Ethan Caldwell – Chief Administrative Officer and General Counsel Russell Horowitz – Chairman and CEO John Keister – President and COO Michael Arends – CFO

Ross Sandler – RBC Capital Markets Christa Quarles – Thomas Weisel Partners Dan Sommer [ph] Kaizad Gotla – Banc of America Securities Clayton Moran – Stanford Group Company Ryan Bergan [ph]

Good afternoon, ladies and gentlemen, and welcome to the Marchex Incorporated sponsored second quarter earnings conference call. At this time all participants have been placed on a listen-only mode and the floor will be open for your questions and comments following the presentation. It is now my pleasure to turn the floor over to your host, General Counsel and Chief Administrative Officer, Ethan Caldwell. Sir, the floor is yours.

Thank you. Good afternoon everyone and welcome to Marchex’s business update and second quarter 2008 conference call. Joining us today are Russell Horowitz, Chairman and Chief Executive Officer; John Keister, President and Chief Operating Officer; Michael Arends, Chief Financial Officer; and Peter Christothoulou, Chief Strategy Officer. During the course of this conference call we will make forward-looking statements that involve substantial risks and uncertainties. All statements other than statements of historical facts included on this call regarding our strategy, future operations, future financial position, future revenues, and other financial guidance, acquisitions, projected costs, prospects, and plans and objectives of management are forward-looking statements. We may not actually achieve the plans, intentions or expectations disclosed in our forward-looking statements and you should not place undue reliance on the forward-looking statements. Actual results or events could differ materially from the plans, intentions and expectations disclosed in the forward-looking statements we make. There are a number of important factors that could cause Marchex's actual results to differ materially from those indicated by such forward-looking statements as are described in the Risk Factors section of our most recent periodic report and registration statement filed with the Securities and Exchange Commission. All of the information provided on the conference call is as of today’s date and we undertake no duty to update the information provided herein. During the course of this conference call, we will also reference certain non-GAAP measures of financial performance and liquidity, including OIBA, adjusted OIBA, adjusted EBITDA, and adjusted non-GAAP EPS. A reconciliation of these non-GAAP financial measures to the comparable GAAP financial measures is contained in today’s earnings press release, which is available on the Investor Relations section of our website, and definitions of these measures as used by us and the reasons why we believe these measures provide useful information are also contained in today’s earnings press release. At this time, I would like to turn the call over to Russell Horowitz, our Chairman and Chief Executive Officer.

Thank you, Ethan, and welcome everyone. I will start today’s call with an update on the continued progress we made on Marchex’s core strategic objectives. John will then detail our operational progress, and Mike will take you through our second quarter financial performance. Our focus on our local mission and the continued progress we made on our core objectives led the strategic progress and growth in the second quarter across our business. This progress, particularly in this current economic environment, has further deepened our belief and confidence in the strength of the local market opportunity and that our objectives are the right ones. As a reminder, Marchex’s primary strategic objectives are, first, to operate and deliver the industry’s most local-centric advertising platform at scale, which means providing performance-based click and call advertising solutions that can support millions of local advertisers, and second, deliver an unparalleled local search experience that provides the highest utility and relevance to local consumers. To capture the lion’s share of the local opportunity, everyday we focus Marchex’s efforts on becoming the most relevant integration point for connecting local advertisers of all sizes to consumers with local intent. In the second quarter, we continue to execute on this vision hitting or exceeding multiple operational milestones across our business. Let me turn first to the local advertising services side of our business where we delivered on a number of key milestones. During the second quarter, we again experienced strong growth in new local advertisers adding more than 10,000 new advertisers through our direct sales channel and local aggregator partnerships. The number of local advertisers using Marchex products and services is now more than 75,000. We are currently ahead of pace to reach our previously stated goal of 100,000 local advertisers by the end of 2009. In addition to fueling our advertiser growth, the investments we have been making in our local advertising platform are enabling us to continue building on our base of aggregator partnerships, bringing our total to more than 110 relationships. Given our unique capabilities, we’re in an ideal position to both expand on our existing relationships and capitalize on new opportunities. Our business development pipeline is more robust now than at any time in our history. On the product side, we continue to innovate with Marchex Connect, our local advertising platform, culminating in the recent release of Marchex Connect 2.0. This significant launch of the next version of our platform is unique and it integrates three very important local advertising elements. One, online marketing, which includes search, category specific advertising and other forms of locally targeted advertising; Two, call-based advertising; and three, business profile pages, which are highly trackable search-engine optimized web pages for local businesses. With this product release, we believe we have clearly reinforced Marchex’s position as an industry leader in supporting the needs of local advertisers and aggregators. Furthermore, we maintain a meaningful lead relative to other companies trying to serve this market opportunity. We also made significant progress with our branding initiatives. In the second quarter, we launched Marchex Adhere, bringing together our network of third party premium publishers and our increasingly local pay-per-click network to provide advertisers the single source for our local vertical and national traffic. Adhere allows advertisers to choose their targeting based on keywords, categories, or specific websites, all in one place. As a result of branding simplification, unified product offerings and unique targeting capabilities, we are seeing increases in our direct advertiser relationships. Let me now turn to the proprietary traffic side of our business, which we also refer to as local search, where we continue to experience strong growth in the second quarter. In June, more than 32 million unique users visited our local search network, up from 30 million unique users in March of 2008. Traffic growth remained particularly strong in our local reference websites, which are those sites in our network including OpenList.com, Yellow.com, and geo-vertical sites such as ChicagoDoctors.com that help consumers find local businesses and services. In addition to strong traffic growth, we continue to see growth in repeat visits, page views, and click-throughs as consumers continued to engage with the content on our local websites and perform subsequent local searches. Users of our network added nearly 200,000 proprietary reviews and ratings in the second quarter, a strong indication of continued traction with consumers. Local business engagement with our network continues to be robust. Thousands of local businesses continue to use Marchex tools to confirm the accuracy of their business information and add content to our sites that is relevant to local consumers looking for the products and services they offer. As a result, we are building what we believe to be one of the largest highest quality sources of local business information and content on the Internet. Additionally in the second quarter, we continued to experience high demand for our proprietary local traffic from our partners and direct advertisers. In the second quarter, we increased the amount of inventory available to Marchex advertisers on our proprietary network in order to meet this demand. The growth in organic traffic, local consumer and business engagement and demand from direct advertisers and partners for our proprietary local traffic are indicators of the progress we have made on our strategy to build the deepest, broadest and most relevant sources of local information online. There are also further evidence of Marchex’s increasing leadership in the local market. To quickly touch on some non-operational highlights, in the last four months, between April and July, we also sold a small number of non-strategic demands that yielded us approximately $2.5 million in cash. This contribution is excluded from adjusted OIBA and EBITDA, but provides additional cash flow and liquidity to support stock repurchases and other strategic objectives. Moving forward, we will continue to be opportunistic with sales of selected domains. We also continued to be active with our stock repurchase program, which Mike will detail in a few minutes. Our commitment to our share repurchase program is a reflection of our ongoing commitment to the Marchex opportunity and belief that our shares continue to represent a compelling value in the market. To that end, today we announced that we’ve increased our buyback plan to 6 million [ph] shares, up from 5 million shares. With that, I’d like to turn the call over to John.

Thanks, Russ. I would now like to provide additional detail on some of the items that Russ mentioned earlier. First, in the second quarter, we continued to innovate with our local advertising platform and our delivering products and services that are clearly differentiating Marchex as the leading local advertising solution for advertisers of all sizes who need local customers. This innovation culminating in the ahead of schedule release of the new version of our platform, Marchex Connect 2.0 integrates online advertising packages with call tracking and analytics. Marchex Connect provides our local partners with the innovative performance-based advertising models that need to migrate more of their advertiser spends online. We continue to see a macro shift occurring in the local market where local advertising dollars are shifting from traditional channels to online channels. We believe this trend is further accelerating because of the state of the overall economy. Local advertisers as well as national advertisers who advertise locally are increasingly interested in performance-based online marketing as opposed to traditional offline marketing. To effectively respond to the shift, our local partners need local solutions that deliver both clicks and calls at volume. These solutions much deliver qualified leads and customers while providing the measurement capabilities needed to acquire, retain and increase the ad spend of new advertisers. We believe Marchex Connect offers the most innovative local advertising solutions and analytics in the industry at the scale needed to support large local aggregators and advertisers with budgets of all sizes. It addresses our large local partners and advertisers three most immediate needs. One, it delivers integrated performance-based click and call-based leads at scale. Two, it delivers proof of return on investment which is driven by call tracking and our business profile pages. These pages are fully optimized to drive click and call-based local leads from both paid advertising and organic search results. They also track and provide comprehensive reporting on all actions taken on the page, including click-throughs, calls generated, emails, forms submitted, and coupon and map prints. This provides the advertisers with a full picture of the mix of leads they are driving through their advertising campaigns and the resulting return on investment they receive. Three, through our platform, we provide advertisers access to the broadest, most diversified local traffic sources in the industry. This also means we are uniquely able to fulfill campaigns at unmet scale across the wide array of local and vertical distribution sources, including our proprietary local search network in the categories and locations most in demand from local advertisers. Marchex Connect 2.0 will further position us to attract and secure new aggregator partnerships as well as grow our relationships with existing partners, which is a continued key focus in the coming months. In addition to consolidating our pay per click and contextual traffic brands under Marchex Adhere, we also just recently completed the second phase of our brand consolidation with the launch of the Marchex Digital Platform Group. The Digital Platform Group unites our call-based advertising services provided by VoiceStar and our interactive advertising services provided by Traffic Leader, together with Marchex Connect, our local advertising platform and related services, all under one umbrella brand. The common thread across all these businesses is that they provide private label, performance-based local marketing solutions to our customers. The mission of the Digital Platform Group is to be the leading local digital advertising and technology provider for national companies with local offices, franchises, storefronts, or sales forces. Our primary objective is to the leading source for local lead generation, whether they are driven by clicks, calls, or even submitted web forms. What is defined as a lead is determined by our customers. This unification of our internal teams focused on click and call-based local advertising services and technology under a single brand positions us well to accomplish this mission. With the launch of both Marchex Adhere and the Digital Platform Group, and with our strong pipeline for new large local partners and advertisers, we are positioned to expand Marchex’s position as a leader in the local industry. Our consolidation of brands has improved our ability to communicate Marchex’s business in a simple and effective way to our partners and customers. This is a very important development for Marchex and is already beginning to deliver results in the form of new business. We are very pleased with the operational progress we made in the second quarter and believe we are well positioned for continued execution in the back half of 2008 and into 2009. While there is still additional work to do to further integrate our platform and distribution sources, the response to our platform innovations to date has been very positive. Looking forward, we are on track to deliver additional, exciting local product innovations in the back half of this year, including pay per phone call products and additional local targeting capabilities on our proprietary local search network, which we believe will further expand our partnership pipeline and unlock additional value from our proprietary network. The entire company is excited about the trends we are seeing in local and about Marchex’s ability to expand our leadership position in the local market. I’d like to now turn the call over to Mike to walk through our financial performance.

Thanks, John. I’m pleased to report today that our investments to support our local mission over the past several quarters continue to drive our growth. Revenue for the second quarter was $37.4 million compared to $34.7 million n the second quarter of 2007. Revenue from proprietary traffic sources was $16.6 million. Revenue from local advertising services was $20.8 million. The second quarter was characterized by our efforts to continue taking more of our own advertising inventory and making it available to Marchex advertisers. As we previously communicated, taking over more direct inventories, one of our most important 2008 initiatives as we seek to improve yield across our network. I’m pleased to note these initiatives are on track and are impacting our growth. As a reminder, a dynamic associated with these efforts that is important to understand is as follows. As Marchex takes more of our own direct advertisers’ budget and fulfills these spends on our proprietary websites like with OpenList.com, more of these dollars are recognized as proprietary revenue rather than third party advertising services revenue. As a result, the mix shift between our sources of revenue may change quarter-to-quarter as we continue to sell more of our direct advertising inventory. There are four principal factors that contributed to our revenue in the second quarter. First, with strong growth in revenue from proprietary traffic sources on a sequential and year-over-year basis. This was driven by increased traffic on our local reference websites where we’ve made product progress that has generated increased user retention and repeat traffic, which we have complemented with our strategic marketing initiatives. We also had a significant increase in paid events, generating more than $125 million in the second quarter, up from more than $85 million in the first quarter of 2008. The sequential increase in paid events was largely driven by a balance of three factors. One, an increase in traffic relative to the first quarter driven by organic traction, increased repeat usage, and strategic marketing initiatives. Two, better execution in fulfilling against growing advertiser demand for our traffic. And three, expanding inventory on our sites as we increase the amount of inventory where we are selling directly to advertisers, an initiative that we had previously communicated with disproportionately waited to the first half of the year. Second, we continue to experience strong demand from local advertising partners for traffic from our local websites due to their quality and conversion rates. Third, we saw continued growth in our small and medium size local advertisers, which as we mentioned, grew by 10,000 advertisers in the second quarter, which is more than double the rate of net advertiser additions on a year-over-year basis. And lastly, we saw a continuation of trends from the first quarter with lower budget allocations or spending from certain large advertisers who are more exposed to retail categories, who we believe are and continue to be negatively impact by macroeconomic conditions. To this end, while we believe the macro environment is a more challenging environment for many classes of advertisers, we believe Marchex is partially being held by certain macro offsets, including the shift in advertising spending by small and medium size businesses to the Internet for the first time and also the shift in demand from local advertisers of all sizes to a greater mix of performance-based advertising models where there is greater transparency in terms of understanding what they are really getting for what they spend. We currently believe the net of these trends will be to increase growth in Marchex’s business in the back half 2008 and into 2009. Total operating costs, excluding stock-based compensation and an amortization of intangible assets for the second quarter of 2008, were $32 million compared to $28.3 million in the second quarter of 2007. In looking at the mix in operating costs for the second quarter, our service costs, excluding stock-based compensation, decreased as a percentage of revenue on a year-over-year basis, largely due to the shift in revenue mix, which led to a larger mix in revenue coming from proprietary traffic sources. Excluding stock compensation expense, sales and marketing was $7.6 million. In the second quarter sales and marketing included some of our planned investment in VoiceStar, much of which is sales and marketing related, as well as added cost for our re-branding initiative, which will be spread between the second and third quarters. Following our re-brand launch, we increased marketing initiatives to increase brand visibility as well as to acquire direct advertiser relationships. We also increased marketing for our local websites as we continue to experience strong demand from advertisers for traffic from this channel. Over the last several quarters we have seen an increase in the return on investment on our marketing spend for our local websites as we had new, rich contented features to these sites. As our marketing execution improves on these sites, we may increase our marketing over time. Other operating costs for the second quarter included additional investment in our local initiatives, including additional investment in product development, increased technology infrastructure costs, and additional professional fees including intellectual property initiatives. We believe these investments will lead to additional growth and are critical to Marchex achieving leadership in the local market over the long-term. Adjusted operating income before amortization for the second quarter was $5.4 million. Adjusted EBITDA for the second quarter was $8 million. Adjusted operating income before amortization and adjusted EBITDA are two of the principle metrics we use to measure the progress of our business, liquidity, and our ability to generate cash. GAAP net income applicable to common stockholders was $509.000 or $0.01 per diluted share for the second quarter of 2008. This compares to GAAP net income applicable to common stockholders of $354,000, or $0.01 per diluted share for the same period of 2007. Adjusted non-GAAP earnings per share, an estimate some Wall Street investors utilize as a supplemental measure of our operating progress, was $0.09 per share for the second quarter. Turning to the balance sheet. We had approximately $29 million cash on hand as of June 30, 2008. During the second quarter we used approximately $10 million to acquire approximately 845,000 shares of our outstanding Class B common stock, bringing our total shares acquired under our repurchase program to 3.8 million shares or 10% of our common shares outstanding as part of our stock repurchase program. Importantly, based on continuing progress in our ongoing operational initiatives, we expect to continue to generate significant cash flow. Going forward, we anticipate that we will use our cash principally to continue investing in our stock repurchase plan and in long-term growth initiatives, including product development, sales initiatives, and selected acquisition opportunities. I would now like to discuss our guidance for 2008, including guidance for the third quarter. Today we are reiterating our 2008 guidance for revenue to $152 million or more and release third quarter 2008 revenue guidance of a range of $37.5 to $38.5 million. While we continue to operate in an economic environment that has some uncertainty with regards to advertisers’ budgets, we believe that given the majority of our business is driven by the favorable trends of the emerging online local markets Marchex is in a position to grow faster and deliver on our operational targets in the back half of 2008 and into 2009. For the third quarter looking at current progress, we anticipate we will continue to see more local advertisers using Marchex products and services though we do expect some normal seasonal impact from advertisers lowering budgets in the summer months. Additionally, in the third quarter we anticipate revenue from proprietary traffic sources will be in the similar range to or slightly higher than the second quarter of 2008, as our initiatives to take inventory are still underway. We anticipate increases in consumer usage on our local search network with certain offsets from our ongoing initiatives to increase direct sales of advertising inventory. For adjusted operating income before amortization for 2008, we are reiterating our guidance for 2008 of $22 million or more and releasing third quarter guidance of approximately $5.5 million. We are on track with our investments in our business, and as a result, continue to believe we will see increases in adjusted operating income before amortization, cash flow generation, an increasing operating contribution for the balance of 2008, while also setting a strong foundation for how we enter 2009. For 2008 adjusted EBITDA, we expect to add back $9 million or more to our adjusted operating income before amortization and applying adjusted EBITDA of $31 million or more for 2008. For the third quarter we anticipate adjusted EBITDA of approximately $8 million. For the third quarter, we expect sales and marketing costs to be in the range of 18% to 20% of revenue, which factors in some increased costs from our release and re-branding efforts and upcoming related activities. 2008 has thus so far been characterized by the growing strength of the local online advertising market. We continue to believe local online advertising is in its early phases and that our business is better levered to this mega trend than ever before. As we continue to make progress with our business, we look forward to updating you on our outlook. With that, I’d like to turn the call back to Russ.

Thanks Mike. Let me conclude by emphasizing a few key points. First, Marchex is emerging as the leading integration point for advertisers with local online budges and consumers looking to interact and transact with businesses in the local communities. Second, the investments we made on our products, people, infrastructure and branding initiatives have fueled our continued executional progress and financial results. Third, we believe our progress in the first half of 2008 has set a solid foundation for the remainder of the year. As a result, despite the challenging economic environment, we are as excited as ever about our [ph] local online opportunity, which is in its early stages, and Marchex’s ability to capitalize on it over the remainder of 2008 and beyond. And with that, we’d like to open up the call for questions.

(Operator instructions) And we’ll take the first question from Ross Sandler. Your line is live. Ross Sandler – RBC Capital Markets: Thanks guys. Just a couple of questions. First, Russ, if you look across all your products and all your distribution points, how much revenue today has been generated by the 25,000 local advertisers that you’ve signed up through 2Q and how much is kind of in the legacy businesses? Is it over half at this point? And I got a couple of follow-ups.

Yes. The vast majority of our revenue is driven by those 75,000 local advertisers and basically all of our growth is driven by those advertisers in these business opportunities. So, our mission's pretty clear and our levers are pretty clear at this stage. Ross Sandler – RBC Capital Markets: Okay. Of the $16.6 million revenue from the local search network, how much that is being driven by Yahoo! today versus your own direct sales and with Yahoo! a monetization drag on the quarter? And I guess the follow-up to that would be, the revenue for paid event has kind of been declining as those numbers grow sequentially, so at what point do you think that that kind of bottoms out and starts to grow in tandem with the paid events? Thanks.

Sure. A lot of folks know that over the last year we’ve had a real focus on trying to put local content and local advertising on local pages to create a user experience that really engages consumers. And we’ve been having a lot of success with that. And so if you go back to I think Q4 of ’06 where Yahoo! was 38% of our revenue, by last quarter it declined every quarter down to 18%. And this quarter while we haven’t reported a number yet, you can – you will see it declined fairly meaningfully again. And when you look at how that’s translating with kind of decreased contribution from Yahoo! into acceleration of growth in our proprietary revenue, a lot of it comes down to our focus on relevance and yields. And so kind of revenue per event is one metric, but what we’re really focused on is yield. And so what we’ve seen is we’ve effectively seeded the market for our own inventory by putting relevant content, paid and unpaid, onto our websites is that the user engagement, while translating to looking [ph] for event is also leading to increasing yield. And while that trend has been lower events in terms of revenue and increasing overall revenue for the last couple of quarters, we do think we’re approach a drop where they’ll all be moving up together. Clearly, we didn’t create the playbook that yield us what matters, but we are at a stage in our seeding of the market that we think we’ll shortly see all these metrics moving in a favorable direction. That being said, the key metric here is yield. And that’s been very favorable for a number of quarters.

Thank you very much. We’ll take the next question from Christa Quarles. Your line is live. Christa Quarles – Thomas Weisel Partners: Hi. First question is on the 75,000 advertisers, I was wondering if you could give us a little bit of the complexion of that and what your adjustable market is. So, what I’m trying to get at is, is roughly 30,000 of those AT&T and that you couldn’t necessarily re-market to those or -- just trying to get a better sense there? And also if you could kind of give a comparative of what you are doing for Comcast, for example, versus what Yahoo! is doing? And then I have a follow-up. Thanks.

Sure. If you look at the 75,000, it includes advertisers of a number of profiles. We may have individual businesses with one location, we may have individual accounts that have multiple locations, and then we may have aggregators that we count as one, but could represent thousands or tens of thousands of advertisers. So the 75,000 is very important as it relates to understanding the direct relationships we have, but the number of underlying advertisers when you look at aggregators kind of represented at single accounts, but who in turn represent thousands of underlying advertisers can be multiples of that 75,000. So we think the adjustable market clearly could be into the millions and we think that the touch points for Marchex products and services is a multiple of the 75,000. And so when you think about kind of where the opportunity is and where we have opportunities to up-sell additional products, it’s really the majority of those 75,000 that we quote. When we look at the relationship that Yahoo! has formed with certain folks and I think you mentioned Comcast, I believe they are primarily focused on the display opportunity and we are really focused on what we think as the biggest mega trend, which is offline local advertising going through a major transformation into online and performance-based channels. And that’s why we focus on clicks and calls and other measurable lead forms to get business where we see the mean [ph] of that $100 billion in offline spending migrating to. And where we feel we position ourselves over the last five years through the positive relationship build-outs to be a leader. Christa Quarles – Thomas Weisel Partners: Okay. And then it sounded like Mike mentioned that increasing coverage was a contributor to the better revenue in the quarter. And I was just wondering if you could kind of expand on that as to where you are and how much room you have on the coverage front? Thanks.

The question I think goes more towards how much inventory we have in terms of coverage, how much from a direct perspective we have. Is that what--? Christa Quarles – Thomas Weisel Partners: I was just – maybe I misunderstood you, but I think you kind of highlighted three components. One was better traffic, one was better sell-through, and I interpreted the third comment to be about better coverage. And I was just wondering if -- sort of where you are in terms of editorial versus paid mix on a page and whether coverage really was a factor in terms of the improved performance?

Think about it from a perspective the number of different methods that we’ve gained transaction. One is from the repeat visitor perspective, one is from just getting more connected relevancy, local consumer getting more connected to the local content. We’ve added inventory to some of the pages, which may relate to what you’re thinking about the coverage comments. And in terms of adding the inventory, part of that is actually going deeper into some of the subset pages. And we do think there are more areas where we can get a little bit more paid than what we have today in terms of overall coverage on a go-forward basis. And that’s something that we’re working on again from a yield perspective looking out into ’08 and then as we move into positioning for ’09. Christa Quarles – Thomas Weisel Partners: Okay, thanks.

Thank you very much. We’ll take the next question from Dan Sommer [ph]. Your line is live.

Hi guys, thanks for taking the call. I’ve got a quick question on just sort of broad one and if there is a relevant metric you can give, that would be great. But on your visibility into your guidance on the second half numbers, maybe how that’s changed a little bit macro-environment? And a follow-up on that after that.

Sure. When we look at our business, we’ve got a diversified base of customers. A lot of them we’ve worked with for a number of years. Clearly we are at a stage now where we see greater opportunities to support partners with multiple products. The characteristics of the local market we think are very favorable when it comes to relative visibility. So clearly we are in a performance-based industry and there are variable elements to it, but we like this sector and we like this market segment because we do think you see a lower amplitude of volatility in advertiser budgets as you might in broader medium models.

Okay, great. That’s helpful. And then the second one just regarding some of the domain sales in the quarter, in the past – I now figure you’ve used 200,000 domains and it seems that that shifted a little bit more lately in your public comments to focusing more on 150,000 or so locally focused domains. So, can we take that as to mean that you have, say, roughly 40,000 or 50,000 domains that you would consider selectively selling as you did with some group here in the quarter?

If you kind of do the math, I think you could safely conclude that there are many thousands and perhaps some number of tens of thousands of names that may not fit directly or strategically into the local mission. And we have assets here that we think are underleveraged and we have an ability to deploy that capital to strategically grow our business and fund stock repurchases and it’s a nice incremental source of cash flow. The way that we look at this is, we look at our domains and we say, are they strategic and local, and if the answer is yes, it’s very unlikely we could sell them. If we look at it and say, could it be local to the extent we may not see today that we’re less willing to sell them. And the third bucket is we don’t see a path to localize it, we will listen and we will consider if we’ve got a better alternative use of capital if we get a compelling offer. And as it relates to our approach that we are being more aggressive because we do think over time there’s a meaningful amount of capital, we can redeploy into levering our value creation opportunity. Over the last four months, we have put more focus on that and we’ve seen very good results with a very small number of domain sales. And so I do think it’s an indication of what’s possible going forward even though things like this can have peaks and valleys along the way.

Okay, thank you. That’s very helpful.

Thank you very much. We’ll take the next question from Brian Pitz. Your line is live. Kaizad Gotla – Banc of America Securities: Hi, this is Kaizad Gotla in for Brian Pitz. Just a couple of questions. First, how is the deal with the Cobalt Group performing? Are you seeing any impact from weakness in the auto category? And then I have a follow-up.

Sure. John, why don’t you handle this one?

Sure. In terms of the Cobalt, of course, that’s a deal that we are working on them with the Marchex voice services part of our business. And the launch with Cobalt went very well. We’ve seen their business to be very strong. So in terms of that particular relationship, we feel very good about it. When we look at the macro category of autos generally, clearly there has been some concern about that category globally in the advertising space. Right now when we look at where we are headed as a company, it’s not something that we have particular concern about.

Just to augment that, we’ve seen media reports of autos – auto companies cutting budgets, but a lot of it is focused on impression based media and not lead generation. And so the lead generation part we feel is very strong. Kaizad Gotla – Banc of America Securities: Okay, great. And the other question was, what kind of pricing differential on average do you see between pay-per-call rates and cost-per-click rates?

It’s -- really a lot of these things come down to yield. Both of those – when you look at kind of relative costs, calls generally are a premium product to click rates, but as it relates to trying to compare them, it’s apples and oranges. So, calls getting premium because in a lot of ways they are one step closer to a customer transaction. Kaizad Gotla – Banc of America Securities: Great. Thank you.

Thank you.

Thank you. We’ll take the next question from Clayton Moran. Your line is live. Clayton Moran – Stanford Group Company: Thank you. Couple of questions. You mentioned that you have more inventory on the proprietary sites and you are filling more inventory directly. Are you also showing fewer Yahoo! ads? And can you give us the percent of inventory filled via Yahoo! versus a year ago?

We are showing – so the answer to the second part is we are showing fewer Yahoo! ads in total. And I think if you think about how much of total advertising inventory we're fulfilling, it's probably about half if you look at some of the more recent statistics. Clayton Moran – Stanford Group Company: Okay. On the call-based side of things, can you tell us how that’s growing and where you are in regards to the investment there?

Right. We had messaged a year ago that having an integrated local-centric platform including clicks and calls and the ability to track other forms of leads, we are going to be an important part of our investment. I think we messaged about $8 million of incremental investment over the year. And we also messaged that kind of it would peak with the second quarter and we pretty much see things play out that way. The announcement of our formal launch of Marchex Connect 2.0 as an integrated product and service was ahead of schedule and is being well received by the marketplace. And so when you look at where we are in our ability to support all these performance-based products, including calls, we feel we are in a good position and these are growth drivers going forward. They are incremental growth drivers going forward. Clayton Moran – Stanford Group Company: Can you give us an idea of how the call-based business is growing?

Without specifically quantifying it, it’s growing, if you look at kind of the overall business, at the higher end of range when you look at local advertiser adoption of performance-based products. Clayton Moran – Stanford Group Company: Okay. And last question on the domains that you sold, just curious it looks like there is no cost basis, were those a part of the name development, acquisition, or were those sites that you had went out and gotten on your own?

Just to clarify, there is some cost basis we do amortized the names so they get depreciated over a period of time. So that’s why their book value may have been declining over a period of time. And some of them, yes, were from the NDL transaction. There were some other – a small number of ones that were from other bulk transactions we did a number of years ago. Clayton Moran – Stanford Group Company: Okay, thanks.

Thank you. We’ll take the next question from Ryan Bergan [ph]. Your line is live.

Thanks for taking my question. I just want to touch a little more on advertising demand, and I wonder if you can contrast the demand between national and local buyers, and then between owned and third-party traffic?

So – we talked today about kind of two countertrends. The macro environment or media overall -- I don’t think we’re giving anybody a new scoop here – is challenging. And we’ve seen weakness in retail exposed and comparison shopping sources, but those just aren't really our focus. We have an open network, so some of those folks come in. But it’s not a big part of our business and it’s not the relationships we’re focused on developing. When you specifically look at local advertisers, both kind of the small and medium size local advertisers, and the national advertisers marketing locally, kind of across your typical yellow pages taxonomy, that's the place we've seen strength. Obviously for Marchex net-net, we think those two trends net out to a positive place and accelerating growth. But at a broader kind of perspective, those kind of more general national advertisers and retail focused ones are somewhat challenged. Things like doctors and lawyers and others, those are strong.

How about between owned and third-party traffic?

Clearly we’ve seen a lot of progress when it comes to our proprietary traffic. What we’ve seen in a lot of ways is just a cumulative compounding benefit of the progress we’re making with our products and understanding our users. And so on a third party basis, we continue to be a very valuable partner with private label solutions for a diverse set of premium publishers. And that continues to bring high quality distribution options. And as John noted in today’s call, we take a distribution agnostic approach to be able to go acquire customers wherever they may be. Marchex's mission is to be able to acquire customers for local businesses in a more cost-effective manner than any other company. And so we continue to add high quality third party distribution sources. But to the extent we can continue to see accelerating growth of our own traffic, we know that’s favorable as it relates to the value proposition for advertisers and as it relates to the scalability of our business model. And that’s over the last number of quarters has been a disproportionate outperformer.

Thank you very much, ladies and gentlemen, we appear to have no further questions. Do you have any closing comments you’d like to make?

Look, we appreciate everybody’s participation and we look forward to reporting our progress to you in subsequent months. Thanks again.

Thank you very much. Ladies and gentlemen, this concludes today’s conference. You may now disconnect your lines and have a wonderful day.