UNITED STATES SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                                   FORM 10-QSB

(Mark One)

[X]  Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
     Act of 1934

     For the quarterly period ended March 31, 2004

[ ]  Transition Report Pursuant to Section 13 or 15(d) of the Securities
     Exchange Act

     For the transition period from _____________ to _______________

     Commission File Number 0-24217

                                    YP CORP.
        (Exact name of small business issuer as specified in its charter)

                NEVADA                                85-0206668
    (State or other jurisdiction of       (IRS Employer Identification No.)
     incorporation or organization)

                         4840 EAST JASMINE ST. SUITE 105
                               MESA, ARIZONA 85205
                    (Address of principal executive offices)

                                 (480) 654-9646
                           (Issuer's telephone number)

                                  YP.NET, INC.
                                  (Former Name)

     Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for such
shorter period that the registrant was required to file such reports), and (2)
has been subject to such filing requirements for the past 90 days.

Yes  X     No
    ---       ---

                      APPLICABLE ONLY TO CORPORATE ISSUERS

     The number of shares of the issuer's common equity outstanding as of May
11, 2004 was 48,874,302 shares of common stock, par value $.001.

     Transitional Small Business Disclosure Format (check one):

     Yes        No  X
         ---       ---


<PAGE>
<TABLE>
<CAPTION>
                           INDEX TO FORM 10-QSB FILING
                      FOR THE QUARTER ENDED MARCH 31, 2004

                                TABLE OF CONTENTS

                                     PART I.
                              FINANCIAL INFORMATION

                                                                       Page
<S>                                                                    <C>
Item 1.  Financial  Statements

         Consolidated Balance Sheet
           as of March 31, 2004 . . . . . . . . . . . . . . . . . . .     3
         Consolidated Statements of Operations
           for the Three and Six Month Periods
           Ended March 31, 2004 and March 31, 2003. . . . . . . . . .     4
         Consolidated  Statements  of  Cash  Flows
           for the Six month periods ended March 31,
           2004 and March 31, 2003. . . . . . . . . . . . . . . . . .     5
         Notes to the Consolidated Financial Statements . . . . . . .     7

Item 2.  Management's Discussion and Analysis . . . . . . . . . . . .    19

Item 3.  Controls  and  Procedures. . . . . . . . . . . . . . . . . .    43

                                     PART II
                                OTHER INFORMATION

Item  6.  Exhibits  and  Reports  on  Form  8-K . . . . . . . . . . .    44

SIGNATURES
</TABLE>


                                        2
<PAGE>
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

                                           YP CORP.
                             UNAUDITED CONSOLIDATED BALANCE SHEET
                                      AS OF MARCH 31, 2004
ASSETS:

CURRENT ASSETS
<S>                                                                                   <C>
   Cash and equivalents                                                               $ 2,242,002
   Accounts receivable, net of allowance for doubtful accounts of $5,193,394           13,231,132
   Prepaid expenses and other current assets                                              306,815
   Deferred tax asset                                                                   1,375,329
                                                                                      ------------
      Total current assets                                                             17,155,278

ACCOUNTS RECEIVABLE, long term portion, net of allowance
      for doubtful accounts of $359,203                                                 1,022,348

CUSTOMER ACQUISITION COSTS, net of accumulated amortization of $2,297,854               3,745,788

PROPERTY AND EQUIPMENT, net                                                               763,603

DEPOSITS AND OTHER ASSETS                                                                 113,310

INTELLECTUAL PROPERTY- URL, net of accumulated amortization of $2,100,460               3,432,638

ADVANCES TO AFFILIATES                                                                  5,003,962
                                                                                      ------------
    TOTAL ASSETS                                                                      $31,236,927
                                                                                      ============

LIABILITIES AND STOCKHOLDERS' EQUITY:

CURRENT LIABILITIES:
   Accounts payable                                                                   $   822,474
   Accrued liabilities                                                                  1,994,232
   Notes payable- current portion                                                         115,868
   Income taxes payable                                                                 4,155,425
                                                                                      ------------
      Total current liabilities                                                         7,087,999

DEFERRED INCOME TAXES                                                                      40,518
                                                                                      ------------
      Total liabilities                                                                 7,128,517
                                                                                      ------------

STOCKHOLDERS' EQUITY:
   Series E convertible preferred stock, $.001 par value, 200,000 shares authorized,
        131,840 issued and outstanding, liquidation preference $39,552                     11,206
   Common stock, $.001 par value, 100,000,000 shares authorized,
        55,580,136 issued, 48,874,302 outstanding                                          48,874
   Paid in capital                                                                      9,751,126
   Deferred stock compensation                                                         (4,032,024)
   Treasury stock at cost                                                                (690,306)
   Retained earnings                                                                   19,019,534
                                                                                      ------------
      Total stockholders' equity                                                       24,108,410
                                                                                      ------------
    TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY                                        $31,236,927
                                                                                      ============
<FN>
               See the accompanying notes to these unaudited financial statements
</TABLE>


                                        3
<PAGE>
<TABLE>
<CAPTION>

                                                   YP CORP.
                                UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
                 FOR THE THREE AND SIX MONTH PERIODS  ENDED MARCH 31, 2004 AND MARCH 31, 2003

                                             Three Months       Six Months       Three Months       Six Months
                                                Ended             Ended             Ended             Ended
                                            March 31, 2004    March 31, 2004    March 31, 2003    March 31, 2003
                                           ----------------  ----------------  ----------------  ----------------
<S>                                        <C>               <C>               <C>               <C>

NET REVENUES                               $    16,394,853   $    30,261,820   $     6,849,044   $    12,590,499
                                           ----------------  ----------------  ----------------  ----------------

OPERATING EXPENSES:
     Cost of services                            6,618,537        11,500,939         1,848,966         3,671,116
     General and administrative expenses         3,134,522         5,925,265         1,666,108         3,042,186
     Sales and marketing expenses                1,428,210         2,718,390           862,939         1,495,374
     Depreciation and amortization                 199,719           395,912           159,306           298,238
                                                                                                 ----------------
         Total operating expenses               11,380,988        20,540,506         4,537,319         8,506,914
                                           ----------------  ----------------  ----------------  ----------------

OPERATING INCOME                                 5,013,865         9,721,314         2,311,725         4,083,585
                                           ----------------  ----------------  ----------------  ----------------

OTHER (INCOME) AND EXPENSES
     Interest (income) expense                     (78,545)         (149,698)          (12,069)          (12,789)
     Other (income) expense                        (71,395)         (346,153)         (180,980)         (229,886)
                                           ----------------  ----------------  ----------------  ----------------

     Total other (income)expense                  (149,940)         (495,851)         (193,049)         (242,675)
                                           ----------------  ----------------  ----------------  ----------------

INCOME BEFORE INCOME TAXES                       5,163,805        10,217,165         2,504,774         4,326,260

INCOME TAX  PROVISION (BENEFIT)                  1,815,206         3,583,881           999,853         1,728,447
                                           ----------------  ----------------  ----------------  ----------------

NET INCOME                                 $     3,348,599   $     6,633,284   $     1,504,921   $     2,597,813
                                           ================  ================  ================  ================

NET INCOME PER SHARE:
  Basic                                    $          0.07   $          0.14   $          0.03   $          0.06
                                           ================  ================  ================  ================

  Diluted                                  $          0.07   $          0.14   $          0.03   $          0.06
                                           ================  ================  ================  ================

WEIGHTED AVERAGE
COMMON SHARES OUTSTANDING:
  Basic                                         46,946,458        46,904,402        43,271,333        42,011,711
                                           ================  ================  ================  ================

  Diluted                                       48,145,140        47,640,118        43,271,333        42,011,711
                                           ================  ================  ================  ================
<FN>
                       See the accompanying notes to these unaudited financial statements
</TABLE>


                                        4
<PAGE>
<TABLE>
<CAPTION>
                                           YP CORP.
                        UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
               FOR THE SIX MONTH PERIODS ENDED MARCH 31, 2004 AND MARCH 31, 2003

                                                               SIX MONTHS        SIX MONTHS
                                                                 ENDED             ENDED
CASH FLOWS FROM OPERATING ACTIVITIES:                        MARCH 31, 2004    MARCH 31, 2003
                                                            ----------------  ----------------
<S>                                                         <C>               <C>
  Net income                                                $     6,633,284   $     2,597,813
  Adjustments to reconcile net income to net cash
    provided by (used in) operating activities:
  Depreciation and amortization                                     395,912           298,238
  Income recognized on forgiveness of debt                                -           (45,362)
  Loss on disposal of fixed assets                                   36,932                 -
  Amortization of deferred stock compensation                       503,071                 -
  Deferred income taxes                                              37,962           155,176
  Officers & consultants paid common stock                                -           453,750
  Common stock surrendered                                                -          (160,979)
  Changes in assets and liabilities:
    Trade and other accounts receivable                          (5,801,351)       (2,283,431)
    Customer acquisition costs                                     (502,547)       (1,218,660)
    Prepaid and other current assets                               (152,539)         (113,628)
    Other assets                                                     35,000            52,096
    Receivable from affiliate                                             -          (110,121)
    Accounts payable                                                394,051           148,684
    Accrued liabilities                                             (72,743)         (105,603)
    Due to affiliates                                                     -            14,017
    Income taxes payable                                          1,466,113         1,573,273
                                                            ----------------  ----------------
          Net cash  provided by operating activities              2,973,145         1,255,263
                                                            ----------------  ----------------

CASH FLOWS FROM INVESTING ACTIVITIES:
  Advances made to affiliates and related parties                (2,725,000)         (400,000)
  Purchases of  intellectual property                              (151,863)           (6,761)
  Purchases of  equipment                                          (233,128)         (469,548)
                                                            ----------------  ----------------
          Net cash (used in)  investing activities               (3,109,991)         (876,309)
                                                            ----------------  ----------------

CASH FLOWS FROM FINANCING ACTIVITIES:
  Proceeds from debt                                                      -           147,000
  Principal repayments on notes payable                                   -          (454,000)
                                                            ----------------  ----------------
          Net cash (used)/provided by financing activities                -          (307,000)
                                                            ----------------  ----------------

(DECREASE) INCREASE IN CASH                                        (136,846)           71,954

CASH, BEGINNING OF PERIOD                                         2,378,848           767,108
                                                            ----------------  ----------------

CASH, END OF PERIOD                                         $     2,242,002   $       839,062
                                                            ================  ================
<FN>
               See the accompanying notes to these unaudited financial statements
</TABLE>


                                        5
<PAGE>
                                    YP CORP.
                UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
  FOR THE SIX MONTH PERIODS ENDED MARCH 31, 2004 AND MARCH 31, 2003, continued

SUPPLEMENTAL CASH FLOW INFORMATION:

<TABLE>
<CAPTION>
                                 Six month        Six month
                               period ended     period ended
                              March 31, 2004   March 31, 2003
                              ---------------  ---------------
<S>                           <C>              <C>
Interest Paid                 $             -  $         9,545
                              ===============  ===============
<FN>
       See the accompanying notes to these unaudited financial statements
</TABLE>


                                        6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
FOR THE THREE MONTH PERIODS  ENDED MARCH 31, 2004 AND MARCH 31, 2003

1.   Basis of Presentation

The accompanying unaudited financial statements represent the consolidated
financial position of YP Corp. f/k/a YP.Net, Inc. ("the Company") for the three
and six month periods ended March 31, 2004, and March 31, 2003, which includes
results of operations of the Company, Telco Billing, Inc. ("Telco") and Telco of
Canada, Inc, its wholly owned subsidiaries, and statement of cash flows for the
six month periods ended March 31, 2004 and March 31, 2003.  These statements
have been prepared in accordance with generally accepted accounting principles
("GAAP") for interim financial information.  Accordingly, they do not include
all the information and footnotes required by generally accepted accounting
principles for complete financial statements.  In the opinion of management, all
adjustments to these unaudited financial statements necessary for a fair
presentation of the results for the interim period presented have been made.

2.   Company Organization and Operations

YP Corp. f/k/a YP.Net, Inc., a Nevada corporation (the "Company," "we," "us," or
"our"), is in the business of providing Internet-based Yellow Page advertising
space on or through www.Yellow-Page.Net, www.YP.Net  and www.YP.com.  Subsequent
                    -------------------  ----------
to March 31, 2004, the Company changed its name from "YP. Net, Inc." to "YP
Corp."

The Company's  "yellow page" database lists approximately 18 million businesses
throughout the United States.  Our website enables internet users to search
through these "yellow page" listings and is used by businesses and consumers
attempting to locate a business and/or service provider in response to a user's
specific search criteria.

As our primary source of revenue, we offer a Mini-Webpage(TM) to businesses for
a monthly fee.  The Mini-Webpage(TM) provides a business with a priority
placement listing over non-paying listings and is displayed in a bigger and
bolder font at the beginning of, or in the first section of the user's search
results - thus featuring our paying customers more prominently to user's of our
website. In addition, our paying customers get a Mini-Webpage(TM) which includes
a 40-word description of their business, their hours of operation and other
useful information, a direct link to the paying customers website, (if they have
one and it is provided by the advertiser), map, driving directions to the paying
customers location and more. We market for advertisers for this Internet
Advertising Package ("IAP"), under the name "Yellow-Page.Net, exclusively to
businesses through a direct mail solicitation program.  The solicitation
includes a promotional incentive (i.e. generally  a $3.25 check) which, if
cashed by the business, automatically signs the business up for the IAP service
for an initial twelve month period with automatic renewals thereafter. This easy
subscription process provides a written confirmation (i.e., the check) of the
subscription by the newly subscribing business, which is verified by an
independent third party (i.e., the paying customers depositing bank). To
additionally insure the intention of sign-up, the Company then mails a written
confirmation card to the newly subscribing business generally within 30 days
from activation. The Company also provides a 120-day cancellation period whereby
the subscribing business may cancel and receive a full refund of any amounts
paid to the Company.

Each paying customer is billed monthly for that month's service, the vast
majority of such monthly billings appear on the subscribing business's local
phone bill.  Management believes this ability to bill the paying customer
through the paying customers phone bill is a significant competitive advantage
for the


                                        7
<PAGE>
Company as few independent (not owned by a telephone company) yellow page
companies are authorized to bill directly on the phone bill for services
rendered.

We were originally incorporated as a New Mexico company in 1969 and the Company
was re-incorporated in Nevada in 1996 as Renaissance Center, Inc. Our Articles
of Incorporation were restated in July 1997 and our name was changed to
Renaissance International Group, Ltd. Effective July 1998, we changed our name
to RIGL Corporation. In June 1999, we acquired Telco Billing, Inc. ("Telco") and
commenced our current operations through this entity. In October 1999, we
amended our Articles of Incorporation to change our corporate name to YP.Net,
Inc. to better identify our company with our business focus.

From August through March 1999, we abandoned all subsidiaries previously
involved in the multi-media software and medical billing and practice management
areas. With the acquisition of Telco, our business focus shifted to the Internet
yellow page services business and this business is currently our main source of
revenue. Telco is operated as our wholly owned subsidiary.

In April 2004, we again amended our Articles of Incorporation to change our name
to YP Corp.

3.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Cash and Cash Equivalents:  This includes all short-term highly liquid
--------------------------
investments that are readily convertible to known amounts of cash and have
original maturities of three months or less.  At times cash deposits may exceed
government insured limits.  At March 31, 2004, cash deposits exceeded those
insured limits by $1,964,000.

Principles of Consolidation: The consolidated financial statements include the
----------------------------
accounts of the Company and its wholly owned subsidiaries, Telco Billing, Inc.
and Telco of Canada, Inc.  All significant intercompany accounts and
transactions are eliminated.

Customer Acquisition Costs:  These costs represent the direct response marketing
---------------------------
costs that are incurred as the primary method by which customers subscribe to
the Company's services.  The Company purchases mailing lists and sends
advertising materials to prospective subscribers from those lists.  Customers
subscribe to the services by positively responding to those advertising
materials which serve as the contract for the subscription.  The Company
capitalizes and amortizes the costs of direct-response advertising on a
straight-line basis over eighteen months, the estimated average period of
retention for new customers.  The Company capitalized costs of $1,437,093 and
$2,721,862  and $1,358,902 and $2,342,712 during the three and six months ended
March 31, 2004 and March 31, 2003, respectively.  The Company amortized
$1,214,236 and $2,280,100 and $640,996 and 1,124,049 of total capitalized costs
during the three and six months ended March 31, 2004 and March 31, 2003,
respectively.

The Company also incurs advertising costs that are not considered
direct-response advertising.  These other advertising costs are expensed when
incurred.  These advertising expenses were $213,975 and $438,291 and $221,941
and $377,322 for the three and six months ended March 31, 2004 and March 31,
2003, respectively.

Revenue Recognition: The Company's revenue is generated by customer
-------------------
subscriptions of directory and advertising services.  Revenue is billed and
recognized monthly for services subscribed in that specific month.  The Company
utilizes outside billing companies to transmit billing data, much of which is
forwarded to Local Exchange Carriers ("LEC's") that provide local telephone
service.  Monthly subscription fees are generally included on the telephone
bills of the customers.  The Company recognizes revenue based on net billings
accepted by the LEC's.  Due to the periods of time for which adjustments


                                        8
<PAGE>
may be reported by the LEC's and the billing companies, the Company estimates
and accrues for dilution and fees reported subsequent to year-end for initial
billings related to services provided for periods within the fiscal year.

Revenue for billings to certain customers whom are billed directly by the
Company and not through the LEC's, is recognized based on estimated future
collections. The Company continuously reviews this estimate for reasonableness
based on its collection experience.

Income Taxes: The Company provides for income taxes based on the provisions of
------------
Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes, which, among other things, requires that recognition of deferred income
taxes be measured by the provisions of enacted tax laws in effect at the date of
financial statements.

Financial Instruments: Financial instruments consist primarily of cash, accounts
---------------------
receivable, advances to affiliates,  and obligations under accounts payable,
accrued expenses and notes payable.  The carrying amounts of cash, accounts
receivable, accounts payable, accrued expenses and notes payable approximate
fair value because of the short maturity of those instruments. The Company has
applied certain assumptions in estimating these fair values. The use of
different assumptions or methodologies may have a material effect on the
estimates of fair values.

Net  Income  Per  Share:  Net  income per share is calculated using the weighted
------------------------
average  number  of  shares  of  common  stock outstanding during the year.  The
Company  has  adopted  the  provisions  of  SFAS  No.  128,  Earnings Per Share.

Use  of  Estimates:  The  preparation of financial statements in conformity with
------------------
generally  accepted  accounting principles requires management to make estimates
and  assumptions  that affect the reported amounts of assets and liabilities and
disclosure  of  contingent  assets  and liabilities at the date of the financial
statements  and  the  reported  amounts  of  revenues  and  expenses  during the
reporting  period.  Actual  results  could  differ  from  those  estimates.

Significant  estimates  made  in  connection  with  the  accompanying  financial
statements  include  the  estimate  of  dilution  and  fees  associated with LEC
billings  and  the  estimated  reserve  for  doubtful  accounts  receivable.

Stock-Based Compensation: Statements of Financial Accounting Standards No. 123,
------------------------
Accounting for Stock-Based Compensation, ("SFAS 123") established accounting and
disclosure requirements using a fair-value based method of accounting for
stock-based employee compensation. In accordance with SFAS 123, the Company has
elected to continue accounting for stock based compensation using the intrinsic
value method prescribed by Accounting Principles Board Opinion No. 25,
"Accounting for Stock Issued to Employees."

Impairment of Long-lived Assets: The Company assesses long-lived assets for
--------------------------------
impairment in accordance with the provisions of SFAS 121, Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of.
SFAS 121 requires that the Company assess the value of a long-lived asset
whenever there is an indication that its carrying amount may not be recoverable.
Recoverability of the asset is determined by comparing the forecasted
undiscounted cash flows generated by said asset to its carrying value.  The
amount of impairment loss, if any, is measured as the difference between the net
book value of the asset and its estimated fair value.


                                        9
<PAGE>
Recently Issued Accounting Pronouncements:  In July 2002, the FASB issued SFAS
-----------------------------------------
No. 146, "Accounting for Costs Associated With Exit or Disposal Activities".
This Standard requires costs associated with exit or disposal activities to be
recognized when they are incurred.  The Company estimates the impact of adopting
these new rules will not be material.

In October 2002, the FASB issued SFAS No. 147, "Acquisitions of Certain
Financial Institutions." SFAS No. 147 is effective October 1, 2002. The adoption
of SFAS No. 147 did not have a material effect on the Company's financial
statements.

In April 2003, the FASB issued SFAS No. 149, "Amendment of Statement 133 on
Derivative Instruments and Hedging Activities," effective for contracts entered
into or modified after June 30, 2003. This amendment clarifies when a contract
meets the characteristics of a derivative, clarifies when a derivate contains a
financing component and amends certain other existing pronouncements. The
Company believes the adoption of SFAS No. 149 will not have a material effect on
the Company's financial statements.

In May 2003, the FASB issued SFAS No. 150, "Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity." SFAS No. 150
is effective for financial instruments entered into or modified after May 31,
2003, and otherwise is effective at the beginning of the first interim period
beginning after June 15, 2003. SFAS No. 150 requires the classification as a
liability of any financial instruments with a mandatory redemption feature, an
obligation to repurchase equity shares, or a conditional obligation based on the
issuance of a variable number of its equity shares. The Company does not have
any financial instruments with a mandatory redemption feature. The Company
believes the adoption of SFAS No. 150 will not have a material effect on the
Company's financial statements.

In November 2002, the FASB issued FASB Interpretation No. 45, "Guarantor's
Accounting and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness of Others" (FIN 45).  FIN 45 clarifies the
requirements for a guarantor's accounting for and disclosure of certain
guarantees issued and outstanding. The initial recognition and initial
measurement provisions of FIN 45 are applicable to guarantees issued or modified
after March 31, 2003.  The disclosure requirements of FIN 45 are effective for
financial statements for periods ending after December 15, 2002. The adoption of
FIN 45 did not have a significant impact on the Company's financial statements.
See Note 10.

In January 2003, the FASB issued FIN No. 46, "Consolidation of Variable Interest
Entities" (FIN 46). FIN No. 46 states that companies that have exposure to the
economic risks and potential rewards from another entity's assets and activities
have a controlling financial interest in a variable interest entity and should
consolidate the entity, despite the absence of clear control through a voting
equity interest. The consolidation requirements apply to all variable interest
entities created after January 31, 2003. For variable interest entities that
existed prior to February 1, 2003, the consolidation requirements are effective
for annual or interim periods beginning after June 15, 2003. Disclosure of
significant variable interest entities is required in all financial statements
issued after January 31, 2003, regardless of when the variable interest was
created. The Company is presently reviewing arrangements to determine if any
variable interest entities exist but does not anticipate the adoption of FIN 46
will have a significant impact on the Company's financial statements.

4.   ACCOUNTS RECEIVABLE

The Company provides billing information to third party billing companies for
the majority of its monthly billings.  Billings submitted are "filtered" by
these billing companies and the LEC's.  Net accepted billings are recognized as
revenue and accounts receivable.  The billing companies remit payments to the
Company on the basis of cash ultimately received from the LEC's by those billing
companies.  The


                                       10
<PAGE>
billing companies and LEC's charge fees for their services, which are netted
against the gross accounts receivable balance.  The billing companies also apply
holdbacks to the remittances for potentially uncollectible accounts.  These
dilution amounts will vary due to numerous factors and the Company may not be
certain as to the actual amounts of dilution on any specific billing submittal
until several months after that submittal.  The Company estimates the amount of
these charges and holdbacks based on historical experience and subsequent
information received from the billing companies.  The Company also estimates
uncollectible account balances and provides an allowance for such estimates.
The billing companies retain certain holdbacks that may not be collected by the
Company for a period extending beyond one year.  These balances have been
classified as long-term assets in the accompanying balance sheet.

The Company experiences significant dilution of its gross billings by the
billing companies.  The Company negotiates collections with the billing
companies on the basis of the contracted terms and historical experience.
Holdbacks, fees, and other matters, which are determined by the LEC's and the
billing companies, may affect the Company's cash flow.  The Company processes
its billings through two primary billing companies.

PaymentOne, Inc. f/k/a eBillit, Inc. ("PaymentOne") provides the majority of the
Company's billings, collections, and related services. The net receivable due
from PaymentOne at March 31, 2004 was $10,265,000, net of an allowance for
doubtful accounts of $3,998,000.  The net receivable from PaymentOne at March
31, 2004, represents approximately 72% of the Company's total net accounts
receivable at March 31, 2004.

Subscription receivables that are directly billed by the Company are valued and
reported at the estimated future collection amount.  Determining the expected
collections requires an estimation of both uncollectible accounts and refunds.
Subscriptions receivable at March 31, 2004 was $133,451, net of allowance for
doubtful accounts of $46,820.

Accounts receivable at March 31, 2004 is summarized as follows:

<TABLE>
<CAPTION>
                                        Current    Long-Term      Total
                                      -----------  ----------  -----------
<S>                                   <C>          <C>         <C>
     Gross accounts receivable        $18,424,526  $1,381,551  $19,806,077
     Allowance for doubtful accounts    5,193,394     359,203    5,552,597
                                      -----------  ----------  -----------
                                      $13,231,132  $1,022,348  $14,253,480
                                      ===========  ==========  ===========
</TABLE>

Certain receivables have been classified as long-term because the Company's
collection experience with those receivables has historically extended beyond
one year.

5.   INTELLECTUAL PROPERTY AND OTHER INTANGIBLE ASSETS

The URL is recorded at its cost net of accumulated amortization.  Management
believes that the Company's business is dependent on its ability to utilize this
URL given the recognition of the Yellow page term.  Also, its current customer
                                 -----------
base relies on the recognition of this term and URL as a basis for maintaining
the subscriptions to the Company's service.  Management believes that the
current revenue and cash flow generated through use of Yellow-page.net supports
                                                       ---------------
the carrying of the asset.  The Company


                                       11
<PAGE>
periodically analyzes the carrying value of this asset to determine if
impairment has occurred.  No such impairments were identified during the year
ended September 30, 2003 or the six months ended March 31, 2004.  The URL is
amortized on an accelerated basis over the twenty-year term of the licensing
agreement.  Amortization expense on the URL was $82,000 and $164,000 for the
three and six months ended March 31, 2004, respectively.

Additionally, the Company has capitalized costs of other intangible assets such
as web site development costs and other URL's.  These assets are recorded at
cost net of accumulated amortization.  At March 31, 2004, the net recorded
balance was approximately $414,000, net of accumulated amortization of
approximately $110,000.  Amortization expense on these assets was approximately
$39,000 and $68,000 for the three and six months ended March 31, 2004.

6.   PROVISION FOR INCOME TAXES

Deferred income taxes reflect the net tax effects of temporary differences
between the carrying amounts of assets and liabilities for financial reporting
purposes and the amounts used for income tax purposes.

Income  taxes  for three and six months ended March 31 is summarized as follows:

<TABLE>
<CAPTION>
                                  Three                    Three
                                  Months    Six Months     Months    Six Months
                                  Ended        Ended       Ended        Ended
                                March 31,    March 31,   March 31,    March 31,
                                   2004        2004         2003        2003
                                ----------  -----------  ----------  -----------
<S>                             <C>         <C>          <C>         <C>
     Current Provision          $1,563,074  $ 3,015,316  $  888,889  $ 1,576,233
     Deferred (Benefit)
     Provision                     252,132      568,565     110,964      152,214
                                ----------  -----------  ----------  -----------
     Net income tax provision   $1,815,206  $ 3,583,881  $  999,853  $ 1,728,447
                                ==========  ===========  ==========  ===========
</TABLE>

During the year ended September 30, 2003, the Company expanded certain
operations and revenue generating assets in Nevada where there are no corporate
income taxes thereby reducing the statutory rate used for state income taxes.

At March 31, 2004, deferred income tax assets related to differences in book and
tax bases of accounts receivable, direct marketing costs and intangible assets.

At March 31, 2004 deferred tax liabilities were comprised of differences in book
and tax bases of customer acquisition costs and property and equipment
respectively.

7.   NET INCOME PER SHARE

Net income per share is calculated using the weighted average number of shares
of common stock outstanding during the three and six months ended March 31, 2004
and March 31, 2003, respectively.  Preferred stock dividends are subtracted from
the net income to determine the amount available to common shareholders.  There
were $494 and $989 in preferred stock dividends the three and six months ended
March 31, 2004.  Warrants to purchase 500,000 shares of common stock were
included in the calculation for the three and six months ended and March 31,
2003.  The exercise price of those warrants


                                       12
<PAGE>
was greater than the trading value of the common stock and therefore inclusion
of such would be anti-dilutive.  Also excluded from the calculation for the
three and six months ended March 31, 2004 and 2003 were 131,840 shares of Series
E Convertible Preferred Stock issued during the year ended September 30, 2002,
which are considered anti-dilutive due to the cash payment required by the
holders of the securities at the time of conversion.  The dilutive effect of
unvested restricted stock awards and certain warrants are included in the
calculation of diluted earnings per share for the three and six month periods
ended March 31, 2004.  Excluded from the calculation of diluted earnings per
share for the six month period ended March 31, 2004 are warrants to purchase
125,000 shares of common stock and unvested restricted stock awards totaling
240,000 shares.  The securities are excluded from the calculation because their
inclusion would be anti-dilutive.

The following presents the computation of basic and diluted loss per share from
continuing operations for the three months and six months ended March 31, 2004:

<TABLE>
<CAPTION>
                                           Three
                                           Months                          Six Months
                                           Ended                              Ended
                                          March 31,                        March 31,
                                            2004                              2004

                                                                   Per                               Per
                                           Income       Shares    Share      Income       Shares    share
                                         -----------  ----------  ------  ------------  ----------  ------
<S>                                      <C>          <C>         <C>     <C>           <C>         <C>
Net  Income                              $3,348,599                       $ 6,633,284
Preferred stock dividends                      (494)                             (989)
                                         -----------                      ------------
Income available to common
  Stockholders                           $3,348,105                       $ 6,632,295
                                         ===========                      ============
BASIC EARNINGS PER SHARE:

Income available to common stockholders
                                         $3,348,105   46,946,458  $ 0.07  $ 6,632,295   46,904,402  $ 0.14
                                         -----------  ----------  ------  ------------  ----------  ------
Effect of dilutive securities

  Warrants                                               207,796       -                   126,977
  Unvested restricted stock awards                       990,886       -                   608,739
  Preferred stock dividend                      494                               989
                                         -----------  ----------  ------  ------------  ----------  ------
DILUTED EARNINGS PER SHARE               $3,348,599   48,145,140  $ 0.07  $ 6,633,284   47,640,118  $ 0.14
                                         ===========  ==========  ======  ============  ==========  ======
</TABLE>

8.   COMMITMENTS AND CONTINGENCIES

Telco Billing

The acquisition of Telco by the Company called for the issuance of 17,000,000
new shares of stock in exchange of the existing shares of Telco.  As part of
that agreement, the Company gave the former shareholders the right to "Put" back
to the Company certain shares of stock at a minimum stock price of 80% of the
current trading price with a minimum strike price of $1.00.  The net effect of
which was that the former Telco shareholders could require the Company to
repurchase shares of stock of the Company at a minimum cost of $10,000,000.  The
agreement required the Company to attain certain market share levels.


                                       13
<PAGE>
The "Put" feature has been renegotiated and retired. As part of the renegotiated
settlement, the Company provided a credit facility of up to $20,000,000 to the
former Telco shareholders, collateralized by the stock held by these
shareholders, with interest at least 0.25 points higher than the Company's
average cost of borrowing.  Additional covenants warrant that no more that
$1,000,000 can be advanced at any point in time and no advances can be made in
excess without allowing at least 30 days operating cash reserves or if the
Company is in an uncured default with any of its lenders.  At March 31, 2004,
the Company had advanced approximately $4,851,000 under this agreement.   The
former Telco shareholders have not made any interest or principal payments in
the three months ended March 31, 2004.

In the three month period ended December 31, 2003, the Company and the former
Telco shareholders agreed to amend the arrangement whereby the Company will be
required to advance only an additional $1,300,000 through April 2004 and the
ability to draw on that facility will cease at that time.  However, the Company
made a commitment in connection with that amendment to begin paying dividends to
all of its common stockholders in the fiscal year ended September 30, 2004.

Billing Service Agreements
--------------------------

The Company has entered into a customer billing service agreement with
PaymentOne, Inc. f/k/a eBillit, Inc. ("PaymentOne").  PaymentOne provides
billing and collection and related services associated to the telecommunications
industry.  The agreement term is for two years, automatically renewable in
two-year increments unless appropriate notice to terminate is given by either
party.  The agreement will automatically renew on September 1, 2005, unless
either party gives notice of termination 90 days prior to that renewal date.
Under the agreement, PaymentOne bills, collects and remits the proceeds to Telco
net of reserves for bad debts, billing adjustments, telephone company fees and
PaymentOne fees.  If either the Company's transaction volume decreases by 25%
from the preceding month, or less than 75% of the traffic is billable to major
telephone companies, PaymentOne may at its own discretion increase the reserves
and holdbacks under this agreement.    PaymentOne handles all billing
information and collection of receivables.  The Company's cash receipts on trade
accounts receivable are dependent upon estimates pertaining to holdbacks and
other factors as determined by PaymentOne.  PaymentOne may at its own discretion
increase the reserves and holdbacks under this agreement.

The Company has also entered into an agreement with ACI Communications, Inc.
ACI provides billing and collection and related services associated to the
telecommunications industry.

These agreements with the billing companies provide significant control to the
billing companies over cash receipts and ultimate remittances to the Company.
The Company estimates the net realizable value of its accounts receivable on
historical experience and information provided by the billing companies
reflecting holdbacks and reserves taken by the billing companies and LEC's.

Other
-----

The Company's Board of Directors has committed the Company to pay for the costs
of defending a civil action filed against its CEO and Chairman.  The action
involved a business that the CEO was formerly involved in. The Company and at
least one officer had received subpoenas in connection with this matter and the
Board believes that it is important to help resolve this matter as soon as
possible. The Board action included the payment of legal and other fees for any
other officers and directors that may have become involved in this civil action.
During the three and six months ended March 31, 2004, the Company paid costs of
approximately $32,000 and $56,000, respectively, on behalf of its CEO relative
to this matter.  The amounts expensed in the current period are presented as
compensation expense within general and administrative expenses in the
accompanying statement of operations for the three and six months ended March
31, 2004.  The Company believes that all civil actions against the CEO related
to


                                       14
<PAGE>
this matter have been dismissed or are being dismissed.  However, additional
legal costs will be incurred to address all matters in finalizing this issue
and, at this time, the Company cannot estimate what additional costs may be
incurred to continue covering the costs related to this matter, but all such
costs shall be deemed to be additional compensation to the CEO.

The Company has entered into "Executive Consulting Agreements" with four
entities controlled by four of the Company's officers individually.  These
agreements call for fees to be paid for the services provided by these
individuals as officers of the Company as well as their respective staffs.
These agreements are not personal service contracts of these officers
individually.  The agreements extend through 2007 and require annual performance
bonuses that aggregate up to approximately $320,000 depending upon available
cash and meeting of certain performance criteria.

Subsequent to March 31, 2004, the Company entered into a $1 million one year
renewable revolving credit facility agreement with a lending institution.  The
terms of the agreement require interest only payments on the outstanding balance
at the per annum rate of the one month LIBOR plus 3%.  Outstanding advances are
secured by all existing and acquired tangible and intangible assets of the
Company located in the United States.

9.   RELATED PARTY TRANSACTIONS

During the three and six month periods ended March 31, 2004 and 2003, the
Company entered into the related party transactions with Board members, officers
and affiliated entities as described below:

Directors & Officers
--------------------

Board of Director fees for the three and six month periods ended March 31, 2004
were $40,000 and $60,000, respectively.  These amounts are included in the
amounts discussed below.

The CEO, a Subsidiary Officer, a Subsidiary Officer and Corporate Secretary as
well as the CFO are paid for their services and those of their respective staffs
through separate entities controlled by these individuals who pre-date their
association with the Company.  The following describes the compensation paid to
these entities.

Sunbelt Financial Concepts, Inc.
--------------------------------

Sunbelt Financial Concepts, Inc. ("Sunbelt") provides the services of the
Chairman and CEO and his staff to the Company.

Sunbelt provides the strategic and overall planning as well as the operations
management to the Company.  Sunbelt's team is experienced in all areas of
management and administration.

During the three and six month periods ended March 31, 2004, the Company paid a
total of approximately $133,000 and $289,000 to Sunbelt.  In addition, during
the three and six month periods ended March 31, 2004, the Company paid
approximately $32,000 and $86,000 on behalf of the CEO to attorneys for legal
fees incurred by  Sunbelt  related to the personal legal matters discussed in
Note 8. Approximately $625,000 of total amounts due Sunbelt remain accrued at
March 31, 2004.


                                       15
<PAGE>
Advertising Management & Consulting Services, Inc.
--------------------------------------------------

Advertising Management & Consulting Services, Inc. ("AMCS") provides the
services of a Subsidiary Officer, a Director of the Company, and his staff to
the Company. AMCS is a marketing and advertising company experienced in
designing Direct Marketing Pieces, insuring compliance with regulatory
authorities for those pieces and designing new products that can be mass
marketed through the mail.  AMCS' president is a director of the Company.

The Company outsources the design and testing of its many direct mail pieces to
AMCS for a fee. AMCS is also responsible for new products that have been added
to the Company's website and is working on new mass-market products to offer the
Company's customers.

Total amount paid to this director and AMCS during the three and six month
periods ended March 31, 2004 was approximately $110,000 and $297,000,
respectively.  At March 31, 2004, the total amount accrued to AMCS was
approximately $119,000.

Advanced Internet Marketing, Inc.
---------------------------------

Advanced Internet Marketing, Inc. ("AIM") provides the services of a Subsidiary
Officer, Corporate Secretary and a Director of the Company, and his staff to the
Company.

The Company outsources the design and marketing of it's website on the World
Wide Web to AIM.  AIM's team of designers is experienced in all areas of web
design and has created all of the Company's logos and images for branding.

The total amount paid to AIM during the three and six month periods ended March
31, 2004 was approximately $67,000 and $164,000, respectively.  At March 31,
2004, the total amount accrued to AIM is approximately $96,000.

MAR & Associates
----------------

The compensation for services of the Company's Chief Financial Officer are paid
to MAR & Associates ("MAR").  The total amount paid to MAR and the CFO during
the three and six month periods ended March 31, 2004 was approximately $66,000
and $147,000, respectively.  At March 31, 2004, the total amount accrued to MAR
was approximately $29,000.

Other
-----

The Company made additional advances to former Telco shareholders of $2,725,000
and $4,725,000 during the three and six month periods ended March 31, 2004.
Interest earned on these advances was approximately $82,000 and $153,000 for the
three and six month periods ended March 31, 2004.

Advances to affiliates are summarized as follows at March 31, 2004:

<TABLE>
<CAPTION>
<S>                                   <C>
            Morris & Miller           $3,511,108

           Mathew & Markson            1,492,854
                                      ----------
Total                                 $5,003,962
                                      ==========
</TABLE>


                                       16
<PAGE>
On December 22, 2003, the Company entered into an agreement with the former
Telco shareholders that terminated the line of credit agreement effective April
9, 2004 (Note 8).

Simple.Net, Inc. ("SN")
-----------------------

The Company had contracted with Simple.Net, Inc. ("SN"), an internet service
provider owned by a director of the Company, to provide internet dial-up and
other services to its customers.   SN had sold said services to the Company at
below market rate prices from time to time. During the three and six month
periods ended March 31, 2004, the Company recorded expense of approximately
$107,000 and $422,000, respectively for said services.  At March 31, 2004,
$37,000 net due to SN was accrued in accounts payable.

In addition, SN paid a monthly fee to the Company for technical support and
customer service provided to SN's customers by the Company's employees. The
Company charged SN for these services according to a per customer pricing
formula:

Customer Service & Management Agreement fees are calculated by number of
customer records of SN multiplied by a base cost of $1.02.

Technical Support fees are calculated by number of customer records of SN
multiplied by a base cost of 60 cents.

For the three and six month periods ended March 31, 2004, the Company recorded
other income of approximately $66,000 and $288,000, respectively, from SN for
these services.

On December 29, 2003, we entered into a separation agreement with Simple.Net
which becomes effective January 31, 2004. Under this agreement, Simple.Net will
no longer provide any services to us, although the Separation Agreement provided
for a 30-day extension until March 2, 2004.

10.  CONCENTRATION OF CREDIT RISK

The Company maintains cash balances at banks in Arizona.  Accounts are insured
by the Federal Deposit Insurance Corporation up to $100,000.  At March 31, 2004,
the Company had bank balances exceeding those insured limits of $899,000.
Financial instruments that potentially subject the Company to concentrations of
credit risk are primarily trade accounts receivable.  The trade accounts
receivable are due primarily from business customers over widespread
geographical locations within the LEC billing areas across the United States.
The Company historically has experienced significant dilution and customer
credits due to billing difficulties and uncollectible trade accounts receivable.
The Company estimates and provides an allowance for uncollectible accounts
receivable.  The handling and processing of cash receipts pertaining to trade
accounts receivable is maintained primarily by two third party billing
companies.  The Company is dependent upon these billing companies for collection
of its accounts receivable.  As discussed in Note 4, the net receivable due from
a single billing services provider at March 31, 2004 was $10,265,000, net of an
allowance for doubtful accounts of $3,998,000.  The net receivable from that
billing services provider at March 31, 2004, represents approximately 72% of the
Company's total net accounts receivable at March 31, 2004.

As discussed in Note 9, the Company has advanced a net amount of $5,003,962 to
an affiliate.  That amount is receivable from the affiliate at March 31, 2004.
The Company has a receivable for that amount


                                       17
<PAGE>
which earns interest at 8% and is payable in April 2007.  The receivable is
collateralized by shares of the Company's common stock held by the affiliate.

                         *     *     *     *     *     *


                                       18
<PAGE>
ITEM 2.     MANAGEMENT'S DISCUSSION AND ANALYSIS

     For a description of our significant accounting policies and an
understanding of the significant factors that influenced our performance during
the three and six months ended March 31, 2004, this "Management's Discussion and
Analysis" should be read in conjunction with the Consolidated Financial
Statements, including the related notes, appearing in Item 1 of this Quarterly
Report.

Forward-Looking  Statements

     This portion of this Quarterly Report on Form 10-QSB, includes statements
that constitute "forward-looking statements."  These forward-looking statements
are often characterized by the terms "may," "believes," "projects," "expects,"
or "anticipates," and do not reflect historical facts.  Specific forward-looking
statements contained in this portion of the Annual Report include, but are not
limited to the Company's:  (i) belief that the increase in ACH billing will
continue and escalate; (ii) expectation that the recent increase in dilution
will be reduced to more normal levels over the next few quarters; and (iii)
anticipation that capital expenditures will not grow at the same rate in future
fiscal periods compared to the prior fiscal year.

     Forward-looking statements involve risks, uncertainties and other factors,
which may cause our actual results, performance or achievements to be materially
different from those expressed  or implied by such forward-looking statements.
Factors and risks that could affect our results and achievements and cause them
to materially differ from those contained in the forward-looking statements
include those identified in the section below titled "Certain Risk Factors
Affecting Our Business," as well as other factors that we are currently unable
to identify or quantify, but may exist in the future.

     In addition, the foregoing factors may affect generally our business,
results of operations and financial position.  Forward-looking statements speak
only as of the date the statement was made.  We do not undertake and
specifically decline any obligation to update any forward-looking statements.

Executive  Overview

     Business Summary

     We use a business model similar to print Yellow Page publishers.  We
publish basic directory listings, free of charge, exclusively on the Internet.
Like Yellow Page publishers, we generate virtually all of our revenues from
those advertisers that desire increased exposure for their businesses by
purchasing our Internet Advertising Package(TM), or IAP. Our basic listings
contain the business name, address and phone number for almost 18 million U.S.
businesses.  We strive to maintain a listing for almost every business in
America in this format.

     To generate revenues, certain advertisers pay us a monthly fee for our IAP
in the same manner that advertisers pay additional fees to traditional print
Yellow Page providers for enhanced advertisement font, location or display.  The
IAP includes, Mini-Webpage(TM), map


                                       19
<PAGE>
directions, a toll-free calling feature, a link to the advertiser's own webpage
and, at no additional charge, a priority or preferred placement on our website.
The users of our website(s) are prospective IAP advertisers for our advertisers.

     We also offer other ancillary services and products that currently account
for less than 5% of our revenue.  These ancillary services and products include
website design and hosting, and dial-up Internet access.

     Sales and Marketing

     We employ a direct mail marketing program to solicit our IAP advertisers.
Currently, our direct mail marketing program includes a promotional incentive in
the form of a $3.25 activation check that a solicited business simply deposits
with its bank to activate the service and become an IAP advertiser on a monthly
basis.  As a method of third-party verification, the potential IAP advertiser's
bank verifies that the depositing party is in fact the solicited business.  Upon
notice of activation by the IAP advertiser's bank, we contact the business to
confirm the order.  Within 30 days of activation, we also send a confirmation
card to the business.  We offer a cancellation period of 120 days with a full
refund.  Our direct mail marketing program complies with and, in many instances,
exceeds the United States Federal Trade Commission, or "FTC," requirements as
established by an agreement between our company and the FTC.

     IAP advertisers

     In September 2003, we revised the method by which we count our IAP
advertisers.  We now differentiate between "paying IAP advertisers" and
"activated IAP advertisers."  Paying IAP advertisers, as the name implies, are
those advertisers that are actually currently paying for the IAP service.  The
terms activated IAP advertisers or activated advertisers are broader and more
inclusive terms.  They include those advertisers that are currently paying for
the IAP service, as well as those advertisers that either have signed-up for the
IAP service but have not yet been billed or have been billed but have not yet
remitted to us their fees.

     We believe that the new methodology is more accurate and can be more
consistently applied to each period.  We also believe that tracking and
disclosing the numbers of our activated IAP advertisers, in addition to our
paying IAP advertisers, provides greater clarity into our business by providing
an indication or forecast of how many activated IAP advertisers may eventually
become paying IAP advertisers.  Our average retention rate for paying IAP
advertisers is approximately 29 months, which, in turn, approaches the average
operating life expectancy of 36 months for a small business in the U.S.,
according to the U.S. Small Business Administration.

     Methods of Billing

     We bill most of our IAP advertisers on their local telephone bill through
their Local Exchange Carrier, or "LEC."  We are one of only a few independent
Internet advertisers that are permitted to utilize this unique and
cost-efficient method of billing.  By billing our IAP advertisers on their local
telephone bill, we believe we are able to realize a greater average rate of
collection than direct invoice-billing.  The amount and frequency of collections
on invoice-billed IAP advertisers historically has been significantly lower than
for IAP advertisers billed on


                                       20
<PAGE>
their monthly telephone bill.  Accordingly, our revenues can be negatively
impacted if the billing method used to bill a IAP advertiser converts from
monthly telephone bill invoicing to direct invoicing.

     We are not permitted to bill our IAP advertisers through Competitive Local
Exchange Carriers, or CLECs.  Recently, the CLEC's have been participating in
providing local telephone services to IAP advertisers at an increasing rate.  We
have begun to address this problem and we are implementing data filters to
reduce the effects of the CLEC's.  We have also sought other billing methods to
reduce the adverse effects of the CLEC billings, including Automated Clearing
House, or ACH, which is direct debit from the IAP advertiser's bank account. and
credit cards.  ACH billing now accounts for approximately 12% of our total
billings and has reduced our dependency on LEC billing.  We expect this trend to
continue and escalate.

     Accounting Policies and Procedures

     We bill our services monthly and recognize revenue for services billed in
that month.  We utilize outside billing companies, or billing aggregators, to
transmit billing data, much of which is forwarded to the LECs for inclusion on
the IAP advertiser's monthly local telephone bill.  Because we have a 120-day
cancellation policy on new advertiser sign-ups, we accrue for such refunds as a
liability and net such anticipated refunds against revenue to report a net
revenue number in our financial statements.

     The billing aggregators and, subsequently, the LECs, filter all billings
that we submit to them.  We recognize as revenue and accounts receivable the net
billings accepted by the LECs.  The billing aggregators remit payments to us on
the basis of cash that the billing aggregators ultimately receive from the LECs.
The billing aggregators and LECs charge fees for their services, which generally
are 3% to 7% each on a monthly basis.  These fees, in turn, are netted against
the gross accounts receivable balance.  The billing aggregators and LECs also
apply holdbacks to the remittances for potentially uncollectible accounts.
These holdbacks and fees result in significant dilution to our gross billings
and, therefore, may significantly affect our cash flow.

     Due to the periods of time for which adjustments may be reported by the
LECs and the billing aggregators, we estimate and accrue for dilution and fees
reported subsequent to year-end for initial billings related to services
provided for periods within the fiscal year.  Dilution amounts will vary due to
numerous factors.  Accordingly, we may not be certain as to the actual amounts
of dilution on any specific billing submittal until several months after that
submittal.  We estimate the amount of these fees and holdbacks based on
historical experience and subsequent information received from the billing
aggregators.  We also estimate uncollectible account balances and provide an
allowance for such estimates.

     We process our billings through two primary billing aggregators-PaymentOne,
Inc.and ACI Communications, Inc. PaymentOne provides the majority of our
billings, collections, and related services. The receivable due from PaymentOne
at March 31, 2004 was $10,265,000, net of an allowance for doubtful accounts of
$3,998,000. The net receivable from PaymentOne at March 31, 2004 represented
approximately 72% of our total net accounts receivable.


                                       21
<PAGE>
     With respect to our alternative billing methods, we recognize revenue for
ACH billings when they are accepted.  We recognize revenue for direct-invoice
billings based on estimated future collections on such billings.  We
continuously review these estimates for reasonableness based on our collection
experience.

     Subscription receivables that result from direct-invoice billing are valued
and reported at the estimated future collection amount.  Determining the
expected collections requires an estimation of both uncollectible accounts and
refunds.  The net subscriptions receivable at March 31, 2004 was $133,451.

     Our cost of services is comprised, primarily, of variable costs, including
the following:

     -    allowances for bad debt, which are based upon historical experience
          and reevaluated monthly;

     -    billing fees, such as the fees charged by our billing aggregators and
          the Local Exchange Carriers;

     -    billing aggregator inquiry fees, which generally are 1% on a monthly
          basis;

     -    dilution resulting from fees and holdbacks due to items such as wrong
          telephone numbers and other indications of uncollectibility;

     -    Internet expenses, such as dial-up expenses; and

     -    direct mailer marketing costs and the amortization of such costs.

     Our general and administrative expenses are comprised, primarily, of fixed
costs, including compensation expenses, which generally equate to 5% to 10% of
net We recognize revenue for direct-invoice billings based on estimated future
collections on such billings.  We continuously review these estimates for
reasonableness based on our collection experience. revenue, as well as other
expenses, such as lease payments, telephone, professional fees, and office
supplies.

     We expect to make progress on a number of initiative over the next six to
twelve months, including the following:

     -    attempt to get listed on a national exchange or quotation system;

     -    add additional independent directors to our Board of Directors;

     -    establish of an audit committee that fully complies with the
          requirements of Sarbanes-Oxley and the exchanges;

     -    engage a national auditing firm;

     -    obtain broader, more sophisticated and more reliable research
          coverage;

     -    negotiate with our two largest shareholders, Morris & Miller, Ltd. and
          Mathew and Markson, Ltd. for an accelerated payment schedule on their
          existing outstanding


                                       22
<PAGE>
          loans that have a balloon maturity April 2007. On April 29, 2004, we
          received their first negotiated accelerated payment on these
          outstanding loans in the amount of $500,000; and

     -    roll out our national branding campaign through various mediums of
          advertisement, including, Internet, billboard, radio and cable
          television in select markets to be determined. We have recently
          engaged a marketing firm. We expect to use approximately $2,000,000 on
          this campaign over the next twelve months. This may have a negative
          impact on our margins. However, to mitigate any adverse impact,
          management intends to attempt to incur these expenses gradually to be
          commensurate with anticipated increases in revenues resulting from the
          branding campaign.

Results  Of  Operations

     Net revenue for the three-month period ended March 31, 2004, was
$16,394,853 compared to $6,849,044 for the three-month period ended March 31,
2003, an increase of approximately 139%.  For the six-month period ended March
31, 2004, net revenue was $30,261,820 compared to $12,590,499 for the six-month
period ended March 31, 2003, an increase of approximately 140%.  This increase
in net revenue is primarily the result of two factors: (1) an increase in the
number of our IAP advertisers and (2) an increase in our monthly pricing.  These
two factors are discussed further below.

     Our activated IAP advertiser count increased to approximately 305,000 at
March 31, 2004 compared to approximately 222,000 at March 31, 2003, an increase
of approximately 37%.  Our paying IAP advertiser count increased to
approximately 265,000 at March 31, 2004 compared to approximately 151,000 at
March 31, 2003, an increase of approximately 75%.

     The increase in activated IAP advertisers described above equates to
average monthly growth of 7,000 activated IAP advertisers for the three-month
period ended March 31, 2004.  This remains within our targeted net growth of
5,000 to 10,000 new activated IAP advertisers per month.

     Relating to our price increases, in March 2003 we increased our monthly
fees for the IAP product  from $17.95 to $21.95 for new customers.  At the same
time, for existing customers, the monthly fee for the IAP product was increased
to $24.95 upon their first twelve-month anniversary of paying the $17.95 service
fee.  In January 2004, we began charging new customers monthly fees of $29.95
for the IAP product.  In addition, in March 2004, the monthly fee on the IAP
product for existing customers was increased to $29.95 upon their first
six-month anniversary of paying the previous fee.

     Regarding our cost of services, between August 2003 and March 31, 2004, we
converted 45,000 direct-invoice IAP advertisers, out of an approximate target of
70,000, to telephone billing.  However, in the fiscal quarter ended March 31,
2004, we continue to experience short-term dilution and chargebacks resulting
from those direct-invoice IAP advertisers that we were unable to convert to LEC
billing.  Dilution is generally attributable to IAP advertiser credits and other
receivable write-downs, such as unbillable telephone numbers.  It does not
necessarily mean that we have lost a customer.  We merely seek alternative
billing methods for these


                                       23
<PAGE>
customers.  This level of dilution has been higher in the quarter ended March
31, 2004 than in the prior quarter ended December 31, 2003 resulting in higher
cost of services.  However, we expect the dilution to be reduced to more normal
levels over the next few quarters as this dilution runs its course through the
billing system.

     Cost of services for the three-month periods ended March 31, 2004 and March
31, 2003 were $6,618,537 and $1,848,966, respectively, an increase of
approximately 258%.  Cost of services for the six-month periods ended March 31,
2004 and March 31, 2003 were $11,500,939 and $3,671,116, respectively, an
increase of approximately 213%.

     Our cost of services as a percentage of net revenue was approximately 40%
for the three months ended March 31, 2004 compared to approximately 27% for the
same period in the prior fiscal year.  Our cost of services as a percentage of
net revenue was approximately 38% for the six months ended March 31, 2004
compared to approximately 29% for the same period in the prior fiscal year.

     These increased costs of services resulted from the previously mentioned
increased IAP advertiser counts, as well as increased dilution discussed above.

     Amortization of direct marketing costs included in cost of sales is
$1,214,236 for the three months ended March 31, 2004 and $640,996 for the
prior-year period. Amortization of direct marketing costs included in cost of
sales is $2,280,100 for the six months ended March 31, 2004 and $1,124,049 for
the prior-year period.

     Gross profits increased to $9,776,316 for the three months ended March 31,
2004 from $5,000,078 for the prior-year period, an increase of 96%.  Gross
margins decreased to approximately 60% of net revenues in the three months ended
March 31, 2004 compared to approximately 73% of net revenues in the prior-year
period.  Gross profits increased to $18,760,881 for the six months ended March
31, 2004 from $8,919,383 for the prior-year period, an increase of 110%.  Gross
margins decreased to approximately 62% of net revenues in the six months ended
March 31, 2004 compared to approximately 71% of net revenues in the prior-year
period.  The increase in our gross profits was due to increased revenues
resulting from the previously mentioned increased IAP advertiser counts and
price increases, offset by increased dilution discussed above.

     Our general and administrative expense for the three-month periods ended
March 31, 2004 and March 31, 2003 were $3,134,522 and $1,666,108, respectively,
an increase of approximately 88%.  Our general and administrative expense for
the six-month periods ended March 31, 2004 and March 31, 2003 were $5,925,265
and $3,042,186, respectively, an increase of approximately 95%.  These general
and administrative expenses increased due to an increase in costs and employees
relating to our growth in IAP advertisers, our Quality Assurance and Outbound
marketing initiatives, as well as an increase in certain officers' compensation
relating to employment contracts with such officers.

     As a percentage of net revenue, general and administrative expenses were
approximately 19% for the three months ended March 31, 2004 compared to 24% for
the same period in 2003.  As a percentage of net revenue, general and
administrative expenses were approximately 20%


                                       24
<PAGE>
for the six months ended March 31, 2004 compared to 24% for the same period in
2003.  The reduction in general and administrative expenses as a percentage of
net revenue is the result of the leveraging of our fixed cost infrastructure
over a larger IAP advertiser base.

     Sales and marketing expenses for the three-month periods ended March 31,
2004 and March 31, 2003 were $1,428,210 and $862,939, respectively, an increase
of approximately 66%.  Sales and marketing expenses for the six-month periods
ended March 31, 2004 and March 31, 2003 were $2,718,390 and $1,495,374,
respectively, an increase of approximately 82%.  The primary reason for the
increase in sales and marketing is due to the re-institution of our marketing
solicitation program and the implementation of new market strategies and
modification of direct mail marketing pieces.  Such marketing has resulted in
the increase in IAP advertisers cited previously.  We expect these sales and
marketing costs to continue to increase as our marketing efforts increase and as
we continue to roll out our branding campaign.  We capitalize certain direct
marketing expenses and amortize those costs over an 18-month period based on the
analyzed IAP advertiser attrition rates.

     As a percentage of net revenues, sales and marketing expenses were
approximately 9% and 13% for the three-month periods ended March 31, 2004 and
2003, respectively.  As a percentage of net revenues, sales and marketing
expenses were approximately 9% and 12% for the six-month periods ended March 31,
2004 and 2003, respectively.

     Depreciation and amortization primarily relates to the amortization of our
intellectual property and depreciation of equipment.  Amortization relating to
the capitalization of our direct mail marketing costs is included in cost of
sales, as discussed previously.

     Our depreciation and amortization expense was $199,719 in the three months
ended March 31, 2004 compared to $159,306 for the three months ended March 31,
2003.  Our depreciation and amortization expense was $395,912 in the six months
ended March 31, 2004 compared to $298,238 for the six months ended March 31,
2003.  Depreciation and amortization increased slightly in the current periods
compared to the comparable periods in 2003 due to additional purchases of
equipment relating to our upgrade in infrastructure in the information
technology department, hardware purchased relating to our Quality Assurance and
Outbound Marketing initiatives, and a result of our agreement to license the
"YP.Com" Uniform Resource Locator ("URL") from OnRamp Access, Inc.

     Regarding our other intellectual property, the cost of our
"Yellow-Page.net" URL license was capitalized at $5,000,000.  This URL is
amortized on an accelerated basis over the twenty-year term of the agreement.
Amortization expense on this URL was $82,000 and $93,032 for the three-month
periods ended March 31, 2004 and March 31, 2003, respectively.  Amortization
expense on this URL was $164,000 and $186,440 for the six-month periods ended
March 31, 2004 and March 31, 2003, respectively.  Annual amortization expense in
future years related to the "Yellow-Page.net" URL is anticipated to be
approximately $250,000 to $350,000.  As a result of the significant equipment
purchases relating to the previously-mentioned infrastructure additions,
depreciation expense is expected to be greater in the third and fourth quarters
of fiscal 2004 compared to the prior-year periods.  However, we do not
anticipate capital expenditures to grow at the same rate in future fiscal
periods compared to the prior fiscal year.


                                       25
<PAGE>
     Operating income for the three-month period ended March 31, 2004 was
$5,013,865 compared to $2,311,725 in the prior-year period, an increase of
approximately 117% of net revenue.  Operating margins decreased to approximately
31% of net revenue from approximately 34% in the prior-year period.  Operating
income for the six-month period ended March 31, 2004 was $9,721,314 compared to
$4,083,585 in the prior-year period, an increase of approximately 138%.
Operating margins were approximately 32% of net revenue in both the current- and
prior-year period.  The increase in operating income is the result of the
increased revenue discussed above.  Operating margins remained steady in the
comparative periods due to the leveraging of certain fixed expenses over a
larger IAP advertiser base, offset by the short-term increase in dilution.

     Interest income, net of interest expense, for the three-month periods ended
March 31, 2004 was $78,545.  This compares to interest income, net of interest
expense, of $12,069 for the three months ended March 31, 2003.  Interest income,
net of interest expense, for the six-month periods ended March 31, 2004 was
$149,698.  This compares to interest income, net of interest expense, of $12,789
for the six months ended March 31, 2003.  The increase in interest income, net
of interest expense, primarily results from our increased average cash position
resulting, in turn, from our increased profitability, as well as increased
interest income resulting from the increase in advances to affiliates.

     We recorded other income of $71,395 and $180,980, for the three-month
periods ended March 31, 2004 and March 31, 2003, respectively.  We recorded
other income of $346,153 and $229,886, for the six-month periods ended March 31,
2004 and March 31, 2003, respectively.  The primary components of other income
in the three- and six-month periods ended March 31, 2004 is revenue of $65,549
and $287,326, respectively, received from Simple.Net, a related party, for IAP
advertiser and technical services provided by the Company to Simple.Net.  The
primary component of other income in the three- and six-month periods ended
March 31, 2003 was $276,155 and $0, respectively, received from Simple.Net,
offset by a $90,000 legal settlement in the three-month period ended March 31,
2003.  Our agreement with Simple.Net was terminated as of January 2004, with an
extension of payment and services through March 2004.

     Net income before taxes for the three-month periods ended March 31, 2004
and March 31, 2003 was $5,163,805 and $2,504,774, respectively, an increase of
approximately 106%.  Pre-tax margins decreased to approximately 32% of net
revenue in the current period compared to approximately 37% of net revenue in
the prior-year period.  The increase in pre-tax income is a result of those
factors that resulted in the increase in operating income, offset by the
decrease in total other income discussed above.  Net income before taxes for the
six-month periods ended March 31, 2004 and March 31, 2003 were $10,217,165 and
$4,326,260, respectively, an increase of approximately 136%.  Pre-tax margins
were approximately 34% of net revenue in both the current- and prior-year
period.  The increase in pre-tax income is a result of those factors that
resulted in the increase in operating income in addition to the increased
interest income and other income discussed above.

     The income tax provision was $1,815,206 in the three months ended March 31,
2004 compared to $999,853 in the prior-year period.  The income tax provision
was $3,583,881 in the six months ended March 31, 2004 compared to $1,728,447 in
the prior-year period.  The increase


                                       26
<PAGE>
in the income tax provision is the result of our increased profitability in
current-year periods compared to the previous year periods, as well as the fact
that we were able to utilize our net operating loss carryforwards for the
prior-year periods that were unavailable in the three- and six-month periods
ended March 31, 2004.

     Net income for the three-month periods ended March 31, 2004 and March 31,
2003 was $3,348,599, or $0.07 per diluted share, and $1,504,921, or $0.03 per
diluted share, respectively, an increase in net income of approximately 123%.
Net income as a percentage of net revenues for the three months ended March 31,
2004 was approximately 20%, compared to approximately 22% for the same
prior-year period.  Net income for the six-month periods ended March 31, 2004
and March 31, 2003 was $6,633,284, or $0.14 per diluted share, and $2,597,813,
or $0.06 per diluted share, respectively, an increase in net income of over
155%.  Net income as a percentage of net revenues for the six months ended March
31, 2004 was approximately 22% compared to approximately 21% for the same
prior-year period.

Liquidity And Capital Resources

     Net cash provided by operating activities for the six-month period ended
March 31, 2004, was $2,973,145 compared to $1,255,263 for the six-month period
ended March 31, 2003.  The increase in cash generated from operations is
primarily due to a significant increase in net income resulting from an increase
in IAP advertisers, as well as an increase in income tax payable, offset by an
increase in the accounts receivable balance from such growth and funds expended
for mailings related to our direct marketing efforts.

     Cash used in investing activities was $3,109,991 for the six-month period
ended March 31, 2004.  The primary component of cash used in investing
activities was advances to affiliates of $2,725,000.  All advances to affiliates
have ceased as of April 9, 2004.  In the six-month period ended March 31, 2003,
cash used in investing activities was $876,309, which consisted primarily of
purchases of equipment of $469,548 and lower advances to affiliates of $400,000.

     There was no cash used or provided by financing activities for the
six-month period ended March 31, 2004, compared to cash used in financing
activities of $307,000 for the six-month period ended March 31, 2003.  The cash
used in financing activities represents total payments of $454,000 to reduce the
principal balances of our outstanding debt, offset by financing of $147,000
under our trade acceptance draft program with AcTrade Financial Technologies,
Ltd. ("AcTrade").

     We had working capital of $10,067,279 as of March 31, 2004, compared to
$4,035,589 as of March 31, 2003.  The increase is due primarily to increases in
cash of $1,402,940, accounts receivable of $7,567,420 offset by increases in
accrued liabilities of $1,916,048 and income taxes payable of $2,095,909.

     In the past, we borrowed under two credit facilities.  These credit
facilities are maintained primarily for safety and security back-up purposes as
our cash flow generally is more than sufficient to maintain and grow our
business.  In April, 2004, we established a $1,000,000 credit facility with
Merrill Lynch Business Financial Services, Inc.  This facility is for one year
and is renewable.  The applicable interest rate on borrowings, if any, will be a
variable rate of 3%, plus


                                       27
<PAGE>
one-month LIBOR (as published in the Wall Street Journal).  The facility
required an annual line fee of $10,000, payable whether or not we have drawn any
funds on the line.  We intend to terminate our existing credit facilities with
Bank of the Southwest and AcTrade Financial Technologies, Ltd.

     We still owe $115,866 to Mathew & Markson Ltd. on a note related to the
original acquisition of the "Yellow Page.net" URL.

     As previously described, collections on accounts receivable are received
primarily through the billing service aggregators under contract to administer
this billing and collection process.  The billing service aggregators generally
do not remit funds until they are collected.  The billing companies maintain
holdbacks for refunds and other uncertainties.  Generally, cash is collected and
remitted to us over a 60 to 120 day period subsequent to the billing dates.
Under our current agreement with our primary billing service provider,
PaymentOne, cash is remitted to us on a sixty day timetable.

     As of April 9, 2004, we terminated certain loan obligations that we owed to
Morris & Miller, Ltd. and Mathew and Markson, Ltd., our two largest
shareholders.  Under this termination agreement, we were to make final
advancements to these shareholders of approximately $1,300,000.  The aggregate
of all advances made by the Company to these shareholders is to be repaid to the
Company at the end of three years, along with accrued interest.  Subsequently,
the shareholders have agreed to forego the final advancement of $250,000 under
this termination agreement.  Additionally, on April 29, 2004, we received their
first negotiated accelerated payment on these outstanding loans in the amount of
$500,000.

     In connection with our termination of those loan obligations, we have begun
paying a $0.01 per share dividend each quarter, subject to available cash and
compliance with applicable laws.  The first dividend was paid on April 30, 2004
to holders of record on March 20, 2004.

Certain Risk Factors Affecting Our Business

     Our business is subject to numerous risks, including those discussed below.
If  any  of  the events described in these risks occurs, our business, financial
condition  and  results  of  operations  could  be  seriously  harmed.

                          Risks Related to Our Business

WE HAVE A RELATIVELY LIMITED OPERATING HISTORY UPON WHICH INVESTORS CAN EVALUATE
THE LIKELIHOOD OF OUR SUCCESS.

     We have been engaged in the Internet-based Yellow Pages industry through
our subsidiary, Telco Billing, since 1997.  As a result, an investor in our
securities must consider the uncertainties, expenses, and difficulties
frequently encountered by companies such as ours that are in the early stages of
development.  Investors should consider the likelihood of our future success to
be highly speculative in light of our relatively limited operating history, as
well as the challenges, limited resources, expenses, risks, and complications
frequently encountered by similarly situated companies in the early stages of
development, particularly companies in new


                                       28
<PAGE>
and rapidly evolving markets such as Internet Yellow Pages.  To address these
risks and to sustain profitability, we must, among other things:

     -    maintain and increase our base of advertisers;

     -    increase the number of users who visit our web sites for online
          directory services;

     -    implement and successfully execute our business and marketing
          strategy;

     -    continue to develop and upgrade our technology;

     -    continually update and improve our service offerings and features;

     -    provide superior IAP advertiser service;

     -    respond to industry and competitive developments;

     -    successfully manage our growth while controlling expenses; and

     -    attract, retain, and motivate qualified personnel.

We may not be successful in addressing these risks.  If we are unable to do so,
our business, prospects, financial condition, and results of operations would be
materially and adversely affected.

OUR SUCCESS DEPENDS UPON OUR ABILITY TO ESTABLISH AND MAINTAIN RELATIONSHIPS
WITH OUR ADVERTISERS.

     Our ability to generate revenue depends upon our ability to maintain
relationships with our existing advertisers, to attract new advertisers to sign
up for revenue-generating services, and to generate traffic to our advertisers'
websites.  We primarily use direct marketing efforts to attract new advertisers.
These direct marketing efforts may not produce satisfactory results in the
future.  We attempt to maintain relationships with our advertisers through IAP
advertiser service and delivery of traffic to their businesses.  An inability to
either attract additional advertisers to use our service or to maintain
relationships with our advertisers could have a material adverse effect on our
business, prospects, financial condition, and results of operations.

IF WE DO NOT INTRODUCE NEW OR ENHANCED OFFERINGS TO OUR ADVERTISERS AND USERS,
WE MAY BE UNABLE TO ATTRACT AND RETAIN THOSE ADVERTISERS AND USERS, WHICH WOULD
SIGNIFICANTLY IMPEDE OUR ABILITY TO GENERATE REVENUE.

     We will need to introduce new or enhanced products and services in order to
attract and retain advertisers and users and remain competitive.  Our industry
has been characterized by rapid technological change, changes in advertiser and
user requirements and preferences, and frequent new product and service
introductions embodying new technologies.  These changes could render our
technology, systems, and website obsolete.  We may experience difficulties that
could delay or prevent us from introducing new products and services.  If we do
not periodically enhance our existing products and services, develop new
technologies that address our advertisers' and users' needs and preferences, or
respond to emerging technological advances and industry standards and practices
on a timely and cost-effective basis, our products and services may not be
attractive to advertisers and users, which would significantly impede our


                                       29
<PAGE>
revenue growth. In addition, our reputation and our brand could be damaged if
any new product or service introduction is not favorably received.

OUR REVENUE MAY DECLINE OVER TIME.

     We have experienced a decrease in revenue from the Local Exchange Carriers
(LEC) from the effects of the Competitive Local Exchange Carriers (CLEC) that
are participating in providing local telephone services to IAP advertisers.  We
have begun to address this problem and we are implementing data filters to
reduce the effects of the CLECs.  We have also sought other billing methods to
reduce the adverse effects of the CLEC billings.  These other billing methods
may be cheaper or more expensive than our current LEC billing and we have not
yet determined if they will be less or more effective.  We cannot provide any
assurances that our efforts will be successful and may experience future
decreases in revenue.

OUR QUARTERLY RESULTS OF OPERATIONS COULD FLUCTUATE DUE TO FACTORS OUTSIDE OF
OUR CONTROL, WHICH MAY CAUSE CORRESPONDING FLUCTUATIONS IN THE PRICE OF OUR
SECURITIES.

     Our net sales may grow at a slower rate on a quarter-to-quarter basis than
we have experienced in recent periods.  Factors that could cause our results of
operations to fluctuate in the future include the following:

     -    fluctuating demand for our services, which may depend on a number of
          factors including:

          o    changes in economic conditions and our IAP advertisers'
               profitability,

          o    varying IAP advertiser response rates to our direct marketing
               efforts,

          o    our ability to complete direct mailing solicitations on a timely
               basis each month,

          o    changes in our direct marketing efforts,

          o    IAP advertiser refunds or cancellations, and

          o    our ability to continue to bill IAP advertisers on their monthly
               telephone bills, ACH or credit card rather than through direct
               invoicing;

     -    timing of new service or product introductions and market acceptance
          of new or enhanced versions of our services or products;

     -    our ability to develop and implement new services and technologies in
          a timely fashion to meet market demand;

     -    price competition or pricing changes by us or our competitors;

     -    new product offerings or other actions by our competitors;

     -    month-to-month variations in the billing and receipt of amounts from
          Local Exchange Carriers (LEC), such that billing and revenues may fall
          into the subsequent fiscal quarter;

     -    the ability of our check processing service providers to continue to
          process and provide billing information regarding our solicitation
          checks;


                                       30
<PAGE>
     -    the amount and timing of expenditures for expansion of our operations,
          including the hiring of new employees, capital expenditures, and
          related costs;

     -    technical difficulties or failures affecting our systems or the
          Internet in general;

     -    a decline in Internet traffic at our website;

     -    the cost of acquiring, and the availability of, information for our
          database of potential advertisers; and

     -    the fact that our expenses are only partially based on our
          expectations regarding future revenue and are largely fixed in nature,
          particularly in the short term.

     The fluctuation of our quarterly operating results, as well as other
factors, could cause the market price of our securities to fluctuate
significantly in the future. Some of these factors include:

     -    the announcement of new IAP advertisers or strategic alliances or the
          loss of significant IAP advertisers or strategic alliances;

     -    announcements by our competitors;

     -    sales or purchases of our securities by officers, directors and
          insiders;

     -    government regulation;

     -    announcements regarding restructuring, borrowing arrangements,
          technological innovations, departures of key officers, directors or
          employees, or the introduction of new products;

     -    political or economic events and governmental actions affecting
          Internet operations or businesses; and

     -    general market conditions and other factors, including factors
          unrelated to our operating performance or that of our competitors.

     Investors in our securities should be willing to incur the risk of such
price fluctuations.

OUR ABILITY TO EFFICIENTLY PROCESS NEW ADVERTISER SIGN-UPS AND TO BILL OUR
ADVERTISERS MONTHLY DEPENDS UPON OUR CHECK PROCESSING SERVICE PROVIDERS AND
BILLING AGGREGATORS, RESPECTIVELY.

     We currently use three check processing companies to provide us with
advertiser information at the point of sign-up for our Internet Advertising
Package.  One of these processors has indicated that it will be outsourcing this
function in the future.  Therefore, we have refrained from sending new business
to this check processor.  Our ability to gather information to bill our
advertisers at the point of sign-up could be adversely affected if one or more
of these providers experiences a disruption in its operations or ceases to do
business with us.

     We also depend upon our billing aggregators to efficiently bill and collect
monies from the Local Exchange Carriers (LEC) relating to the LEC's billing and
collection of our monthly charges from advertisers.  We currently have
agreements with two billing aggregators.  Any


                                       31
<PAGE>
disruption in our billing aggregators' ability to perform these functions could
adversely affect our financial condition and results of operations.

THE LOSS OF OUR ABILITY TO BILL IAP ADVERTISERS THROUGH LOCAL EXCHANGE CARRIERS
ON THE IAP ADVERTISERS' TELEPHONE BILLS WOULD ADVERSELY IMPACT OUR RESULTS OF
OPERATIONS.

     Our business model depends heavily upon our ability to bill advertisers on
their telephone bills through their respective Local Exchange Carriers (LEC).
The existence of the LECs is the result of Federal legislation.  In the same
manner, Congress could pass future legislation that obviates the existence of or
the need for the LECs.  Additionally, regulatory agencies could limit or prevent
our ability to use the LECs to bill our advertisers.  Finally, the introduction
of and advancement of new technologies, such as WiFi technology or other
wireless-related technologies, could render unnecessary the existence of fixed
telecommunication lines, which, accordingly, would again obviate the need for
and access to the LECs.  Our inability to use the LECs to bill our advertisers
through their monthly telephone bills would have a material adverse impact on
our results of operations.

WE DEPEND UPON THIRD PARTIES TO PROVIDE CERTAIN SERVICES AND SOFTWARE, AND OUR
BUSINESS MAY SUFFER IF THE RELATIONSHIPS UPON WHICH WE DEPEND FAIL TO PRODUCE
THE EXPECTED BENEFITS OR ARE TERMINATED.

     We currently outsource to third parties certain of the services that we
provide, including the work of producing usable templates for and hosting of the
QuickSites, website templates known as Ezsites, and wholesale Internet access.
These relationships may not provide us benefits that outweigh the costs of the
relationships.  If any strategic supplier demands a greater portion of revenue
derived from the services it provides or increases charges for its services, we
may decide to terminate or refuse to renew that relationship, even if it
previously had been profitable or otherwise beneficial.  If we lose a
significant strategic supplier, we may be unable to replace that relationship
with other strategic relationships with comparable revenue potential.  The loss
or termination of any strategic relationship with one of these third-party
suppliers could significantly impair our ability to provide services to our
advertisers and users.

     We depend upon third-party software to operate certain of our services.
The failure of this software to perform as expected would have a material
adverse effect on our business.  Additionally, although we believe that several
alternative sources for this software are available, any failure to obtain and
maintain the rights to use such software would have a material adverse effect on
our business, prospects, financial condition and results of operations.  We also
depend upon third parties to provide services that allow us to connect to the
Internet with sufficient capacity and bandwidth so that our business can
function properly and our websites can handle current and anticipated traffic.
Any restrictions or interruption in our connection to the Internet would have a
material adverse effect on our business, prospects, financial condition, and
results of operations.


                                       32
<PAGE>
THE MARKET FOR OUR SERVICES IS UNCERTAIN AND IS STILL EVOLVING.

     Internet Yellow Pages services are evolving rapidly and are characterized
by an increasing number of market entrants. Our future revenues and profits will
depend substantially upon the widespread acceptance and the use of the Internet
and other online services as an effective medium of commerce by merchants and
consumers.  Rapid growth in the use of and interest in the Internet may not
continue on a lasting basis, which may negatively impact Internet-based
businesses such as ours. In addition, advertisers and users may not adopt or
continue to use Internet-base Yellow Pages services and other online services
that we may offer in the future.  The demand and market acceptance for recently
introduced services generally is subject to a high level of uncertainty.

     Most potential advertisers have only limited, if any, experience
advertising on the Internet and have not devoted a significant portion of their
advertising expenditures to Internet advertising.  Advertisers may find Internet
Yellow Pages advertising to be less effective for meeting their business needs
than traditional methods of Yellow Pages or other advertising and marketing.
Our business, prospects, financial condition or results of operations will be
materially and adversely affected if potential advertisers do not adopt Internet
Yellow Pages as an important component of their advertising expenditures.

WE MAY NOT BE ABLE TO SECURE ADDITIONAL CAPITAL TO EXPAND OUR OPERATIONS.

     Although we currently have no material long-term needs for capital
expenditures, we will likely be required to make increased capital expenditures
to fund our anticipated growth of operations, infrastructure, and personnel.  We
currently anticipate that our cash on hand as of May 1, 2004, together with cash
flows from operations, will be sufficient to meet our anticipated liquidity
needs for working capital and capital expenditures over the next 12 months.  In
the future, however, we may seek additional capital through the issuance of debt
or equity depending upon our results of operations, market conditions or
unforeseen needs or opportunities.  Our future liquidity and capital
requirements will depend on numerous factors, including the following:

     -    the pace of expansion of our operations;

     -    our need to respond to competitive pressures; and

     -    future acquisitions of complementary products, technologies or
          businesses.

     Our forecast of the period of time through which our financial resources
will be adequate to support our operations is a forward-looking statement that
involves risks and uncertainties and actual results could vary materially as a
result of the factors described above.  As we require additional capital
resources, we may seek to sell additional equity or debt securities or draw on
our existing bank line of credit.  Debt financing must be repaid at maturity,
regardless of whether or not we have sufficient cash resources available at that
time to repay the debt.  The sale of additional equity or convertible debt
securities could result in additional dilution to existing stockholders. We
cannot provide assurance that any financing arrangements will be available in
amounts or on terms acceptable to us, if at all.


                                       33
<PAGE>
WE MUST MANAGE OUR GROWTH AND MAINTAIN PROCEDURES AND CONTROLS ON OUR BUSINESS.

     We have rapidly and significantly expanded our operations and we anticipate
further significant expansion to accommodate the expected growth in our IAP
advertiser base and market opportunities.  We have increased the number of our
personnel from the inception of our operations to the present.  This expansion
has placed, and is expected to continue to place, a significant strain on our
management and operational resources.  As a result, we may not be able to
effectively manage our resources, coordinate our efforts, supervise our
personnel or otherwise successfully manage our resources.  We have recently
added a number of key managerial, technical, and operations personnel and we
expect to add additional key personnel in the future.  We also plan to continue
to increase our personnel base.  These additional personnel may further strain
our management resources.

     The rapid growth of our business could in the future strain our ability to
meet IAP advertiser demands and manage our IAP advertiser relationships.  This
could result in the loss of IAP advertisers and harm our business reputation.

     In order to manage the expected growth of our operations and personnel, we
must continue maintaining and improving or replacing existing operational,
accounting, and information systems, procedures, and controls.  Further, we must
manage effectively our relationships with our IAP advertisers, as well as other
third parties necessary to our business.  Our business could be adversely
affected if we are unable to manage growth effectively.

WE DEPEND UPON OUR EXECUTIVE OFFICERS AND KEY PERSONNEL.

     Our performance depends substantially on the performance of our executive
officers and other key personnel.  The success of our business in the future
will depend on our ability to attract, train, retain and motivate high quality
personnel, especially highly qualified technical and managerial personnel.  The
loss of services of any executive officers or key personnel could have a
material adverse effect on our business, results of operations or financial
condition.  We do not maintain key person life insurance on the lives of any of
our executive officers or key personnel.

     Competition for talented personnel is intense, and there is no assurance
that we will be able to continue to attract, train, retain or motivate other
highly qualified technical and managerial personnel in the future.  In addition,
market conditions may require us to pay higher compensation to qualified
management and technical personnel than we currently anticipate.  Any inability
to attract and retain qualified management and technical personnel in the future
could have a material adverse effect on our business, prospects, financial
condition, and results of operations.

OUR BUSINESS IS SUBJECT TO A STRICT REGULATORY ENVIRONMENT.

     Existing laws and regulations and any future regulation may have a material
adverse effect on our business.  For example, we believe that our direct
marketing programs meet or exceed existing requirements of the United States
Federal Trade Commission (FTC).  Any


                                       34
<PAGE>
changes to FTC requirements or changes in our direct or other marketing
practices, however, could result in our marketing practices failing to comply
with FTC regulations.  As a result, we could be subject to substantial liability
in the future, including fines and criminal penalties, preclusion from offering
certain products or services, and the prevention or limitation of certain
marketing practices.

WE FACE INTENSE COMPETITION, INCLUDING FROM COMPANIES WITH GREATER RESOURCES,
WHICH COULD ADVERSELY AFFECT OUR GROWTH AND COULD LEAD TO DECREASED REVENUES.

     Several companies, including Verizon, Yahoo and Microsoft, currently market
Internet Yellow Pages services that directly compete with our services and
products.  We may not compete effectively with existing and potential
competitors for several reasons, including the following:

     -    some competitors have longer operating histories and greater financial
          and other resources than we have and are in better financial condition
          than we are;

     -    some competitors have better name recognition, as well as larger, more
          established, and more extensive marketing, IAP advertiser service, and
          IAP advertiser support capabilities than we have;

     -    some competitors may supply a broader range of services, enabling them
          to serve more or all of their IAP advertisers' needs. This could limit
          our sales and strengthen our competitors' existing relationships with
          their IAP advertisers, including our current and potential IAP
          advertisers;

     -    some competitors may be able to better adapt to changing market
          conditions and IAP advertiser demand; and

     -    barriers to entry are not significant. As a result, other companies
          that are not currently involved in the Internet-based Yellow Pages
          advertising business may enter the market or develop technology that
          reduces the need for our services.

     Increased competitive pressure could lead to reduced market share, as well
as lower prices and reduced margins for our services.  If we experience
reductions in our revenue for any reason, our margins may continue to decline,
which would adversely affect our results of operations.  We cannot assure you
that we will be able to compete successfully in the future.

WE MAY FACE RISKS AS WE EXPAND OUR BUSINESS INTO INTERNATIONAL MARKETS.

     We currently are exploring opportunities to offer our services in other
English-speaking countries.  We have limited experience in developing and
marketing our services internationally, and we may not be able to successfully
execute our business model in markets outside the United States. We will face a
number of risks inherent in doing business in international markets, including
the following:


                                       35
<PAGE>
     -    international markets typically experience lower levels of Internet
          usage and Internet advertising than the United States, which could
          result in lower-than-expected demand for our services;

     -    unexpected changes in regulatory requirements;

     -    potentially adverse tax consequences;

     -    difficulties in staffing and managing foreign operations;

     -    changing economic conditions;

     -    exposures to different legal standards, particularly with respect to
          intellectual property and distribution of information over the
          Internet;

     -    burdens of complying with a variety of foreign laws; and

     -    fluctuations in currency exchange rates.

     To the extent that international operations represent a significant portion
of our business in the future, our business could suffer if any of these risks
occur.

WE MAY BE UNABLE TO PROMOTE AND MAINTAIN OUR BRANDS.

     We believe that establishing and maintaining the brand identities of our
Internet Yellow Pages services is a critical aspect of attracting and expanding
a base of advertisers and users.  Promotion and enhancement of our brands will
depend largely on our success in continuing to provide high quality service.  If
advertisers and users do not perceive our existing services to be of high
quality, or if we introduce new services or enter into new business ventures
that are not favorably received by advertisers and users, we will risk diluting
our brand identities and decreasing their attractiveness to existing and
potential IAP advertisers.

WE MAY NOT BE ABLE TO ADEQUATELY PROTECT OUR INTELLECTUAL PROPERTY RIGHTS.

     Our success depends both on our internally developed technology and our
third party technology. We rely on a variety of trademarks, service marks, and
designs to promote our brand names and identity.  We also rely on a combination
of contractual provisions, confidentiality procedures, and trademark, copyright,
trade secrecy, unfair competition, and other intellectual property laws to
protect the proprietary aspects of our products and services.  Legal standards
relating to the validity, enforceability, and scope of the protection of certain
intellectual property rights in Internet-related industries are uncertain and
still evolving. The steps we take to protect our intellectual property rights
may not be adequate to protect our intellectual property and may not prevent our
competitors from gaining access to our intellectual property and proprietary
information.  In addition, we cannot provide assurance that courts will always
uphold our intellectual property rights or enforce the contractual arrangements
that we have entered into to protect our proprietary technology.

     Third parties may infringe or misappropriate our copyrights, trademarks,
service marks, trade dress, and other proprietary rights.  Any such infringement
or misappropriation could have a material adverse effect on our business,
prospects, financial condition, and results of operations.  In addition, the
relationship between regulations governing domain names and laws


                                       36
<PAGE>
protecting trademarks and similar proprietary rights is unclear.  We may be
unable to prevent third parties from acquiring domain names that are similar to,
infringe upon or otherwise decrease the value of our trademarks and other
proprietary rights, which may result in the dilution of the brand identity of
our services.

     We may decide to initiate litigation in order to enforce our intellectual
property rights, to protect our trade secrets, or to determine the validity and
scope of our proprietary rights.  Any such litigation could result in
substantial expense, may reduce our profits, and may not adequately protect our
intellectual property rights.  In addition, we may be exposed to future
litigation by third parties based on claims that our products or services
infringe their intellectual property rights.  Any such claim or litigation
against us, whether or not successful, could result in substantial costs and
harm our reputation.  In addition, such claims or litigation could force us to
do one or more of the following:

     -    cease selling or using any of our products that incorporate the
          challenged intellectual property, which would adversely affect our
          revenue;

     -    obtain a license from the holder of the intellectual property right
          alleged to have been infringed, which license may not be available on
          reasonable terms, if at all; and

     -    redesign or, in the case of trademark claims, rename our products or
          services to avoid infringing the intellectual property rights of third
          parties, which may not be possible and in any event could be costly
          and time-consuming.

     Even if we were to prevail, such claims or litigation could be
time-consuming and expensive to prosecute or defend, and could result in the
diversion of our management's time and attention.  These expenses and diversion
of managerial resources could have a material adverse effect on our business,
prospects, financial condition, and results of operations.

CURRENT CAPACITY CONSTRAINTS MAY REQUIRE US TO EXPAND OUR INFRASTRUCTURE AND IAP
ADVERTISER SUPPORT CAPABILITIES.

     Our ability to provide high-quality Internet Yellow Pages services largely
depends upon the efficient and uninterrupted operation of our computer and
communications systems.  We may be required to expand our technology,
infrastructure, and IAP advertiser support capabilities in order to accommodate
any significant increases in the numbers of advertisers and users of our web
sites.  We may not be able to project accurately the rate or timing of
increases, if any, in the use of our services or expand and upgrade our systems
and infrastructure to accommodate these increases in a timely manner.  If we do
not expand and upgrade our infrastructure in a timely manner, we could
experience temporary capacity constraints that may cause unanticipated system
disruptions, slower response times, and lower levels of IAP advertiser service.
Our inability to upgrade and expand our infrastructure and IAP advertiser
support capabilities as required could impair the reputation of our brand and
our services, reduce the volume of users able to access our website, and
diminish the attractiveness of our service offerings to our advertisers.

     Any expansion of our infrastructure may require us to make significant
upfront expenditures for servers, routers, computer equipment, and additional
Internet and intranet


                                       37
<PAGE>
equipment, as well as to increase bandwidth for Internet connectivity.  Any such
expansion or enhancement will need to be completed and integrated without system
disruptions.  An inability to expand our infrastructure or IAP advertiser
service capabilities either internally or through third parties, if and when
necessary, would materially adversely affect our business, prospects, financial
condition, and results of operations.

                          Risks Related to the Internet

WE MAY NOT BE ABLE TO ADAPT AS THE INTERNET, INTERNET YELLOW PAGES SERVICES, AND
IAP ADVERTISER DEMANDS CONTINUE TO EVOLVE.

     Our failure to respond in a timely manner to changing market conditions or
client requirements could have a material adverse effect on our business,
prospects, financial condition, and results of operations. The Internet,
e-commerce, and the Internet Yellow Pages industry are characterized by:

     -    rapid technological change;

     -    changes in advertiser and user requirements and preferences;

     -    frequent new product and service introductions embodying new
          technologies; and

     -    the emergence of new industry standards and practices that could
          render our existing service offerings, technology, and hardware and
          software infrastructure obsolete.

     In order to compete successfully in the future, we must

     -    enhance our existing services and develop new services and technology
          that address the increasingly sophisticated and varied needs of our
          prospective or current IAP advertisers;

     -    license, develop or acquire technologies useful in our business on a
          timely basis; and

     -    respond to technological advances and emerging industry standards and
          practices on a cost-effective and timely basis.

OUR FUTURE SUCCESS WILL DEPEND ON CONTINUED GROWTH IN THE USE OF THE INTERNET.

     Because Internet Yellow Pages is a new and rapidly evolving industry, the
ultimate demand and market acceptance for our services will be subject to a high
level of uncertainty.  Significant issues concerning the commercial use of the
Internet and online service technologies, including security, reliability, cost,
ease of use, and quality of service, remain unresolved and may inhibit the
growth of Internet business solutions that use these technologies.  In addition,
the Internet or other online services could lose their viability due to delays
in the development or adoption of new standards and protocols required to handle
increased levels of Internet activity, or due to increased governmental
regulation.  Our business, prospects, financial condition, and results of
operations would be materially and adversely affected if the use of Internet
Yellow Pages and other online services does not continue to grow or grows more
slowly than we expect.


                                       38
<PAGE>
WE WILL BE REQUIRED TO KEEP PACE WITH RAPID TECHNOLOGICAL CHANGE IN THE INTERNET
INDUSTRY.

     In order to remain competitive, we will be required continually to enhance
and improve the functionality and features of our existing services, which could
require us to invest significant capital.  If our competitors introduce new
products and services embodying new technologies, or if new industry standards
and practices emerge, our existing services, technologies, and systems may
become obsolete.  We may not have the funds or technical know-how to upgrade our
services, technology, and systems.  If we face material delays in introducing
new services, products, and enhancements, our advertisers and users, may forego
the use of our services and select those of our competitors, in which event our
business, prospects, financial condition and results of operations could be
materially and adversely affected.

REGULATION OF THE INTERNET MAY ADVERSELY AFFECT OUR BUSINESS.

     Due to the increasing popularity and use of the Internet and online
services such as online Yellow Pages, federal, state, local, and foreign
governments may adopt laws and regulations, or amend existing laws and
regulations, with respect to the Internet and other online services.  These laws
and regulations may affect issues such as user privacy, pricing, content,
taxation, copyrights, distribution, and quality of products and services.  The
laws governing the Internet remain largely unsettled, even in areas where
legislation has been enacted.  It may take years to determine whether and how
existing laws, such as those governing intellectual property, privacy, libel,
and taxation, apply to the Internet and Internet advertising and directory
services. In addition, the growth and development of the market for electronic
commerce may prompt calls for more stringent consumer protection laws, both in
the United States and abroad, that may impose additional burdens on companies
conducting business over the Internet.  Any new legislation could hinder the
growth in use of the Internet generally or in our industry and could impose
additional burdens on companies conducting business online, which could, in
turn, decrease the demand for our services, increase our cost of doing business,
or otherwise have a material adverse effect on our business, prospects,
financial condition, and results of operations.

WE MAY NOT BE ABLE TO OBTAIN INTERNET DOMAIN NAMES THAT WE WOULD LIKE TO HAVE.

     We believe that our existing Internet domain names are an extremely
important part of our business.  We may desire, or it may be necessary in the
future, to use these or other domain names in the United States and abroad.
Various Internet regulatory bodies regulate the acquisition and maintenance of
domain names in the United States and other countries.  These regulations are
subject to change. Governing bodies may establish additional top-level domains,
appoint additional domain name registrars or modify the requirements for holding
domain names.  As a result, we may be unable to acquire or maintain relevant
domain names in all countries in which we plan to conduct business in the
future.

     The extent to which laws protecting trademarks and similar proprietary
rights will be extended to protect domain names currently is not clear.  We
therefore may be unable to prevent competitors from acquiring domain names that
are similar to, infringe upon or otherwise decrease the value of our domain
names, trademarks, trade names, and other proprietary rights.  We cannot provide
assurance that potential users and advertisers will not confuse our domain


                                       39
<PAGE>
names, trademarks, and trade names with other similar names and marks.  If that
confusion occurs, we may lose business to a competitor and some advertisers and
users may have negative experiences with other companies that those advertisers
and users erroneously associate with us.  The inability to acquire and maintain
domain names that we desire to use in our business, and the use of confusingly
similar domain names by our competitors, could have a material adverse affect on
our business, prospects, financial conditions, and results of operations in the
future.

OUR BUSINESS COULD BE NEGATIVELY IMPACTED IF THE SECURITY OF THE INTERNET
BECOMES COMPROMISED.

     To the extent that our activities involve the storage and transmission of
proprietary information about our advertisers or users, security breaches could
damage our reputation and expose us to a risk of loss or litigation and possible
liability.  We may be required to expend significant capital and other resources
to protect against security breaches or to minimize problems caused by security
breaches.  Our security measures may not prevent security breaches. Our failure
to prevent these security breaches or a misappropriation of proprietary
information may have a material adverse effect on our business, prospects,
financial condition, and results of operations.

OUR TECHNICAL SYSTEMS COULD BE VULNERABLE TO ONLINE SECURITY RISKS, SERVICE
INTERRUPTIONS OR DAMAGE TO OUR SYSTEMS.

     Our systems and operations may be vulnerable to damage or interruption from
fire, floods, power loss, telecommunications failures, break-ins, sabotage,
computer viruses, penetration of our network by unauthorized computer users and
"hackers," natural disaster, and similar events.  Preventing, alleviating, or
eliminating computer viruses and other service-related or security problems may
require interruptions, delays or cessation of service.  We may need to expend
significant resources protecting against the threat of security breaches or
alleviating potential or actual service interruptions.  The occurrence of such
unanticipated problems or security breaches could cause material interruptions
or delays in our business, loss of data, or misappropriation of proprietary or
IAP advertiser-related information or could render us unable to provide services
to our IAP advertisers for an indeterminate length of time.  The occurrence of
any or all of these events could materially and adversely affect our business,
prospects, financial condition, and results of operations.

IF WE ARE SUED FOR CONTENT DISTRIBUTED THROUGH, OR LINKED TO BY, OUR WEBSITE OR
THOSE OF OUR ADVERTISERS, WE MAY BE REQUIRED TO SPEND SUBSTANTIAL RESOURCES TO
DEFEND OURSELVES AND COULD BE REQUIRED TO PAY MONETARY DAMAGES.

     We aggregate and distribute third-party data and other content over the
Internet.  In addition, third-party websites are accessible through our website
or those of our advertisers. As a result, we could be subject to legal claims
for defamation, negligence, intellectual property infringement, and product or
service liability.  Other claims may be based on errors or false or misleading
information provided on or through our website or websites of our directory
licensees.  Other claims may be based on links to sexually explicit websites and
sexually explicit advertisements.  We may need to expend substantial resources
to investigate and defend these


                                       40
<PAGE>
claims, regardless of whether we successfully defend against them.  While we
carry general business insurance, the amount of coverage we maintain may not be
adequate.  In addition, implementing measures to reduce our exposure to this
liability may require us to spend substantial resources and limit the
attractiveness of our content to users.

                         Risks Related to Our Securities

STOCK PRICES OF TECHNOLOGY COMPANIES HAVE DECLINED PRECIPITOUSLY AT TIMES IN THE
PAST AND THE TRADING PRICE OF OUR COMMON STOCK IS LIKELY TO BE VOLATILE, WHICH
COULD RESULT IN SUBSTANTIAL LOSSES TO INVESTORS.

     The trading price of our common stock has risen significantly over the past
twelve months and could continue to be volatile in response to factors including
the following, many of which are beyond our control:

     -    decreased demand in the Internet services sector;

     -    variations in our operating results;

     -    announcements of technological innovations or new services by us or
          our competitors;

     -    changes in expectations of our future financial performance, including
          financial estimates by securities analysts and investors;

     -    our failure to meet analysts' expectations;

     -    changes in operating and stock price performance of other technology
          companies similar to us;

     -    conditions or trends in the technology industry;

     -    additions or departures of key personnel; and

     -    future sales of our common stock.

     Domestic and international stock markets often experience significant price
and volume fluctuations that are unrelated to the operating performance of
companies with securities trading in those markets.  These fluctuations, as well
as political events, terrorist attacks, threatened or actual war, and general
economic conditions unrelated to our performance, may adversely affect the price
of our common stock.  In the past, securities holders of other companies often
have initiated securities class action litigation against those companies
following periods of volatility in the market price of those companies'
securities.  If the market price of our stock fluctuates and our stockholders
initiate this type of litigation, we could incur substantial costs and
experience a diversion of our management's attention and resources, regardless
of the outcome.  This could materially and adversely affect our business,
prospects, financial condition, and results of operations.


                                       41
<PAGE>
CERTAIN PROVISIONS OF NEVADA LAW AND IN OUR CHARTER MAY PREVENT OR DELAY A
CHANGE OF CONTROL OF OUR COMPANY.

     We are subject to the Nevada anti-takeover laws regulating corporate
takeovers. These anti-takeover laws prevent Nevada corporations from engaging in
a merger, consolidation, sales of its stock or assets, and certain other
transactions with any stockholder, including all affiliates and associates of
the stockholder, who owns 10% or more of the corporation's outstanding voting
stock, for three years following the date that the stockholder acquired 10% or
more of the corporation's voting stock except in certain situations.  In
addition, our amended and restated articles of incorporation and bylaws include
a number of provisions that may deter or impede hostile takeovers or changes of
control or management.  These provisions include the following:

     -    our board is classified into three classes of directors as nearly
          equal in size as possible, with staggered three year-terms;

     -    the authority of our board to issue up to 5,000,000 shares of serial
          preferred stock and to determine the price, rights, preferences, and
          privileges of these shares, without stockholder approval;

     -    all stockholder actions must be effected at a duly called meeting of
          stockholders and not by written consent unless such action or proposal
          is first approved by our board of directors;

     -    special meetings of the stockholders may be called only by the
          Chairman of the Board, the Chief Executive Officer, or the President
          of our company; and

     -    cumulative voting is not allowed in the election of our directors.

     These provisions of Nevada law and our articles and bylaws could prohibit
or delay mergers or other takeover or change of control of our company and may
discourage attempts by other companies to acquire us, even if such a transaction
would be beneficial to our stockholders.

OUR COMMON STOCK MAY BE SUBJECT TO THE "PENNY STOCK" RULES AS PROMULGATED UNDER
THE EXCHANGE ACT.

     In the event that no exclusion from the definition of "penny stock" under
the Exchange Act is available, then any broker engaging in a transaction in our
common stock will be required to provide its IAP advertisers with a risk
disclosure document, disclosure of market quotations, if any, disclosure of the
compensation of the broker-dealer and its sales person in the transaction, and
monthly account statements showing the market values of our securities held in
the IAP advertiser's accounts.  The bid and offer quotation and compensation
information must be provided prior to effecting the transaction and must be
contained on the IAP advertiser's confirmation of sale.  Certain brokers are
less willing to engage in transactions involving "penny stocks" as a result of
the additional disclosure requirements described above, which may make it more
difficult for holders of our common stock to dispose of their shares.


                                       42
<PAGE>
ITEM 3     CONTROLS AND PROCEDURES

     Disclosure controls and procedures are designed with an objective of
ensuring that information required to be disclosed in our periodic reports filed
with the Securities and Exchange Commission, such as this Quarterly Report on
Form 10-QSB, is recorded, processed, summarized and reported within the time
periods specified by the Securities and Exchange Commission.  Disclosure
controls are also designed with an objective of ensuring that such information
is accumulated and communicated to our management, including our chief executive
officer and chief financial officer, in order to allow timely consideration
regarding required disclosures.

     The evaluation of our disclosure controls by our principal executive
officer and principal financial officer included a review of the controls'
objectives and design, the operation of the controls, and the effect of the
controls on the information presented in this Quarterly Report.  Our management,
including our chief executive officer and chief financial officer, does not
expect that disclosure controls can or will prevent or detect all errors and all
fraud, if any.  A control system, no matter how well designed and operated, can
provide only reasonable, not absolute, assurance that the objectives of the
control system are met.  Also, projections of any evaluation of the disclosure
controls and procedures to future periods are subject to the risk that the
disclosure controls and procedures may become inadequate because of changes in
conditions, or that the degree of compliance with the policies or procedures may
deteriorate.

     Based on their review and evaluation as of a date within 45 days of the
filing of this Form 10-QSB, and subject to the inherent limitations all as
described above, our principal executive officer and principal financial officer
have concluded that our disclosure controls and procedures (as defined in Rules
13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) are effective
as of the end of the period covered by this report.  They are not aware of any
significant changes in our disclosure controls or in other factors that could
significantly affect these controls subsequent to the date of their evaluation,
including any corrective actions with regard to significant deficiencies and
material weaknesses.


                                       43
<PAGE>
                           PART II - OTHER INFORMATION

Items 1-5 are not applicable and have been omitted.

ITEM 6.     EXHIBITS AND REPORTS ON FORM 8-K UPDATE

(a)  The following exhibits are either attached hereto or incorporated herein by
reference as indicated:

<TABLE>
<CAPTION>
Exhibit
Number   Description
-------  -----------
<S>      <C>
3.1      Amended and Restated Articles of Incorporation

3.2      Amended and Restated Bylaws

14       Code of Ethics

31       Certification pursuant to SEC Release No. 33-8238, as adopted
         pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32       Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002
</TABLE>

(b)  The Registrant filed the following Current Reports on Form 8-K during the
three-month period covered by this Quarterly Report:

     -    On January 8, 2004, the Company filed a Current Report on Form 8-K
          attaching a letter from the Company's Chief Executive Officer to the
          Company's shareholders concerning the status of the Company.

     -    On January 9, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release concerning possible manipulation of its
          stock price.

     -    On January 12, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release concerning a lawsuit filed by the Company
          against Stocklemon.com.

     -    On January 14, 2004, the Company filed a Current Report on Form 8-K
          announcing an increase in its IAP advertiser counts.

     -    On February 9, 2004, the Company filed a Current Report on Form 8-K to
          disclose an Investor Fact Sheet.

     -    On March 3, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release announcing the establishment of a Rule
          10b5-1 purchase plan program.


                                       44
<PAGE>
     -    On March 11, 2004, the Company filed a Current Report on Form 8-K
          attaching the presentation by the Company at the Red Chip Investor
          Conference.

     -    On March 11, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release announcing the initiation of a $.01 per
          share dividend on its common stock to be paid on April 30, 2004.

     -    On March 11, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release announcing the termination of its agreement
          with Simple.Net.

     -    On March 11, 2004, the Company filed a Current Report on Form 8-K
          attaching a press release announcing that it would be hosting a
          meeting with research analysts and investors on April 23, 2004.


                                       45
<PAGE>
                                   SIGNATURES

     In accordance with Section 13 or 15(d) of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.

YP.CORP.

Dated:  May 13, 2004                     /s/  Angelo Tullo
                                         ---------------------------------------
                                         Angelo Tullo, Chairman of the Board and
                                         Chief Executive Officer (Principal
                                         Executive Officer)

Dated:  May 13, 2004                     /s/  David Iannini
                                         --------------------------------------
                                         David Iannini, Chief Financial Officer
                                         (Principal Accounting Officer)


                                       46
<PAGE>
<TABLE>
<CAPTION>
                                  EXHIBIT INDEX

Exhibit
Number   Description
-------  -----------
<S>      <C>
3.1      Amended and Restated Articles of Incorporation

3.2      Amended and Restated Bylaws

14       Code of Ethics

31       Certification pursuant to SEC Release No. 33-8238, as adopted
         pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32       Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant
         to Section 906 of the Sarbanes-Oxley Act of 2002
</TABLE>


<PAGE>