Tom Ward - Investor Relations Bill Oesterle - Chief Executive Officer Tom Fox - Chief Financial Officer Angela Hicks Bowman - Chief Marketing Officer

Aaron Kessler - Raymond James Shawn Milne - Janney Capital Markets Justin Post - Merrill Lynch Kerry Rice - Needham & Company James Cakmak - Telsey Group Gene Munster - Piper Jaffray Peter Stabler - Wells Fargo Securities Todd Van Fleet - First Analysis Jeff Houston - Barrington Jason Helfstein - Oppenheimer & Company Darren Aftahi - Northland Securities Sameet Sinha - B. Riley Blake Harper - Wunderlich Securities

Good day, ladies and gentlemen. Thank you for standing by, and welcome to Angie's List’s Fourth Quarter and Fiscal Year 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session with instructions to follow at that time. (Operator Instructions) As a reminder, today's call is being recorded. I would now like to turn the conference call over to Tom Ward, Angie's List's Vice President of Investor Relations. Please go ahead, Tom.

Thank you, Sam. Good afternoon, and welcome to Angie's List’s fourth quarter and fiscal year 2013 earnings call. With me today are Bill Oesterle, Angie's List's Co-Founder and CEO; Angie Hicks, our Co-Founder and Chief Marketing Officer; and Tom Fox, the company's CFO. As a reminder, today's discussion will include statements that constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, including predictions, expectations, estimates, or other information that might be considered forward-looking. Throughout today's discussion, we will present some important factors relating to our business, which may potentially affect these forward-looking statements. While these forward-looking statements represent our current judgment, these statements are also subject to risks and uncertainties that may cause actual results to differ materially from statements made today. As a result, we caution you against placing undue reliance on these forward-looking statements. We encourage you to review our public filings, including our 2012 annual report on Form 10-K and subsequent quarterly reports for a complete discussion of these factors and other risks that may affect our future results or the market price of our stock. We are not obligating ourselves to revise our results or publicly release any revisions to these forward-looking statements in light of new information or future events. In addition, as we refer to earnings, we also will refer to adjusted EBITDA, which we define as earnings before interest, income taxes, depreciation and amortization and excluding non-cash stock-based compensation and a pending litigation settlement accrual. Adjusted EBITDA is a non-GAAP financial measure and you can find a reconciliation of adjusted EBITDA to the most directly comparable GAAP financial measure in our fourth quarter and fiscal year 2013 earnings release, which is posted on the Investor Relations section of our website. We believe that the use of adjusted EBITDA provides additional insight for investors to use in evaluation of ongoing operating results and trends. However, non-GAAP financial measures, such as adjusted EBITDA, should not be considered in isolation from or as a substitute for financial information prepared in accordance with GAAP. During the Q&A session today, we would like to accommodate as many questions as possible, so please limit yourself to one question and one follow-up. I would now like to turn the call over to Bill Oesterle, Angie's List's CEO. Bill?

Thanks Tom. All-in-all, we had a great year in 2013. And honestly, our results were mixed in the fourth quarter. Back in February last year, we laid out our goals for 2013. They were to rapidly grow revenue, make significant investments in products and technology, and finally maintain secure levels of cash. We did all three. We grew fast, expanded our offerings and produced cash, all at the same time. We are very proud of those achievements, and I would like to specifically compliment our employees on a lot of hard work. Thank you. In the fourth quarter, we continued performance in nearly all of our key areas. Retention, both member and service provider, was very good. Marketplace revenue grew over 70% year-over-year, and we gained considerable visibility into transactions that we enabled and produced about $9 million in cash flow from operation. In spite of all this progress, we did a poor job scaling new member signups. We originated a large number of new members and we did it efficiently, but our total new member additions trialed last year by 3%. There are too many reasons for this performance. Late in the third quarter, we began to migrate our technology platform and broaden our membership offerings. Our join funnel spent most of the fourth quarter in transition and experimentation. With the inevitable disruption that a process like that entails, we chose to reallocate marketing spend to brand development and strategic online advertising activities. While the transition has been at times difficult, we worked hard to execute it in the seasonally slow winter months. We believe that the payoff for these investments will be additional member scale in 2014 and beyond, so let me turn to 2014. The overall financial themes remain the same. We intend to grow revenue significantly, increase cash and margins predictably, and invest in products and technology aggressively. Our first priority will be to take our new membership platform and deploy it at scale. We intend to diversify our offerings with things like tiered membership levels and marketplace based join, but also with additional channels and messaging. Angie will elaborate on those. In addition, 2014 is the year we intend to scale our marketplace. We have spent the last two years identifying the willing and able service companies, measuring their performance, and building fulfillment processes to improve customer outcomes. This coordinated marketplace effort is ready for scale, and we have found a talented partner in The Work App to help enable our service providers and our marketplace. Our goal is to drive growth in transactions, growth in member acquisition, and most importantly dramatic improvement in member experience. As I stated before, we plan to achieve these goals while simultaneously delivering strong revenue and EBITDA growth; and consistent with what we delivered in 2013, we expect to achieve this growth with internally generated cash. With our improving leverage in cash generation, we now have greater flexibility to explore new and innovative opportunities to drive membership growth, increase commerce transactions, and improved member experience. Lastly, we are making progress in our search for a new CTO. We are evaluating a number of very experienced candidates, and we are optimistic we will have this role filled by the second quarter of this year. Now, let me turn the discussion over to Angie.

Thanks Bill. In the fourth quarter, we added 225,000 new members and increased total paid members by 39% compared to the fourth quarter of last year. We added more than 1.2 million members during 2013 end the year with nearly 2.5 million paid members. We achieved this solid member growth on only a 9% increase in total marketing investment for the year, while our CTA declined 1%. I'm very pleased with our renewal rates in the fourth quarter and for the year. We continue to have very loyal members, in fact the strength of our renewals, in addition to our shift to more annual memberships partially offset the fourth quarter softness we experienced in our new member sales. Our renewing members are becoming a larger percentage of our total member base. As Bill mentioned, the impact of our marketing yield we experienced in the third quarter continued into the fourth quarter. Therefore, we took the opportunity in the fourth quarter to put marginal dollars to work in brand investment. At the same time, we invested in new membership product structure and price points, channel exploration, and new marketing message. Our brand investment in the fourth quarter was focused in online search. As the destination site, we wanted to be sure we owned many more of the top search results for the term Angie's List and related terms. Our investments are focused on ensuring our suite of properties is well represented in search. Frankly, our terms are a competitive differentiator for us, and we expect to continue to allocate marketing dollars to this effort. This technique should have a disproportionate impact on competitors that rely on SEM and SEO exclusively. As Bill mentioned, we are putting a new join funnel in place to remove the friction from the member signup process. In addition to the join funnel technical improvement, we expect to remove friction by diversifying our product offering including a tiered membership structure, alternative pricing options, and marketplace as a vehicle for join. On the topic of tiered membership, this is the structure we are currently testing. However, if the test proves successful, we would expect to implement this structure across all markets in 2014. During the fourth quarter, we also took the opportunity to create different marketing messaging with the development of specific messages about our commerce offering. This new creative is currently in test in select markets. As we think about our marketing investments for 2014, we will continue to invest in our brands, market message, and pricing, and we will evaluate those investments across different channels. We have historically invested the majority of our marketing spend in TV advertisements, but we will also test some diversification of that spend this year to different channels that may provide better yield. I would now like to turn the call over to Tom.

Thank you, Bill and Angie, and good afternoon everyone. I will provide some additional detail on our financial results for the fourth quarter and full-year. I will then provide our outlook for the first quarter of 2014 as well as some perspective on our current expectations for full year 2014 performance. As a quick reminder, my comments on growth rates will refer to year-over-year changes for the respective period unless I indicate otherwise. We delivered a solid fourth quarter. Total paid memberships increased 39%, total revenue increased 49%, membership revenue increased 29%, and total service provider revenue increased 57%. Within that service provider revenue, advertising revenue was $45 million, an increase of 55% and E-commerce revenue was $6 million, up 72% compared to the fourth quarter of 2012. In addition, our service provider contract value backlog ended the fourth quarter at $121 million, an increase of 48%. If you recall, the contract value backlog consists of that portion of service provider contract value that has not yet been recognized as revenue. Now, turning to our expenses. We made significant investments during 2013 to grow our base of membership and service providers as well as innovative products to improve how our members address their local service needs. In spite of growth in these investments, we realized significant leverage improvement in the business as our operating loss improved by $20 million compared to full-year 2012. For the fourth quarter, in particular, selling expense increased $8.9 million compared to the fourth quarter of 2012. We ended the fourth quarter with a total of 965 people in our sales organization with 773 responsible for originations and 192 responsible for renewals. As a reminder, we had $1 million in non-recurring adjustment to our commission accrual in the fourth quarter of 2012. Excluding this adjustment, the year-over-year change in selling expense would have been in line with the increases we recorded during each of the first three quarters of 2013. The increase in our G&A expense for the quarter is primarily due to the accrual of $4 million related to the proposed litigation settlement. If you combine on a year-over-year basis, our G&A expense line also includes incremental operating cost from the acquisition of BrightNest. Adjusted EBITDA, a non-GAAP financial measure, was $9.9 million for the fourth quarter compared to $4.4 million in the year-ago period, despite the higher marketing and selling investments in the fourth quarter of 2013. Our adjusted EBITDA loss for the full-year 2013 was $18.9 million, an improvement of more than $26 million compared to prior year. Moving on to the balance sheet. We ended the year with approximately $56 million in cash, cash equivalents, and investments. We used approximately $3.5 million cash in operations during the fourth quarter of 2013 compared to the use of approximately $5.6 million in the year-ago period. For the full-year 2013, we generated approximately $9 million in cash from operations compared to the $33 million used in 2012. We are very pleased with the significant improvement in our cash generation. While 2013 was a good year for Angie's List, there are a number of areas where we are focusing our investments in order to capitalize on the significant opportunity ahead of us to continue to grow our membership, increase the number and quality of our commerce transaction, and improve the overall member experience. With that said, I would like to provide you with our outlook for the first quarter of 2014. For the first quarter, we currently expect total revenue of $71.5 million to $72.5 million, marketing expense of $22.5 million to $23.5 million. As a reminder, the first quarter marketing spend ramps up as we head into our seasonally high period of the second and third quarters. Non-cash, stock-based compensation expense of approximately $1.5 million, and approximately 58.5 million shares outstanding at March 31, 2014. While we are not providing specific outlook on selling expense for the first quarter, remember that the first quarter is a seasonally strong period for origination. In addition, given the large opportunity available to us in the local services market, we will continue to invest heavily to grow our sales force. As far as our current expectations for the full-year 2014, due to the investments we expect to make this year in growing our base of members and service providers as well as in our product and technology. We currently expect an increase in operating margin of approximately 10 percentage points for the full-year 2014 compared to full-year 2013. This concludes our prepared remarks. Operator, please open the line for questions.

Thank you. (Operator Instructions) Our first question comes from Aaron Kessler of Raymond James. Your line is now open. Aaron Kessler - Raymond James: Great. Thanks guys. Actually a couple of questions; first, can you just give us an update on the sales force productivity in the quarter – sales of service providers were a little below our estimate, can you just give us some updates there how sales productivity may improve throughout the quarter and your outlook for that in 2014? Thank you.

Yes. We're actually seeing, obviously, we went through that period of sales force conversion, and we had, what I described last quarter of a hangover from that. With that hangover, we believe to be complete, we've had increasing sales force productivity in the last couple of months of the quarter, and we expect that -- we feel as though we have our legs beneath us there, and we're beginning to scale the force again with some considerable effort or energy. Now, there is something I would like to point out, this notion of net service provider adds is an interesting one. I think there is a little bit of a misperception in terms of how that dynamic is working. We had growth this quarter, obviously, it was -- I forgot like 1400, 1500 service providers, but the interesting thing is the growth in our sales force, a significant amount of growth in our sales force is actually associated with E-commerce origination. We're putting a lot of bodies on our marketplace activity, and by design those bodies are targeting existing advertisers, that's the qualification for them. So, there is a little bit of work, we are both increasing the number of providers, but we are simultaneously increasing the depth of the things that they purchase, and that will move both the numerator and the denominator with respect to sort of cost per new service provider added, and we think it’s just not an appropriate measure given the large force that we're beginning to deploy against the E-commerce, and the success that they're having inside of the existing base. Aaron Kessler - Raymond James: Great. And can you just give us a little more detail possibly on the tiered membership, should we expect like a free solution, how should we think about how that will evolve?

Now, the tiered membership, at least is currently envisioned. I mean we have – we're testing all kinds of things, and I certainly won't remove any of the optionality off the table, but as it's currently conceived, it's effectively three price point tiering. We're trying to have a lower introductory price point with basic service and then incremental tiers of service for – attached with different offerings. So, we think we can – we think we can simultaneously provide very high value service to those members that want it, and we can provide a very basic offering for those members, that is more of an introductory offering to members who are new to the service – the people who are new to the service. Aaron Kessler - Raymond James: Okay. Thank you.

Thank you. Our next question comes from Shawn Milne of Janney Capital Markets. Your line is now open. Shawn Milne – Janney Capital Markets: Okay, thanks. Let me jump back to the sales productivity notion. I understand you fired more people on the E-commerce side, but Bill, we see now a sequential drop off from 2500 to 1400, 1500, but you said the last two months were better, I mean, that suggests that I mean it was really a trough in there in October. Why can't you be a little more specific about that improving into – potentially improving into Q1 or some level of the expectation, or do you just believe we're now, your broader goal is to take this – let's call roughly 50,000 service providers and then drive deeper monetization? Thanks.

Well, let's see. We're going to get growth, but as I described last time, so we're going to have attrition inside of those, which is sort of force – E-commerce will have the effect of doing that, so our potential eligible advertisers are growing dramatically, and we're effectively holding serve in the penetration against those -- that growing base. What I'm saying is we're going to continue to grow that, I expect to, but what I'm just saying that's more of an output measure than it is necessarily an input measure, because we could successfully be deploying sales talent to deepening the relationship there. Remember, our average take on a transaction that we participate in is something like 25%. That is a tremendous amount of upside -- revenue upside per service provider if we can encourage more of them into that. Now, I will say we're seeing good productivity in the first quarter, I didn't mean to specifically omit that. We are seeing continued progress in the first quarter. I feel as though from where we sit today, the trajectory is very good. Now, I guess the point I'm trying to make is that may not necessarily manifest itself in rapid service provider growth, it may but it may not, we could still be very successful in some of the efforts that we're doing with relatively modest gains there in the short-term. Shawn Milne – Janney Capital Markets: So, I'll start looking in how we should – best should we can measure ARPU per service provider but that's the contract value backlog decelerated again. So there would be offset to that, what would you expect the E-commerce business to grow like in 2014? How bigger do you think it is going to be?

Well, we're not providing specific guidance on that, but we just came off 70% - 72% growth rate, half of that quarter-over-quarter, that's a big number. So I expect just to be able to build momentum in that area, everything we're doing is devoted to getting more members and getting those members active – their activity captured in commerce. So -- and by definition, that's going to affect if we're adding marginal commerce that's going to take some of the forward book away because the commerce doesn't – it isn't booked all the way out 12 months so it's transactional. So, you're not going to see the types of growth in TV necessarily forward backlog that you saw, when that was our complete emphasis, it doesn't mean that's a bad thing, we're trying to achieve a world where we get both. So, that's my only point, Shawn. Shawn Milne – Janney Capital Markets: Okay. Thanks.

Thank you. Our next question comes from Justin Post of Merrill Lynch. Your line is now open. Justin Post – Merrill Lynch: Great. Thank you. I'm here with Paul. So, can you talk to all about user activity, it's always been our view, if you are building a robust audience the service provider side will come. Can you tell us anything about reviews per person or visits per person or how that's trending. And how do you think you can increase activity levels this year? Maybe I have one follow-up.

Yes. So we've seen very, very consistent behavior in the traditional metrics that you just laid out. So, the members are behaving as the members that behaved. What we're doing commerce is adding engagements and that's our – that's strategically where we're going; we're growing the number of transactions, we’re growing the interactions per transaction. All of those things are incremental engagement and we know for a fact empirically that when we execute a transaction well that the core engagement metrics get better, renewal rates and. So it's a pretty clear path that we have, improve the transaction and you're going to get better engagement. And so everything that we're doing and everything that we work on the second half of this year has been associated with improve the quality of the transaction. Justin Post – Merrill Lynch: Great. And then to that point on the transactions, it seems like some things are pretty standardized and probably very attractive for you. But I could imagine a lot of categories where it's really difficult to get the transactions done on the site. How are you thinking about that?

Yes. We made a lot of progress on this. So, we have opened up toolsets and mobile toolsets that allow for even the ill-defined transaction, the transactions that are closed, the transactions that are simply appointments. For those to be taking place in band and we have determined ways to begin to monetize those transactions depending on how much of them takes place in band. And even if we are not monetizing them, we're at least watching them so that we can improve them which should translate into greater member activity. The transparency has been the first effort because the things that we can see, we can watch, things that we can see – we can measure things that we can measure, we can improve and that's – and then we have figured out we are already scaling processes to – monetize transactions that are – what I will call open definition transactions. So that – we have that underway and we're putting that under scale. Justin Post – Merrill Lynch: Got it. And then last question, as you exit the year about 2.5 million members and looking at your cohort data and the growth in different cohorts, do you have any update on market opportunity or where you think that 2.5 could go based on your trajectory today? Thanks.

Yes. I mean, if you just take a look at the mature cohorts, we continue to grow them. So there is all of the evidence we have is that our addressable market is increasing. And that's our – even our most mature market Indianapolis has deepened its penetration since – every quarter since we've been a public company. And so, I won't get into the specifics of – you can sort of do some bracketing math on that yourself but the opportunity – the opportunity has been growing, all the evidence says that it is. We have historically increased the rate that were penetrating that opportunity, in this quarter we didn't do a good job of that but the opportunity itself is getting bigger. Justin Post – Merrill Lynch: Thank you. Appreciate it.

Thank you. Our next question comes from Kerry Rice of Needham & Company. Your line is now open. Kerry Rice - Needham & Company: Thanks. I just wanted to touch base on marketing efficiency particularly in-light of Q4 we expected you to spend more than last year just given the dynamics in the marketplace in 2012. But as I look forward, how do I think about the marketing efficiency, do we expect kind of cost per customer acquisition to continue to trim lower like it did in 2013 or should we see some pick up there and then may be kind of think about gross ads on the other side of that?

Yes. Well, we are giving specific CPA guidance. I think the best I can do there is probably that we maintain pretty rigorous CPA discipline. So we're not going to let our CPAs get way outside of the traditional bands that we've kept our CPAs in. Now the fourth quarter is even an interesting example, its $60 CPA, we still have plenty of room I'm sorry, 52. Sorry, we still have plenty of room. We could put marginal dollars to work. We want to make sure, however, that we're doing that as efficient way as we possibly can and we didn't -- we weren't comfortable that we could do that given some of the things that we had going on. So we're not going – the short answer, we're not going to allow the CPAs to get outside of our historic band but we also aren't going to promise sequential improvements every quarter. So long as we're driving an attractive return profile and we have a very attractive return profile we're going to attempt to execute against that. Kerry Rice - Needham & Company: And then on kind of service provider retention, I think in the past you said that's about 70% or around 70% and improving, is that still the trend and then contribution margin in the second year still high in the -- it goes around 80% contribution margin?

Yes. So typically we speak of this in terms of the revenue renewal percentage or the contract renewal percentage and that's over 100% continues to be, which is great and its very high margin business and whatever the margins that we've articulated in the past continue to hold true. Kerry Rice - Needham & Company: Thank you.

Thank you. Our next question comes from James Cakmak of Telsey Group. Your line is now open. James Cakmak - Telsey Group: Hi. Thanks. I just wanted to follow up on some of the comments around the marketing spend and reconcile some of those. I know you engaged an additional brand campaigns this quarter and you do have the ability to adjust virtually in real-time. So I guess if you could provide some detail around how much of that 52 was the incremental brand spend versus kind of the core CPA, because last quarter you had mentioned that it had started to creep up a bit?

Yes. We increased this quarter. I don't think we're going to break it out specifically but it was millions of dollars were invested in those activities and successfully. So we achieved some strategic objectives with those dollars most specifically getting competitors off of our search term that was our goal. We achieved it. Interestingly in the process of achieving that we have sort of realized and refined our ability to go out and not just defend our brand terms. But we're able to go identify very key search terms and deploy the technique on an offensive basis to make sure that we are sort of cordoning those SCO, SCM, SCA activity and owning them. So this is an area that again, we aren't going to provide guidance on it, but you can expect us to particularly as there are competitors that are rising up – who's strategy is totally dependent on SCO and SCM we're going to defend that turf. James Cakmak - Telsey Group: Okay. And then quickly the follow up on the E-commerce opportunity, I know you don't provide transaction numbers now for a couple of quarters, but I think you provided the take rate still hovering around 25%, perhaps if you can speak to what the additional sales efforts and everything how the gross deal value has been trending further on the E-commerce side?

Yes. So we're continuing with that It wouldn't surprise me if -- there are almost potentially some advantages as you getting the take rate lower, it almost stays up in-spite of our efforts it’s working. So the take rate has continued to remain more stable than I expected. We ended up the year with 475,000 total commerce transaction, so that – you can back your way into the fourth quarter. We're just seeing nice gains; seasonally the fourth quarter is slow for us, which I think we've said until we are blue in the face. But it was an outstanding quarter. Yet our expectations are that we can even be more outstanding so. James Cakmak - Telsey Group: Okay. Thank you.

Thank you. Our next question comes from Gene Munster of Piper Jaffray. Your line is now open. Gene Munster - Piper Jaffray: Thanks. Just real quickly, I was wondering in your service provider revenue perspective how much further can we see the average revenue per service provider increase? And then secondly, could you remind us, could you say what the percentage dollar renewal was on the advertising dollar? Thanks.

Yes. I said -- we [started consistently], it’s over 100%. And what I'll tell you is, I don't know I think, it's a very important point. With the advent of commerce then the potential relationship that we can have, financial relationship that we can have with the service provider goes up in order of magnitude. The commerce -- if we start to pull these transactions and we're successful at driving them to the service companies then it’s not so much like a price increase of a contract, it’s now we're enabling them to directly sell on our platform and that carries high margins, everybody is happy. And it is potentially on a per service provider basis a dramatic increase a game changing increase in our -- the revenue that we're deriving from that process. I think that's the clear thing that people have to understand, if we can drive revenue, drive marketplace revenue with the service provider it’s potentially multiple of what we are driving with them today. Gene Munster - Piper Jaffray: Okay. Thank you.

Thank you. Our next question comes from Peter Stabler of Wells Fargo Securities. Your line is now open. Peter Stabler - Wells Fargo Securities: Good afternoon. Thanks for taking the question. Bill, wondering if you could elaborate a little bit on the funnel friction that you mentioned in your prepared remarks. Can you add any color, could you give us any more specifics on exactly what you mean and what kind of tax changes occurred and may be what was unexpected? And then I've got one quick follow up. Thanks.

Yes. So we completely -- we came up with the concept over the course of the year and people started playing around with this notion of can we broaden the member offering? Can we -- what we quickly found was that's going to require a joint funnel that is flexible enough to do that and to run, now you're talking increasing sophistication and some of the tier pricing okay that doesn't require that much sophistication a little bit. But there are also some things where we wanted to begin to attach membership to commerce transaction, embed those, to come up with new packaging. That is something I guess very complicated, you're linking your marketplace to your joint funnel and we found that the historical joint -- the good old joint funnel we build whenever it was 2005 – while it served us extremely well that it began to -- it had significant limitations to it both in terms of scale and in terms of flexibility and so we went through the process. We sort of had to have the discovery that, hey, if we're trying to get it to do things that it's not really built to do, it’s going to stumble that let us to the conclusion we're going to have to build a new one and the best time to do that is in the fourth quarter when things are slowing down. So that's a big process. We completely migrated the platform, different technology stack, put a bunch of energy in it, simultaneous with that we were experimenting with different offering. So now all of a sudden you have technological transition and you've got the sort of product experimentation layered on top of that. That's not a great time to be dumping a lot of incremental advertising dollars on to your platform just because you are increasing your degree of precision and so we devoted some of the dollars away into things that we thought were strategically important but weren't going to necessarily yield traditional memberships in the short-term while we were going through this process. We were using Star Wars analogy, the Battle Star isn't completely built the joint Battle Star, but it's a fully operational battle station. We're ready to deploy it. So we can do some things with it. And there are some very interesting things that we intend to do with it. And several of them are now in the field, which is a meaningful, we had no ability to put them in the field in the third quarter and now they're in the field. Peter Stabler - Wells Fargo Securities: So it sounds like the heavy lifting there is done at this point or is there more development?

Yes. I'm going to say the front-end heavy lifting -- there is certainly more development -- to some degree you want a platform that allows you to develop. So the foundational work is largely complete. And so now it's all the turning the dials and flipping the levers and those sorts of things and actually putting different content down on to the platform. So we've got the building blocks in place. We've got things out and underway, there is going to be things we're ringing out of it for a while and we're going to be learning along the way. But we are moving. Peter Stabler - Wells Fargo Securities: So last question would be, anyway to size the breakage in terms of signs-on that this funnel work may have cost? Thank you.

No. It's really -- it would be almost impossible for us to do because we are pulling back marketing, we had different campaign. I mean ideally one way to that – we are certainly used to having a stable to declining CPA, when the marketing spend is even increased and we did in this quarter, we had an increase in CPAs. And so that, that can – that tells you at least compared to historical performance what the potential impact was. Peter Stabler - Wells Fargo Securities: It's helpful. Thanks.

Thank you. Our next question comes from Todd Van Fleet of First Analysis. Your line is now open. Todd Van Fleet - First Analysis: Hi, good afternoon, guys. Bill, you said that you thought the company did a poor job of realizing new member sign-ups in the quarter, just curious as to what would have been kind of reasonable performance level in your view? And then I have a follow-up. Thanks.

Yes. I think it's consistent. If you look at just how we performed throughout the year. So subtract out the fourth quarter and look at how we performed in all of the other quarter any -- those were all successful quarters. In the third quarter you started to see we begun the transition, you started to see that you didn't have growth on your growth, so we just had plain old growth. And any one of those quarters I view as a successful quarter so that sort of tells you what the standard is that we're looking for. Todd Van Fleet - First Analysis: Okay. That's helpful. And then a question on the scalability of the business here in the current year. So I think you'd said about 10 percentage points of operating margin improvement in the current year over 2013 and I'm just wondering why we wouldn't see as the business like this gets bigger it should scale better and we saw a nice improvement in 2013 over the prior year. I mean, I'm just trying to think about how much in your view is kind of investments in 2014 versus just kind of ordinary one other course scaling of the business?

Yes. We're going to put significant investment and clearly we have the ability to produce big fat margins. And all of the evidence says that that's true. We could produce big fat margins potentially in 2014. But that would come if -- we still believe we have tremendous upside to invest in for 2015 and 2016. And so the efforts that we're going through with these investments in member acquisition, in platforms to expand the joint funnel and product in marketplace, those are all really about maintaining growth rates out in the next three or four years. This business has the potential to continue high rates of growth. And we think we can effectively invest those dollars, we have the flexibility to do it, we’ve got the margins, we're going to deploy those, we're going to deploy those in key areas that we've been waiting to invest in for years and years and years. And we're in the fortunate position that our belief is that we can grow the top line, we can grow the member base, and we can grow margins and build for the future. Last year was a Triple Lindy, it’s a Quadruple Lindy this year. Todd Van Fleet - First Analysis: Okay. Thank you.

Thank you. Our next question comes from Jeff Houston of Barrington. Your line is now open. Jeff Houston - Barrington: Hi. Thanks for taking my questions. Following up on the gross member additions, we're about half-way through the first quarter and just looking to see if there is any early indicators that the changes to the joint funnel platform and the product experimentations in the fourth quarter are kind of bearing some fruits. Just any color on progress those are making in terms of adding – improving gross member additions?

Yes, it's still – I would say we're not going to provide much insight into that. These are still – the part of the quarter that we're through is the down part of the quarter, it's the slow part of the quarter, one of the slowest parts of the - and we're getting all – our initiatives are now in – at experimentation and we will be putting them at scale. So we’ve got lots of stuff that's out, we're not in a position to provide any early indicators there of how any of that's doing. What I'm confident is we have enough lines in the water here that we ought to be able to – by the time we get around to the next earnings call, we ought to be able to provide some pretty specific performance on how that's going. We are going to deploy money. We are deploying technology. We are deploying products. We're putting them in new places like we ought to be able to point to a specific progress there, if not then we're going to be peeling back those investments pretty substantially. Jeff Houston - Barrington: Okay. Separately the $4 million of legal settlement in the quarter does that work out to $0.07 of EPS, EPS would have been $0.07 higher without that? And then could you just provide a little bit of color on what exactly the details of that settlement?

This is Tom. I think that math works correctly at $0.07 effectively. Not much more detail we can provide other than what we’ve kind of said in the release and in the commentary a moment ago. We feel like the suit is in a place for the plaintiffs and Angie's List to come to terms in principle and it's now subject to court approval. So we feel we're optimistic, we're going to get this wrapped up and as such for accounting purposes we entered the $4 million accrual in Q4. Jeff Houston - Barrington: Great. Thank you.

Thank you. Our next question comes from Jason Helfstein of Oppenheimer & Company. Your line is now open. Jason Helfstein - Oppenheimer & Company: Thanks. Just one question to Bill and Angie. So, our work suggests really that, there really isn't a branding problem out there. So all the TV ads that you guy have done over all the years, has really paid off and there is generally high awareness. But really it's ultimately getting the consumer to want to pay or to at least try the product to see that it is a very good product. So can you just talk about how you're thinking about that? And what are the different things you can do to basically merchandise the product in a different way where it's not just about a television ad, they go to the website but then they don't want to pay and they go away to actually get them to try it whether it's with partners or different types of things you are thinking about? Thanks.

Yes, sure. Now, some of this is going to be theoretical, I mean some of these things are things that we are testing and without getting too far into the results of these. But, there are also just one obviously you can, to the extent, years ago we put monthly pricing in and it was a wonderful success, it essentially became a trial membership at lower price point. There are other ways to cut at that with tiered pricing allows you opportunities there, tiering pricing also allows you to merchandise incremental services that can attract people. So, things that are interesting. Finally, there are other – we have components of the services that can be marketed in different places, there are number of marketplaces that we have product for that we just haven't put the products up. So it's a way to get introductions to the service by purchasing a component of the service that we haven't in a specific marketplace that we just haven't touched before. So we're just getting more merchandising out into the field. And then finally, a thing that I mentioned and it may just be that it's the jargon is require some explanation is that we're finding ways to bundle membership with commerce purchases. Those are things that will allow people to take – if you purchase an offer from one of our service providers outside the pay wall but bundled in that either as a direct bundling or as an indirect bundling where it’s an upsell is the membership.

So it's basically reversing the logic there. I mean usually it’s buy the membership, then buy the service that you're looking for, this is an attempt to reverse that, kind of come in, here is the service you want to buy plumbing good for $100. And as part of that, hey, you're going to get an Angie's List membership. So we kind of take them to their paying point first.

We certainly want to be – we don't want to be – we're very leery about giving away our service. But we are – you said an interesting thing, yes, they have lots of brand ID, we want to expand the understanding of what that brand can do for you. So we're not just a ratings business. We are a marketplace business and our marketplace is getting very good and there are wonderful benefits of that. And so just to – I think the brand is going to require evolution, we're just going to compete on the ratings, well, there are places you can get ratings, it is not that ratings that's all of the other things that we can bring. We're in a position now that we can score the service providers with objective information about their performance, provide that scoring as a – in tandem with the ratings information. And all that means is that you're likely to get better experience. We got to begin to express that message and convey that build upon the brands – the trusted brand that we already have. Jason Helfstein - Oppenheimer & Company: A quick follow-up to that. So, Angie specifically are you making changes where it will be additions to your marketing teams to bring in additional people, additional experience, additional capabilities to help you achieve these goals?

Yes. I mean that we are expanding the bench in the marketing teams so that we can – that we can kind of make sure that we got the team we need to execute on all the experiments we're looking at this year for sure. Jason Helfstein - Oppenheimer & Company: Okay. Thanks.

Thank you. Our next question comes from Darren Aftahi of Northland Securities. Your line is now open. Darren Aftahi – Northland Securities: Guys, thanks for taking my questions. Just two quick ones, on the figure number 773 in terms of sales force originators, what percentage of those are dedicated towards E-commerce and how fast does that grow quarter-to-quarter? And then how many E-commerce markets did you have deployed in 4Q and how is it going to ramp in 1Q? Thanks.

We don't break down the sales force with that level of detail. In fact, [wasn't until a while ago] [ph] I realized he broke it out terms of year end renewals. So now, in terms of - we effectively have commerce deployed in all of the markets. So it’s – that's available, that functionality is available. What we are going through, and you can imagine this goes directly to my targeting. We are going to our best provider the one that we deem as most likely to succeed in offering marketplace offers. And we are starting with them. We are going to the best ones. And we are trying to enable them to offer online merchandise. And by definition that's a focused effort on our best and brightest service provider. We are going to work our way down less on a geographic basis, but more on a – who do we think based on our objective measures, based on our ratings, based on all of the information that we know, who do we think is going to be the best service provider -- the next best service provider to execute good transactions in our marketplace. So it's a targeted exercise. It's not as though we just are randomly calling people up. We know who are going to go sell to here and enable and help build.

Thank you. Our next question comes from Sameet Sinha of B. Riley. Your line is now open. Sameet Sinha - B. Riley: Yes. Thank you very much. Bill, for me, it looks like you are going deeper into your market, the number of markets continue to expand while also changing this products going from the membership and rating business to the marketplace. Do you think there is too many things happening, maybe you need to focus on a couple of things, maybe not expanding to smaller markets because these are kind of marginal markets that you are going into. That's my first question. The second thing is for Angie. Angie, we’re talking about suddenly deploying millions of dollars into a new media where you have no experience, never this kind of money thrown into it, there have to be inefficiencies. Do you think, over a period of time that spend will see significant efficiencies and if yes, maybe your search engine marketing company agency has given you some sort of brackets about where this could go, the [customer] [ph] acquisition from these channels?

Okay. So the question for me, Sameet, it's an interesting one about the small market. To some degree they are bit of a byproduct, so long as we are advertising nationally, if we have – you are getting – you are sort of accruing membership and the raw material ratings and reviews and you are accruing that at no marginal cost. And so there is still, it doesn't take much effort for us these days. The new markets that we are in, we effectively led, they build themselves. They build has a byproduct until they hit a certain point where we feel as though what – we are going to formally organize them as a market. And that activity is very low input activity. We think with respect to the other complexities of the business, well, it's kind of – this is an evolutionary process. I mean, we started with taking member review – very high-quality member reviews from a very specific demographic of member compiling those and providing them back to the users so that they can make better purchasing decision. That's been the fundamental premise. Now all we are doing is beginning to compile other signals from the transaction. Do these service providers show up on time? Do they return their phone call? Are they willing to enable online functionality? Take those direct signals and supplement the historical ratings that we have always collected all on the same premise. We want consumers to get superior local service. And what we are seeing is, when you marry those direct signals, those direct measurements. So the reviews you get an improvement in outcomes and interestingly, if you make those signals transparent to the service company, the service company begins to actually alter their behavior. And that's just powerful. And so it's a really important initiative and it's consistent with the membership model and that we have always executed. That we are going to add variation to that but it's consistent. I will let Angie answer…

And then on your question on marketing spend, I mean Sameet, the way we think about any testing and diversification is truly is testing, so we like test the channel, or test an opportunity, we will test it make sure it’s kind of operating within a band that we are happy with before we would scale it. So our process of testing in that period in the organization hasn't changed. But we will continue to experiment with more diversification.

And Sameet, I will say there is a little bit of – it’s almost the inverse the question you asked, it’s if we were to cap our marketing spend then we would expect efficiency, we would expect to become more proficient at the vehicles that we are buying and it’s sort of the process of refinement. However, our goal and our history is actually what we are trying to do is expand the dollars that we can get to work and maintain the cost per acquisition. So at this point, we are still in a position, that we think we can scale the rate of growth of the business. And we are going to do everything we can to find - we’ve spent 20 year eking out incremental ways to grow – marginally grow the business at acceptable CPA. We have not given up on that exercise. We have been sort of remarkably successful at finding new things every time we go out looking for them. We’ve got some theories on how to do that. To some degree, if we can't figure out how to spend those dollars well, then, yes, then there will be an efficiency play. Then we are really trying to strive for lower CPAs on flat spend. But we still think that there are ways that we can invest to drive member growth. That are still certainly the mature markets tell us there are plenty of members out there that can still be signed up. Sameet Sinha - B. Riley: Okay. Thank you.

Thank you. And our final question comes from Blake Harper of Wunderlich Securities. Your line is now open. Blake Harper - Wunderlich Securities: Yes. Thanks. Bill and Angie, both talked about SCM, could you maybe remind us how much of your traffic in your members come from SCM and SCO. And then Bill, also you’d talked about some competitors there, could you just maybe elaborate some on the competitive landscape and what impact if anything that you think that's having on your member and service provider numbers? Thanks.

We haven't specifically broken out kind of our sales from search activities before – but keep in mind, our site has been a brand’s estimation, so a lot of our sales come from people that are specifically looking for Angie's List.

So with respect to the competition we certainly aren't seeing it on the service provider side at all. And it’s difficult for us to assess, I mean - we believe we have a pretty good understanding of what the performance issues were in the fourth quarter on – what caused us to not to be able to deploy marginal dollars and some of the reasons why, but it’s impossible to know, the world is getting more competitive, we know that. And some of those competitors, they are increasing their offering. One other thing that we are in a position to defend against is sort of very low cost entry to the market by simply buying search terms. So that we can directly impact the cost of entry for and there are a number of competitors that that is their only marketing. So their prospect to the world is that, hey, we can go capture leads and put them into our system at x dollars. Our intent is to make sure that we raise the cost of that lead acquisition. So we monetize well. We have a direct monetization method off of SCO and SCM, we are going to use it. Blake Harper - Wunderlich Securities: Okay. Thanks.

Thank you. And at this time, I would like to turn the call back to Bill Oesterle for any further remarks.

All right. Again, I would just sort of reiterate the course of the business particularly this last year where it has been grow, it’s been improve the margins, improve the product. We intend to – we think we have fantastic opportunity to continue that. We got a lot of work and some interesting things to do. But, we are quite optimistic about what lays before us. Thank you all for your time. I look forward to talking with you individually.

Ladies and gentlemen, thank you for participating in today's conference. This does conclude today's program. You may all disconnect. Everyone have a wonderful day.