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Vertro Inc. (NASDAQ:VTRO)

Q2 2011 Earnings Call

August 10, 2011 4:30 PM ET

Executives

Michael Buchanan – Director, IR

Peter Corrao – President and CEO

Jim Gallagher CFO

Rob Roe – General Manager

Analysts

Ryan Bergan – Craig-Hallum Capital

John Gilliam – Point Clear Strategies

Operator

Good day, ladies and gentlemen, and thank you for standing by. Welcome to the Vertro Second Quarter 2011 Conference Call. At this time, all participants are in a listen-only mode. Later, we will conduct a question-and-answer session and instructions will follow at that time. (Operator Instructions) As a reminder, this conference is being recorded.

I would now introduce your host for today, Mr. Mike Buchanan, Director of Investor Relations. Sir, please go ahead..

Michael Buchanan

Thank you, and good afternoon, everyone. Welcome to Vertro’s second quarter 2011 financial results conference call. Joining me on the call today are President and CEO, Peter Corrao; CFO, Jim Gallagher; and General Manager, Rob Roe.

I’d like to remind everyone that today’s comments include forward-looking statements. These statements are subject to risks and uncertainties that may cause actual results and events to differ materially from those expressed in the forward-looking statements. These risks and uncertainties will be outlined at the end of this conference call, and are also detailed in our filings with the SEC.

Before handing over to Peter, let me review how we measure our financial performance. In addition to the standard GAAP measurements, we utilize certain profitability-based metrics to evaluate our period-to-period and year-over-year performance. They are EBITDA, earnings from continued operations before interest, income taxes, depreciation and amortization; adjusted EBITDA; adjusted income or loss and adjusted income or loss per share. A description of our reasons for utilizing these measures as well as our definition of them and a reconciliation of the corresponding GAAP measurements can be found in the earnings release we issued today.

Certain of the ALOT user metrics we’ll be discussing this afternoon are broken out by Region One and rest-of-world. As a reminder, Region One comprises English speaking users in the U.S., Canada, United Kingdom, Ireland, Australia and New Zealand. To comply with the SEC’s guidance on fair and open disclosure, we have made this conference call publicly available via audio webcast through the Investor Relations section of our website at www.vertro.com, and a replay of this conference call will be available for 90 days.

I’d now like to turn the call over to President and CEO, Peter Corrao. Peter?

Peter Corrao

Thanks Mike, and good afternoon, everyone. Thanks for joining us. So Q2 was a challenging quarter for the company. We experienced difficulties in achieving cost effective distribution for ALOT products because we’re unable to acquire our targeted number of users at our desired prices.

As many of you are now aware after reading our second quarter 2011 earnings release, the impact of the change to our Search Engines Results Page or SERP mandated by our monetization partner combined with our conservative approach of managing customer acquisition costs during the quarter, negatively impacted revenues as we had expected.

The overriding factor in the revenue decline was the reduction in our estimate in our customer acquisition costs which as we said in the past, directly correlates to fewer new users and lower revenues. We took a prudent approach to spending in order give ourselves time to adjust to the new SERP changes and begin to optimize our new customer acquisition cost model based on new adjusted LTV expectations.

To get into specifics on the SERP change, before our last earnings call our monetization partner issued a mandate for displaying ads on the search results page of its downloadable application affiliates, reducing the total number of ads in our case the SERP went from 18 ads configured seven on the top, eight on the right and three beneath the fold to 11 ads which is now three on the top, eight on the right and none beneath the fold. While the timing of the announcement was unexpected as was the new configuration, we’ve previously done some testing on certain configurations and we’re ready to confront the issue once the monetization partner decided to move forward with the newly proposed SERP changes.

We anticipated and signaled that the proposed change to the SERP would affect our revenues and we now see that there are approximately 7% to 10% below revenues that we expected for users before the SERP change. To make up for a decline and return to growth and revenue in users, we have instituted number of changes some of which have already been executed.

First, we’ve refocused our direct marketing team to more effectively manage our customer acquisition costs. Second, we’re also continuing to focus on achieving greater distributions of our Appbars and apps in all of our supported markets. Third, we are further maximizing ROI by introducing new features and functionality that help improve retention most notably with the new homepage configuration that has shown encouraging initial results. And fourth, with proactive changes we’ve made to our search site, include the addition of seller ratings, daughter windows, and site links enhancements are designed to make the search experience more positive want to create more user activity.

Overall, Vertro’s international users have increased as a percentage of total revenue due to the decline in the number of Region One users. As of the end of Q2, we had 4.1 million Region One users and 4.2 million rest-of-world users. This compares to 4.4 million Region One users and 4.2 million rest-of-world users we had at the end of Q1. This mix of users will potentially favorable in the future due to faster growing user base in international regions other than Region One, was also a contributing factor in the quarter’s lower revenue. This is because countries outside of those included in Region One are currently providing less total revenue per user.

On the plus side, some international markets were little affected by SERP changes because the ad fill rates are lower than Region Ones ad fill rates. We plan to launch localized versions of the Appbar in Brazil, the United Kingdom, France, Spain, Mexico and other key markets within the next few months. Rollout in the United States, the part of Region One and in Brazil will actually begin in the next few days. In addition, our new homepage configuration is also available to the users in all of these markets.

I’d like to now talk about our commitment to achieving our long-term goals primarily through the further execution and expansion of our Appbar strategy. We’re very excited about the progress we’ve made in the last quarter and that we are currently making. The new apps release are already showing signs of success with continuing pipeline for releases planned to keep user attraction high and lower our attrition. This is in part of our overall strategy to make high quality products available that cater to the niche consumers.

Our Appbar includes an expanding number of categories of end-user interest from music and games, social networking, shopping and others geared to attract new high quality niche users to the targeted app offerings. All of the apps are designed to advance Vertro’s strategic goal of either increasing distribution, enhancing user retention and lifetime value and diversification of our revenue stream beyond search alone by increasing on search revenue.

Current search revenues comprised approximately 85% of Q2 amount while non-search made up approximately 15% or revenue totals. During the quarter, we launched the daily music download app offered by eMusic. We also released apps developed through other third-party relationships such as Free Credit Score built by Experian and our People Deals app built by People String to increase non-search revenues.

Other apps introduced during the quarter built by the ALOT team included Package Tracker app which allows users to follow their online purchase delivered via FedEx, UPS or USPS and had initially produced strong retention rates, Craigslist.org, which provides easy access to the services, and our Groupon app, which notifies users when there are new deals in their area and also alerts the user to Groupon’s daily deals. Also I’ll take a moment to mention our most recent app releases. In the current quarter, the company introduced its ALOT App Rewards, an app that offers users immediate value as they receive cash back into an individual account as they make their purchases on-line. We expected that this app to drive revenue on a number of levels, mainly by improving user retention as customers continue to find new bargain deals and build their cash back savings account. The app should also increase our non-search revenue as Vertro receives a percentage of every purchase made by the consumer.

During Q3, the company will have released other apps such SmileyTown, which allows users to post emoticons on Facebook, a Facebook Share app, and an Expedia Travel app. Social media apps like SmileyTown and Facebook Share offer a greater opportunities for vital distribution of our product while apps like Expedia Travel offer more ways to increase non-search revenue.

I’d also like to point out that while we remained adjusted EBITDA positive despite our revenue shift making us our seventh consecutive quarter of adjusted EBITDA profitability. Other achievements during the quarter included one, the successful renegotiation of our credit facility with our strategic partner, Bridge Bank. Two, we were also notified by NASDAQ, that we are no longer under monitoring review, as we have been and continue to be full compliance with NASDAQ’s listing policies for some time now. And third, during Q3, we entered into a settlement agreement with regards to our litigation with Microsoft.

In closing, I’d like to reiterate that we have integrated the SERP change and we believe that its manageable currently and in the future. The efforts of our direct marketing team to more effectively manage customer acquisition costs should enable us to acquire our targeted number of users at our desired prices. We’ve done some early testing with our homepage configuration and the results are encouraging, increase in retention SERP activity and revenue per user. We lastly remain excited about our Appbar and app strategy and our ability to potentially increase retention and monetization.

We believe these activities and the related benefits will outlay the anticipated negative effects attributed to the SERP change, and we should be back on the road to user and revenue growth. Our entire team is excited with the momentum and the traction of our Appbar strategy, our new homepage configuration and our direct marketing efforts are showing. So with that said, let me hand the call back to Jim and he could discuss our financial results. Jim?

Jim Gallagher

Thanks, Peter, and good afternoon to everybody. As Peter explained, Q2 was a challenging quarter due to both internal and external changes that impacted our revenue model. We believe we have addressed these challenges that were accounted during the quarter and executed solutions and minimized the effects on revenues.

For the quarter, although our revenue was $7.5 million, a decline of $0.9 million since last quarter, or approximately $1 million difference year-over-year. As Peter discussed our Q2 revenues were negatively impacted by a reduction in spending in order to afford us time to evaluate the SERP engines and their effect on our customer acquisition model as well as the anticipated reduction in revenues in search revenue attributed to the mandated SERP change.

In addition the macroeconomic environment has resulted in a reduction in overall consumer spending. The reduction in revenue resulted in a loss from continued operations of $0.3 million or $0.05 per diluted share and adjusted net income of $0.01 million, and breakeven on a per diluted share basis for the quarter. Additionally, we experienced an EBITDA loss of $0.2 million in Q2. However, we still maintain adjusted EBITDA profitability of $0.1 million and results were in line with analyst estimates of breakeven adjusted EPS and adjusted EBITDA of $0.1 million.

On our financial results reflect a decline compared to the previous quarter, we did last minute increase by utilizing tighter overall cost controls on operating expenses. Our operating expenses were less than what we have projected in our last earning calls due to savings from employee related costs and consulting service costs. Total OpEx excluding customer acquisition costs of $2.2 million for the quarter was approximately $0.73 million per month which is below our previously projected estimate of $0.78 million per month.

Cash and cash equivalents decreased by $0.3 million during the quarter from $5.2 million in Q1 2011 to $4.9 million in Q1 2011. The decrease was primarily due to reduced cash flow from operations, and capitalized software development costs offset by the release of restricted cash under the new credit facility. As Peter previously stated, we announced in June that we successfully renegotiated our credit facility with our strategic partner Bridge Bank N.A. The deal increases Vertro’s total borrowing potential to $8 million from $5 million.

The new credit facility is a combination of a receivable financing facility of up to $6.5 million along with the capital growth facility of up to $1.5 million. While we’ve not drawn on the financing facility to-date, the new credit facility agreement will give us the ability to execute on appropriate and timely growth opportunities as they present themselves. Our balance sheet, cash position and networking capital remains strong as a direct result of the progress that we’ve achieved in executing our strategic initiatives and closely managing our operating costs.

With that, I’m going to hand the call back to the operator for any questions. Operator Karen?

Question-and-Answer Session

Operator

Thank you sir. (Operator Instructions) And our first question comes from the line of Ryan Bergan from Craig-Hallum Capital.

Ryan Bergan – Craig-Hallum Capital

Thank you. Do you feel like you’ve had enough time, since I think it was June 11th when the SERP changes were going to take effect, do you think you’ve had enough time to fully evaluate what those changes are going to be, and what do you – what are your expectations for the changes to be for the remainder of the year?

Peter Corrao

Yes, well Ryan enough time in a life time value model – that’s our life time value model is scheduled as you know around one year. So perfect for us would be able to look at the changes for a year. But we’ve known about the changes since our partner notified us about in mid May. So we began testing in mid May. We completely executed early to mid June. And I think we’ve got – we do have a pretty good feel for it and there are all sorts of numbers bantered around on the last call of how much the reduction could be. Of course we were scared to death of not knowing what that reduction might be because we’ve never tested against the specific search implementation that we did.

We have tested it though and it looks like it ranges depending on the cohort and the country between 7% and 10%. And I would be surprised if that changed much.

Ryan Bergan – Craig-Hallum Capital

I believe you had planned to offset some of the challenges there by sending some traffic to the Yahoo Bing, did you see the offset that you were expecting from doing that, and do you expect to continue to send traffic to Yahoo Bing?

Peter Corrao

Yes, we’ve got a non-exclusive with Yahoo Bing and Google. So the way the program works is that we send a call out to ads for all of them. Our partners at Google get primary placement on those ads, that’s acquired by our contractor then and we fill the rest of the space with Yahoo and Bing traffic. And so we’ll continue to do it just like that, and I don’t see any changes coming on that front at all, Ryan.

Ryan Bergan – Craig-Hallum Capital

Are you able to share what percent of revenue you got from Google in the second quarter?

Peter Corrao

I don’t have that number in front of me but 85% of our revenue or actually I think it was 84% of our revenue was search, 16% was non-search. And loosely, I don’t have the number but call it maybe 85/15 of the search would have been Google, 15 would have been non-Google search partner. That’s not dissimilar Ryan to what have been in previous quarters before the SERP changes.

Ryan Bergan – Craig-Hallum Capital

What was the non-search revenue percent in first quarter?

Peter Corrao

Yes, we’ve been – last quarter I think it was 84/16.

Ryan Bergan – Craig-Hallum Capital

And it was 85/15.

Peter Corrao

I’m sorry, it was 86/14. I’m sorry.

Ryan Bergan – Craig-Hallum Capital

Okay, so the non-search revenue picked up by one percentage points sequentially?

Peter Corrao

That’s accurate.

Ryan Bergan – Craig-Hallum Capital

Okay. And it looks like the revenue per click had an uptick in Q2. Do you feel like that in Q1, you had a trough there, and can you talk to trends you’re seeing?

Rob Roe

We don’t generally publish the RPC results, I mean generally speaking performance has been the most significant – this is Rob, by the way, I am sorry, is the most significant performance effect recently was the change in the layout in the presentation. So I wouldn’t point towards other factors as being significant.

Peter Corrao

I think what Ryan maybe doing is taking our total queries, I’m guessing because we don’t publish anything different dividing them by revenue, is that what you’re doing Ryan?

Ryan Bergan – Craig-Hallum Capital

Correct.

Peter Corrao

Yes.

Rob Roe

I mean an average revenue search continues to perform most – its mostly steady but with the change in the mix of the users for one-tier to another, definitely has an effect. So our tier-one or Region One users have it generally higher relative RPM or revenue per search but that’s really reflective of the value of those economies and the search economies and then our non – other rest-of-world came little lower and so we have seen a change in the mix more biased towards rest-of-world over the last quarter and that does change in average RPM.

Peter Corrao

But I think Ryan, taken the total queries which aren’t clicks on paid listings, dividing that into the revenue with the mixed change I wouldn’t read too much into that between last quarter and this quarter and generally speaking, I think it’s accurate. We’re not seeing any trend difference between last quarter and this quarter as a result of the SERP change. I think any changes that you would be seeing Ryan would simply be mixed differences.

Ryan Bergan – Craig-Hallum Capital

Got you. Okay, thank you for that. Can you talk about revenue seasonality for the remainder of the year, I know you’ve got some changes going on so to look back at your prior couple of fiscal years, I don’t know how helpful that can be for me but when I look at the model I am just trying to – help me understand where you think you can be in Q3, Q4 versus Q2?

Peter Corrao

Yes, we don’t as you know Ryan, and there it goes, well we’re not forecasting revenues in EBITDAs but I’ll zero in a little bit on what we’re thinking. So we pulled in our horns as we discussed on advertising in Q2 because of the SERP changes. So when we knew it was coming, call it mid May, we had over half of the quarter where we were very careful and frankly under spending when compared to what we would have done in the past and what were plan would have been because we didn’t know what the new LTV would be after we planned the SERP change.

The result of that is we ended up with live users during the quarter that was down. We’re trying to signal in the prepared statements and exactly where we want you guys to be thinking is that we think we found our way to sort of steady state as a result of the SERP that’s the 7% to 10%. We’ve used a time from May until literally today to figure out then how to readjust our CPAs or our acquisition costs to attract new consumers in that have appropriate LTVs to meet the new lower LTVs that we’re getting from our monetization partner. And we think we can get back to growth beginning now really or have been probably last 10 or 12 days and continue that growth including growth in our acquisition spending in the 1% to 2% per month rates beginning now and going forward.

So we plan to do that. We think we can do it like that, and revenues would ensue, that would lead you to believe though that revenues would likely dip in Q3 slightly below the Q2 levels. And then we believe as of now we’re kind of back to late ‘09 and early 2010 growth levels were once we get through that dip, we should be back to where we’re getting high single-digit, low double-digit growth on a quarter-by-quarter basis, and that growth like we did in late ‘09 and early ‘010 way of the majority of that growth should flow through to the bottom line because our operating expenses as you can see are well under control and even dropping. And we think we’ve got our cost back inline from acquisition cost from consumer standpoint.

So look the thing has been up. This couldn’t have been any tougher for us getting to where we are but, we’re really satisfied with where are right now in terms of being able to get back to growth. We think that growth will come in terms of users now. We are growing now and have been in the last 10 days or so. And we are growing in the levels that we need to on a cost basis, and that means revenues start to increase late next quarter and really start to take off into Q4, Q1 of next year.

So I guess the best thing I would do is refer you back to late ‘09 and early ‘010 and we think that we’re on that pace again for user growth beginning about 10 days ago.

Ryan Bergan – Craig-Hallum Capital

What was – you said, what was cash from ops in the quarter?

Jim Gallagher

Total cash was approximately $4.9 million.

Ryan Bergan – Craig-Hallum Capital

And what was cash from operations?

Jim Gallagher

As compared to $5.2 million in the quarter before. Cash from operations, we had a cash and cash equivalence, net cash used provided by financing – let me just get the numbers for you, Ryan. Yes, somewhat of a drop in the operating activities was about $400,000. And then the total decrease or adjustment in cash and cash equivalence in the quarter was about $1.5 million, $1.6 million.

Ryan Bergan – Craig-Hallum Capital

And CapEx?

Jim Gallagher

CapEx, we had in the area of about I think it’s like $300,000 in terms of capitalized software development costs which again is part of the overall app strategy rollout that we’re looking at.

Ryan Bergan – Craig-Hallum Capital

And then what are your expectations for your cash balance in Q3?

Jim Gallagher

Again we still feel that our cash position is strong. We’re still looking to maintain the levels of cash that we currently had. The main focus that we do have is really focused on our networking capital number. And we’ve been able to really be able to maintain and strengthen that over the quarters. The main impact that we’re looking at now is bringing down whatever liabilities that we do have to a more reasonable level.

The other thing to keep in mind Ryan, is obviously with the new credit facility with Bridge Bank, we do have the ability to tap into that. We’ve chosen not to do it at this time, but if something did come up in terms of a strategic opportunity, that would allow us to grow faster, we certainly would look into tapping into that. But at the current time, we could probably draw down up to about probably $4 million that would effectively allow us to do that if we so desire.

Peter Corrao

Yes, right. I don’t want to get you turned off by that, to think that we’re planning on borrowing money to operate in Q3, we clearly are not. Cash in Q3 close should be approximately where we are slightly behind that. It’s not going to dip dramatically. And we do not plan on drawing down on our credit facility for cash needs for operations.

Another story, if we come up with a great deal for acquisitions of consumers and we had to do an upfront payment, that’s a different story. But if we had one of those deals, we would be crowing about it write down and spending money as quick as we could. We just don’t have one right now.

Ryan Bergan – Craig-Hallum Capital

All right, guys. I appreciate the color and good luck.

Peter Corrao

Great, thank you.

Operator

Thank you sir. (Operator Instructions) One moment for any further questions. (Operator Instructions) Our next question comes from the line of John Gilliam from Point Clear Strategies.

John Gilliam – Point Clear Strategies

Good afternoon, gentlemen. The previous caller asked a question about the revenue impacts from the SERP changes, I think you said somewhere in the 7% to 10% range for the limited period that you’ve been able to judge thus far. Is that 7% to 10% below what you did in the same time period last year?

Peter Corrao

That’s a good question, John. Great question actually. So when our partner gave us the change, we didn’t – part of the deal wasn’t that that we could run a cohort as an ongoing standard to compare it to, no we’re not, we just made the change, right. So the 7% to 10%, let me explain it this way, is for distribution that we’re getting today and our existing customers today, what’s the revenue per customer and/or revenue per thousand customers we anticipate getting over the next year compared to what we anticipate getting from that same customer and new customers over a year with the old SERP.

So in another way, with the old SERP, old customer and new customer if we expected one unit a year revenue in a year, would now it now looks like we’re getting 0.90 to 0.93 of that revenue instead of the one.

John Gilliam – Point Clear Strategies

I got you, okay.

Peter Corrao

And so and the reason we’re even using the 7% to 10% is we don’t have a standard that we’re measuring against, we switched it all, right.

John Gilliam – Point Clear Strategies

Okay.

Peter Corrao

So and again its always back to the LTV, we’re anticipating what we’re going to get for the year, you never really know to until you get there, but we’ve got a good model for it. And I think if we did have – if our partner would have allowed us to run one cohort as a standard, and keep it open for the year and measure against it, I don’t think we’ve seen much difference, Rob?

Rob Roe

Yes, we’re pretty good at our measurements.

John Gilliam – Point Clear Strategies

Okay.

Peter Corrao

And again while that’s not great John, you were on the last call, there were numbers thrown around on the last call of what that SERP change might cost, I know it was way higher than 7 to 10%.

John Gilliam – Point Clear Strategies

Right.

Peter Corrao

I can hardly repeat the numbers because it makes me want to throw up, right.

John Gilliam – Point Clear Strategies

Sure. Yes, that was a scary thing.

Peter Corrao

That’s right. Right, we felt pretty good about this. It seems like a manageable number and one that we can get through and the things that we talked about adding to it, the new homepage that we began to introduce has really promising results for us. So we think pretty incremental revenue, the app strategy seems to be working, non-search revenue is up.

I think we’re going to get through this and I am happy to signal as I did now two years ago, once we get through this dip because of lead lag on revenues that you well know with our business, which I think will get out of that kind of mid to late Q3 but certainly in Q4, I think we’ll be – my whole team believes that we’ll be back to growth rates like we achieved back then on even lesser costs today. So we couldn’t be happier about our business future right now from where we sit in.

John Gilliam – Point Clear Strategies

And on that point I think I got this, when you asked this, did you say we’re looking at possibly a slight dip in Q3 from Q2 from a revenue standpoint but you thought – that you could get back to that possibly high single-digit order quarterly growth in Q4?

Jim Gallagher

That’s right.

John Gilliam – Point Clear Strategies

Okay.

Peter Corrao

And be on that and continue to be on that. So you remember that sort of the same drum that we were beating when we were back in Q3.

Jim Gallagher

Q4 of ‘09.

Peter Corrao

Q4 of ‘09, we think that we can get back to growth rates like that.

John Gilliam – Point Clear Strategies

Okay. The majority of the apps you got you’ve introduced in the last few months have potential for increasing that non-search revenue percentage. Do you feel like we’ll see a substantial change back in Q4 in that mix which has been pretty consistent in the last few quarters in the 85/15 range?

Peter Corrao

Yes, our apps that are revenue producing apps John, are some of them are almost too good to be true story like our Cash Back App.

John Gilliam – Point Clear Strategies

Right.

Peter Corrao

We don’t have enough experience now, well we can start forecasting that on its own. I would love to be able to say look we’ve got some experience in each Cash Back App. Users are going to give us pick a big number and then we can start to multiply that out times to the U.S. and then extensions into other English speaking countries and beyond. We’re just not there yet, but for sure, our intention is to bring in more apps like our eBay App, and our Groupon App and our Cash Back App that delivers substantial revenue along with satisfying our consumer.

And I talked about last time I’d like to be in a position where looking out in the future years 50% of our revenue is coming from non-search and 50% was coming search and non-search was a big deal to us. So we’re certainly trying to build and partner with companies whose Apps can do this sort of revenue and all of us feel like we can get those apps to do that.

John Gilliam – Point Clear Strategies

And the Groupon App that you mentioned, did I understand you correctly, that’s a potential for revenue generation?

Peter Corrao

Actually we’ve got two similar apps, we’ve got a Groupon App and LivingSocial App and let’s not getting into specifics on the deal which wouldn’t be good for us. Both are meant to get us new distribution, both are meant to keep could us longer and lower trading consumers. One of them is a high paying app and the other one is a not high paying app. So we like them both for consumer purposes, we promote to get both of them. One of them pays us a substantial rent share and one does not.

John Gilliam – Point Clear Strategies

Rent share on the deals that the user participates on?

Peter Corrao

I guess I should say CPA type relationship, John.

John Gilliam – Point Clear Strategies

Okay.

Peter Corrao

A unit – the consumer buys the unit worth of a deal and we get a percentage of that units worth of revenue back.

John Gilliam – Point Clear Strategies

Okay. That could be a big deal. That’s what I was getting at and I didn’t realized that.

Peter Corrao

Very similar to our eBay deals that we talked about.

John Gilliam – Point Clear Strategies

Right, which has been significant in terms of at least a percentage of that non-search.

Peter Corrao

That’s exactly right.

John Gilliam – Point Clear Strategies

Okay, good deal. Thanks very much gentlemen.

Peter Corrao

Thank you.

Operator

Thank you sir. (Operator Instructions) We’ll pause for a moment for any further questions. And I see no further questions in the queue at this time. I’d like to turn the conference back over to Vertro for any final remarks.

Michael Buchanan

Hi, this conference call contains certain forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Words or expressions such as plan, will, intend, anticipate, believes or expect or variations of such words and similar expressions are intended to identify such forward-looking statements including (1) our ability to successfully execute upon our corporate strategies, (2) our ability to distribute and monetize our international products at rates sufficient to meet our expectations, (3) our ability to develop and successfully market new products and services, (4) the potential acceptance of new products in the market, and (5) the impact of potential – the impact of changes to our monetization partners implementation guidelines.

These statements are based on management’s current expectations and are subject to uncertainty and changes in circumstances. Actual results may vary materially from expectations contained in the forward-looking statements. Key risks are described in Vertro’s reports filed with the U.S. Securities and Exchange Commission including Form 10-Q for Q2 2011. In addition, past performance cannot be relied upon as a guide to future performance.

That concludes our call for today. Thank you for listening.

Operator

Ladies and gentlemen, thank you for your participation in today’s conference. This does conclude the program. And you may now disconnect. Everyone have a great day.

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