LiveDeal, Inc. Announces Fiscal 2009 Second-Quarter and Year-to-Date Financial Results

Conference Call Scheduled for May 18, 2009
LAS VEGAS--(Business Wire)--
LiveDeal, Inc. (NASDAQ:LIVE), a provider of web-based advertising and marketing
services for small- and medium-sized local businesses, announced today its
financial results for the second quarter and six months of fiscal 2009. LiveDeal
will host a conference call today (Monday, May 18) at 8:30 a.m. EST (5:30 a.m.
PST) to discuss these results. Dial-in information is provided below.

Fiscal 2009 Second-Quarter and Year-to-Date FinancialResults

For the second quarter of fiscal 2009, total revenue was $3.5 million, compared
to $6.0 million in the same quarter of fiscal 2008. Approximately $3.3 million
of the decline in revenues was attributable to a reduction in LiveDeal`s Yellow
Pages directory services business, which resulted in part from the sale of a
large portion of the Company`s customer list. This decrease was partially offset
by approximately $880,000 in revenue from LiveDeal`s Direct Sales business,
which provides web-based advertising and marketing services to small- and
medium-sized, local businesses.

The Company reported a net loss for the quarter of $19.1 million, or $3.19 per
fully diluted share. The loss included the net impact of approximately $16.1
million in write-offs due to the impairment of certain of the Company`s goodwill
and intangible assets. LiveDeal also established a valuation allowance in the
amount of $9.5 million against its deferred tax assets, that was partially
offset by tax benefits as a result of the operating loss in the quarter. In the
second quarter of fiscal 2008, the Company reported virtually no net income or
loss.

"This was a challenging quarter that represented the next essential step in
transitioning the Company from its traditional lines of business to its Direct
Sales business, which provides web-based advertising and marketing services to
small- and medium-sized, local businesses, and which we believe represents the
Company`s future," said Mike Edelhart, Chief Executive Officer of LiveDeal. "We
are encouraged by the continuing growth of the Direct Sales business during
difficult economic times and by our ability to translate parts of our previous
business into cash. We believe these changes give us a healthy foundation for
future growth and value creation."

Net revenues for the first six months of fiscal 2009 decreased to $8.6 million
from $12.4 million in the same period of last year for reasons similar to those
stated above. The Company expects the percentage of its total revenues derived
from its Direct Sales business to continue to increase as the Company emphasizes
this premium segment (which includes the LiveSites, LiveAdvisor and LiveClicks
products) over its legacy Yellow Pages directory services business.

The Company reported a net loss of $18.2 million for the first six months of
fiscal 2009, down from net income of $329,000 for the same period in fiscal
2008.

As of March 31, 2009, LiveDeal had cash on hand of $10.1 million and no
long-term debt.

Fiscal 2009 Second-Quarter Highlights

In January 2009, the Company evaluated its business and adopted a new strategy
that moved away from LiveDeal`s traditional Yellow Pages and classified
advertising businesses to one that targets sales of advertising and marketing
services to small- and medium-sized, local businesses. Specifically, the Company
is now focusing on delivering customers a suite of Internet-based, local search
driven, customer acquisition services sold via telemarketing and supported by
its websites and internally developed software. This change occurred because the
Company believes that the sale of advertising and marketing services to
businesses is a high-growth industry and that the Company`s traditional business
in directory services and classified advertising is less attractive.

In conjunction with this change, LiveDeal discontinued the operations of its
Philippines-based call center, which provided telemarketing services to support
the Company`s directory services business, including those directory services
that were sold during the second quarter of fiscal 2009.

In the second quarter of fiscal 2009, these strategic changes impacted the
Company`s financial statements in several ways. For example, the Company:

* recorded impairment charges of $16.1 million related to the write-down of its
goodwill and other intangible assets;
* began discontinuing its classifieds business;
* sold certain customer lists associated with its directory services business in
two separate transactions, recording an aggregate gain of approximately $3.5
million; and
* established a valuation allowance of $9.5 million related to LiveDeal`s
deferred tax assets, the impact of which resulted in reducing deferred tax
assets of $5.1 million at the end of the first quarter of fiscal 2009 to $1.2
million as of the end of the second quarter.

The extent of the impairment charges discussed above covers substantially all of
the Company`s goodwill acquired in its acquisitions of (i) LiveDeal, Inc., the
business focus of which is online classified advertising, and (ii) 247
Marketing, Inc., which is based in the Philippines and the business focus of
which is providing telemarketing services. Substantially all of the Company`s
intangible assets related to its directory services business, including URLs,
internally developed software, and other miscellaneous intangible assets, were
also written off during the quarter.

Conference Call Information

LiveDeal will host a conference call to discuss its second quarter 2009 results
and provide an update with respect to its business today at 8:30 a.m. EST (5:30
a.m. PST). To participate in the conference call, dial (800) 299-7098 (domestic)
or (617) 801-9715 (international). The passcode for the call is 86678514.

To listen to the live webcast of the conference call, please visit the Investor
Relations portion of our website at http://investor.livedeal.com.

About LiveDeal, Inc.

LiveDeal, Inc., through its online property, www.livedeal.com, offers businesses
and consumers a simple and affordable way of creating a web presence and
marketing their products and services to local audiences. LiveDeal also provides
local online marketing solutions for small- and medium-sized businesses.
LiveDeal seeks to deliver local search engine marketing (SEM) through its
LiveAdvisor and LiveClicks products that combine best-of-breed technology with a
strong partnership model and an inside sales team to create an efficient
platform that local businesses need to create and optimize their Internet search
advertising campaigns. The Company also allows businesses to extend their
marketing reach to their relevant customers on the Internet through partnerships
with Google, Yahoo!, Miva, Looksmart, Superpages.com and others. LiveDeal, Inc.
is headquartered in Las Vegas, Nevada and has offices in Santa Clara,
California. For more information, please visit www.livedeal.com.

Forward-Looking and Cautionary Statements

This press release may include statements that constitute "forward-looking
statements," which are often characterized by the terms "may," "believes,"
"projects," "expects," or "anticipates," and do not reflect historical facts.
Forward-looking statements involve risks, uncertainties and other factors that
may cause actual results, performance or achievements of LiveDeal, Inc. and its
subsidiaries to be materially different from those expressed or implied by such
forward-looking statements. Forward-looking statements included in this press
release include statements concerning the Company`s expectation that: (i) it
will achieve a healthy foundation for future growth and value creation; (ii) it
will realize deferred revenue in fiscal 2009 and/or subsequent periods; (iii) it
will capture a larger share of the local Internet business; (iv) its expanded
suite of products will yield favorable results; and (v) its revenues will
increasingly come from the Company`s Direct Sales business.

Factors that may affect forward-looking statements and the Company`s business
generally include but are not limited to (i) the risk factors and cautionary
statements set forth in the Company`s Annual Report on Form 10-K for the fiscal
year ended September 30, 2008; (ii) other factors or statements described in the
Company`s other filings with the Securities and Exchange Commission; and (iii)
other factors that LiveDeal is currently unable to identify or quantify, but may
exist in the future.

Forward-looking statements speak only as of the date the statement was made.
LiveDeal does not undertake and specifically declines any obligation to update
any forward-looking statements.

LIVEDEAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS

March 31, 2009 September 30, 2008
(unaudited)

Assets
Cash and cash equivalents $ 10,090,479 $ 4,639,787
Accounts receivable, net 3,080,558 6,880,492
Prepaid expenses and other current assets 566,163 792,309
Customer acquisition costs, net - 642,220
Income taxes receivable 8,880 487,532
Deferred tax asset, net of valuation allowance 1,189,290 949,121
Total current assets 14,935,370 14,391,461
Accounts receivable, long term portion, net 2,799,820 2,011,143
Property and equipment, net 704,203 959,854
Deposits and other assets 81,712 83,547
Intangible assets, net 2,211,223 6,736,078
Goodwill - 11,706,406
Deferred tax asset, long term, net of valuation allowance - 3,863,502
Total assets $ 20,732,328 $ 39,751,991

Liabilities and Stockholders' Equity
Liabilities:
Accounts payable $ 492,794 $ 1,078,712
Accrued liabilities 2,339,541 1,991,369
Current portion of capital lease obligation 68,040 61,149
Total current liabilities 2,900,375 3,131,230
Long term portion of capital lease obligation 153,207 170,838
Total liabilities 3,053,582 3,302,068

Commitments and contingencies

Stockholders' equity:
Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 127,840 issued and outstanding, liquidation preference $38,202 10,866 10,866
Common stock, $0.001 par value, 100,000,000 shares authorized, 6,153,183 and 6,513,687 issued and outstanding at March 31, 2009 and September 30, 2008, respectively 6,153 6,514
Paid in capital 20,310,508 20,884,112
Retained earnings (accumulated deficit) (2,648,781 ) 15,548,431
Total stockholders' equity 17,678,746 36,449,923

Total liabilities and stockholders' equity $ 20,732,328 $ 39,751,991

LIVEDEAL, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months ended March 31, Six Months ended March 31,
2009 2008 2009 2008

Net revenues $ 3,548,275 $ 6,039,356 $ 8,557,789 $ 12,445,597
Cost of services 1,466,882 1,081,461 3,067,532 2,075,031
Gross profit 2,081,393 4,957,895 5,490,257 10,370,566

Operating expenses:
General and administrative expenses 4,054,354 3,845,145 8,313,381 7,240,036
Impairment of goodwill and intangible assets 16,111,494 - 16,111,494 -
Sales and marketing expenses 713,326 1,080,254 2,285,385 2,673,895
Total operating expenses 20,879,174 4,925,399 26,710,260 9,913,931
Operating income (loss) (18,797,781 ) 32,496 (21,220,003 ) 456,635
Other income (expense):
Interest income, net 6,159 27,719 19,919 63,752
Other income (expense) 3,458,220 4,753 7,263,998 3,631
Total other income (expense) 3,464,379 32,472 7,283,917 67,383

Income (loss) before income taxes (15,333,402 ) 64,968 (13,936,086 ) 524,018
Income tax provision 3,709,936 49,773 4,162,812 219,277
Income (loss) from continuing operations (19,043,338 ) 15,195 (18,098,898 ) 304,741

Discontinued operations:
Income (loss) from discontinued component, including disposal costs (64,301 ) (18,929 ) (155,422 ) 39,416
Income tax provision (benefit) (24,024 ) (7,072 ) (58,066 ) 14,726
Income (loss) from discontinued operations (40,277 ) (11,857 ) (97,356 ) 24,690

Net income (loss) $ (19,083,615 ) $ 3,338 $ (18,196,254 ) $ 329,431

Earnings per share - basic 1 :
Income (loss) from continuing operations $ (3.18 ) $ 0.00 $ (3.01 ) $ 0.05
Discontinued operations (0.01 ) (0.00 ) (0.02 ) 0.00
Net income (loss) $ (3.19 ) $ 0.00 $ (3.03 ) $ 0.05

Earnings per share - diluted 1 :
Income (loss) from continuing operations $ (3.18 ) $ 0.00 $ (3.01 ) $ 0.05
Discontinued operations (0.01 ) (0.00 ) (0.02 ) 0.00
Net income (loss) $ (3.19 ) $ 0.00 $ (3.03 ) $ 0.05

Weighted average common shares outstanding:
Basic 5,983,490 6,189,371 6,010,521 6,209,995
Diluted 5,983,490 6,358,116 6,010,521 6,391,245

1 Certain amounts may not total due to rounding of individual components.

LiveDeal, Inc.
Pamela Sziebert, 408-855-9988 ext. 118
irinfo@livedeal.com

Copyright Business Wire 2009