----

----

| S | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

| £ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

| Nevada(State or other jurisdiction of incorporation or organization)                      | 85-0206668(IRS Employer Identification No.) |
|-------------------------------------------------------------------------------------------|---------------------------------------------|
|                                                                                      |                                        |
| 2490 East Sunset Road, Suite 100Las Vegas, Nevada(Address of principal executive offices) | 89120(Zip Code)                             |

| Large Accelerated Filer o          | Accelerated Filer o                         |
|------------------------------------|---------------------------------------------|
|                               |                                        |
| Non-Accelerated Filer  o | Smaller reporting company  þ |

----

----

----

INDEX 

|       |   |                                                                                                            | Page   |
|------------|--------|-----------------------------------------------------------------------------------------------------------------|--------|
| Item 1.    |   | Financial Statements                                                                                            |   |
|       |   |                                                                                                            |   |
|       |   | Condensed Consolidated Balance Sheets as of December 31, 2008 (unaudited) and September 30, 2008                | 3      |
|       |   | Unaudited Condensed Consolidated Statements of Operations for the Three Months Ended December 31, 2008 and 2007 | 4      |
|       |   | Unaudited Condensed Consolidated Statements of Cash Flows for the Three Months Ended December 31, 2008 and 2007 | 5      |
|       |   | Notes to Unaudited Condensed Consolidated Financial Statements                                                  | 6      |
|       |   |                                                                                                            |   |
| Item 2.    |   | Management’s Discussion and Analysis of Financial Condition and Results of Operations                     | 14     |
|       |   |                                                                                                            |   |
| Item 3.    |   | Quantitative and Qualitative Disclosures About Market Risk                                                      | 21     |
|       |   |                                                                                                            |   |
| Item 4.    |   | Controls and Procedures                                                                                         | 21     |
|       |   |                                                                                                            |   |
|       |   |                                                                                                            |   |
|       |   | PART II                                                                                                         |   |
|       |   | OTHER INFORMATION                                                                                               |   |
|       |   |                                                                                                            |   |
| Item 1.    |   | Legal Proceedings                                                                                               | 22     |
|       |   |                                                                                                            |   |
| Item 1A.   |   | Risk Factors                                                                                                    | 22     |
|       |   |                                                                                                            |   |
| Item 2.    |   | Unregistered Sale of Equity Securities and Use of Proceeds                                                      | 22     |
|       |   |                                                                                                            |   |
| Item 6.    |   | Exhibits                                                                                                        | 22     |
|       |   |                                                                                                            |   |
| Signatures | 24     |

----

Index

| ITEM 1. | FINANCIAL STATEMENTS |
|---------|----------------------|

LIVEDEAL

|                                                                                                                                                         |   | December 31, |       |   | September 30, |   |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------|------------|--------|--------------------|--------|
|                                                                                                                                                         |   | 2008              |       |   | 2008               |   |
|                                                                                                                                                         |   | (unaudited)       |       |   |               |   |
|                                                                                                                                                         |   |              |       |   |               |   |
| Assets                                                                                                                                                       |   |              |       |   |               |   |
| Cash and cash equivalents                                                                                                                                    |   | $                 | 7,569,993  |   |               | $      | 4,639,787 |   |
| Accounts receivable, net                                                                                                                                     |   |              | 6,508,868  |   |               |   | 6,880,492 |   |
| Prepaid expenses and other current assets                                                                                                                    |   |              | 779,610    |   |               |   | 792,309 |   |
| Customer acquisition costs, net                                                                                                                              |   |              | 160,552    |   |               |   | 642,220 |   |
| Income taxes receivable                                                                                                                                      |   |              | -          |   |               |   | 487,532 |   |
| Deferred tax asset                                                                                                                                           |   |              | 843,161    |   |               |   | 949,121 |   |
| Total current assets                                                                                                                                         |   |              | 15,862,184 |   |               |   | 14,391,461 |   |
| Accounts receivable, long term portion, net                                                                                                                  |   |              | 2,090,971  |   |               |   | 2,011,143 |   |
| Property and equipment, net                                                                                                                                  |   |              | 893,815    |   |               |   | 959,854 |   |
| Deposits and other assets                                                                                                                                    |   |              | 86,944     |   |               |   | 83,547 |   |
| Intangible assets, net                                                                                                                                       |   |              | 6,333,305  |   |               |   | 6,736,078 |   |
| Goodwill                                                                                                                                                     |   |              | 11,706,406 |   |               |   | 11,706,406 |   |
| Deferred tax asset, long term                                                                                                                                |   |              | 4,236,563  |   |               |   | 3,863,502 |   |
| Total assets                                                                                                                                                 |   | $                 | 41,210,188 |   |               | $      | 39,751,991 |   |
|                                                                                                                                                         |   |              |       |   |               |   |   |   |
| Liabilities and Stockholders' Equity                                                                                                                         |   |              |       |   |               |   |   |   |
| Liabilities:                                                                                                                                                 |   |              |       |   |               |   |   |   |
| Accounts payable                                                                                                                                             |   | $                 | 1,001,500  |   |               | $      | 1,078,712 |   |
| Accrued liabilities                                                                                                                                          |   |              | 2,817,107  |   |               |   | 1,991,369 |   |
| Income tax payable                                                                                                                                           |   |              | 196,442    |   |               |   | - |   |
| Current portion of capital lease obligation                                                                                                                  |   |              | 67,272     |   |               |   | 61,149 |   |
| Total current liabilities                                                                                                                                    |   |              | 4,082,321  |   |               |   | 3,131,230 |   |
| Long term portion of capital lease obligation                                                                                                                |   |              | 169,609    |   |               |   | 170,838 |   |
| Total liabilities                                                                                                                                            |   |              | 4,251,930  |   |               |   | 3,302,068 |   |
|                                                                                                                                                         |   |              |       |   |               |   |   |   |
| Commitments and contingencies                                                                                                                                |   |              |       |   |               |   |   |   |
|                                                                                                                                                         |   |              |       |   |               |   |   |   |
| Stockholders' equity:                                                                                                                                        |   |              |       |   |               |   |   |   |
| Series E convertible preferred stock, $0.001 par value, 200,000 shares authorized, 127,840 issued and outstanding, liquidation preference $38,202            |   |              | 10,866     |   |               |   | 10,866 |   |
| Common stock, $0.001 par value, 100,000,000 shares authorized, 6,195,683 and 6,513,687 outstanding at December 31, 2008 and September 30, 2008, respectively |   |              | 6,196      |   |               |   | 6,514 |   |
| Paid in capital                                                                                                                                              |   |              | 20,505,883 |   |               |   | 20,884,112 |   |
| Retained earnings                                                                                                                                            |   |              | 16,435,313 |   |               |   | 15,548,431 |   |
| Total stockholders' equity                                                                                                                                   |   |              | 36,958,258 |   |               |   | 36,449,923 |   |
|                                                                                                                                                         |   |              |       |   |               |   |   |   |
| Total liabilities and stockholders' equity                                                                                                                   |   | $                 | 41,210,188 |   |               | $      | 39,751,991 |   |

----

Index

LIVEDEAL

|                                        |   | Three Months ended |       |
|---------------------------------------------|--------|--------------------|------------|
|                                        |   | December 31,  |       |
|                                        |   | 2008               |       |   | 2007 |   |
|                                        |   |               |       |   |   |   |
| Net revenues                                |   | $                  | 5,163,130  |   |   | $ | 7,068,888 |   |
| Cost of services                            |   |               | 1,609,125  |   |   |   | 1,005,549 |   |
| Gross profit                                |   |               | 3,554,005  |   |   |   | 6,063,339 |   |
|                                        |   |               |       |   |   |   |   |   |
| Operating expenses:                         |   |               |       |   |   |   |   |   |
| General and administrative expenses         |   |               | 4,259,026  |   |   |   | 3,394,971 |   |
| Sales and marketing expenses                |   |               | 1,808,322  |   |   |   | 2,185,886 |   |
| Total operating expenses                    |   |               | 6,067,348  |   |   |   | 5,580,857 |   |
| Operating income (loss)                     |   |               | (2,513,343 | ) |   |   | 482,482 |   |
| Other income (expense):                     |   |               |       |   |   |   |   |   |
| Interest income, net                        |   |               | 13,759     |   |   |   | 36,032 |   |
| Other income (expense)                      |   |               | 3,805,778  |   |   |   | (1,121 | ) |
| Total other income (expense)                |   |               | 3,819,537  |   |   |   | 34,911 |   |
|                                        |   |               |       |   |   |   |   |   |
| Income before income taxes                  |   |               | 1,306,194  |   |   |   | 517,393 |   |
| Income tax provision (benefit)              |   |               | 418,833    |   |   |   | (191,301 | ) |
| Net income                                  |   | $                  | 887,361    |   |   | $ | 326,092 |   |
|                                        |   |               |       |   |   |   |   |   |
| Net income per common share:                |   |               |       |   |   |   |   |   |
| Basic                                       |   | $                  | 0.15       |   |   | $ | 0.05 |   |
| Diluted                                     |   | $                  | 0.15       |   |   | $ | 0.05 |   |
|                                        |   |               |       |   |   |   |   |   |
| Weighted average common shares outstanding: |   |               |       |   |   |   |   |   |
| Basic                                       |   |               | 6,036,964  |   |   |   | 6,230,395 |   |
| Diluted                                     |   |               | 6,109,473  |   |   |   | 6,424,978 |   |

----

Index

LIVEDEAL

|                                                                                        |   | Three Months Ended December 31, |       |
|---------------------------------------------------------------------------------------------|--------|---------------------------------|------------|
|                                                                                        |   | 2008                            |       |   | 2007 |   |
| CASH FLOWS FROM OPERATING ACTIVITIES:                                                       |   |                            |       |   |   |   |
| Net income                                                                                  |   | $                               | 887,361    |   |   | $ | 326,092 |   |
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: |   |                            |       |   |   |   |   |   |
| Depreciation and amortization                                                               |   |                            | 1,062,015  |   |   |   | 496,842 |   |
| Non-cash stock compensation expense                                                         |   |                            | 19,856     |   |   |   | - |   |
| Amortization of deferred stock compensation                                                 |   |                            | 89,077     |   |   |   | 209,079 |   |
| Deferred income taxes                                                                       |   |                            | (267,101   | ) |   |   | 4,882 |   |
| Gain on sale of internet domain name                                                        |   |                            | (3,805,778 | ) |   |   | - |   |
| Provision for uncollectible accounts                                                        |   |                            | 347,712    |   |   |   | 67,693 |   |
| Changes in assets and liabilities:                                                          |   |                            |       |   |   |   |   |   |
| Accounts receivable                                                                         |   |                            | (55,916    | ) |   |   | (485,229 | ) |
| Prepaid expenses and other current assets                                                   |   |                            | 12,699     |   |   |   | 145,952 |   |
| Deposits and other assets                                                                   |   |                            | (3,397     | ) |   |   | 690 |   |
| Accounts payable                                                                            |   |                            | (77,212    | ) |   |   | (105,412 | ) |
| Accrued liabilities                                                                         |   |                            | 825,738    |   |   |   | (161,249 | ) |
| Income taxes receivable and payable                                                         |   |                            | 683,974    |   |   |   | 202,808 |   |
|                                                                                        |   |                            |       |   |   |   |   |   |
| Net cash provided by (used in) operating activities                                         |   |                            | (280,972   | ) |   |   | 702,148 |   |
|                                                                                        |   |                            |       |   |   |   |   |   |
| CASH FLOWS FROM INVESTING ACTIVITIES:                                                       |   |                            |       |   |   |   |   |   |
| Proceeds from sale of internet domain name                                                  |   |                            | 3,850,000  |   |   |   | - |   |
| Additional closing costs related to acquisition of LiveDeal, Inc.                           |   |                            | -          |   |   |   | (7,000 | ) |
| Additional closing costs related to acquisition of OnCall Subscriber Management, Inc.       |   |                            | -          |   |   |   | (16,243 | ) |
| Expenditures for intangible assets                                                          |   |                            | (119,369   | ) |   |   | (163,384 | ) |
| Purchases of equipment                                                                      |   |                            | (11,567    | ) |   |   | (44,730 | ) |
|                                                                                        |   |                            |       |   |   |   |   |   |
| Net cash provided by (used in) investing activities                                         |   |                            | 3,719,064  |   |   |   | (231,357 | ) |
|                                                                                        |   |                            |       |   |   |   |   |   |
| CASH FLOWS FROM FINANCING ACTIVITIES:                                                       |   |                            |       |   |   |   |   |   |
| Series E preferred stock dividends                                                          |   |                            | (479       | ) |   |   | (480 | ) |
| Principal repayments on capital lease obligations                                           |   |                            | (19,927    | ) |   |   | - |   |
| Purchase of treasury stock                                                                  |   |                            | (487,480   | ) |   |   | (293,832 | ) |
|                                                                                        |   |                            |       |   |   |   |   |   |
| Net cash used in financing activities                                                       |   |                            | (507,886   | ) |   |   | (294,312 | ) |
|                                                                                        |   |                            |       |   |   |   |   |   |
|                                                                                        |   |                            |       |   |   |   |   |   |
| INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS                                            |   |                            | 2,930,206  |   |   |   | 176,479 |   |
|                                                                                        |   |                            |       |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, beginning of period                                              |   |                            | 4,639,787  |   |   |   | 5,674,533 |   |
|                                                                                        |   |                            |       |   |   |   |   |   |
| CASH AND CASH EQUIVALENTS, end of period                                                    |   | $                               | 7,569,993  |   |   | $ | 5,851,012 |   |

----

Index

LIVEDEAL

| 1. | ORGANIZATION AND BASIS OF PRESENTATION |
|----|----------------------------------------|

| 2. | BALANCE SHEET INFORMATION |
|----|---------------------------|

|                                  |   | December 31, |       |   | September 30, |   |
|---------------------------------------|--------|-------------------|------------|--------|--------------------|--------|
|                                  |   | 2008              |       |   | 2008               |   |
| Receivables, current, net:            |   |              |       |   |               |   |
| Accounts receivable, current          |   | $                 | 8,342,754  |   |               | $      | 8,923,315 |   |
| Less: Allowance for doubtful accounts |   |              | (1,833,886 | )      |               |   | (2,042,823 | ) |
|                                  |   | $                 | 6,508,868  |   |               | $      | 6,880,492 |   |
| Receivables, long term, net:          |   |              |       |   |               |   |   |   |
| Accounts receivable, long term        |   | $                 | 2,255,895  |   |               | $      | 2,171,865 |   |
| Less: Allowance for doubtful accounts |   |              | (164,924   | )      |               |   | (160,722 | ) |
|                                  |   | $                 | 2,090,971  |   |               | $      | 2,011,143 |   |
| Total receivables, net:               |   |              |       |   |               |   |   |   |
| Gross receivables                     |   | $                 | 10,598,649 |   |               | $      | 11,095,180 |   |
| Gross allowance for doubtful accounts |   |              | (1,998,810 | )      |               |   | (2,203,545 | ) |
|                                  |   | $                 | 8,599,839  |   |               | $      | 8,891,635 |   |

|                                                                    |   | December 31, |      |   | September 30, |   |
|-------------------------------------------------------------------------|--------|-------------------|-----------|--------|--------------------|--------|
|                                                                    |   | 2008              |      |   | 2008               |   |
| Components of allowance for doubtful accounts are as follows:           |   |              |      |   |               |   |
| Allowance for dilution and fees on amounts due from billing aggregators |   | $                 | 1,639,888 |   |               | $      | 1,775,276 |   |
| Allowance for customer refunds                                          |   |              | 358,922   |   |               |   | 428,269 |   |
|                                                                    |   | $                 | 1,998,810 |   |               | $      | 2,203,545 |   |

----

Index

|                                      |   | December 31, |       |   | September 30, |   |
|-------------------------------------------|--------|-------------------|------------|--------|--------------------|--------|
|                                      |   | 2008              |       |   | 2008               |   |
| Customer acquisition costs, net:          |   |              |       |   |               |   |
| Customer acquisition costs                |   | $                 | 1,700,000  |   |               | $      | 1,700,000 |   |
| Less:  Accumulated amortization |   |              | (1,539,448 | )      |               |   | (1,057,780 | ) |
|                                      |   | $                 | 160,552    |   |               | $      | 642,220 |   |

|                                 |   | December 31, |      |   | September 30, |   |
|--------------------------------------|--------|-------------------|-----------|--------|--------------------|--------|
|                                 |   | 2008              |      |   | 2008               |   |
| Property and equipment, net:         |   |              |      |   |               |   |
| Leasehold improvements               |   | $                 | 240,002   |   |               | $      | 233,970 |   |
| Furnishings and fixtures             |   |              | 311,319   |   |               |   | 311,319 |   |
| Office, computer equipment and other |   |              | 990,020   |   |               |   | 961,931 |   |
|                                 |   |              | 1,541,341 |   |               |   | 1,507,220 |   |
| Less: Accumulated depreciation       |   |              | (647,526  | )      |               |   | (547,366 | ) |
|                                 |   | $                 | 893,815   |   |               | $      | 959,854 |   |

|                                          |   | December 31, |       |   | September 30, |   |
|-----------------------------------------------|--------|-------------------|------------|--------|--------------------|--------|
|                                          |   | 2008              |       |   | 2008               |   |
| Intangible assets, net:                       |   |              |       |   |               |   |
| Domain name and marketing related intangibles |   | $                 | 6,699,600  |   |               | $      | 7,208,600 |   |
| Non-compete agreement                         |   |              | 3,465,000  |   |               |   | 3,465,000 |   |
| Website and technology related intangibles    |   |              | 4,236,030  |   |               |   | 4,147,459 |   |
|                                          |   |              | 14,400,630 |   |               |   | 14,821,059 |   |
| Less:  Accumulated amortization     |   |              | (8,067,325 | )      |               |   | (8,084,981 | ) |
|                                          |   | $                 | 6,333,305  |   |               | $      | 6,736,078 |   |

|                        |   | December 31, |      |   | September 30, |   |
|-----------------------------|--------|-------------------|-----------|--------|--------------------|--------|
|                        |   | 2008              |      |   | 2008               |   |
| Accrued liabilities:        |   |              |      |   |               |   |
| Deferred revenue            |   | $                 | 1,540,972 |   |               | $      | 917,068 |   |
| Accrued payroll and bonuses |   |              | 358,925   |   |               |   | 306,984 |   |
| Accrued expenses - other    |   |              | 917,210   |   |               |   | 767,317 |   |
|                        |   | $                 | 2,817,107 |   |               | $      | 1,991,369 |   |

| 3. | STOCK-BASED COMPENSATION |
|----|--------------------------|

----

Index

| Volatility              |   |      | 97  | % |
|-------------------------|--------|-----------|-----|---|
| Risk-free interest rate |   |      | 2.6 | % |
| Expected term           |   | 6.0 years |
| Forfeiture rate         |   |      | 40  | % |

|                              |   | Number of Shares |    |   | Weighted Average Exercise Price |   |   | Weighted Average Fair Value |   |   | Weighted Average Remaining Contractual Life |   |   | Aggregate Intrinsic Value |   |
|-----------------------------------|--------|------------------|---------|--------|---------------------------------|--------|--------|-----------------------------|--------|--------|---------------------------------------------|--------|--------|---------------------------|--------|
| Outstanding at September 30, 2008 |   |             | 5,000   |   |                            |   |   |                        |   |   |                                        |   |   |                      |   |   |
| Granted at market price           |   |             | 500,000 |   |                            | $      | 1.61   |                        |   | $      | 1.26                                        |   |   |                      |   |   |   |   |
| Exercised                         |   |             | -       |   |                            | $      | -      |                        |   |   |                                        |   |   |                      |   |   |   |   |
| Cancelled                         |   |             | -       |   |                            | $      | -      |                        |   |   |                                        |   |   |                      |   |   |   |   |
| Outstanding at December 31, 2008  |   |             | 505,000 |   |                            |   |   |                        |   |   |                                        |   |   |                      | 9.8    |   |   | $ | - |   |
| Exercisable                       |   |             | 5,000   |   |                            | $      | 2.78   |                        |   |   |                                        |   |   |                      | 9.4    |   |   | $ | - |   |

|                      |   | Exercisable        |   |   | Unexercisable                   |   |   | Total              |   |
|---------------------------|--------|--------------------|--------|--------|---------------------------------|--------|--------|--------------------|--------|
|                      |   |               |   |   |                            |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Range of Exercise Prices  |   | Number Outstanding |   |   | Weighted Average Exercise Price |   |   | Number Outstanding |   |   | Weighted Average Exercise Price |   |   | Number Outstanding |   |   | Weighted Average Exercise Price |   |
|                      |   |               |   |   |                            |   |   |               |   |   |   |   |   |   |   |   |   |   |
| Less than $3.00 per share |   |               | 5,000  |   |                            | $      | 2.78   |               |   |   | 500,000 |   |   |   | 1.61 |   |   |   | 505,000 |   |   | $ | 1.62 |   |

| Outstanding (unvested) at September 30, 2008 |   |   | 227,425 |   |
|----------------------------------------------|--------|--------|---------|--------|
| Granted                                      |   |   | 10,000  |   |
| Forfeited                                    |   |   | (11,000 | )      |
| Vested                                       |   |   | (8,000  | )      |
| Outstanding (unvested) at December 31, 2008  |   |   | 218,425 |   |

| 4.  | NET INCOME PER SHARE |
|----------|----------------------|

----

Index

|                                               |   | Three Months Ended December 31, |      |
|----------------------------------------------------|--------|--------------------------------------|-----------|
|                                               |   | 2008                                 |      |   | 2007 |   |
|                                               |   |                                 |      |   |   |   |
| Net income                                         |   | $                                    | 887,361   |   |   | $ | 326,092 |   |
| Less: preferred stock dividends                    |   |                                 | (479      | ) |   |   | (480 | ) |
| Income applicable to common stock                  |   | $                                    | 886,882   |   |   | $ | 325,612 |   |
|                                               |   |                                 |      |   |   |   |   |   |
| Basic weighted average common shares outstanding   |   |                                 | 6,036,964 |   |   |   | 6,230,395 |   |
| Add incremental shares for:                        |   |                                 |      |   |   |   |   |   |
| Unvested restricted stock                          |   |                                 | 72,509    |   |   |   | 193,612 |   |
| Stock options                                      |   |                                 | -         |   |   |   | - |   |
| Series E convertible preferred stock               |   |                                 | -         |   |   |   | 971 |   |
| Diluted weighted average common shares outstanding |   |                                 | 6,109,473 |   |   |   | 6,424,978 |   |
|                                               |   |                                 |      |   |   |   |   |   |
| Net income per share:                              |   |                                 |      |   |   |   |   |   |
| Basic                                              |   | $                                    | 0.15      |   |   | $ | 0.05 |   |
| Diluted                                            |   | $                                    | 0.15      |   |   | $ | 0.05 |   |

|                                           |   | Three Months Ended December 31, |    |
|------------------------------------------------|--------|--------------------------------------|---------|
|                                           |   | 2008                                 |    |   | 2007 |   |
|                                           |   |                                 |    |   |   |   |
| Shares of non-vested restricted stock          |   |                                 | 49,325  |   |   |   | 54,493 |   |
| Stock options                                  |   |                                 | 505,000 |   |   |   | - |   |
| Shares of Series E convertible preferred stock |   |                                 | 127,840 |   |   |   | - |   |

| 5.  | COMMITMENTS AND CONTINGENCIES |
|----------|-------------------------------|

|                             |   | Payments Due by Fiscal Year |      |
|----------------------------------|--------|-----------------------------|-----------|
|                             |   | Total                       |      |   | 2009 |   |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | 2013 |   |   | Thereafter |   |
| Operating lease commitments      |   | $                           | 1,994,838 |   |   | $ | 629,757 |   |   | $ | 555,465 |   |   | $ | 415,565 |   |   | $ | 315,331 |   |   | $ | 78,720 |   |   | $ | - |   |
| Noncanceleable service contracts |   |                        | 595,500   |   |   |   | 495,500 |   |   |   | 100,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                             |   | $                           | 2,590,338 |   |   | $ | 1,125,257 |   |   | $ | 655,465 |   |   | $ | 415,565 |   |   | $ | 315,331 |   |   | $ | 78,720 |   |   | $ | - |   |

----

Index

| 2009                                                  |   | $      | 57,657  |    |
|-------------------------------------------------------|--------|--------|---------|---------|
| 2010                                                  |   |   | 76,876  |    |
| 2011                                                  |   |   | 76,876  |    |
| 2012                                                  |   |   | 44,844  |    |
| 2013                                                  |   |   | -       |    |
| Thereafter                                            |   |   | -       |    |
| Total minimum lease payments                          |   |   | 256,254 |    |
| Less imputed interest                                 |   |   | (19,373 | )       |
| Present value of minimum lease payments               |   |   | 236,881 |    |
| Less: current maturities of capital lease obligations |   |   | (67,272 | )  |
| Noncurrent maturities of capital lease obligations    |   | $      | 169,609 |    |

| 6. | CONCENTRATION OF CREDIT RISK |
|----|------------------------------|

----

Index

| 7. | RECENT ACCOUNTING PRONOUNCEMENTS |
|----|----------------------------------|

----

Index

| 8. | SUBSEQUENT EVENTS |
|----|-------------------|

|   | 1. | The current effects of the recession and general economic downturn; |
|--------|----|---------------------------------------------------------------------|

|   | 2. | The sale of its “www.yp.com” domain name in the first quarter of 2009; |
|--------|----|------------------------------------------------------------------------------------|

|   | 3. | The January 2009 resignation of the Company’s president and chief operating officer, who was instrumental in the development of its directory services product offerings; |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | The termination of certain significant directory business contracts; |
|--------|----|----------------------------------------------------------------------|

|   | 5. | The transition from the initial phase of certain significant directory business contracts; and |
|--------|----|------------------------------------------------------------------------------------------------|

|   | 6. | Continuing losses in the Company’s classified businesses. |
|--------|----|-----------------------------------------------------------------|

----

Index

|   | 1. | The goodwill acquired by the Company in its acquisition of LiveDeal, Inc., the business focus of which is online classified advertising; |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------|

|   | 2. | The goodwill acquired by the Company in its acquisition of 247 Marketing, Inc., the business focus of which is providing telemarketing services based in the Philippines; |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | Intangible assets related to the Company’s directory services business, including URLs, internally developed software, and other miscellaneous intangible assets. |
|--------|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Goodwill                                      |   | $      | 11,706,406 |   |
|-----------------------------------------------|--------|--------|------------|--------|
| Domain name and marketing related intangibles |   |   | 1,971,036  |   |
| Website and technology related intangibles    |   |   | 606,162    |   |
|                                          |   | $      | 14,283,604 |   |

|                 |   | December 31, 2008 |       |
|----------------------|--------|-------------------|------------|
|                 |   | As Reported       |       |   | Adjustments |   |   |   | As Adjusted |   |
| Total current assets |   | $                 | 15,862,184 |   |   | $ | - |   |   |   | $ | 15,862,184 |   |
| Total assets         |   |              | 41,210,188 |   |   |   | (11,695,588 | ) | (a) |   |   | 29,514,600 |   |
| Total liabilities    |   |              | 4,251,930  |   |   |   | - |   |   |   |   | 4,251,930 |   |
| Stockholder's equity |   |              | 36,958,258 |   |   |   | (11,695,588 | ) | (a) |   |   | 25,262,670 |   |

----

Index

MANAGEMENT’S 

----

Index

|   | § | Website acquisition whereby we obtain website address names on behalf of our small business clients. |
|--------|--------|------------------------------------------------------------------------------------------------------|

|   | § | Website development and deployment services where we create, house and manage websites on behalf of our small business clients. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | § | Website traffic and audience development whereby we provide sophisticated search engine marketing techniques, access to our own websites, partnerships with other websites and other techniques to generate traffic to our customers’ websites, whether created and housed by us or not. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Website analytics and performance reports which generate information for our customers about activities on their websites and lead activities for their businesses based on Internet activities. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Directory services that provide both basic and enhanced directory listings for our customers on our own directory and on partner directories. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Classified services through which we provide classified and bulk inventory commerce capabilities for our small business customers through our classified marketplace. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Gary Perschbacher was replaced by Rajeev Seshadri as Chief Financial Officer as of January 9, 2009; |
|--------|--------|-----------------------------------------------------------------------------------------------------|

|   | · | President and Chief Operating Officer, John Raven submitted his resignation effective February 15, 2009; |
|--------|--------|----------------------------------------------------------------------------------------------------------|

|   | · | Yishay Yovel was named Vice President of Product Management in October of 2008; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | Pamela Sziebert was appointed Vice President of Marketing in November of 2008; |
|--------|--------|--------------------------------------------------------------------------------|

|   | · | Dean Heistad is the Company’s new Vice President of Technology Strategy as of January 5, 2009; and, |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | Ruben Atchison joined the Company as Director of Search Engine Marketing as of December 2008. |
|--------|--------|-----------------------------------------------------------------------------------------------|

----

Index

|   | 1. | The current effects of the recession and general economic downturn; |
|--------|----|---------------------------------------------------------------------|

|   | 2. | The sale of our “www.yp.com” domain name in the first quarter of 2009; |
|--------|----|------------------------------------------------------------------------------------|

|   | 3. | The January 2009 resignation of our president and chief operating officer, who was instrumental in the development of our directory services product offerings; |
|--------|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 4. | The termination of certain significant directory business contracts; |
|--------|----|----------------------------------------------------------------------|

|   | 5. | The transition from the initial phase of certain significant directory business contracts; and |
|--------|----|------------------------------------------------------------------------------------------------|

|   | 6. | Continuing losses in our classified businesses. |
|--------|----|-------------------------------------------------|

|   | 1. | The goodwill acquired in our acquisition of LiveDeal, Inc., the business focus of which is online classified advertising; |
|--------|----|---------------------------------------------------------------------------------------------------------------------------|

|   | 2. | The goodwill acquired in our acquisition of 247 Marketing, Inc., the business focus of which is providing telemarketing services based in the Philippines; |
|--------|----|------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | 3. | Intangible assets related to our directory services business, including URLs, internally developed software, and other miscellaneous intangible assets. |
|--------|----|---------------------------------------------------------------------------------------------------------------------------------------------------------|

----

Index

| Goodwill                                      |   | $      | 11,706,406 |   |
|-----------------------------------------------|--------|--------|------------|--------|
| Domain name and marketing related intangibles |   |   | 1,971,036  |   |
| Website and technology related intangibles    |   |   | 606,162    |   |
|                                          |   | $      | 14,283,604 |   |

|                 |   | December 31, 2008 |       |
|----------------------|--------|-------------------|------------|
|                 |   | As Reported       |       |   | Adjustments |   |   |   | As Adjusted |   |
| Total current assets |   | $                 | 15,862,184 |   |   | $ | - |   |   |   | $ | 15,862,184 |   |
| Total assets         |   |              | 41,210,188 |   |   |   | (11,695,588 | ) | (a) |   |   | 29,514,600 |   |
| Total liabilities    |   |              | 4,251,930  |   |   |   | - |   |   |   |   | 4,251,930 |   |
| Stockholder's equity |   |              | 36,958,258 |   |   |   | (11,695,588 | ) | (a) |   |   | 25,262,670 |   |

|                            |   | Net Revenues |      |
|---------------------------------|--------|--------------|-----------|
|                            |   | 2008         |      |   | 2007 |   |   | Change |   |   | Percent |   |
|                            |   |         |      |   |   |   |   |   |   |   |   |   |
| Three Months Ended December 31, |   | $            | 5,163,130 |   |   | $ | 7,068,888 |   |   | $ | (1,905,758 | ) |   |   | (27 | )% |

|                            |   | Cost of Services |      |
|---------------------------------|--------|------------------|-----------|
|                            |   | 2008             |      |   | 2007 |   |   | Change |   |   | Percent |   |
|                            |   |             |      |   |   |   |   |   |   |   |   |   |
| Three Months Ended December 31, |   | $                | 1,609,125 |   |   | $ | 1,005,549 |   |   | $ | 603,576 |   |   |   | 60 | % |

----

Index

|                            |   | Gross Profit |      |
|---------------------------------|--------|--------------|-----------|
|                            |   | 2008         |      |   | 2007 |   |   | Change |   |   | Percent |   |
|                            |   |         |      |   |   |   |   |   |   |   |   |   |
| Three Months Ended December 31, |   | $            | 3,554,005 |   |   | $ | 6,063,339 |   |   | $ | (2,509,334 | ) |   |   | (41 | )% |

|                            |   | General and Administrative Expenses |      |
|---------------------------------|--------|-------------------------------------|-----------|
|                            |   | 2008                                |      |   | 2007 |   |   | Change |   |   | Percent |   |
|                            |   |                                |      |   |   |   |   |   |   |   |   |   |
| Three Months Ended December 31, |   | $                                   | 4,259,026 |   |   | $ | 3,394,971 |   |   | $ | 864,055 |   |   |   | 25 | % |

|   | · | Increased compensation costs of approximately $581,000 primarily attributable to the hiring of additional sales force and technological personnel in light of the development of our Las Vegas operations, partially offset by reduced executive salaries and reduced stock-based compensation charges; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Increased professional fees of approximately $174,000 related to increased legal expenses incurred in response to certain legal actions brought against us, fees incurred for Sarbanes-Oxley related consulting fees, and increased recruitment fees to hire key personnel in response to our change in strategic direction; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An increase of approximately $81,000 to depreciation and amortization expense relating to additional fixed assets related to the relocation of our corporate headquarters to Las Vegas and additional capitalized software development costs relating to new product offerings; and, |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | An increase in other general and administrative expenses of approximately $40,000. |
|--------|--------|------------------------------------------------------------------------------------|

|                                                                 |   | Q1 2009 |      |   | Q4 2008 |   |      | Q3 2008 |   |   | Q2 2008   |   |   | Q1 2008 |      |
|----------------------------------------------------------------------|--------|---------|-----------|--------|---------|--------|-----------|---------|--------|--------|-----------|--------|--------|---------|-----------|
| Compensation for employees, leased employees, officers and directors |   | $       | 2,508,835 |   |    | $      | 1,810,383 |    |   | $      | 3,181,375 |   |   | $       | 2,377,412 |   |   | $ | 1,928,272 |   |
| Professional fees                                                    |   |    | 455,832   |   |    |   | 456,180   |    |   |   | 275,638   |   |   |    | 191,330   |   |   |   | 281,418 |   |
| Reconfirmation, mailing, billing and other customer-related costs    |   |    | 6,096     |   |    |   | 48,529    |    |   |   | 18,185    |   |   |    | 27,735    |   |   |   | 17,601 |   |
| Depreciation and amortization                                        |   |    | 559,289   |   |    |   | 588,718   |    |   |   | 505,095   |   |   |    | 487,085   |   |   |   | 478,433 |   |
| Other general and administrative costs                               |   |    | 728,974   |   |    |   | 643,785   |    |   |   | 842,517   |   |   |    | 761,583   |   |   |   | 689,247 |   |
|                                                                 |   | $       | 4,259,026 |   |    | $      | 3,547,595 |    |   | $      | 4,822,810 |   |   | $       | 3,845,145 |   |   | $ | 3,394,971 |   |

|                            |   | Sales and Marketing Expenses |      |
|---------------------------------|--------|------------------------------|-----------|
|                            |   | 2008                         |      |   | 2007 |   |   | Change |   |   | Percent |   |
|                            |   |                         |      |   |   |   |   |   |   |   |   |   |
| Three Months Ended December 31, |   | $                            | 1,808,322 |   |   | $ | 2,185,886 |   |   | $ | (377,564 | ) |   |   | (17 | )% |

----

Index

|   | · | $171,000 of decreased online advertising as we focused our online advertising toward LiveClicks and other traffic generating activities, which are more cost effective than our previous online advertising efforts; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | $166,000 of decreased  customer acquisition costs as we began transitioning away from marketing activities geared toward our directory services business; and, |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a reduction of approximately $41,000 in branding and other marketing expenses. |
|--------|--------|--------------------------------------------------------------------------------|

|                            |   | Operating Income (Loss) |       |
|---------------------------------|--------|-------------------------|------------|
|                            |   | 2008                    |       |   | 2007 |   |   | Change |   |   | Percent |   |
|                            |   |                    |       |   |   |   |   |   |   |   |   |   |
| Three Months Ended December 31, |   | $                       | (2,513,343 | ) |   | $ | 482,482 |   |   | $ | (2,995,825 | ) |   |   | (621 | )% |

|                            |   | Total Other Income (Expense) |      |
|---------------------------------|--------|------------------------------|-----------|
|                            |   | 2008                         |      |   | 2007 |   |   | Change |   |   | Percent |   |
|                            |   |                         |      |   |   |   |   |   |   |   |   |   |
| Three Months Ended December 31, |   | $                            | 3,819,537 |   |   | $ | 34,911 |   |   | $ | 3,784,626 |   |   |   | 10841 | % |

|                            |   | Income Tax Provision (Benefit) |    |
|---------------------------------|--------|--------------------------------|---------|
|                            |   | 2008                           |    |   | 2007 |   |   | Change |   |   | Percent |   |
|                            |   |                           |    |   |   |   |   |   |   |   |   |   |
| Three Months Ended December 31, |   | $                              | 418,833 |   |   | $ | (191,301 | ) |   | $ | 610,134 |   |   |   | (319 | )% |

|                            |   | Net Income (Loss) |    |
|---------------------------------|--------|-------------------|---------|
|                            |   | 2008              |    |   | 2007 |   |   | Change |   |   | Percent |   |
|                            |   |              |    |   |   |   |   |   |   |   |   |   |
| Three Months Ended December 31, |   | $                 | 887,361 |   |   | $ | 326,092 |   |   | $ | 561,269 |   |   |   | 172 | % |

----

Index

|                             |   | Payments Due by Fiscal Year |      |
|----------------------------------|--------|-----------------------------|-----------|
|                             |   | Total                       |      |   | 2009 |   |   | 2010 |   |   | 2011 |   |   | 2012 |   |   | 2013 |   |   | Thereafter |   |
| Operating lease commitments      |   | $                           | 1,994,838 |   |   | $ | 629,757 |   |   | $ | 555,465 |   |   | $ | 415,565 |   |   | $ | 315,331 |   |   | $ | 78,720 |   |   | $ | - |   |
| Capital lease commitments        |   |                        | 256,254   |   |   |   | 57,657 |   |   |   | 76,876 |   |   |   | 76,876 |   |   |   | 44,844 |   |   |   | - |   |   |   | - |   |
| Noncanceleable service contracts |   |                        | 595,500   |   |   |   | 495,500 |   |   |   | 100,000 |   |   |   | - |   |   |   | - |   |   |   | - |   |   |   | - |   |
|                             |   | $                           | 2,846,592 |   |   | $ | 1,182,914 |   |   | $ | 732,341 |   |   | $ | 492,441 |   |   | $ | 360,175 |   |   | $ | 78,720 |   |   | $ | - |   |

----

Index

| ITEM 3. | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK |
|---------|------------------------------------------------------------|

| ITEM 4. | CONTROLS AND PROCEDURES |
|---------|-------------------------|

----

Index

| ITEM 1.  | LEGAL PROCEEDINGS |
|---------------|-------------------|

| ITEM 1A.  | RISK FACTORS |
|----------------|--------------|

| ITEM 2.  | UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS |
|---------------|-------------------------------------------------------------|

| Period              |   | (a) Total Number of Shares (or Units) Purchased |    |   | (b) Average Price Paid per Share (or Unit) |   |   | (c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs1 |   |   | (d) Maximum Number(or Approximate Dollar Value) of Shares (or Units) that May Yet Be Purchased Under the Plans or Programs |   |
|---------------------|--------|-------------------------------------------------|---------|--------|--------------------------------------------|--------|--------|--------------------------------------------------------------------------------------------------|--------|--------|----------------------------------------------------------------------------------------------------------------------------|--------|
| October 1-31, 2008  |   |                                            | 317,004 |   |                                       | $      | 1.65   |                                                                                             |   |   | 317,004                                                                                                                    |   |   | $ | 486,676 |   |
| November 1-30, 2008 |   |                                            | -       |   |                                       |   | N/A    |                                                                                             |   |   | -                                                                                                                          |   |   |   | - |   |
| December 1-31, 2008 |   |                                            | -       |   |                                       |   | N/A    |                                                                                             |   |   | -                                                                                                                          |   |   |   | - |   |
| Total               |   |                                            | 317,004 |   |                                       |   |   |                                                                                             |   |   | 317,004                                                                                                                    |   |   | $ | 486,676 |   |

| ITEM 6.  | EXHIBITS |
|---------------|----------|

| Exhibit Number |   | Description                                                                                                                                              |
|----------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|
|           |   |                                                                                                                                                     |
| 3.1            |   | Amended and Restated Articles of Incorporation (incorporated by reference to Exhibit 3.1 to Form 8-K, SEC File No. 000-24217, filed on August 15, 2007). |
|           |   |                                                                                                                                                     |
| 3.2            |   | Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to Form 10-K, SEC File No. 000-24217, for the year ended September 30, 2007).      |
|           |   |                                                                                                                                                     |
| 10.1           |   | Domain Name Purchase and Transfer Agreement by and between the Company and YellowPages.com LLC                                                           |
|           |   |                                                                                                                                                     |
| 10.2           |   | Employment Agreement by and between the Company and Rajeev Seshadri                                                                                      |
|           |   |                                                                                                                                                     |
| 31             |   | Certifications pursuant to Section 302 of the Sarbanes-Oxley Act of 2002                                                                                 |
|           |   |                                                                                                                                                     |
| 32             |   | Section 1350 Certifications                                                                                                                              |

----

Index

SIGNATURES

|                                | LiveDeal, Inc.          |
|-------------------------------------|-------------------------|
|                                |                    |
| Dated:  February 17, 2009 | /s/ Rajeev Seshadri     |
|                                | Rajeev Seshadri         |
|                                | Chief Financial Officer |

----