Search Engine, Answers.com, Reports Second Quarter Financials

New York, New York - (Website Hosting Directory) - August 15, 2008 - Search engine portal, Answers.com, reported unaudited financial results for its second quarter in 2008, with increased revenues of $3 million.

Robert S. Rosenschein, Chairman and CEO noted,''Revenues were $3.0 million, and we were pleased to beat the top end of our revenue guidance by $200,000. WikiAnswers continued its exciting growth, accounting for 50% of top-line revenue in Q2.''

Non-GAAP net loss was $342 thousand, which was $130 thousand better than the low end of original guidance. Robert Rosenschein, Chairman and CEO of Answers Corporation explained, ''The positive surprise for Q2 was our unique user-generated WikiAnswers site, which contributed $177,000 in Q2, up over 50% from Q1. It continues to flourish, and its dynamic content will become more of a centerpiece in our overall strategy and growth moving forward. Due to the recent search engine algorithm changes, we face new challenges in diversifying our traffic. First, we are right-sizing our organization, approximately 12% of our base payroll, with an eye toward returning to Non-GAAP profitability in Q4 of this year. Next, we aim to restore shareholder value and confidence and diversify and expand our traffic sources. Finally, we are committed to leveraging our direct ad sales talent, recruited in Q2, and expect it to bear fruit this year.''

Mr. Rosenschein added, ''The major event of Q2 was the strategic investment from Redpoint Ventures, a top-tier Silicon Valley venture capital investor, and we welcome Allen Beasley to our board. This investment validates our growth strategy and raises our cash balance to over $10 million. We will be focusing on maximizing traffic and revenue in Q4 and in 2009. We recently took two other important steps. The first was to shelve our direct ad sales efforts and place extra emphasis on building traffic and market share, monetizing that traffic with Google AdSense and other ad networks. This decision enables us to focus on the core competency of growing the WikiAnswers community and database. The second was the non-cash write-off of the Brainboost asset. We've made a strategic decision to focus our Q and A efforts on WikiAnswers, which has succeeded beyond our expectations. We are as excited and confident as ever about the company's short- and long-term prospects to lead the answer space.''

Q2 2008 Financial Results included:

Revenues were $3,003 thousand in Q2 2008, an increase of 7% compared to $2,810 thousand reported for the same period in 2007, and a decrease of 1% compared to the $3,031 thousand reported for Q1 2008.
WikiAnswers.com revenues were $1,500 thousand in Q2 2008, an increase of 27% compared to $1,185 thousand in Q1 2008.
Answers.com revenues were $1,485 thousand in Q2 2008, a decrease of 19% compared to $1,828 thousand in Q1 2008.
Adjusted EBITDA in Q2 2008, including a $90 thousand charge resulting from the winding down of our direct ad sales efforts, was negative $670 thousand, $364 thousand more than the negative $306 thousand of Adjusted EBITDA in Q2 2007, and $489 thousand more than the negative Adjusted EBITDA of $181 thousand in Q1 2008.
GAAP net loss in Q2 2008, including the write-off of the Brainboost Answers Engine in the amount of $3,138 thousand, was $4,619 thousand, an increase of $3,372 thousand compared to Q2 2007, and an increase of $952 thousand, compared to the GAAP net loss of $3,667 thousand in Q1 2008. GAAP net loss in Q1 2008 included $2,543 thousand of termination fees and write-off of costs relating to the terminated Lexico acquisition and abandoned follow-on offering. GAAP net loss per share in Q2 2008 was $0.59, compared to $0.16 in Q2 2007, and $0.47 in Q1 2008.

Answers Corporation operates Answers.com information portal, delivering comprehensive content on four million topics spanning health, finance, entertainment, business and more. Content includes over 180 licensed titles from leading publishers such as Houghton Mifflin Riverdeep Group PLC, Barron's, Encyclopedia Britannica, All Media Guide and others; original articles written by Answers.com's editorial team; community-contributed articles from Wikipedia; and user-generated questions and answers from Answers.com's industry-leading WikiAnswers (wiki.answers.com). Founded in 1999 by CEO Bob Rosenschein, Answers.com can be launched directly from within Internet Explorer 7, Firefox and Opera browsers, and its service is integrated into sites like Amazon.com's A9.com, The New York Public Libraries' homeworkNYC.org, The New York Times, CBSNews.com and others. Answers.com is also available for mobile devices at mobile.answers.com. For investment information, visit ir.answers.com. (answ-p).

To learn more, please visit: www.answers.com.

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