and growing and it's just really exciting now on the programmatic side. We think there are opportunities there as well as display and as I mentioned, really try to sell for the needs of the advertisers across all the display platforms. So we'll look at companies in that area – as you know there aren't many large companies, very small buying companies I'd say in the range there that probably have anywhere from $5 million to $30 million of revenue that are growing nicely, high double-digit growth year over year and that we're looking for them to ideally – in mobile what we are looking for is things that are going to be profitable, breakeven or things that we can have scale to – that are not losing a lot of money that we have to put more cash in from (inaudible). So we're looking focused on those types of additions that will either A, help build out and accelerate our Lightspeed so when we look at the Grow Mobile acquisition, there are other components that we still need to add to that (inaudible) to be a full 360 solution for advertisers, social and other aspects that we're still working on. I…

And we'll take our next question from Jay Srivatsa with Chardan Capital Markets.

Thanks for taking my question. Just a couple of quick questions there, Josef. In terms of media buying, obviously they correlate heavily towards the revenues in the next quarter for you. When do you expect to resume meaningful media buying and when do you expect the overall market to really start to (inaudible) like that?

Jay, great question, and to be truthful we wish we had a great answer for you. But we'd like to be transparent with investors as well and I don't have a great answer but I can tell you we are seeing similar things, I also (inaudible) IEC and Blucora as I mentioned – Dan mentioned earlier. I think all of us are seeing that 2015 we expect things to get to a much more stable state and then certainly I think that goes in our favor as we're in – some of the biggest (inaudible) out there are stable state and working on some initiatives as we mentioned and the guidelines are clear as I think (inaudible) again, I think they will be over time. I think that's good news for us and we (inaudible) and we will grow from the baseline. If it happens sooner, then clearly we will certainly do that as we said before. We are always looking at opportunities but we are disciplined, we have a great system as I mentioned, we have audits, we have engagement systems that we use internally not just (inaudible) and those systems are very, very good at telling us what a lifetime value is, what the ROI is, and we believe that the best course of action for our business and for our shareholders is to exercise prudence with regard to how we spend their money. We know that – obviously that means we have low revenues next year, because when you spend (inaudible) money now your revenues. But I think the most important thing we're focused on is the next two or three years, we're not focused on the next quarter or the quarter after that, we're focused on building the long-term business, we can grow and we'll grow in a sustainable less volatile, but really (inaudible) unique value-added proposition to advertisers and developers. We actually really firmly believe we can get there and we're excited about that (inaudible) that the last time we looked at it Jay – and we hopefully will increase volumes as we soon as we believe it's the right time with the right metrics and ROI we'll certainly do that. I'd say the best guess (inaudible) is mid-2015 in a more significant way but hopefully – we're certainly working on things to make it happen sooner.

Thank you. A question for Yacov. You mentioned a 20% reduction in headcount. Was that all completed or more to be done? Give us some update on that please.

Yeah, sure Jay, yes, we completed that – those measures actually just in the last few days as well as planning through the rest of the cost reductions that we're intending to implement in 2015.

Thank you.

And our next question comes from Kerry Rice with Needham. Kerry Rice – Needham & Company, LLC: Just a quick follow-up on that. I think Yacov you mentioned what you thought the charge would be for that in Q4 for the workforce reduction and then on the customer acquisition costs, how far do you think about those falling as either as a percentage of revenue or an absolute dollar in Q4?

So with regards to the first question, we did not quantify it actually because actually we haven't completed the cost savings exercise that we've begun. We will tell you as soon as – and we'll tell the market as soon as we've completed the process. But obviously when you go through a reorganization of your workforce as well as the facilities, there will be some charge and as I said we'll inform the market as soon as that happens. With regards to the level of media buying, we're expecting it to actually level out currently and we'll try to maintain that going forward. Kerry Rice – Needham & Company, LLC: Thank you.

And ladies and gentlemen, this does conclude today's question-and-answer session. I would like to turn the conference back over to management for any closing or additional remarks. I will now turn the call back over to Josef Mandelbaum for closing remarks.

Thank you. To wrap things up, we are pleased with our third quarter results and are proactively making the decisions necessary for building a stronger business, thus creating long term value for all stakeholders. We are cognizant of the challenges before us as well as the opportunities that exist. We are confident in our strategy and look forward to updating you on our progress in future quarters. Lastly, I want to say a special thank you to all of our associates. I know these are challenging times but together we can and will rise to the occasion. Together we will accomplish our mission of building a long term sustainable and valuable business for ourselves, and our shareholders. Thank you.

And ladies and gentlemen, that does conclude today's conference. We do thank you for your participation. You may now disconnect. Have a great rest of your day.