Ethan Caldwell – CAO Russell Horowitz - CEO Michael Arends – CFO John Keister - COO Peter Christothoulou – CSO Cameron Ferroni – CTO Bill Day - CMO

Christa Quarles - Thomas Weisel Partners Brian Pitz - Banc of AmericaSecurities Gene Munster - Piper Jaffray & Co. Eric Martinuzzi - Craig-Hallum Capital Group Analyst for Jordan Rohan – RBC Capital Markets Analyst for William Morrison – Thinkequity Partners Clay Moran - Stanford Financial Group Maurice McKenzie - Signal Hill Group Marianne Wolk - Susquehanna Financial Group

Welcome to the Marchex third quarter earnings conference call.(Operator Instructions) It is now my pleasure to turn the floor over to yourhost, Ethan Caldwell, General Counsel and Chief Administrative Officer. Sir,you may begin.

Thank you. Goodafternoon everyone and welcome to Marchex's business update and third quarter2007 conference call. Joining us today are Russell Horowitz, Chairman and ChiefExecutive Officer; John Keister, President and Chief Operating Officer; MichaelArends, Chief Financial Officer; Peter Christothoulou, Chief Strategy Officer;Cameron Ferroni, Chief Technology Officer; and Bill Day, Chief Media Officer. During the course of this conference call, we will makeforward-looking statements that involve substantial risks and uncertainties.All statements other than statements of historical facts included on this callregarding our strategy, future operations, future financial position, futurerevenues, acquisitions, projected costs, prospects, plans and objectives ofmanagement, are forward-looking statements. We may not actually achieve the plans, intentions, orexpectations disclosed in our forward-looking statements and you should notplace undue reliance on the forward-looking statements. Actual results or events could differmaterially from the plans, intentions and expectations disclosed in theforward-looking statements we make. There are a number of important factors that could causeMarchex's actual results to differ materially from those indicated by suchforward-looking statements as are described in the risk factors section of ourmost recent periodic report and registration statement filed with theSecurities and Exchange Commission. All of the information provided on thisconference call is as of today's date and we undertake no duty to update theinformation provided herein. During the course of this conference call, we'll alsoreference certain non-GAAP measures of financial performance and liquidityincluding OIBA, adjusted OIBA, adjusted EBITDA, and adjusted non-GAAP EPS. Areconciliation of these non-GAAP financial measures to the comparable GAAPfinancial measures is contained in today's earnings press release which isavailable on the investor relations section of our website and definitions ofthese measures as used by us and the reasons why we believe these measuresprovide useful information to investors will be referenced during thisconference call and are also contained in today's earnings press release. At this time, I would like to turn the call over to RussellHorowitz, our Chairman and Chief Executive Officer.

Thank you, Ethan.I'll start by providing a summary of the progress Marchex has made with ourlocal strategy as outlined in last quarter's call. John will then provide anupdate on our advertising services business and Mike will take you through ourfinancial results and guidance for the fourth quarter. In our last call, I outlined in detail the local marketopportunity. Marchex's areas of strength and growth, now the cross-section ofthe two, led us to determine it was the right time to make a strongercommitment to local. We believe, and leading industry analysts agree, thatlocal will be the primary driver of online advertising growth for the next fiveyears. Fundamentally, we believe local is one of the rare market-changingopportunities that like ecommerce, search and most recently, social networking,has the potential to create and transfer significant value to those in aposition to capitalize on it. In the past quarter, we established a clear framework forthe ongoing execution of Marchex's local strategy. At the core of thisframework are two fundamental strategic objectives that are guiding everythingwe do. Our first objective is to build and deliver the most local-centricadvertising platform in the industry, supporting clicks and calls for localadvertisers. Doing this is helping Marchex drive increased adoption of localonline advertising by the more than 15 million local and national advertisersthat currently fuel the $100 billion local advertising market. Our second objective is to deliver unparalleled utility andrelevance to the millions of consumers who are increasingly turning to the Internetfor local information. Let me now walk through the specific progress we have madewith both of these objectives and the items outlined in our last call. On thelocal advertiser adoption side, first we extended and expanded our long-termpartnership agreement with AT&T and its subsidiary YellowPages.com, tocreate, manage, and fulfill local search advertising campaigns for theiradvertisers. The agreement extends our already deep relationship into 2011,enhancing Marchex's role as a primary driver for bringing local advertisersonline. Marchex's ability to win this very strategic, long-term relationship wasenhanced by the increased investment in our local products we mentioned lastquarter. The broad reach of AT&T's salesforce, combined withMarchex's scaleable technology and ability to provide traffic from our localcontent network, makes this an ideal partnership that we believe will furtheraccelerate Marchex's position as a local leader and supports our commitment toinvesting in this opportunity. Second, in September we completed our acquisition of VoiceStar,a leading provider of call-based services for advertisers including pay per phonecall, call tracking, and web form to phone. Our product team has already begunintegrating VoiceStar's offering into Marchex's advertising platform. With theaddition of VoiceStar's call-based offering, we believe we have the mostcomprehensive and local-centric advertising platform in the industry. We know that the majority of local advertisers, whether ornot they have a website and are looking for clicks, rely on phone calls todrive sales. We believe that large local sales organizations, many of whom workwith Marchex and VoiceStar today, will grow their sales of pay per phone callproducts dramatically over the next few years. As such, we believe that call-basedservices will be a key driver of the adoption of local online advertising andalong with clicks, are a required component of an industry-leading, localadvertising platform. Third, we continue to see strong growth in new advertiseracquisition. Through the third quarter, we added more than 20,000 new advertisersthrough our aggregator partnerships, direct sales channels and with theaddition of more than 16,000 call based local advertisers, through ouracquisition of VoiceStar. This puts the total number of local advertiser usingMarchex's products and services at more than 50,000. Because of the sales momentum we are seeing from partners,our own direct sales efforts, and the addition of call-based services to ourplatform, we believe we are on track to have more than 80,000 advertisers usingMarchex's products and services by the end of 2009. Let me now turn to the consumer traffic side of ourbusiness. Again, our objective on the consumer side is to deliver unparalleledutility and relevance to the millions of consumers who are increasingly turningto the Internet for local information. We took several steps towards thisobjective in the third quarter. First, we launched a new version of OpenList.com which iscurrently serving as the hub of our local content network. OpenList.comincludes 15 million business listings as well as refined content across 20,000categories covering virtually every city and town in the United States. Second, we extended OpenList content to 50,000 additionalowned and operated websites, expanding our local footprint in content to morethan 150,000 owned and operated websites in total. In tandem with thismilestone, we announced that organic traffic to OpenList integrated websites onour network increased by more than 20% in September, over the average for thethree month pre-OpenList integration. Since then, traffic to the OpenList integrated websites hascontinued to grow. At this point, the vast majority of our owned and operated websitesare local and our highest traffic growth is from these local websites. Third, we've deepened our local consumer utility by addingcontent including hundreds of thousands of user-generated reviews from leadingvertical providers including HealthGrades, Contractors.com, and OpenTable.com.In addition in the third quarter, visitors to our local content network addedmore than 20,000 proprietary user-generated reviews and ratings directly to ourwebsites. In order to be a leader in delivering local utility andrelevance, we believe it is very important to offer consumers great localbusiness information, enriched with other value-added information such asreviews and ratings from visitors to our websites and user-generated and expertreviews from other leading authoritative sources. This approach enables us to deliver proprietary content whilealso utilizing our technology to capture and deliver large amounts of highlyrelevant information across a wide spectrum of categories and topics. Thiscombination will provide local consumers the breadth and depth of informationthey need to make better, more efficient local decisions every day. To ensure we have the proper resources to execute on ourlocal strategy, in the third quarter we continued to invest in building aworld-class team, adding talent in each of the areas key to growing our localbusiness. Consistent with our message last quarter, we are actively hiring tosupport our sales and product efforts as both John and Mike will touch on morein a minute. In addition, in October we added Nick Hanauer to our Boardof Directors as Vice Chairman. Nick's track record of success in identifyingand executing against revolutionary advertising and consumer-focusedopportunities from Amazon to aQuantive makes him the ideal addition to ourBoard of Directors. His experience, leadership, and in-depth understanding ofconsumers, technology, and advertising will provide significant value. In summary, in the third quarter we made significantprogress in the specific areas that (1) further our position as a leader in thelocal marketplace and (2) will continue to drive growth in our business goingforward. During the quarter, we also continued to be active with ourstock repurchase program by purchasing 1.4 million shares of our outstandingClass C common stock, which represents approximately 3% of our common sharesoutstanding. We are committed to the Marchex opportunity and as a result, willcontinue with our share repurchase program as market conditions permit. Mikewill touch on this in more detail in a few minutes. With that, I'll turn the call over to John.

Thanks Russ. In the third quarter we continued to align ouradvertising services business in order to add local advertisers more quickly,drive increased budgets, and deliver highly targeted traffic to our localadvertisers. The combination of owning local traffic and understanding how totarget campaigns locally are important parts of differentiation for Marchexthat allow us to win new advertiser business and expand that business onceadvertisers are actually in our system. First as Russ highlighted, we extended our partnership withAT&T and YellowPages.com into 2011, which enhances Marchex's role as aprimary catalyst for bringing local advertisers online and buying throughMarchex. Every month, AT&T's approximately 5,000 sales representativesnationwide introduce search marketing to tens of thousands of localadvertisers. We believe our strategy of partnering with leading localaggregators such as AT&T, Comcast and The Cobalt Group is a winningstrategy to build the largest base of local online advertisers. As evidence, the number of new local advertisers usingMarchex products and services in 2007 is in the aggregate 50% higher than thesame period in 2006, primarily as a result of this strategy. In addition, wehave been expanding our direct sales force and concentrating their efforts onlarge advertisers with local interests. In the past quarter, we added severalleading national advertisers to our roster including Roto-Rooter, Cox AutoTrader, Geico, and Carnival Cruise Lines, in addition to leading agenciesincluding Avenue A and Reprise Media. National advertisers are increasingly interested in localtraffic and local targeting. With our local content network, our locallyfocused advertising services platform, and proven fulfillment capabilities,Marchex is in a prime position to be a major beneficiary of this emerging trendas the primary provider of local traffic and services to agencies and nationaladvertisers. We are also highly focused on forming new partnerships withadditional leading aggregators of advertisers. By virtue of acquiringVoiceStar, we now have relationships with more than 100 local advertiseraggregators including Comcast, Yellow Book USA,and The Cobalt Group. Our opportunity is now to expand this roster of partnersand to grow our business with these existing partners. Therefore, in order to grow these relationships and kickstart integration with VoiceStar, in the last few weeks we have begun placingVoiceStar pay per phone call advertisements on Marchex's network. VoiceStar hashundreds of partners that are selling pay per phone call advertisements andnaturally, Marchex should be a distribution point for these advertisements. Comprehensiveintegration will take time and is part of our ongoing product investment.However, we are pleased that we have been able to begin the integration andcross-sell process so soon after the acquisition. We are transforming our advertiser services business fromone primarily selling third party distribution into one selling a highlyscaleable, comprehensive local advertising solution with traffic from Marchex'sown local network increasingly at the center. Looking forward, as we continue to build our local contentnetwork and expand available inventory for Marchex's direct advertisers,Marchex will increasingly become a must buy for advertisers of all sizesinterested in local inventory, local targeting, and local traffic. With that, I'd like to hand the call over to Mike to walkthrough our financial results.

Thanks, John. Today I'll review our third quarter financialresults and close with forward guidance for the fourth quarter. Let me beginwith revenue. Third quarter revenue was $33.5 million compared to $32.3 millionin the third quarter of 2006. Revenue from proprietary traffic sources was $10million. Total unique visitors to our owned and operated network of websiteswas 26 million for the month of September according to internal logs. Thenumber of revenue-generating events and referrals for the quarter was more than35 million. Consistent with our guidance last quarter, the principalimpacting factors in the quarter were: (1) A decreasein the overall combined revenue per click rate as we continue to shiftinventory to direct Marchex advertisers. This decrease was in part driven by adecrease in our rate from direct advertisers which was expected, as there was atime lag between increasing inventory allocation and subsequent advertiser sellthrough rates. (2) Arefocusing of our marketing resources toward a greater mix of OpenListintegrated websites which led to a reduction in marketing spending. Looking more closely at the factors that impact our revenuefrom proprietary traffic sources, we expect the first order impact as we takeover more inventory on a direct basis and as Yahoo! continues to roll outchanges in Panama through the end of the year, to decrease our average revenueper click rate from direct advertisers as well as third-party sources. As a result, we expect fourth quarter revenue fromproprietary traffic sources to be at a level similar to what we saw in thethird quarter. However, over time as we continue to grow our direct advertiserbase, improve the relevance of our local advertising targeting, and driveincreased traffic to Marchex's owned and operated websites, we believe we willclose the gap on the rate we receive from third parties and in turn, driverevenue from proprietary traffic sources higher. The cumulative effect of these changes will lead to a secondorder benefit of stronger, long-term growth in revenue from proprietary trafficsources as well as greater defensibility and greater long-term profitability. Revenue from advertising services was $23.5 million. Thegrowth was driven primarily by: (1) Theaddition of more locally focused advertisers using Marchex products andservices, resulting from our direct sales efforts as well as through ourpartnered relationships. (2) Theaddition of third party distribution partners and expanded relationships withexisting partners. Total operating costs excluding stock-based compensation andamortization of intangible assets for the third quarter of 2007 were $28.7million compared to $23.7 million in the third quarter of 2006. In looking at the mix in operating costs for the thirdquarter, our service costs excluding stock-based compensation increased as apercentage of revenue on a year-over-year basis largely due to increases indistribution partner payments, increased personnel, and contractor costs. While our updated objectives and refocusing associated withour OpenList integrated websites has led to a decreased marketing spending inthe short term, we believe this evolved strategy puts us in a better long-termposition to drive increased traffic and usage levels which we recognize as akey driver of operating leverage and value creation. Moving forward, we expect sales and marketing costs to be inthe range of 14% to 16% of revenue in the fourth quarter, with spendingparticularly focused on the relaunched OpenList.com and other high utilitylocal websites in our network. Other operating costs include an additional investment inpersonnel and product development, increased technology infrastructure costs,and additional professional fees including intellectual property initiatives. Adjusted operating income before amortization for the thirdquarter was $4.8 million. Adjusted EBITDA for the third quarter was $7.3million. Adjusted operating income before amortization and adjusted EBITDA aretwo of the principal metrics we use to measure the progress of our business,liquidity, and our ability to generate cash. GAAP net loss applicable to common stockholders for thequarter was $1.5 million or $0.04 per share compared to a net loss of$411,000.00 or $0.01 per share in the third quarter of 2006. Going forward, ourGAAP results may be impacted by a number of factors, including stock-basedcompensation charges, increased amortization costs associated with ouracquisitions, other potential future acquisitions, our preferred stockdividends, and increased public company costs which will also impact ouradjusted operating income before amortization and adjusted EBITDA results. Adjusted non-GAAP earnings per share, an estimate some WallStreet investors utilize as a supplemental measure of our operating progress,was $0.07 per share for the third quarter. For a reconciliation of GAAP EPS toadjusted non-GAAP EPS for the third quarter, please refer to today's pressrelease. Turning to the balance sheet, we had approximately $37 millioncash on hand as of September 30, 2007.During the third quarter, we used approximately $13 million in our acquisitionof VoiceStar as well as an additional $13.6 million to acquire approximately1.4 million shares of out outstanding Class B common stock or 3% of our commonshares outstanding as part of our share repurchase program. Importantly, we continue to generate significant cash flowfrom operations. Going forward, we expect to continue to generate significantcash flow although it will remain lumpy based on the timing of certaininvestments, payments, and other factors. We anticipate that we will use ourcash principally to continue investing in long-term growth initiativesincluding internal product development and sales initiatives, selectedacquisition opportunities, and our stock repurchase plan. I would now like to discuss our financial outlook for Q42007. Our guidance for the fourth quarter of 2007 is revenue of $35 million ormore compared to $32.6 million in the fourth quarter of 2006. We believecontinued momentum from our local advertising services business, combined withnormal seasonal strength in advertising budgets will be the primary drivers ofyear-over-year growth. Fourth quarter adjusted operating income beforeamortization guidance is $4 million or more. Consistent with our third quarterguidance, certain expenses related to our increased investment in localleadership, including our investment in the integration and platform build outof our pay per phone call services, increased personnel costs, development andtechnical operations costs, costs associated with communications andco-location facilities, and increased sales and marketing costs will continuein the fourth quarter and carry into next year. For adjusted EBITDA, we expect to add back approximately $2million to our adjusted operating income before amortization for the fourthquarter, implying adjusted EBITDA of $6 million or more. In conclusion, we are encouraged by the initial positivereturns we are seeing from our accelerated investment in products and people.We will continue to invest in our areas of strength and growth to ensure thatMarchex realizes increased leadership in local and increased value in ourintellectual property. With that, I'd like to turn the call back to Russ.

Thanks, Mike. Let me conclude by emphasizing a few keypoints. First, we believe Marchex has the most local-centric advertisingplatform in the industry which can support large partners and directadvertisers looking for locally targeted fulfillment with clicks and calls. Second, we have a clear focus on deliver unparalleledutility and relevance to local consumers through our network of owned andoperated websites. Third, we are continuing to realize strong growth in thenumber of local and national advertisers using Marchex products and services. Over the last several months, we have sharpened the focus ofour entire organization including our sales, business development and productteams, around our local mission. As a result, we believe Marchex is in a verygood position to capture an increasing share of local advertising dollars asthey migrate online, as well as an increased share of consumers looking forlocal information. I'd now like to open up the call for questions.

Your first question comes from Christa Quarles – ThomasWeisel. Christa Quarles - Thomas Weisel: First question is around your pipeline. As you look at the YellowPagesdirectories, newspapers, ISPs, etcetera, where do you see your platform andyour offering differentiating relative to some of the others out there, ReachLocal, WebVisible for example? Second question is really just about where the state of thelocal market is. We have seen Judy's Book and Insider Pages seem to go away, Iguess. Just wondering if you think that the market continues to accrue towardthe YellowPages partners and therefore, is that sort of emblematic in how yourstrategy plays out? Thanks.

When we define havingthe most local-centric advertising platform, for us that means can we supportaggregators of advertisers and direct advertisers in the first place? And, canwe sell them the products they want, in the second place, which are clicks andcalls. Our system takes complex technology and makes it very simpleat mass scale and so that's the key part. Clearly early adopters that aredirectory companies like the YellowPages, we see this as being very relevantacross all vertical categories whether it's The Cobalt Group in the auto spaceor other folks who are large aggregators of local advertisers across the United States. So one of the key elements relative to the competition isthere are folks who might be focused on calls or might be focused on search butmay even have challenges with the kind of scale we're talking about or may justbe looking at aggregators or direct. In our case, we've made a big investment and we have greaterscale than anyone in the industry and we're well-positioned to support moregrowth with existing partners and at the same time add lots of new partnersbeyond that. So that's really one of the key components to this. On the other end, clearly the traffic side is important.Where we have at this point we are the largest local ad network in theindustry, whether owned and operated, local sites are at the center of it.

Your next question comes from Brian Pitz – Banc of AmericaSecurities. Brian Pitz - Banc of America Securities: Just a further drill down on OpenList. While it is improvingvisitation to the site, would you discuss how it is really impacting thevelocity of ad clicks through the pages? How do you really think about valuing your domain nameportfolio? Do you try to mark these properties to market? How do you guysglobally think about that portfolio? Thanks.

I'll answer the first part and I'll let Mike answer thesecond. I think that's a more technical question. Our focus on the consumerside is just relevance. If we can increase relevance that's monetizable that isgreat, but first and foremost, we really want to deliver to consumers lookingfor local information because we think that's the fundamental driver ofincreased traffic over time. So for us when we look at what we're doing with OpenList, weare focused on increased relevance of editorial content and monetizable contentbut over time, if we can add more monetizable content that's fine but ourfundamental mission is more relevance, period. We think we've seen confirmingtrends that's supporting the investment we're making and better businessinformation distributed through OpenList and we're clearly going to invest more.But getting to the heart of it, it's all about relevance and we think that'swhat drives higher traffic which is one of the key drivers of equity valuecreation.

To answer the second part, I think part of the way we thinkabout it, we don't get into a per website valuation per se, but how we do thinkabout it is approximately three years ago, or the majority of our acquisitionshave been close to three years ago, wespent over $220 million and most of that was more than two-and-a-half years ago.If you think about just where the market has gone for some of the investmentsthat venture capital, private equity, and other investors have put into themarketplace and just the valuations of websites as they changed over thatperiod of time, it is quite likely that you could look at the valuationperspective and see a significant increase, perhaps even a doubling, at leastof the valuation on the entire portfolio.

Your next question comes from Gene Munster – Piper Jaffray. Gene Munster - Piper Jaffray: Good afternoon andcongratulations on getting everything moving in the right direction. One of thethings that I'm sure you guys get tired of is questions about Yahoo! but itseems that all that was as expected this quarter. Do you feel that in terms ofthe impact of quality based pricing that we've kind of got that to a pointwhere it's stabilized or is it still a process of figuring it out as thechanges are made at Yahoo! going forward?

What we've seen isconsistent with what we mentioned last quarter. Q3 we didn't see much impact.Q4 to date we have seen some impact and we think it gets better in 2008. It'spretty much followed our expectation.

Your next question comes from Eric Martinuzzi – Craig-Hallum. Eric Martinuzzi - Craig-Hallum: I want to understanda couple of the metrics that you gave. The additional 20,000 advertiser, itlooks like net of VoiceStar, or excluding them, that would be 4,000 additionaladvertisers. Does that compare to the 3,500 that you talked about adding lastquarter?

Yes it does. Eric Martinuzzi - Craig-Hallum: Just on the traffic side, you talked about 26 millionuniques. Does that compare to the 31 million uniques from June '07?

It does. Eric Martinuzzi - Craig-Hallum: Could you go overagain what that decline is due to?

Sure, predominatelyrefocused marketing efforts which translate into sales and marketing decreasingto about 14% of sales on the third quarter from just over 20% of sales lastquarter. So the primary organic initiatives around OpenList and OpenListpowered sites, as we mentioned in our metrics, translated into an initial 20%growth which we think is very encouraging, but that was offset in the shortterm by some of the reduced marketing spending.

Your next question comes from Jordan Rohan – RBC CapitalMarkets. Analyst for JordanRohan – RBC Capital Markets: A question about the revenue per click that you mentioned.You said that the decline was from both your third-party partner and somethingon the direct side. Can you just clarify exactly what the two components of themonetization decline in the owned and operated business was?

The principal thing, Ross, I think is clearly the marketinginitiatives and the decrease in the sales and marketing from 20% of sales in Q2compared to the 14% in Q3. On top of that, the other contributing factor wasour rate per click of just taking more of the advertising inventory over on adirect basis for ourselves and at the present time as we've talked about in thepast, we do have a lower overall rate with our own direct advertisers than wedo from some of our third-party sources. Analyst for JordanRohan – RBC Capital Markets: The upside in theadvertising services line you guys said was a combination of additional advertisersas well as new distribution partners. Can you talk about the latter? What's inthe new distribution that you picked up in the quarter? Thanks.

The primary driver inthe quarter was the increase in advertisers and both have been goodcontributors but the primary driver was that increased number of advertisersspending more money through us.

Your next questioncomes from William Morrison – Thinkequity Partners. Analyst for WilliamMorrison – Thinkequity Partners: Going over the proprietary traffic side, a couple of followup questions. It looks like sales and marketing was down around 33%sequentially versus uniques being down about 16% sequentially, so it looks likeyou haven't seen quite as much of a drop off in traffic as you have inmarketing expense. Is that in line with your expectations and where do you seethat going forward? Secondly, I was just wondering if you could talk a littlebit about the gap that you had mentioned between your inventory allocation andthe sell through? Is there any way that you can evaluate expected value fromeither third party campaigns versus your owned and operated sales?

First off, sales andmarketing, we've had reduced website marketing but also in the quarter increasedour hiring of sales and business development personnel and other relatedinvestments but net-net, it went from 20% to 14%. To your point, the decreasein overall traffic was significantly lower which is consistent with ourexpectation of driving organic traffic through our consumer facing productsinitiative. So we're very encouraged with that. We look ahead and see aswe noted in this conference call, our highest growth area is our local websites.We have catalysts to grow those further. In 2008, that should be thesignificant majority of our traffic and we're on a very good track and weclearly understand that organic traffic growth is what drives our value andoperating leverage. We feel like we've got a lot of focus around the rightthings in driving the value of Marchex forward. On the second part of the question, can you just hit thatagain? Analyst for WilliamMorrison – Thinkequity Partners: Expected value from either third party campaigns versus yourowned and operated direct sales or a gap between third party monetizationversus direct monetization. Is there any way that you can, on the fly, evaluateone versus the other or is it a gap where you have to allocate to either athird party or direct, one or the other?

The methodology forus, while in the past we've talked about increasing the inventory we selldirectly and there has been a range of 20% to 30% and we've moved that up but alot of our focus aside from just overall percentage is us taking the categoriesthat we think we sell the best and deliver the most relevant listings. Soclearly, taking a bigger percentage of local inventory makes sense. We're looking at it overall but we're also looking at acategory level since that's the way we can increase the depth and breadth firstwhich are the keys to closing that gap on monetization and allows us to getthere most quickly. That's been our methodology and what's driving our businessdecisions.

Your next question comes from Clay Moran – Stanford. Clay Moran - Stanford: You just mentioned the direct inventory. Can you tell uswhat percentage of inventory is sold directly now?

As I mentioned, historically we had driven from 20% uptowards 30%. We are up at that high end of the range with certain categorieswhere we feel best equipped to sell through the quickest at much higher levels. Clay Moran - Stanford: You were talkingabout the local advertisers. What percentage of those 50,000 advertisers isactive or was active in the past quarter and where are those ads going? Arethey going primarily to the props side? Are they going to the distributionnetwork and does the distribution network have any local emphasis? Can you justsort of put some color on that? Thanks.

First off, ourdefinition of advertisers are active advertisers so all 50,000 plus are activeadvertisers using Marchex services. So that is a net number and so in terms ofdistribution, the majority of these, if not all of these, are getting acombination of our owned and operated traffic plus partner sources.

Your next question comes from Maurice McKenzie – Signal HillGroup. Maurice McKenzie - Signal HillGroup: Can you discuss any specific takeaways that you learned thisquarter as you dialed back on your marketing spending from a search engineoptimization perspective with respect to your owned and operated properties? Alsocan you discuss the percentage of organic traffic versus paid traffic in thequarter?

The second one is thesignificant majority of our traffic is organic and all of our focus is ondriving higher organic traffic over time and our marketing initiatives areactually geared towards creating organic users in the future. So that's wherewe stand today when you look at the makeup of our network, the makeup of ourtraffic, and our focus going forward those are really the key elements to it.

Your next question comes from Marianne Wolk – SusquehannaFinancial Group. Marianne Wolk - SusquehannaFinancial Group: Can you give us a sense of the percentage of repeat visitorsto your OpenList sites? Is that better than your average? Can you just talk alittle bit about that? Secondly, you mentioned that you renewed your AT&TYellowPages contract. Was there a positive financial impact from that renewal thisquarter or maybe even a negative one because you did extend over multipleyears? Finally, what do you do now for YellowBook and what is theopportunity there? Thanks.

On the first one around OpenList, we haven't disclosedspecific metrics but the frequency of users around our OpenList products haveincreased since we've re-launched OpenList.com and also had an OpenList enabledwebsite. So the trend there is supporting the organic initiative. In terms ofspecifically what we're doing with YellowBook, I'll ask John Keister to step inand give a quick description.

YellowBook is one ofmore than 100 aggregators that VoiceStar works with and we are speaking withall the aggregators at VoiceStar about doing more with us on other parts of ourplatform. YellowBook is one of, like I said, is one of more than 100aggregators that VoiceStar works with today.

On the AT&T relationship, there are volume thresholdsthat trigger certain economics for AT&T and certain incremental investmentfrom Marchex.

(Operator Instructions)

We appreciate everyone's involvement in listening to ourthird quarter business update. We appreciate the questions as welland we'll look forward to keeping you posted on our progress as we moveforward. Thank you again.