James McNally [ph] Elliot Noss – President and CEO Mike Cooperman – CFO

Thanos Moschopoulos – BMO Capital Markets Alex Grassino – Laurentian Bank Securities Aram Fuchs – Fertilemind Capital

Thank you, James. Good afternoon, and thanks for joining us today. On today's call I'll begin with some of the highlights for the fourth quarter and for the year. Mike will then provide a detailed review of our financial results, and I'll close the call with our thoughts for the future. Revenue for the final quarter of 2008 was $19.2 million, an increase of 5% compared to the fourth quarter of 2007. That growth in revenue was in line with our overall growth for the year of 5.1%, which resulted in revenue of $78.5 million. Net income for the quarter was just over $1 million bringing the total for the year to $2.1 million. As discussed on the last conference call in November, we have sold our equity stake in Afilias. As a reminder we received $3.2 million in cash in the fourth quarter and are conditionally due the remaining $4.2 million in two installments later this year. For 2008 we generated cash flow from operations of $2.4 million. I will note that cash flow from operations for the fourth quarter was negatively impacted by two factors that were specific to the period. First, the timing of payables resulted in a typically high cash out flow and second, we incurred one-time severance and related costs associated with the reduction in headcount. Let's look at each of our businesses individually. The main registration within our OpenSRS Wholesale business is showing strong momentum. In the fourth quarter, both new and renewal transactions grew compared to the previous year with new registrations up 9% and renewals up 15%. We are seeing these trends accelerate in the early part of this year. The main names under management increased by 18% from a year earlier to $7.7 million. We note that a portion of that growth would be accounted for by our IYD acquisition. Importantly, domains that are registered through Tucows have above average usage within the industry. Few are sitting inactive and parked relative to our competitors. Real people are using them to do real things which of course means there is a much better probability of those domains being renewed. Competitively, we are doing well. We are hearing it from the registries and we are seeing it in key customer wins. In fact, we were recently recognized by one of the registries as the top registrar in first-time renewals, total new registrations and net growth in names under management with them. The good news especially in the current economic environment, is not only that our domain registration business represents the largest component of our gross margin, but also that it is a recurring revenue stream that is generated by large volumes of low-cost transactions. It is a milk-and-eggs type of business, one that involves the type of buying decision that shouldn't be significantly impacted by the economy. In fact some in the industry believe that the large number of layoffs we are seeing in more traditional businesses could even lead to an increase in demand registration as smaller businesses move online. With the pull back in our email business that I discussed last quarter, our historical domain registration business has become an even more important part of OpenSRS. Thinking of email, while OpenSRS email is aimed at the same target market of web hosts and ISPs as our domain registration service, the decision to keep email in-house versus moving it to OpenSRS is a very different one. With domains, the decision for our customer is about who to spend their money with, with email it is about deciding to take on an additional expense when making the decision to outsource. Therefore, it's not surprising that we are experiencing some business impact from the current economic uncertainty as customers postpone or reconsider outsourcing email. By the way, we are experiencing much more postpone than reconsider. We continue to see significant long-term opportunity to grow this business. More and more service providers are realizing they simply cannot provide a competitive service doing it in-house and a few suppliers really pay attention to our segment. In the short-term we are focused on service quality and operating efficiency. Now I'd like to turn to YummyNames, our newly branded domain portfolio business. As I've discussed previously, our goal with the YummyNames brand is to target marketers and brand experts who recognize the value of quality domain names but may not be familiar with the world of domaining or the availability of names from Tucows domain portfolio. As we focus on marketing our high end brandable names to marketers, we are also continuing to pursue bulk sales of Direct Navigation names. After the quarter’s end, today in fact, we completed the sale of slightly over 2500 names for $1 million. As anyone who have listened to these calls know, we view bulk sale of Direct Navigation names as tactical not strategical and we have attempted to create more regularity in this revenue stream. Therefore, in addition to the $1 million sale, we've made an arrangement which provide some regularity for both us and the buyer over the next 14 to 18 months. Ad revenue related to parked pages with our portfolio was relatively stable with no real erosion in the fourth quarter, which is somewhat surprising given the economic climate. In our retail business, we continue the consolidation of three legacy brands into one entirely new service called Hover. Hover was launched in Q4 and we have now completed two of the three customer transitions to this new platform. Final stage moving NetIdentity customers to Hover should be completed this quarter. Tucows is all about making the Internet easier to use and we believe Hover is now the easiest way to buy and use domains. We are pleased to now be able to start marketing this service in earnest. I would like to briefly touch on Butterscotch, a recently launched online video network that offers educational and user friendly content designed to de-mystify technology for the average user. Butterscotch is off to a great start. To date we have produced more than 400 videos and we are thrilled with the content as well as the public's reaction. Our long-term goal is to migrate traffic from our existing Tucows.com software download site to Butterscotch thereby creating a single property that is a definitive site for understanding and using the Internet. While we are excited about this opportunity, we are being conservative in our expectations given that as an ad supportive business, Butterscotch is the part of the business most likely to be impacted by economic conditions. In summary, of course 2008 was an interesting year for everyone. When looking back at Tucows in 2008 we are clearly not happy with our cash generation. The big reasons cash generation was less than we expected were domain portfolio sales of at least 1 million and perhaps as much as 3 million less than we anticipated, retail sales of $1 million to $2 million less than expected due to selling two Web hosting customer basis and the slowing down of marketing as we move to a new platform. And email sales of $1 million to $2 million less than planned for due to slower adoption, the loss of customers to Google and the impact of the economy delaying perspective customers outsourcing decision.

Thanks, Elliot. Net revenue for the fourth quarter of fiscal 2008 was $19.2 million, up 5% from $18.2 million for the fourth quarter of fiscal 2007. The increase was primarily the result of higher revenues from traditional domain name registration services, which as Elliott discussed earlier, experienced strong growth in both new and renewal transactions compared to the corresponding quarter a year earlier. Cost of revenues before network costs for the fourth quarter increased by 15% or $1.7 million, $12.7 million from $11 million, primarily the result of the higher domain registration volumes we have been experiencing and the impact of the 7% increase in registration fees levied by our main domain name supplies in October of 2007. It should also be noted that the same registries also increased their registration fees by an additional 7% in October this year. These increases were partially offset by a decrease in network costs of $1.4 million, primarily the result of the lower bandwidth, (inaudible) contract and people costs we achieved with the closure and relocation of certain of our call location facilities following the successful completion of the email migration that we have spoken about in previous conference calls as well as the lower depreciation we are now incurring as a result of the retirement of the Oda Hardware that we were deploying at the closed call location facility. Gross margin for the fourth quarter was 25%, compared to 23% for the same quarter last year. This increase is primarily attributable to the reduction in network costs of $1.4 million that I mentioned a moment ago which was partially offset by lower contributions to gross margin from our traditional domain name, email and retail service category. Looking at the gross margin contribution by service category, gross margin from the traditional domain name registration services decreased to $2.7 million from $2.9 million for the same quarter in fiscal 2007. While the intense competitive pressure that we were feeling on domain pricing a few years ago has abated somewhat, competitive nature of the domain name market continues to require us to regularly review and assess our pricing. Net result is that while domain name transaction volumes for the quarter were up on a year-over-year basis, the impact of pricing adjustments to maintain our competitive standing continues to dampen the effect of our increased volumes and gross margin. As Elliott discussed, one of our focuses for domain registration services in 2009 broke gross margin through the implementation of new systems for our low volume customers. Gross margin from domain portfolio services increased to $680,000, $159,000 for the fourth quarter of fiscal 2007, and as a percentage of net sales was essentially unchanged from the same quarter last year at 80%. Gross margin for email services decreased to $1 million from $1.5 million for the fourth quarter of fiscal 2007. As we've discussed in previous conference calls, the decrease was primarily the result of the loss of several enterprise customers that we acquired. Part of the Critical Path asset acquisition we have since moved on to suppliers that are probably more appropriate for their needs. Gross margin percentage for the quarter however increased to 92% from 87%, the result of the improved cost structure we have with our new email platform. Gross margin from retail services decreased to 866,000 from 1 million for the fourth quarter of fiscal 2007. Decrease is primarily the result of our having exited the retail shared hosted services market. Gross margin from other services was relatively unchanged from the fourth quarter of fiscal 2007 at $1.2 million. Gross margin for the quarter was dampened somewhat by the impact the current economic environment is having on advertising through our Web site and the yields on our syndicated fees. Total operating expenses for the fourth quarter increased by $2 million to 42%, $6.9 million, or 36% of net revenues, and $4.9 million, or 27% of net revenue for the fourth quarter of fiscal 2007. The increase in operating cost was primarily the result of the impact of foreign exchange, which as I've discussed in the past, classify under other operating cost – for operating cost. I would also like to remind you that a substantial portion of our fixed expenses are incurred in Canadian dollars and our policy is to attempt to mitigate the exchange rate risk by buying foreign exchange contracts. Due to the significant weakening of the Canadian dollar that occurred during the fourth quarter of fiscal 2008, we incurred a loss on foreign exchange of $2.2 million inclusive of a mark-to-market loss of $1.4 million in the fourth quarter of 2008 compared to a gain on foreign exchange of $106,000 inclusive of a mark-to-market loss of $667,000 in the fourth quarter of 2007. In addition to the $2.2 million loss on foreign exchange transactions that I have just mentioned, at year end we were carrying a $2 million derivative instrument liability on our balance sheet resulting from the contracts we bought to cover our 2009 Canadian dollar exposure that will reverse as these contracts mature. In total, other operating expenses increased by $2.5 million to $3 million, or 15% of net revenue from $525,000 or 3% of net revenue for the fourth quarter of 2007 primarily due to the impact of the foreign exchange loss I've just discussed and the $251,000 in severance costs we incurred as a result of a reduction in headcount we announced in November. This headcount reduction will result in ongoing savings going forward. The increases in other operating costs were partially offset by transitional costs related to the IYD acquisition of $105,000 that we incurred in the fourth quarter of 2007 and that were not incurred in the fourth quarter of 2008. For operating expenses which has other expenses that relate to ongoing sales, marketing, development and administrative costs, decreased compared to the fourth quarter of fiscal 2007 on an absolute dollar basis, $4 million from $4.3 million for the fourth quarter of fiscal 2007, and as a percentage of revenue to 21% from 24%. Net income for the fourth quarter of fiscal 2008 was $1 million or $0.01 per share compared to a net loss of $935,000 or $0.01 per share for the fourth quarter of fiscal 2007. I will note that net income for the fourth quarter of fiscal 2008 was positively impacted by the contribution of $3.1 million from the sale of our equity stake in Afilias. This benefit was partially offset by a loss in foreign exchange $2.2 million that I discussed earlier. Moving on to the balance sheet. Cash at the end of the fourth quarter was $5.4 million, a decrease of $2.7 million from $8.1 million at the end of the fourth quarter of fiscal 2007 and an increase of $2.7 million from $2.7 million for the third quarter of fiscal 2008. The increase compared to the third quarter of fiscal 2008 primarily the results of the proceeds of $3.2 [ph] million from the sale of Afilias was partially offset by our using cash in operations of $229,000. The repayment of $479,000 on our bank loan, investment of $191,000 in property and equipment and the repurchase of shares valued at $272,000.

Thanks, Mike. We all know how tough it is to be a publicly traded company in these turbulent times. Capital markets are in flux. The venture capital system is broken with virtually no opportunities for exit. Hedge funds are focused on redemptions not making new investments. Furthermore, every small public company not just Tucows faces a similar situation. Traditional investor relations or additional analyst coverage can't help much when you are one of a thousand companies with the same message, your valuation is low. What then is a company with $50 million to $200 million in revenue and $5 million to $20 million in cash flow supposed to do? When you step back and look at the public markets, there are three things that public companies do very well. Firstly, they provide a mechanism by which to reward good people. Finding and keeping the best people is the most important factor in any Company's success. Secondly, they provide investors with liquidity and the ability to move in and out of investment much more easily than with private companies. And thirdly, public markets are efficient at returning capital to shareholders either through buyback when the share price is inexpensive or through dividends. We estimate that we pay a premium of between $250,000 and $500,000 a year to be a public company. When you start to consider the benefits I've just described; attraction and retention of top talent, liquidity for investors and the ability to efficiently return capital it starts to seem like a reasonable expense. All of this of course is predicated on consistently generating cash which we have done in the past, we'll continue to do so in the future. Tucows is fundamentally sound. We have growth opportunities across our business and are predominately high volume low cost transaction models with a high recurring revenue component positions us favorably in this challenging environment. We will be aggressive in returning value to shareholders and to this end this morning we announced the initiation of a modified Dutch auction tender offer to repurchase 4 million of our shares. Shareholders are invited to tender some or all of their shares at a price from $0.32 per share to $0.45 per share representing a fairly significant premium to the market at the opening of today at the close of business on March 9. Based on the number of shares tendered and the prices at which those shares are tendered we will determine the lowest price within the $0.32 to $0.45 per share range that will enable us to purchase up to 4 million shares. In addition, we have the option of purchasing up to 1.5 million more if the number of properly tendered shares are higher and we choose to exercise this option. This is a time for efficient operations, prudent capital markets choices, and a clear sense of direction. We believe we deliver all of these things.I would now like to open the call for questions. Operator?

Thanos Moschopoulos – BMO Capital Markets:

Hi, Thanos. Thanos Moschopoulos – BMO Capital Markets:

Hi mate. Thanos Moschopoulos – BMO Capital Markets:

Thanos Moschopoulos – BMO Capital Markets: Okay. But I guess it's kind of hard to say what type of quantities, revenues (inaudible).

Thanos Moschopoulos – BMO Capital Markets:

Thanos Moschopoulos – BMO Capital Markets:

Thanos Moschopoulos – BMO Capital Markets:

Thanos Moschopoulos – BMO Capital Markets:

Thanos Moschopoulos – BMO Capital Markets:

Thanos Moschopoulos – BMO Capital Markets:

Thanos Moschopoulos – BMO Capital Markets:

Thanos Moschopoulos – BMO Capital Markets:

Thanos Moschopoulos – BMO Capital Markets:

Thanos Moschopoulos – BMO Capital Markets:

No, I don't think – it makes no sense to do that. It's a crazy world out there. I think as you and I have talked both on the call and just conversationally, we are hoping for the best and preparing for the worst. We're pretty conservative guys. We have been through a nuclear winter before having lived through the dotcom boom and bust, and then the kind of the echo boom and bust in domain registration so we have a pretty good sense of what to do in tough times. We are being pretty conservative. Thanos Moschopoulos – BMO Capital Markets:

Thanks Thanos.

Alex Grassino – Laurentian Bank Securities:

Alex Grassino – Laurentian Bank Securities:

Alex Grassino – Laurentian Bank Securities:

Alex Grassino – Laurentian Bank Securities:

Alex Grassino – Laurentian Bank Securities:

Alex Grassino – Laurentian Bank Securities:

I think I talked last quarter about '09 being in the $1.5 million to $2 million range, which is kind of down year-on-year and down pretty significantly from '07. Alex Grassino – Laurentian Bank Securities: Sure.

Alex Grassino – Laurentian Bank Securities:

Alex Grassino – Laurentian Bank Securities:

Aram Fuchs – Fertilemind Capital: Yes it is Aram Fuchs for Fertilemind Capital.

Hi Aram. Aram Fuchs – Fertilemind Capital:

Aram Fuchs – Fertilemind Capital:

Aram Fuchs – Fertilemind Capital:

Aram Fuchs – Fertilemind Capital:

Aram Fuchs – Fertilemind Capital:

Aram Fuchs – Fertilemind Capital:

Aram Fuchs – Fertilemind Capital:

Ladies and gentlemen, this concludes the conference call for today. Thank you for participating. Please disconnect your lines.