UNITED
      STATES


SECURITIES
      AND EXCHANGE COMMISSION


Washington,
      D.C. 20549





FORM
      10-K





x
      ANNUAL REPORT PURSUANT
      TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
      ACT OF 1934





For
      the
      fiscal year ended December 31, 2007





or





o
      TRANSITION REPORT
      PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES


EXCHANGE
      ACT OF 1934





For
      the
      transition period from ___________ to ___________




Commission
      File Number 0-21989





Medialink
      Worldwide Incorporated


(Exact
      name of registrant as specified in its charter)





Delaware
            
            52-1481284(State
                or other jurisdiction of
            
            (I.R.S.
                Employer Identification No.)incorporation
                or organization)





708
                Third Avenue, New York, NY
            
            10017(Address
                of principal executive offices)
            
            (Zip
                Code)





Registrant's
      telephone number, including area code: (212) 682-8300





Securities
      registered pursuant to Section 12(b) of the Act:





Title
                of each class
            
            Name
                of each exchange on which registeredCommon
                Stock, par value $0.01 per share
            
            National
                Market System of NASDAQ





Securities
      registered pursuant to Section 12(g) of the Act: None





Indicate
      by check mark if the registrant is a well-known seasoned issuer, as defined
      in
      Rule 405 of the Securities Act.


Yes
o No
x





Indicate
      by check mark if the registrant is not required to file reports pursuant to
      Section 13 or 15(d) of the Act.


Yes
o No
x





Indicate
      by check mark whether the registrant (1) has filed all reports required to
      be
      filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
      the
      preceding 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
o





Indicate
      by check mark if disclosure of delinquent filers pursuant to Item 405 of
      Regulation S-K is not contained herein, and will not be contained, to the best
      of registrant’s knowledge, in definitive proxy or information statements
      incorporated by reference in Part III of this Form 10-K or any amendment to
      this
      Form 10-K. o





Indicate
      by check mark whether the registrant is a large accelerated filer, an
      accelerated filer, a non-accelerated filer, or a smaller reporting company.
      See
      definitions of “large accelerated filer”, “accelerated filer”, and “smaller
      reporting company” in Rule 12b-2 of the Exchange Act.





Large
                accelerated filer o
            Accelerated
              filer oNon-accelerated
                filer o (Do not check if
                a smaller reporting company)
            Smaller
                reporting company x




Indicate
      by check mark whether the registrant is a shell company (as defined in Rule
      12b-2 of the Act). Yes o No x





The
      aggregate market value of the registrant’s voting and non-voting common equity
      held by non-affiliates based on the closing market price on June 30, 2007,
      was
      $28,852,982.





The
      number of shares of the registrant’s common stock outstanding as of February 29,
      2008, was 6,428,059 shares.





DOCUMENTS
      INCORPORATED BY REFERENCE





Portions
      of the registrant’s 2008 Definitive Proxy Statement to be filed with the
      Securities and Exchange Commission are incorporated by reference into Part
      III
      hereof.










**TABLE
      OF CONTENTS**




Item
            
            
            Page**PART
                I**1
            Business
            
            21A
            Risk
                Factors
            
            61B
            Unresolved
                Staff Comments
            
            82
            Properties
            
            83
            Legal
                Proceedings
            
            84
            Submission
                of Matters to a Vote of Security Holders
            
            8Executive
                Officers of the Company
            
            9**PART
                II**5
            Market
                for the Registrant's Common Equity, Related Stockholder Matters and
                Issuer
                Purchases of Equity Securities
            
            106
            Selected
                Financial Data
            
            107
            Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations
            
            117A
            Quantitative
                and Qualitative Disclosures About Market Risk
            
            158
            Financial
                Statements and Supplementary Data
            
            159
            Changes
                in and Disagreements With Accountants on Accounting and Financial
                Disclosure
            
            159A(T)
            Controls
                and Procedures
            
            159B
            Other
                Information
            
            16**PART
                III**10
            Directors,
                Executive Officers and Corporate Governance
            
            1711
            Executive
                Compensation
            
            1712
            Security
                Ownership of Certain Beneficial Owners and Management and Related
                Stockholder Matters
            
            1713
            Certain
                Relationships and Related Transactions, and Director
                Independence
            
            1714
            Principal
                Accountant Fees and Services
            
            17**PART
                IV**15
            Exhibits,
                Financial Statement Schedules
            
            18Signatures
            
            19







**PART
      I**





Certain
      statements made in this Annual Report on Form 10-K are “forward looking”
statements (within the meaning of the Private Securities Litigation Reform
      Act
      of 1995, as amended). Such statements involve known and unknown risks,
      uncertainties, and other factors that may cause our actual results, performance,
      or achievements to be materially different from any future results, performance,
      or achievements expressed or implied by such forward-looking statements.
      Although we believe that the expectations reflected in such forward-looking
      statements are based upon reasonable assumptions, our actual results could
      differ materially from those set forth in the forward-looking statements. See
      “Item 1A - Risk Factors” for a description of certain factors that might cause
      such a difference.





**Item
      1.**  ***Business.***





**General**





Medialink
      Worldwide Incorporated and its subsidiaries (the “Company”, “Medialink”, “we”,
“us”, “our”) is a leading global provider of media communications services to
      corporations and other organizations. Through our media communications
      operations in the United States and the United Kingdom, we provide news and
      marketing media strategies and solutions that enable our clients to inform
      and
      educate their audiences through various media, including television, radio,
      and
      the Internet.





Through
      our Teletrax subsidiaries we provide digital video tracking services to video
      content providers, such as entertainment companies, news organizations,
      television syndicators, direct-response marketing companies, and sports
      organizations. The Teletrax® service provides broadcast television intelligence
      that enables our clients to monitor broadcast usage of their content on a
      worldwide basis.





Medialink
      was incorporated in Delaware in 1986. Our website is http://www.medialink.com.
      Our Annual Reports on Forms 10-K, Quarterly Reports on Forms 10-Q, and Current
      Reports on Forms 8-K along with any amendments to those reports are available,
      free of charge, on or through our Web site as soon as reasonably practicable
      after we electronically file such reports with the Securities and Exchange
      Commission.





**Segment
      Information**





See
      Note
      20 to Medialink’s consolidated financial statements for financial information
      about segments.





**Services**





*Media
      Communications Services.* Our
      media
      communications services offer a range of video and audio consultation,
      production, electronic storage, distribution, and monitoring services. Our
      video
      and audio offerings include video news releases, “b-roll” packages, short-form
      promotional videos, live event broadcasts, and audio news releases that we
      deliver to traditional broadcast and Internet outlets. Our clients can choose
      individual service offerings on a stand-alone basis or a suite of our service
      offerings and distribution channels to better reach their intended audience.
      We
      provide our clients with consultative guidance to assist them in identifying
      potential interest in their message, and offer our clients all aspects of
      production services, including scripting, recording, editing, and narration.
      Through MediaseedTM, our Web-based content management platform that we launched
      in September 2007, we also offer our clients a subscription-based electronic
      storage, management, delivery, and retrieval solution for their video, audio,
      and other content.





We
      distribute our clients’ content to appropriate broadcast television and radio
      stations through our comprehensive distribution platform and to on-line media
      outlets worldwide. In addition, we deliver branded client content in multiple
      formats directly to consumers and other specific and general audiences via
      the
      Internet. Our wide range of standard and customized services enables our clients
      to build public recognition, highlight the launch of new products, explain
      or
      respond to crisis situations, and meet their other communications objectives.
      We
      monitor and analyze the extent to which content is aired through the use of
      several distinct services, used either independently or in combination. The
      services we use to monitor broadcasts include our Teletrax® digital video
      tracking service and other monitoring services provided by third-party vendors.
      This monitoring and analysis provides valuable feedback to our clients about
      the
      size and type of audience that was reached, and the context in which the video
      was aired.




2





Video
      news releases are video productions ranging in length from 90 seconds to several
      minutes that are written and produced to communicate a client’s public
      relations, public affairs, or corporate message, and are analogous to a printed
      press release, transforming the printed word into the sound and pictures that
      television newsrooms can use in news programming at their discretion. Video
      news
      releases have been produced and distributed to television stations for decades
      and are used to display new products or services, demonstrate scientific or
      technological breakthroughs, and generally offer broadcasters content that
      they
      may otherwise not be able to obtain on their own, such as motion picture
      trailers, wind-tunnel testing of automobiles, or NASA space launches. Produced
      in broadcast news style, video news releases relay the client’s news directly to
      television news decision makers who may use the video and audio material either
      in full or edited form, just as print media utilize traditional press releases.
      Television station journalists decide whether and how to use video news releases
      to illustrate or explain products, services, or issues of interest to their
      viewers. While the production and distribution of video news releases are paid
      for by our client, neither the client nor Medialink pays any fee for the
      broadcast of video news releases. The video news releases are considered “earned
      media” since the broadcaster is not paid and they are broadcast during regular
      program times solely at the discretion of the media outlet.





The
      “b-roll” material is video that does not contain a narrated audio track,
      providing broadcasters with the ability to choose select portions of the video
      and provide their own editorial context. The “b-roll” material may be
      supplementary and back-up material that is distributed in conjunction with
      a
      video news release or it may be video that is produced without a corresponding
      video news release and is provided to broadcasters on a stand-alone basis.





We
      also
      provide our clients, through our “In the Know” segments and other narrative
      marketing offerings, traditional branded advertising for their content by
      directly purchasing commercial airtime from broadcasters. These narrative
      marketing segments, which are standard 30- or 60-second commercials that are
      produced more quickly and inexpensively than traditional advertisements, are
      intended to inform and educate the audience rather than sell products or
      services. We provide our narrative marketing offerings as a stand-alone solution
      for clients as well as an adjunct to our traditional earned media offering.
      We
      also produce short-form promotional videos that clients use for internal and
      external presentations, the production of which is similar to that of video
      news
      releases, and present them on Internet websites, video kiosks, and other
      non-broadcast platforms.





Our
      service offerings for live event broadcasts include satellite media tours,
      radio
      media tours, video and audio conferences, webcasts, and special events
      broadcasts. Satellite media tours consist of a sequence of one-on-one satellite
      interviews with a series of television reporters across the country or around
      the world. Satellite media tours typically allow an author, performer,
      executive, or other spokesperson to bring attention to an issue or to promote
      an
      upcoming event, product, movie, or book release. Satellite media tours generally
      are conducted from a studio but can originate from remote locations and may
      be
      aired live by the television station or recorded for a later airing. Radio
      media
      tours are similar to satellite media tours, but are provided to radio stations.
      Both satellite media tours and radio media tours are fully interactive with
      traditional broadcast or Internet journalists, who ask their own questions
      of
      the guests, and are effectively no different than traditional in-studio
      appearances, except that they do not require the guests to travel from city
      to
      city.





Audio
      news releases are similar to video news releases, but are made available to
      radio stations and audio-based websites. Audio news releases may be broadcast
      by
      radio stations based on the stations’ internal editorial decisions or through
      traditional advertising means by the direct purchase of commercial airtime.





MediaseedTM
      offers our clients an Internet-based platform for managing all of their video,
      audio, still picture, and print content regardless of its format and
      origination. MediaseedTM allows clients to collaborate with their colleagues,
      provide archive access to traditional broadcast and Internet media interested
      in
      the client’s content, and easily post their content on their own or other
      third-party websites. Through the use of custom designed digital newsrooms,
      MediaseedTM enables clients to post video and other rich media, select media
      distribution options, and expedite delivery of content worldwide to professional
      journalists and publishers.




3





We
      distribute our clients’ content to the various media outlets with full
      disclosure as to its source. All video news releases and b-roll material clearly
      identify Medialink as the source of the material and are delivered with “slates”
or other labeling at the beginning of the video providing the name of the
      client, certain technical information, and editorial contact information so
      that
      station personnel may request additional information or clarification. Audio
      news releases identify Medialink as the source of the material and indicate
      the
      name of the client. Satellite media tours and radio media tours are delivered
      to
      broadcasters with the identity of the source or entity sponsoring the media
      tour. All video content distributed through MediaseedTM is clearly identified as
      being provided by Medialink, and includes the name of our client and in many
      instances includes the client’s website information so viewers can seek
      additional information.





We
      rely
      on our long-standing distribution alliances and our relationships with major
      news organizations for distributing our media communications services products
      to newsroom decision makers. We distribute video news releases via satellite
      transmission, which makes the material available to newsrooms for retrieval
      and
      use. We also distribute our clients’ video through a digital distribution system
      that is used for distribution directly to affiliates of national networks,
      including ABC and CNN. We also notify television newsrooms of the availability
      of client content through e-mails and direct telephone calls made by our trained
      personnel.





Using
      MediaseedTM, we distribute client video in multiple formats through multiple
      on-line distribution channels. We distribute client material on-line by posting
      video and audio podcasts on the Internet through Yahoo!, Google, and a wide
      range of other websites, and we have entered into arrangements with various
      Internet distribution platforms to provide for the placement of client material
      on an even greater array of news, general information, and interest-specific
      sites. We have also developed a proprietary distribution platform for the
      advance notification and delivery of multi-media content to on-line newsrooms.
      This proprietary distribution platform, which leverages off of MediaseedTM,
      provides for the distribution of broadcast quality video to newsrooms and
      journalists by syndicating our clients’ content via RSS feeds and by delivery to
      the websites of television news stations.





For
      international distribution, we primarily use the services of the Associated
      Press, which for international markets provides both the notification of the
      availability of client content as well as the infrastructure through which
      such
      content is distributed.





Revenues
      in our media communications services segment are subject to seasonal
      fluctuations. The volume of projects from clients declines immediately after
      the
      year-end holiday season and again during the summer months, with the latter
      having a much more significant impact in Europe, resulting in lower revenues
      in
      the first and third quarters of each calendar year as compared to the second
      and
      fourth quarters. In addition, although not seasonal in nature, the revenues
      from
      media communications services decline with the breaking of significant news
      events, which pose the risk of crowding out the clients’ message.





*Digital
      Video Tracking Services.* We
      provide our Teletrax® digital video tracking services through our majority-owned
      subsidiaries, TTX (US) LLC and TTX Limited. Under agreements with Royal Philips
      Electronics (“Philips”), which owns 24% of each of the Teletrax subsidiaries, we
      license the underlying technology used for the Teletrax® service in exchange for
      a royalty fee equal to 20% of service revenues. In addition, all of the
      embedding and detection equipment used in connection with the Teletrax® service
      is manufactured by Philips, the sole manufacturer from which such equipment
      can
      be purchased. The Teletrax® service is provided to entertainment companies, news
      organizations, television syndicators, direct-response marketing companies,
      and
      sports organizations. The Teletrax® service enables owners of video content to
      embed an imperceptible and indelible digital watermark into their material
      whenever it is edited, transmitted, or duplicated. A global network of detectors
      then captures every broadcast incident of the embedded video whether via
      satellite, cable, or terrestrially and generates tracking reports for the
      original content owners. Reports of individual broadcast airings are delivered
      online in near real time to each client’s custom-designed portal or in data file
      transfers. Each client’s broadcast activity is updated dynamically throughout
      the day, enabling clients to respond immediately to reported results such as
      changes in end-user preferences or detections of unauthorized use.




4





We
      have
      expanded the Teletrax® network of detectors to monitor the television broadcasts
      of nearly 1,500 channels worldwide, including full-market coverage of the top
      210 domestic markets. The international network monitors approximately 200
      additional channels, broadcast from nearly 50 nations, and is comprised of
      12
      monitoring stations in North America, Europe, Asia, Australia, the Middle East,
      and South America.





**Clients**





Our
      media
      communications services’ client base encompasses more than 500 clients in a wide
      variety of enterprises and organizations, including automobile manufacturers,
      pharmaceutical companies, consumer goods companies, entertainment companies,
      and
      the public relations firms that represent the various entities. No single media
      communications services client accounted for more than 10% of our consolidated
      revenues for the years ended December 31, 2007 and 2006. For the years ended
      December 31, 2007 and 2006, the five largest media communications services
      clients accounted for approximately 20.4% and 18.1%, respectively, of the
      segment’s revenues and the fifty largest media communications services clients
      accounted for approximately 61.1% and 59.3%, respectively, of the segment’s
      revenues. A significant reduction in business from any of the segment’s clients
      would not have a material adverse effect on the segment or on Medialink. We
      have
      contracts with certain clients for media communications services, but in most
      instances there is no contractual arrangement that would prevent clients from
      selecting other means to perform some or all of their work.





Our
      Teletrax® digital video tracking services client base primarily consists of
      entertainment companies, news organizations, television syndicators,
      direct-response marketing companies, and sports organizations. The segment
      had a
      total of 53 non-affiliated clients as of December 31, 2007. For the years ended
      December 31, 2007 and 2006, the five largest digital video tracking services
      clients accounted for approximately 47.2% and 56.7%, respectively, of the
      segment’s revenues. A significant reduction in business from one of the five
      largest clients would have a material adverse effect on the segment but would
      not have such an effect on Medialink. Clients in the digital video tracking
      services segment are generally under contract for a period of at least one
      year,
      and in many instances are under contract for periods up to three
      years.





**Sales
      and Marketing**





We
      rely
      primarily on an internal sales force and support staff of 36 employees to sell
      and market our media communications services. Because they have conducted
      business together over several years the members of our internal sales force
      have established strong working relationships with certain of their clients.
      These strong client relationships enable us to obtain repeat business over
      a
      long-term period in the absence of any contractual arrangement with our clients.
      However, because of these strong client relationships, the loss of any single
      member of our internal sales force could result in a decline in revenues if
      clients choose to move their business to another provider.





We
      rely
      on a separate internal sales force of seven employees to sell and market our
      Teletrax® digital video tracking services. We also rely on an outside agent to
      assist in the sale and marketing of our Teletrax® services to sports leagues.
      Since primarily all clients in the digital video tracking services segment
      are
      under contract, the loss of any member of the internal sales force should not
      result in a significant decline in revenues.





**Competition**





*Media
      Communications Services.* We
      have
      competitors in all of our media communications services offerings, although
      most
      competitors do not offer our whole array of services and therefore only compete
      with us for select services. Many of our competitors are specialty organizations
      that compete within a narrow band of our service offerings. Certain of our
      competitors have available greater financial, technological, marketing, and
      other resources, and therefore may pose a more significant challenge. We compete
      for media communications services on the basis of quality of service, price
      of
      service, the ability to satisfy client demands, and the ability to offer a
      wide
      variety of services, products, and distribution means to better disseminate
      our
      clients’ messages.




5





*Digital
      Video Tracking Services.* We
      have
      competitors for our digital video tracking services, although such competitors
      rely on different technologies with different levels of reliability and
      integrity and none compete on a worldwide basis. We believe that our Teletrax®
service, which embeds an imperceptible watermark in the video that cannot be
      stripped or altered, provides greater reliability and integrity than our
      competitors’ offerings, which rely on such means as embedding a marker in an
      audio track or other technologies under which the marker can be removed either
      intentionally or unintentionally. We compete for digital video tracking services
      based on the reliability of the Teletrax® service, the scale and breadth of our
      monitoring network, and our clients’ ability to achieve a return on their
      investment based on this reliability and the domestic and international reach
      of
      our network.





**Employees**





We
      had
      123 employees as of December 31, 2007. In addition, we engage independent
      contractors and freelancers to supplement our work force during peak periods
      and
      on a project-by-project basis. We had no employees who were covered by a
      collective bargaining agreement. We believe that our relationships with our
      employees are satisfactory.





**Geographic
      Information**





See
      Note
      20 to Medialink’s consolidated financial statements for financial information
      about geographic regions.





**Item
      1A.**  ***Risk
      Factors.***





*Major
      News Events* - Events
      that dominate news broadcasts may cause our clients to delay or not use our
      services for a particular project as such clients may determine that their
      messages may not receive adequate attention in light of the coverage received
      by
      these other news events. Such circumstances could have a material adverse effect
      on our business, operating results, and financial condition.





*Susceptibility
      to General Economic Conditions* - Our
      revenues are affected by our clients’ marketing communications spending and
      advertising budgets. Our revenues and results of operations may be subject
      to
      fluctuations based upon general economic conditions in the geographic locations
      where we offer services or distribute content. If there were to be a continued
      economic downturn or a continued recession in these geographic locations, then
      we expect that business enterprises, including our clients and potential
      clients, could substantially and immediately reduce their marketing and
      communications budgets. In the event of such an economic climate, there would
      be
      a material adverse effect on our business, operating results, and financial
      condition.





*Receptiveness
      of the Media to Our Services; Changes in Our Marketplace* - We are
      a leading provider of creative production and distribution services to
      corporations and other organizations seeking to communicate with the public
      through the news media. If the marketplace for our services should change or
      if
      the news media, as a result of recent events or a perceived reduction in the
      value of our services or otherwise, should not be as receptive to our services
      or should decide to reduce or eliminate its use of the content that we
      distribute, there would be a material adverse effect on our business, operating
      results, and financial condition.





*Competition* - The
      markets for our services are highly competitive. The principal competitive
      factors affecting us are effectiveness, reliability, price, technological
      sophistication, and timeliness. Numerous specialty companies compete with us
      in
      each of our service lines although no single company competes across all service
      lines. Compared to us, some of our competitors or potential competitors have
      longer operating histories, longer client relationships, and significantly
      greater financial, management, technological, sales, marketing, and other
      resources. In addition, clients could perform internally all or certain of
      the
      services we provide rather than outsourcing such services. We could face
      competition from companies in related communications markets, which could offer
      services that are similar or superior to those offered by us. In addition,
      national and regional telecommunications providers could enter the market with
      materially lower electronic delivery costs, and radio and television networks
      could also begin transmitting business communications separate from their news
      programming. Our ability to maintain and attract clients depends to a
      significant degree on the quality of services provided and our reputation among
      our clients and potential clients as compared to that of our competitors. There
      can be no assurance that we will not face increased competition in the future
      or
      that such competition will not have a material adverse effect on our business,
      operating results, and financial condition.




6





*New
      Services* - We
      must develop new services to remain competitive, maintain or grow market share,
      and to operate in new markets. There can be no assurance that we will be
      successful in developing new services, or that those new services will meet
      client needs. Because of the costs incurred to develop new services, our
      potential inability to market these services successfully may have a material
      adverse effect on our business, operating results, and financial
      condition.





*General
      Governmental Regulations* -
      Changes in governing laws and regulations could, directly or indirectly,
      adversely affect our operations. Limitations, restrictions, or conditions
      imposed on us by these laws and regulations or on the news media could have
      the
      effect of reducing the effectiveness of our services and could have a material
      adverse effect on our business, operating results, and financial
      condition.





*Federal
      Communications Commission Actions -* We
      provide broadcasters, free of charge, with our clients’ video content, which
      contains full identification as to the client or ultimate provider of the video
      content. Our narrative marketing offerings are clearly branded and labeled
      within the video content itself. Broadcasters that choose to air video content
      in its original or edited form may do so with the labeling or attribution that
      we provide or they may air the video content with either no labeling or
      attribution or with their own labeling and attribution. Actions that the Federal
      Communications Commission (“FCC”) may take with regard to broadcasters could
      have the effect of reducing the number of broadcasters that air our clients’
material. Such possible FCC actions include rule enforcement and the
      promulgation of new rules and regulations requiring broadcasters to include
      labeling and attribution in the aired content.





Any
      labeling or attribution requirement would not preclude broadcasters from
      continuing to use the video content that we provide and would not change the
      manner in which we currently provide the video content to the broadcasters
      since
      we have always provided the broadcasters with this information. Any actions
      by
      the FCC on this matter, however, could reduce the effectiveness of certain
      of
      our services and therefore could have a material adverse effect on our business,
      operating results, and financial condition.





*Teletrax* - Our
      Teletrax® service relies on technology that we license from Royal Philips
      Electronics ("Philips") under a long-term agreement.  In addition, all of
      the embedding and detection equipment used in connection with the Teletrax®
service is manufactured by Philips, the sole manufacturer from which such
      equipment can be purchased.  We also rely upon Philips for further
      enhancements and advances in the technology underlying our Teletrax®
services.  If any of our arrangements with Philips were to be
      terminated for any reason, we might not be able to provide the Teletrax®
service.  This would result in our no longer being able to operate the
      digital tracking services segment and may result in third-party claims as a
      result of our breaching our agreements with our clients.  This would have a
      material adverse effect on our business, operating results, and financial
      condition.





*Watermarking
      Client Content* - As
      part of providing our Teletrax® digital video tracking services, a hardware or
      software embedder is placed in the production or distribution chain of the
      client’s content. We may be subject to third-party claims if the process of
      embedding a watermark on the client material or the watermark itself renders
      the
      content unsuitable for broadcast. Such third-party claims for certain
      higher-value content could have a material adverse effect on our business,
      operating results, and financial condition.





*Provisions
      of Our Charter Documents May Have Anti-takeover Effects that Could Prevent
      a
      Change in Control Even if the Change in Control Would be Beneficial to our
      Stockholders -* Provisions
      of our amended and restated certificate of incorporation, by-laws, and Delaware
      law could make it more difficult for a third party to acquire us, even if doing
      so would be beneficial to our shareholders.




7





*Capital
      Requirements* - One or
      more of our businesses or service offerings could require, or benefit from,
      additional investment beyond our current capability. If such additional funding
      was raised by us, or one or more of our business units separately, it could
      have
      the effect of diluting shareholders’ interests.





*History
      of operating losses* -
      We
      continue to incur operating losses that are funded with our existing cash
      reserves, with such operating losses having increased with the sale of U.S.
      Newswire in 2006. We continue to fund the losses in our digital video tracking
      services business and continue to invest in this business. In our media
      communications services business, we continue to pursue new service offerings
      and take cost cutting measures in an effort to return to profitability. Failure
      to return to profitability in our media communications services businesses
      and
      achieve breakeven in our digital video tracking business could have a material
      adverse effect on our ability to continue to fund our operations.





*Other
      Risk Factors* -
      Other
      risk factors include our ability to develop new products and services that
      keep
      pace with technology, our ability to develop and maintain successful
      relationships with critical vendors, and the potential negative effects of
      our
      international operations. In addition, future acquisitions or divestitures
      and
      the absence of long-term contracts with clients and vendors may adversely affect
      our operations and have an adverse effect on our pricing, revenues, operating
      margins, and client base.





**Item
      1B.**  ***Unresolved
      Staff Comments.***





Not
      applicable to smaller reporting companies.




**Item
      2.**  ***Properties.***





We
      rent
      our corporate headquarters in New York City under a lease that expires in
      November 2010. This New York City location is also our primary facility for
      providing our domestic media communications services and serves as the domestic
      base for our digital video tracking services segment. Under a lease that expires
      in January 2011, we rent a facility in London that serves as our primary
      facility for providing international media communications services and as the
      international base for our digital video tracking services segment. We rent
      a
      facility in Norwalk, CT, under a lease that expires in June 2009 that serves
      as
      a satellite location for our information technology group. We also rent various
      smaller facilities in Washington, DC, Los Angeles, San Francisco, and Chicago
      that serve as satellite sales offices. We believe that our facilities are
      adequate to meet our needs.





**Item
      3.**  ***Legal
      Proceedings.***





From
      time
      to time, we become involved in various legal matters that we consider to be
      in
      the ordinary course of business. While we cannot presently determine the
      potential liability, if any, related to any such matters, we believe that no
      such matters, individually or in the aggregate, will have a material adverse
      effect on our financial position.





**Item
      4.**  ***Submission
      of Matters to a Vote of Security Holders.***





There
      were no matters submitted to a vote of security holders during the fourth
      quarter of the fiscal year ended December 31, 2007.





8


**EXECUTIVE
      OFFICERS OF THE COMPANY**





The
      following table lists the executive officers of the Company. Officers are
      appointed by and serve at the discretion of the Board of Directors.





**Name**
            
            **Age**
            
            **Position**Laurence
                Moskowitz
            
            56
            
            Chairman
                of the Board, Chief Executive Officer, and PresidentLawrence
                Thomas
            
            46
            
            Chief
                Operating OfficerKenneth
                G. Torosian
            
            46
            
            Chief
                Financial Officer, Treasurer, and
                Secretary




*Laurence
      Moskowitz* ,
      a
      co-founder of the Company, has served as Chairman of the Board of Directors,
      Chief Executive Officer, and President of the Company since its inception in
      1986.





*Lawrence
      Thomas* has
      served as Chief Operating Officer of the Company since September 2005. From
      March 2005 until his appointment as Chief Operating Officer of the Company,
      Mr.
      Thomas served as President of MultiVu, a provider of broadcast and multimedia
      production and global distribution services. Mr. Thomas previously served at
      MultiVu as Senior Vice President of Sales and Operations from September 2003
      through March 2005 and as Vice President from April 2002 through September
      2003.
      Prior to such time, Mr. Thomas served as Vice President of Multimedia Services
      at PR Newswire Association LLC, MultiVu’s parent company that provides
      electronic delivery of news releases and information.





*Kenneth
      G. Torosian* has
      served as Chief Financial Officer of the Company since August 2005, as Secretary
      since March 2006, and as Treasurer since August 2007. From April 2004 until
      his
      appointment as Chief Financial Officer of the Company, Mr. Torosian served
      as
      the principal of Kerop Management Consultants LLC, a consulting firm. Through
      April 2004, Mr. Torosian served in various capacities at Applied Graphics
      Technologies, Inc., a provider of digital prepress and asset management
      services, including as Corporate Controller from January 1997 until August
      2000,
      as Vice President of Finance from August 2000 until September 2001, and as
      Senior Vice President and Chief Financial Officer from September 2001 until
      August 2003.





9


**PART
      II**





**Item
                5.**
            ***Market
                for Registrant's Common Equity, Related Stockholder Matters and Issuer
                Purchases of Equity
                Securities.***





The
      Company’s common stock is traded on the National Market System of the National
      Association of Securities Dealers Automated Quotation System (“NASDAQ”) under
      the symbol MDLK. The following table sets forth the high and low closing sales
      prices for each period indicated:





**2007**
            
            **2006****High**
            
            **Low**
            
            **High**
            
            **Low**Quarter
                ended March 31
            
            $
            7.80
            
            $
            5.15
            
            $
            4.54
            
            $
            3.39Quarter
                ended June 30
            
            $
            5.81
            
            $
            4.28
            
            $
            4.40
            
            $
            3.71Quarter
                ended September 30
            
            $
            5.19
            
            $
            3.80
            
            $
            4.02
            
            $
            2.80Quarter
                ended December 31
            
            $
            4.50
            
            $
            3.71
            
            $
            5.28
            
            $
            3.02





As
      of
      February 29, 2008, there were approximately 94 registered holders of record
      of
      the Company’s common stock. No dividends have been paid on the Company’s common
      stock.





The
      following table sets forth certain information as of December 31, 2007, with
      respect to the Company’s equity compensation plans under which securities of the
      Company are authorized for issuance.





**Equity
                Compensation Plan Information****Plan
                category**
            
            **Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights**
            
            **Weighted-average
                exercise price of outstanding options, warrants and
                rights**
            
            **Number
                of securities remaining available for future issuance under equity
                compensation plans (excluding securities reflected in column
                (a))****(a)**
            
            **(b)**
            
            **(c)**Equity
                compensation plansapproved
                by security holders
            
            
            1,002,680
            
            $
            4.90
            
            
            1,105,182





The
      Company does not have any equity compensation plans that have not been
      authorized by its stockholders.





The
      Company has neither sold any unregistered securities nor purchased any of its
      equity securities during the year ended December 31, 2007.




**Item
              6.**
            ***Selected
                Financial Data.***





Not
      applicable to smaller reporting companies.




10


**Item
                7.**
            ***Management's
                Discussion and Analysis of Financial Condition and Results of
                Operations.***





In
      September 2006, the Company sold the assets of U.S. Newswire, its wire
      distribution and photography services division. The consolidated financial
      statements reflect U.S. Newswire as a discontinued operation in all periods
      presented. The following discussion and analysis should be read in conjunction
      with the Company’s consolidated financial statements and notes
      thereto.





**Results
      of Operations**





*Year
      ended December 31, 2007, compared with 2006*





Revenues
      in 2007 increased by $1,686, or 5.3%, as compared to 2006. Revenues from media
      communications services in 2007 increased by $735, or 2.5%, to $29,985. The
      increase in revenues was primarily the result of increased revenues from the
      Company’s operation in the United Kingdom of $1,823, or 28.4%, of which $550
      resulted from a change in foreign currency exchange rates and $1,273 resulted
      from increased business, including $1,107 representing amounts recognized for
      re-billable expenses. The increase in the international business was partially
      offset by a decline in domestic media communications services revenues of
      $1,088, or 4.8%. Domestic media communications services revenues in 2007
      included $631 of service revenues recognized under a minimum commitment
      arrangement for which no services were provided. This arrangement relates to
      a
      services agreement that was entered into in connection with the sale of U.S.
      Newswire and contains minimum commitments of $750, $600, and $500 for the fiscal
      years ended September 30, 2007, 2008, and 2009, respectively. Revenues from
      Teletrax® digital video tracking services in 2007 increased by $951, or 38.5%,
      to $3,420 due to an increase in the number of clients being served and
      additional services provided to existing clients. Revenues from Teletrax®
services for the years ended December 31, 2007 and 2006, included $23 and $97,
      respectively, for equipment sales.





Direct
      costs increased by $1,822 in 2007, and as a percentage of revenue increased
      to
      47.4% from 44.1% in 2006. Such increase was primarily the result of lower margin
      projects in the Company’s international media communications services business
      and additional purchases of commercial airtime for the broadcast of client
      video
      in the domestic media communications business, partially offset by no direct
      costs incurred on $631 of revenues recognized in the period related to a minimum
      commitment arrangement for which no services were provided.





Selling,
      general, and administrative (“SG&A”) expenses in 2007 increased by $212 as
      compared to 2006, but as a percentage of revenue decreased to 73.9% in 2007
      from
      77.2% in 2006. SG&A expenses in 2007 and 2006 included $178 and $1,186,
      respectively, of transaction-specific compensation related to the sale of U.S.
      Newswire. SG&A expenses in 2007 and 2006 also included $112 and $219,
      respectively, of severance charges related to certain staff reductions during
      the year.





Exclusive
      of transaction-specific compensation and severance charges, SG&A expenses in
      2007 increased by $1,327 as compared to 2006, and as a percent of revenue were
      73.1% in 2007 as compared to 72.8% in 2006. SG&A expenses related to
      Teletrax® services increased in 2007 by $993 primarily as a result of an
      increase of $715 for payroll-related costs associated with the continued
      expansion of the business. In addition, non-payroll related SG&A for
      Teletrax® services increased $278 as a result of additional consulting costs
      related to technical initiatives and an increased marketing and public relations
      initiative in 2007, partially offset by a charge incurred in 2006 for the
      settlement of outstanding amounts owed by a reseller of the services for less
      than the carrying value with no corresponding charge incurred in 2007.
      Non-Teletrax® SG&A expenses increased by $334 in 2007 primarily as a result
      of additional temporary staffing and recruiting costs in the international
      media
      communications services business, increased occupancy costs incurred in 2007
      due
      to property tax increases and a one-time rent credit received in 2006 with
      no
      corresponding credit in 2007, and consulting costs incurred related to
      Sarbanes-Oxley compliance. These increases were partially offset by cost
      reductions achieved in the domestic media communications services businesses
      primarily as a result of reduced staffing and certain refurbishment costs
      incurred in 2006 in connection with the expiration of a lease in the United
      Kingdom with no corresponding costs in 2007.




11





The
      Company had an operating loss of $9,057 in 2007 as compared to an operating
      loss
      of $8,739 in 2006. The operating losses in 2007 and 2006 included operating
      losses of $3,939 and $3,408, respectively, from the Company’s 76%-owned Teletrax
      subsidiaries. The Company’s results of operations included 100% of the losses
      from the Teletrax subsidiaries since the minority shareholder has no future
      funding obligations.





The
      Company incurred interest expense, net of interest income, of $62 in 2007 as
      compared to net interest expense of $389 in 2006. The decrease in net interest
      expense was due primarily to interest income earned on the proceeds of the
      sale
      of U.S. Newswire and lower interest expense resulting from the redemption of
      $650 of convertible debentures in the first quarter of 2007.





On
      September 29, 2006, the Company sold the assets of its U.S. Newswire division
      to
      PR Newswire Association, LLC, a wholly-owned subsidiary of United Business
      Media
      plc. The assets sold represented the Company's entire wire distribution and
      photography services businesses, which were an operating segment within the
      Company’s media communications services reporting segment. The final sale price
      was $22,577, including $270 for an adjustment related to working capital
      transferred at closing. The Company recognized a gain on the sale of U.S.
      Newswire of approximately $7,566 in 2006 based on the minimum sale price of
      $18,000, with the remaining gain on sale of approximately $4,513 recognized
      in
      2007. The results of operations for 2007 include income from discontinued
      operations of $2,590 primarily representing the additional gain on sale of
      U.S.
      Newswire, net of tax. The results of operations for 2006 include income from
      discontinued operations of $5,375, which included income from the operations
      of
      U.S. Newswire of $921 and the gain on sale of U.S. Newswire, net of tax, of
      $4,390. Income from discontinued operations for 2006 also included $64 of gain
      on the sale of Delahaye, the Company’s division that provided research services
      that was sold in December 2004, as a result of the satisfaction of certain
      outstanding contingencies.




**Liquidity
      and Capital Resources**





The
      Company continues to finance its operations and capital investment requirements
      from its existing cash reserves, which totaled $12,732 at December 31, 2007.
      The
      Company’s cash reserves were primarily generated from the sale of U.S. Newswire
      in September 2006. Working capital at December 31, 2007, decreased by $3,855
      from 2006 primarily as a result of the Company funding operating losses and
      capital investments during the year, partially offset by additional proceeds
      received from the sale of U.S. Newswire. In addition, effective October 1,
      2007,
      the Company changed its policy on how it accounts for equipment previously
      classified as inventory in its digital video tracking services businesses,
      resulting in a non-cash decline in working capital of $602.





During
      the year ended December 31, 2007, $650 of convertible debentures were converted
      into 160,494 shares of the Company’s common stock.





Cash
      flows from operating activities during 2007 decreased by $658 as compared to
      2006 due primarily to the payment of income taxes and recording the benefit
      for
      income taxes recognized in 2007 as well as the timing of customer receipts
      and
      vendor payments, partially offset by the receipt of escrow funds during 2007.
      During 2007, the Company received net proceeds from the sale of U.S. Newswire
      of
      $4,513 and proceeds from the exercise of stock options and warrants totaling
      $276. The Company invested $1,733 in new equipment and leasehold improvements
      primarily related to moving its operations in the United Kingdom, enhancing
      the
      network for Teletrax® services, and upgrading the overall corporate network
      infrastructure.





The
      Company expects to spend approximately $1,200 over the course of the next twelve
      months for capital improvements primarily for upgrades to the network
      infrastructure for the Teletrax® services and for modernization of its media
      communications services business. The Company intends to finance these
      expenditures with working capital. The Company believes that its cash reserves
      and working capital will be sufficient to fund its cash needs through the end
      of
      2008.





The
      Company does not believe that inflation has had a material impact on its
      business.




12


**Off-balance
      sheet arrangements**





The
      Company does not have any off-balance sheet arrangements that have or are
      reasonably likely to have a current or future effect on its financial condition,
      changes in financial condition, revenues or expenses, results of operations,
      liquidity, capital expenditures or capital resources that are material to
      investors.





**Critical
      Accounting Policies**





Management
      must make certain estimates and assumptions in preparing the financial
      statements of the Company. Certain of these estimates and assumptions relate
      to
      matters that are inherently uncertain as they pertain to future events.
      Management believes that the estimates and assumptions used in preparing the
      financial statements of the Company were the most appropriate at that time,
      although actual results could differ significantly from those estimates under
      different conditions.





Note
      2,
“Summary of Significant Accounting Policies,” to the Company’s consolidated
      financial statements included in this Annual Report on Form 10-K provides a
      detailed discussion of the various accounting policies of the Company. We
      believe that the following accounting policies are critical since they require
      subjective or complex judgments that could potentially affect the financial
      condition or results of operations of the Company.




*Allowance
      for Doubtful Accounts:* The
      Company assesses the carrying value of its accounts receivable based on
      management's assessment of the collectibility of specific client accounts,
      which
      includes consideration of the creditworthiness and financial condition of those
      specific clients. The Company also assesses the carrying value of accounts
      receivable balances based on other factors, including historical experience with
      bad debts, client concentrations, the general economic environment, and the
      aging of such receivables. The Company records an allowance for doubtful
      accounts to reduce its accounts receivable balance to the amount that is
      reasonably believed to be collectible. Based on the Company’s estimates, an
      allowance for doubtful accounts of $219 was established at December 31, 2007,
      compared to an allowance of $347 at December 31, 2006. A change in the Company’s
      assumptions, including the creditworthiness of clients and the default rate
      on
      receivables, would result in the Company recovering an amount of its accounts
      receivable that differs from its current carrying value. Such difference, either
      positive or negative, would be reflected as a component of the Company’s
      SG&A expense in future periods.





*Valuation
      of Long-Lived Assets:* In
      assessing the carrying value of its property and equipment and other long-lived
      assets in accordance with Statement of Financial Accounting Standards
      (“SFAS”) No. 144, “Accounting for the Impairment or Disposal of Long-Lived
      Assets,” the Company reviews such assets for impairment when events or changes
      in circumstances indicate that the carrying amount of the asset may not be
      recoverable. Recoverability is determined by comparing the carrying value of
      the
      assets to the future undiscounted cash flows the assets are expected to
      generate. If it is determined that the carrying amount is not recoverable,
      an
      impairment charge is recognized equal to the amount by which the carrying value
      of the asset exceeds its fair market value. No events or changes in
      circumstances have occurred that required the Company to assess the
      recoverability of its property and equipment, and therefore the Company has
      not
      recognized any impairment charges. The Company has reviewed the continued
      operating losses in its Teletrax® digital video tracking services business in
      relation to its expected performance. Based on the Company’s view that the
      Teletrax® business is still in a start-up phase and that the losses are in line
      with expectations, the Company has concluded that no assessment needs to be
      made
      regarding the recoverability of the Teletrax® long-lived assets. A change in the
      Company’s business climate in future periods, including an inability to
      effectively market and sell new service offerings in which significant
      investments have been made, a general downturn in one of the Company’s
      operations, or an inability to attain profitability in the Teletrax® operations,
      could lead to a required assessment of the recoverability of the Company’s
      long-lived assets, which may subsequently result in an impairment
      charge.





*Valuation
      of Goodwill:* In
      assessing the carrying value of goodwill in accordance with SFAS No. 142,
“Goodwill and Other Intangible Assets,” the Company compared the carrying value
      of its reporting units to their fair values. The Company is required to test
      its
      goodwill for impairment at least annually, and more frequently if an event
      occurs or circumstances change to indicate that an impairment may have occurred.
      The Company’s annual testing date is September 30. In accordance with SFAS No.
      142, the Company aggregated certain components to arrive at one of its reporting
      units. The Company estimated the fair value of its reporting units using a
      discounted cash flow approach. In estimating the fair value of its reporting
      units, the Company had to make various assumptions, including projections of
      future revenues based on assumed long-term growth rates, estimated costs, and
      the appropriate discount rates. The estimates used by the Company for long-term
      revenue growth and future costs are based on historical data, various internal
      estimates, and a variety of external sources, and are developed as part of
      the
      Company’s routine long-range planning process. The carrying value of the
      Company’s goodwill was $3,429 at September 30, 2007. Based on the use of these
      assumptions in estimating the fair value of each reporting unit, there was
      no
      impairment of goodwill as of September 30, 2007, the most recent annual testing
      date. A change in the Company’s assumptions, including lower long-term growth
      rates, higher operating costs, or higher discount rates could cause a change
      in
      the estimated fair value of the Company’s reporting units, and therefore could
      result in an impairment of goodwill, which would have a significant adverse
      effect on the Company’s results of operations.




13





*Stock-Based
      Compensation* :
      On
      January 1, 2006, the Company adopted the provisions of SFAS No. 123R and elected
      to use the modified prospective application for the transition upon adoption,
      which requires compensation expense to be recognized on options granted
      subsequent to the adoption date as well as on options granted prior to the
      adoption date for which the requisite service period had not been completed
      as
      of December 31, 2005. The Company determines the fair value of stock options
      granted subsequent to the adoption of SFAS No. 123R using a binomial lattice
      model. The fair value of stock options granted prior to the adoption of SFAS
      No.
      123R was determined using the Black-Scholes option-pricing model. The Company
      must make certain assumptions in determining the fair value of stock options,
      including the volatility of the Company’s common stock, the future dividend
      yield on the Company’s common stock, and the term over which stock options will
      remain outstanding, including making assumptions about the future behavior
      patterns of the holders of stock options in regard to exercising stock options
      prior to their expiration. In addition, the Company must make certain
      assumptions regarding the rate at which options will be forfeited to estimate
      the service period that will be completed by the holders of stock options.
      Any
      deviation in the actual volatility of the Company’s common stock, the actual
      dividend yield, and the actual early exercise behavior of holders of stock
      options from that assumed in estimating the fair value of a stock option will
      not result in a change in the amount of compensation expense recognized by
      the
      Company, but will result in the actual value realized by the holder of the
      stock
      options to be different than the amount of compensation expense recognized.
      Any
      deviation in the actual forfeitures of nonvested stock options during the
      service period from that assumed will result in a change to the amount of
      compensation expense recognized, either as additional compensation expense
      or a
      reversal of previously recognized compensation expense in the period of
      change.





*Income
      Taxes:* In
      assessing the recoverability of its deferred tax assets, the Company compared
      the carrying value of its deferred tax assets to the tax-effected projections
      of
      its taxable income over future periods in which such assets could be realized.
      In estimating its future taxable income, the Company had to make various
      assumptions about its future operating performance. Based on the Company’s
      projection of future taxable income, which include the effects of recent
      operating and tax losses, management believed that it was more likely than
      not
      that the benefit associated with the deferred tax assets will not be fully
      realized in future periods. Accordingly, a valuation allowance in the amount
      of
      $5,332 and $4,403 at December 31, 2007 and 2006, respectively, was established
      to reserve against the carrying value of certain of the Company’s deferred tax
      assets. A change in the Company’s assumptions, including better or worse
      operating performance than projected, could result in a change in the amount
      of
      deferred tax assets that will be recovered, and therefore could result in a
      reduction or increase to the valuation allowance established at December 31,
      2007. Such an adjustment would be reflected as a component of the Company’s
      provision for income taxes in the period of the adjustment.





**Recent
      Accounting Pronouncements**





SFAS
      No.
      160, “Noncontrolling Interests in Consolidated Financial Statements (as amended)
      - an amendment of ARB No. 51,” was issued in December 2007 and prescribes the
      accounting and reporting standards for noncontrolling interests, or minority
      interests, of an entity. SFAS No. 160 requires that ownership interests held
      by
      entities other than the parent company be clearly identified and reported within
      equity in the parent company’s statements of financial position, but separate
      from the equity of the parent company. In addition, SFAS No. 160 requires that
      the amount of consolidated income attributable to the parent company and to
      the
      noncontrolling interests be clearly identified and presented on the face of
      the
      statements of operations. SFAS No. 160 amended Accounting Research Bulletin
      (“ARB”) No. 51, “Consolidated Financial Statements,” to require, among other
      things, that all losses attributable to noncontrolling interests be attributed
      to such interests even when such attribution results in a deficit balance for
      the noncontrolling interests. Under the previous provisions of ARB No. 51,
      no
      losses were attributable to noncontrolling or minority interests to the extent
      such losses exceeded the equity capital of the noncontrolling interests. SFAS
      No. 160 also established new accounting and reporting procedures for changes
      in
      the parent company’s ownership interest and deconsolidation of subsidiaries.
      SFAS No. 160 is effective for fiscal years beginning on or after December 15,
      2008, with earlier adoption strictly prohibited. SFAS No. 160 is to be applied
      prospectively upon adoption, with the exception of presentation and disclosure
      requirements, which are to be applied retrospectively to all periods presented
      upon adoption. The adoption of SFAS No. 160 will change the manner in which
      the
      Company reports the losses incurred by its Teletrax subsidiaries. The Company
      currently reports 100% of the losses from these subsidiaries in its statements
      of operations since the losses have exceeded the equity capital of the
      noncontrolling interests and the noncontrolling interests have no future funding
      obligation. Upon the adoption of SFAS No. 160 on January 1, 2009, the
      noncontrolling interests will be allocated their portion of the losses or income
      and such amounts will be stated separately in the Company’s statements of
      operations. The Company’s funding obligations will remain the same, and
      therefore the Company does not believe that the adoption of SFAS No. 160 will
      have a material effect on its business.





14





**Item
              7A.**
            ***Quantitative
                and Qualitative Disclosures About Market
                Risk.***





Not
      applicable to smaller reporting companies.








**Item
              8.**
            ***Financial
                Statements and Supplementary
                Data.***





See
      Index
      to Financial Statements and Financial Statements commencing on page F-1
      herein.





**Item
                9.**
            ***Changes
                in and Disagreements With Accountants on Accounting and Financial
                Disclosure.***





None.





**Item
              9A(T).**
            ***Controls
                and Procedures.***





*Disclosure
      Controls and Procedures:* The
      Company’s management evaluated, with the participation of the Company’s
      principal executive and principal financial officers, the effectiveness of
      the
      Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and
      15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange
      Act”)) as of December 31, 2007. Based on their evaluation, the Company’s
      principal executive and principal financial officers concluded that the
      Company’s disclosure controls and procedures were effective as of December 31,
      2007.





*Management’s
      annual report on internal control over financial reporting:* The
      Company’s management is responsible for establishing and maintaining adequate
      internal controls over financial reporting (as defined in Rules 13a-15(f) and
      15(d)-15(f) under the Exchange Act). The Company designed its internal controls
      over financial reporting and assessed such controls in accordance with the
      criteria set forth by the Committee of Sponsoring Organizations of the Treadway
      Commission (“COSO”) in “Internal Control - Integrated Framework.”





The
      design of any system of controls is based in part upon certain assumptions
      about
      the likelihood of future events and there can be no assurance that any design
      will succeed in achieving its stated goals under all potential future
      conditions, regardless of how remote. Therefore, even those internal control
      systems determined to be effective can provide only reasonable assurance with
      respect to financial statement preparation and presentation. A deficiency in
      internal controls over financial reporting exists when the design or operation
      of a control does not allow management or employees, in the normal course of
      performing their assigned functions, to prevent or detect misstatements on
      a
      timely basis. A material weakness in internal controls over financial reporting
      exists when a deficiency, or a combination of deficiencies, in internal controls
      can result in a reasonable possibility that a material misstatement of the
      annual or interim financial statements will not be prevented or detected on
      a
      timely basis. A significant deficiency in internal controls over financial
      reporting exists when a deficiency, or a combination of deficiencies, in
      internal controls is less severe than a material weakness, yet important enough
      to merit attention by those responsible for oversight of the registrant's
      financial reporting.




15





The
      Company’s management assessed the effectiveness of the internal controls over
      financial reporting as of December 31, 2007. Based on this assessment, the
      Company’s management believes that the internal controls over financial
      reporting are effective as of December 31, 2007.





This
      annual report on Form 10-K does not include an attestation report of the
      Company's registered public accounting firm regarding internal control over
      financial reporting. Management's report on such controls was not subject to
      attestation by the Company's registered public accounting firm pursuant to
      temporary rules of the Securities and Exchange Commission that permit the
      Company to provide only management's report in this annual report.





*Changes
      in internal control over financial reporting:* There
      have been no changes in the Company’s internal control over financial reporting
      (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that
      occurred during the fiscal quarter ended December 31, 2007, that has materially
      affected, or is reasonably likely to affect, the Company’s internal control over
      financial reporting.




**Item
      9B.**  ***Other
      Information.***





None.





16


**PART
      III**





**Item
      10.**  ***Directors,
      Executive Officers and Corporate Governance.***





(a)
            *Directors*-
                The information with respect to directors required by this item is
                incorporated herein by reference to the Company’s 2008 Definitive Proxy
                Statement to be separately filed with the Securities and Exchange
                Commission by April 29, 2008.





(b)
            *Executive
                Officers*-
                The information with respect to officers required by this item is
                included
                at the end of Part I of this Annual Report on Form 10-K under the
                heading
                “Executive Officers of the
                Company”.




**Item
      11.**  ***Executive
      Compensation.***





The
      information required by this item is incorporated herein by reference to the
      Company’s 2008 Definitive Proxy Statement to be separately filed with the
      Securities and Exchange Commission by April 29, 2008.








**Item
      12.**  ***Security
      Ownership of Certain Beneficial Owners and Management and Related Stockholder
      Matters.***





Except
      as
      set forth below, the information required by this item is incorporated herein
      by
      reference to the Company’s 2008 Definitive Proxy Statement to be separately
      filed with the Securities and Exchange Commission by April 29,
      2008.





The
      following table sets forth certain information as of December 31, 2007, with
      respect to the Company’s equity compensation plans under which securities of the
      Company are authorized for issuance.





**Equity
                Compensation Plan
                Information**




**Plan
                category**
            
            **Number
                of securities to be issued upon exercise of outstanding options,
                warrants
                and rights**
            
            **Weighted-average
                exercise price of outstanding options, warrants and
                rights**
            
            **Number
                of securities remaining available for future issuance under equity
                compensation plans (excluding securities reflected in column
                (a))****(a)**
            
            **(b)**
            
            **(c)**Equity
                compensation plansapproved
                by security holders
            
            
            1,002,680
            
            $
            4.90
            
            
            1,105,182





The
      Company does not have any equity compensation plans that have not been
      authorized by its stockholders.




**Item
      13.**  ***Certain
      Relationships and Related Transactions, and Director
      Independence.***





The
      information required by this item is incorporated herein by reference to the
      Company’s 2008 Definitive Proxy Statement to be separately filed with the
      Securities and Exchange Commission by April 29, 2008.





**Item
      14.**  ***Principal
      Accountant Fees and Services.***





The
      information required by this item is incorporated herein by reference to the
      Company’s 2008 Definitive Proxy Statement to be separately filed with the
      Securities and Exchange Commission by April 29, 2008.





17


**PART
      IV**





**Item
      15.**  ***Exhibits,
      Financial Statement Schedules.***





(a)  Listed
      below are the documents filed as part of this report:




1.
            Financial
                Statements and the Report of Independent Registered Public Accounting
                Firm:




Report
                of Independent Registered Public Accounting FirmConsolidated
                Balance Sheets as of December 31, 2007 and 2006Consolidated
                Statements of Operations for the years ended December 31, 2007 and
                2006Consolidated
                Statements of Cash Flows for the years ended December 31, 2007 and
                2006Consolidated
                Statements of Stockholders’ Equity for the years ended December 31, 2007
                and 2006Notes
                to consolidated financial statements




2.
            Financial
                Statement Schedules:




Schedule
      II - Valuation and Qualifying Accounts for the years ended December 31, 2007
      and
      2006




3.
            Exhibits:




See
      Exhibit Index commencing on page G-1 herein.




18


**SIGNATURES**





Pursuant
      to the requirements of Section 13 or 15(d) of the Securities Exchange Act of
      1934, the registrant has duly caused this report to be signed on its behalf
      by
      the undersigned, thereunto duly authorized.




MEDIALINK
      WORLDWIDE INCORPORATED








By: /s/
      Laurence Moskowitz





Laurence
      Moskowitz


Chairman
      of the Board, Chief Executive Officer, and President


Date:
      March 31, 2008




Pursuant
      to the requirements of the Securities Exchange Act of 1934, this report has
      been
      signed below by the following persons on behalf of the registrant and in the
      capacities indicated on March 31, 2008.




Signature
              
              TitleBy: 
                  /s/ Laurence Moskowitz
              
              Chairman
                  of the Board, Chief Executive Officer, andLaurence
                  Moskowitz
              
              President
                  (Principal Executive Officer)By: 
                  /s/ Kenneth G. Torosian
              
              Chief
                  Financial Officer, Treasurer, and Secretary (PrincipalKenneth
                  G. Torosian
              
              Financial
                  Officer and Principal Accounting Officer)By:
                   /s/ Bruce BishopBruce
                  Bishop
              
              DirectorBy: 
                  /s/ Harold FineltHarold
                  Finelt
              
              DirectorBy: 
                  /s/ John M. GreeningJohn
                  M. Greening
              
              DirectorBy: 
                  /s/ Douglas S. KnopperDouglas
                  S. Knopper
              
              DirectorBy: 
                  /s/ Catherine LugbauerCatherine
                  Lugbauer
              
              DirectorBy: 
                  /s/ James J. O’NeillJames
                  J. O’Neill
              
              DirectorBy: 
                  /s/ Jeffrey StoneJeffrey
                  Stone
              
              DirectorBy: 
                  /s/ Theodore Wm. TashlikTheodore
                  Wm. Tashlik
              
              Director




19


**INDEX
      TO FINANCIAL STATEMENTS**




PageReport
                of Independent Registered Public Accounting Firm
            
            F-2Consolidated
                Balance Sheets as of December 31, 2007 and 2006
            
            F-3Consolidated
                Statements of Operations for the years ended December 31, 2007 and
                2006
            
            F-4Consolidated
                Statements of Cash Flows for the years ended December 31, 2007 and

                2006
            
            F-5Consolidated
                Statements of Stockholders’ Equity for the years ended December 31, 2007
                and 2006
            
            F-6Notes
                to consolidated financial statements
            
            F-7





F-1


Report
      of Independent Registered Public Accounting Firm




The
      Board
      of Directors


Medialink
      Worldwide Incorporated:




We
      have
      audited the accompanying consolidated balance sheets of Medialink Worldwide
      Incorporated and subsidiaries as of December 31, 2007 and 2006, and the related
      consolidated statements of operations, stockholders’ equity, and cash flows for
      the years then ended. In connection with our audits of the consolidated
      financial statements, we also have audited the consolidated financial statement
      schedule included on page S-1. These consolidated financial statements and
      the
      consolidated financial statement schedule are the responsibility of the
      Company’s management. Our responsibility is to express an opinion on these
      consolidated financial statements and the consolidated financial statement
      schedule based on our audits.




We
      conducted our audits in accordance with the standards of the Public Company
      Accounting Oversight Board (United States). Those standards require that we
      plan
      and perform the audit to obtain reasonable assurance about whether the financial
      statements are free of material misstatement. An audit includes examining,
      on a
      test basis, evidence supporting the amounts and disclosures in the financial
      statements. An audit also includes assessing the accounting principles used
      and
      significant estimates made by management, as well as evaluating the overall
      financial statement presentation. We believe that our audits provide a
      reasonable basis for our opinion.




In
      our
      opinion, the consolidated financial statements referred to above present fairly,
      in all material respects, the financial position of Medialink Worldwide
      Incorporated and subsidiaries as of December 31, 2007 and 2006, and the results
      of their operations and their cash flows for the years then ended in conformity
      with U.S. generally accepted accounting principles. Also in our opinion, the
      related consolidated financial statement schedule, when considered in relation
      to the basic consolidated financial statements taken as a whole, presents
      fairly, in all material respects, the information set forth
      therein.






(signed)
      KPMG LLP




New
      York,
      New York





March
      31,
      2008





F-2





**MEDIALINK
                WORLDWIDE INCORPORATED AND SUBSIDIARIES****CONSOLIDATED
                BALANCE SHEETS**(In
                thousands of dollars, except share and per-share
                amounts)


**December
                  31,****2007**
              
              **2006**ASSETSCurrent
                  Assets:Cash
                  and cash equivalents
              
              $
              12,732
              
              $
              17,031Accounts
                  receivable, net of allowance for doubtful accounts of $219 and
                  $347
              
              
              4,965
              
              
              5,319Inventory
              
              
              -
              
              
              602Prepaid
                  expenses
              
              
              519
              
              
              287Prepaid
                  and refundable taxes
              
              
              743
              
              
              701Deferred
                  income taxes
              
              
              169
              
              
              107Escrow
                  funds
              
              
              -
              
              
              1,927Other
                  current assets
              
              
              91
              
              
              78Total
                  current assets
              
              
              19,219
              
              
              26,052Property
                  and equipment - net
              
              
              4,542
              
              
              4,296Goodwill
              
              
              3,429
              
              
              3,429Deferred
                  income taxes
              
              
              217
              
              
              725Other
                  assets
              
              
              738
              
              
              652Total
                  assets
              
              $
              28,145
              
              $
              35,154LIABILITIES
                  AND STOCKHOLDERS' EQUITYCurrent
                  Liabilities:Accounts
                  payable
              
              $
              2,186
              
              $
              1,981Accrued
                  expenses and other current liabilities
              
              
              5,140
              
              
              6,396Income
                  taxes payable
              
              
              -
              
              
              1,927Total
                  current liabilities
              
              
              7,326
              
              
              10,304Convertible
                  debentures, net of unamortized discount of $422 and $727
              
              
              3,928
              
              
              4,273Other
                  long-term liabilities
              
              
              765
              
              
              1,049Total
                  liabilities
              
              
              12,019
              
              
              15,626Commitments
                  and contingenciesStockholders'
                  Equity:Series
                  A Preferred stock: $.01 par value, authorized 50,000 shares; none
                  issued
                  and outstanding
              
              
              -
              
              
              -Common
                  stock: $.01 par value, authorized 15,000,000 shares; issued 6,529,180
                  shares in 2007 and 6,289,986 shares in 2006
              
              
              65
              
              
              63Additional
                  paid-in capital
              
              
              28,490
              
              
              27,327Accumulated
                  deficit
              
              
              (11,826
              )
              
              (7,225
              )Accumulated
                  other comprehensive loss
              
              
              (260
              )
              
              (294
              )Common
                  stock in treasury (at cost, 101,121 shares)
              
              
              (343
              )
              
              (343
              )Total
                  stockholders' equity
              
              
              16,126
              
              
              19,528Total
                  liabilities and stockholders' equity
              
              $
              28,145
              
              $
              35,154




See
        notes
        to consolidated financial statements
  F-3





**MEDIALINK
                WORLDWIDE INCORPORATED AND SUBSIDIARIES****CONSOLIDATED
                STATEMENTS OF OPERATIONS**(In
                thousands, except per-share
                amounts)




**For
                the years ended December 31,****2007**
            
            **2006**Revenues
            
            $
            33,405
            
            $
            31,719Operating
                expenses:Direct
                costs
            
            
            15,823
            
            
            14,001Selling,
                general, and administrative expenses
            
            
            24,697
            
            
            24,485Depreciation
                and amortization
            
            
            1,942
            
            
            1,972Total
                operating expenses
            
            
            42,462
            
            
            40,458Operating
                loss
            
            
            (9,057
            )
            
            (8,739
            )Interest
                expense - net
            
            
            (62
            )
            
            (389
            )Loss
                from continuing operations before taxes
            
            
            (9,119
            )
            
            (9,128
            )Income
                tax benefit
            
            
            (1,928
            )
            
            (2,807
            )Loss
                from continuing operations
            
            
            (7191
            )
            
            (6,321
            )Income
                from discontinued operations, net of tax
            
            
            2,590
            
            
            5,375Net
                loss
            
            $
            (4,601
            )
            $
            (946
            )Net
                loss
            
            $
            (4,601
            )
            $
            (946
            )Other
                comprehensive income
            
            
            34
            
            
            99Comprehensive
                loss
            
            $
            (4,567
            )
            $
            (847
            )Basic
                and diluted income (loss) per common share:Loss
                from continuing operations
            
            $
            (1.13
            )
            $
            (1.03
            )Income
                from discontinued operations
            
            
            0.41
            
            
            0.88Net
                loss
            
            $
            (0.72
            )
            $
            (0.15
            )Weighted
                average number of common shares - basic and diluted
            
            
            6,392
            
            
            6,108





See
      notes to consolidated financial
      statements




F-4





**MEDIALINK
                WORLDWIDE INCORPORATED AND SUBSIDIARIES****CONSOLIDATED
                STATEMENTS OF CASH FLOWS**(In
                thousands of dollars)




**For
                the years ended December 31,****2007**
            
            **2006**CASH
                FLOWS FROM OPERATING ACTIVITIES:Net
                loss
            
            $
            (4,601
            )
            $
            (946
            )Adjustments
                to reconcile net loss to net cash used in operating
                activities:Depreciation
                and amortization
            
            
            1,942
            
            
            1,972Deferred
                income taxes
            
            
            808
            
            
            (832
            )Income
                from discontinued operations
            
            
            (2,590
            )
            
            (5,375
            )Other
            
            
            739
            
            
            949Changes
                in operating assets and liabilities, net of effects of
                dispositions:Accounts
                receivable
            
            
            380
            
            
            (357
            )Prepaid
                expenses and other assets
            
            
            1,672
            
            
            (1,876
            )Prepaid
                and refundable taxes and income taxes payable
            
            
            (4,241
            )
            
            (1,092
            )Accounts
                payable and accrued expenses
            
            
            (1,071
            )
            
            535Other
                liabilities
            
            
            (410
            )
            
            (560
            )Net
                cash provided by operating activities of discontinued
                operations
            
            
            -
            
            
            868Net
                cash used in operating activities
            
            
            (7,372
            )
            
            (6,714
            )CASH
                FLOWS FROM INVESTING ACTIVITIES:Purchases
                of property and equipment
            
            
            (1,733
            )
            
            (1,815
            )Proceeds
                from sale of division
            
            
            4,513
            
            
            17,904Net
                cash used in investing activities of discontinued
                operations
            
            
            -
            
            
            (24
            )Net
                cash provided by investing activities
            
            
            2,780
            
            
            16,065CASH
                FLOWS FROM FINANCING ACTIVITIES:Proceeds
                from the issuance of common stock in connection with the exercise
                of stock
                options and warrants
            
            
            276
            
            
            387Repayments
                of obligations under capital lease
            
            
            -
            
            
            (80
            )Net
                cash provided by financing activities
            
            
            276
            
            
            307Net
                increase (decrease) in cash and cash equivalents
            
            
            (4,316
            )
            
            9,658Effect
                of exchange rate changes on cash and cash equivalents
            
            
            17
            
            
            70Cash
                and cash equivalents at the beginning of period
            
            
            17,031
            
            
            7,303Cash
                and cash equivalents at end of period
            
            $
            12,732
            
            $
            17,031




See
      notes to consolidated financial
      statements




F-5





**MEDIALINK
                WORLDWIDE INCORPORATED AND SUBSIDIARIES****CONSOLIDATED
                STATEMENTS OF STOCKHOLDERS' EQUITY**(In
                thousands of dollars)




**Common
                Stock**
            
            **Additional
                Paid-in Capital**
            
            **Retained
                Earnings (Deficit)**
            
            **Accumulated
                Other Comprehensive Income (Loss)**
            
            **Common
                Stock in Treasury****Balance
                at January 1, 2006**
            
            $
            62
            
            $
            26,591
            
            $
            (6,279
            )
            $
            (393
            )
            $
            (343
            )Issuance
                of 134,626 shares of common stock in connection with exercise of
                stock
                options
            
            
            1
            
            
            386Unrealized
                gain from foreign currency translation adjustments
            
            
            
            
            
            
            
            
            
            
            
            99Compensation
                expense recognized on stock options
            
            
            
            
            
            300Income
                tax benefit associated with the exercise of stock options
            
            
            
            
            
            50Net
                loss
            
            
            
            
            
            
            
            
            (946
            )**Balance
                at December 31, 2006**
            
            
            63
            
            
            27,327
            
            
            (7,225
            )
            
            (294
            )
            
            (343
            )Issuance
                of 78,700 shares of common stock in connection with exercise of stock
                options and warrants
            
            
            1
            
            
            276Issuance
                of 160,494 shares of common stock in connection with conversion of
                debentures
            
            
            1
            
            
            537Unrealized
                gain from foreign currency translation adjustments
            
            
            
            
            
            
            
            
            
            
            
            34Compensation
                expense recognized on stock options
            
            
            
            
            
            347Income
                tax benefit associated with the exercise of stock options
            
            
            
            
            
            3Net
                loss
            
            
            
            
            
            
            
            
            (4,601
            )**Balance
                at December 31, 2007**
            
            $
            65
            
            $
            28,490
            
            $
            (11,826
            )
            $
            (260
            )
            $
            (343
            )





See
        notes
        to consolidated financial statements
  F-6


**MEDIALINK
      WORLDWIDE INCORPORATED**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS**


**(In
      thousands, except share and per-share amounts)**





**1.
      Organization**





Medialink
      Worldwide Incorporated and its subsidiaries (the “Company”) provide media
      communications services and digital video tracking services to corporations
      and
      other organizations. Through its media communications operations in the United
      States and the United Kingdom, the Company offers news and marketing media
      strategies and solutions by providing consultation, production, distribution,
      and monitoring services that enable its clients to inform and educate their
      intended audiences through various media. Through its Teletrax subsidiaries,
      the
      Company provides digital video tracking services that provide broadcast
      television intelligence to video content providers such as entertainment
      companies, news organizations, television syndicators, direct-response marketing
      companies, and sports organizations, enabling clients to monitor their
      content.





In
      September 2006, the Company sold the assets of U.S. Newswire, its wire
      distribution and photography services division. The consolidated financial
      statements reflect U.S. Newswire as a discontinued operation in all periods
      presented.





**2.
      Summary of Significant Accounting Policies**





***Principles
      of Consolidation:*** The
      consolidated financial statements include the accounts of the Company and all
      of
      its subsidiaries. The Company consolidates entities in which it owns greater
      than 50% of the voting equity of an entity or otherwise is able to exert
      control. The Company consolidates its 76%-owned Teletrax subsidiaries and
      includes 100% of the losses from these subsidiaries in its consolidated results
      of operations since the minority shareholder has no future funding obligations.
      All intercompany accounts and transactions have been eliminated in the
      consolidated financial statements.





***Cash
      and Cash Equivalents:*** Cash and
      cash equivalents include all cash balances and highly liquid investments having
      original maturities of three months or less.





***Allowance
      for Doubtful Accounts*** :
      The
      Company recognizes bad debt expense on trade receivables through an allowance
      account using estimates based on past experience, and writes off trade
      receivables against the allowance account when the Company believes it has
      exhausted all available means of collection.




***Inventory:*** Inventory
      in 2006 consists of equipment for sale and equipment for replacement of devices
      requiring service in the Company’s digital video tracking services business.
      Inventory is valued at the lower of cost or market, with cost determined on
      a
      specific identification basis. In October 2007, the Company changed its policy
      on how it accounts for the equipment previously classified as inventory in
      its
      digital video tracking services business in response to changes in the manner
      in
      which the Company conducts this business, including less emphasis on
      selling equipment. Commencing on that date, this equipment has been classified
      as “Property and Equipment” in the Company’s balance sheet and is depreciated
      over its estimated useful life. Accordingly, no inventory is reflected in the
      Company’s balance sheet at December 31, 2007.





***Property
      and Equipment:*** Property
      and equipment is stated at cost. Depreciation is computed on a straight-line
      basis over the estimated useful lives of the assets, which generally range
      from
      three years for certain computer equipment and software to five years for
      certain non-desktop computer equipment, certain video equipment, and furniture
      and fixtures. Embedders and detectors used in the Company’s digital video
      tracking services business are depreciated based on useful lives assigned on
      a
      case-by-case basis, but in no event are such useful lives longer than four
      years. Leasehold improvements and assets recorded under capital leases are
      amortized on a straight-line basis over the shorter of their estimated useful
      lives or the terms of the leases.




F-7


**MEDIALINK
        WORLDWIDE INCORPORATED**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


***Long-lived
      Assets:*** In
      accordance with Statement of Financial Accounting Standards (“SFAS”) No. 144,
“Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company
      evaluates the recoverability of its long-lived assets by comparing their
      carrying value to the expected future undiscounted cash flows to be generated
      from such assets when events or circumstances indicate that an impairment may
      have occurred.





***Goodwill
      and Other Intangible Assets:*** In
      accordance with SFAS No. 142, “Goodwill and Other Intangible Assets,” goodwill
      and other intangible assets with indefinite useful lives are not amortized,
      but
      rather are subject to an annual impairment test. The Company performs its annual
      impairment test on September 30 of each year, or more frequently if an event
      occurs or circumstances change to indicate that an impairment may have occurred.
      Intangible assets with finite useful lives are amortized over their useful
      lives.





***Equity
      Investments:*** The
      Company accounts for its investments in other entities under the equity method
      when it owns between 20% and 50% of the voting equity and does not have the
      ability to exercise control over the other entity or is otherwise not required
      to consolidate the entity in accordance with Financial Accounting Standards
      Board Interpretation No. (“FIN”) 46(R), “Consolidation of Variable Interest
      Entities.” The Company accounts for its investments in other entities under the
      cost method when it owns less than 20% of the voting equity and does not exert
      significant influence. Equity investments are reviewed for impairment whenever
      events or changes in circumstances indicate that the fair value of an equity
      investment is less than its carrying amount and that such a decline in value
      is
      determined to be other than temporary. At December 31, 2007 and 2006, the
      Company’s equity investments were fully impaired and had no carrying
      value.





***Revenue
      Recognition:*** Revenue
      is recognized when the Company has substantially completed performance and
      no
      longer has a consequential obligation to its clients.





*Media
      communications services:* Revenue
      from the Company’s media communications services offerings, including the
      production of video and audio content and the broadcast of live events, is
      recognized upon substantial completion of the services being provided. Revenue
      from the distribution and monitoring of video and audio news releases is
      recognized upon distribution. Revenue from subscription-based services is
      recognized ratably over the term of the subscription.





*Digital
      Video Tracking Services:* Revenue
      from Teletrax® digital video tracking services is recognized ratably over the
      period of service being provided. Revenue from the sale of equipment is
      recognized upon installation and acceptance by the client. Revenues include
      $23
      and $97 from equipment sales for the years ended December 31, 2007 and 2006,
      respectively.





***Operating
      Costs:*** Direct
      costs primarily represent incremental third-party costs incurred in connection
      with providing services to clients, including production costs, as well as
      incremental costs incurred for commissions paid to salaried sales personnel.
      Selling, general, and administrative costs include all internal costs, including
      payroll-related and other internal costs incurred in connection with providing
      services to clients, including all internal production costs.





***Advertising
      expenses:*** Advertising costs are expensed in the period in which the advertising appears
      in
      print or is broadcast. The Company incurred advertising expense, exclusive
      of
      sales and marketing efforts, of approximately $155 and $131 for the years ended
      December 31, 2007 and 2006, respectively.





***Income
      Taxes:*** The
      Company accounts for income taxes under the provisions of SFAS No. 109,
“Accounting for Income Taxes.” Foreign subsidiaries are taxed according to the
      regulations existing in the countries in which they do business. Provision
      has
      not been made for United States income taxes on distributions that may be
      received from foreign subsidiaries, which are considered to be permanently
      invested overseas. A valuation allowance is recorded if it is more likely than
      not that some portion or all of the deferred tax assets will not be realized
      in
      future periods.





***Foreign
      Currency Translation:*** Assets
      and liabilities of foreign operations are translated from the functional
      currency into United States dollars using the exchange rate in effect at the
      balance sheet date. Revenues and expenses of foreign operations are translated
      from the functional currency into United States dollars using the average
      exchange rate for the period. Adjustments resulting from the translation into
      United States dollars are included as a component of “Other comprehensive
      loss.”




F-8


**MEDIALINK
        WORLDWIDE INCORPORATED**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


***Stock-Based
      Compensation:*** The
      Company accounts for stock-based compensation under the provisions of SFAS
      No.
      123 (Revised 2004), “Share-Based Payment” (“SFAS No. 123R”). SFAS No. 123R
      requires that all share-based payments to employees and non-employee directors,
      including grants of stock options, be recognized in the financial statements
      based on their fair values on the date of grant. The Company elected to use
      the
      modified prospective application for the transition upon the adoption of SFAS
      No. 123R, which requires compensation expense to be recognized on options
      granted subsequent to the adoption date as well as on options granted prior
      to
      the adoption date for which the requisite service period had not been completed
      as of December 31, 2005. The Company has also elected to treat option grants
      with graded vesting as a single award and accordingly recognizes the associated
      compensation expense ratably over the service period.





***Estimates:*** The
      preparation of the Company’s consolidated 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.





***Reclassifications:*** Certain
      prior-period amounts in the accompanying financial statements have been
      reclassified to conform to the 2007 presentation.





***Recently
      Issued Accounting Standards:*** SFAS
      No.
      160, “Noncontrolling Interests in Consolidated Financial Statements (as amended)
      - an amendment of ARB No. 51,” was issued in December 2007 and prescribes the
      accounting and reporting standards for noncontrolling interests, or minority
      interests, of an entity. SFAS No. 160 requires that ownership interests held
      by
      entities other than the parent company be clearly identified and reported within
      equity in the parent company’s statements of financial position, but separate
      from the equity of the parent company. In addition, SFAS No. 160 requires that
      the amount of consolidated income attributable to the parent company and to
      the
      noncontrolling interests be clearly identified and presented on the face of
      the
      statements of operations. SFAS No. 160 amended Accounting Research Bulletin
      (“ARB”) No. 51, “Consolidated Financial Statements,” to require, among other
      things, that all losses attributable to noncontrolling interests be attributed
      to such interests even when such attribution results in a deficit balance for
      the noncontrolling interests. Under the previous provisions of ARB No. 51,
      no
      losses were attributable to noncontrolling or minority interests to the extent
      such losses exceeded the equity capital of the noncontrolling interests. SFAS
      No. 160 also established new accounting and reporting procedures for changes
      in
      the parent company’s ownership interest and deconsolidation of subsidiaries.
      SFAS No. 160 is effective for fiscal years beginning on or after December 15,
      2008, with earlier adoption strictly prohibited. SFAS No. 160 is to be applied
      prospectively upon adoption, with the exception of presentation and disclosure
      requirements, which are to be applied retrospectively to all periods presented
      upon adoption. The adoption of SFAS No. 160 will change the manner in which
      the
      Company reports the losses incurred by its Teletrax subsidiaries. The Company
      currently reports 100% of the losses from these subsidiaries in its statements
      of operations since the losses have exceeded the equity capital of the
      noncontrolling interests and the noncontrolling interests have no future funding
      obligation. Upon the adoption of SFAS No. 160 on January 1, 2009, the
      noncontrolling interests will be allocated their portion of the losses or income
      and such amounts will be stated separately in the Company’s statements of
      operations. The Company’s funding obligations will remain the same, and
      therefore the Company does not believe that the adoption of SFAS No. 160 will
      have a material effect on its business.





**3.
      Discontinued Operations**





In
      September 2006, the Company sold the assets of its U.S. Newswire division to
      PR
      Newswire Association, LLC (“PR Newswire”), a wholly-owned subsidiary of United
      Business Media plc, for approximately $22,577, which includes $270 for
      additional working capital delivered at closing. The assets sold represented
      the
      Company's entire wire distribution and photography services businesses, which
      were an operating segment within the Company’s media communications services
      reporting segment. The base sale price was $19,000, of which the Company
      received $16,250 in cash at closing, which included $150 for additional working
      capital, with the remaining $2,900 deposited into escrow, of which $1,900
      represented amounts to cover potential post-closing contingencies and $1,000
      represented deferred sale price. The base sale price was subject to adjustment
      based on the operating performance of U.S. Newswire for the twelve-month period
      ended September 30, 2006, the effective date of the transaction, with the final
      sale price to be between $18,000 and $23,000. In addition, the final sale price
      was to be adjusted based on the working capital of U.S. Newswire as of September
      30, 2006.




F-9


**MEDIALINK
        WORLDWIDE INCORPORATED**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


The
      final
      sale price of $22,577 included an increase to the base sale price of $3,307
      based on the operating performance of U.S. Newswire for the pertinent period
      and
      $270 for additional working capital. In February 2007, the Company received
      additional cash proceeds of approximately $4,427, of which $3,307 represented
      additional sale price received directly from PR Newswire, $1,000 represented
      the
      release of the escrow balance representing deferred purchase price at closing,
      and $120 represented an adjustment for additional working capital. The escrow
      account balance of $1,900 to cover potential post-closing contingencies was
      released to the Company during 2007. In 2006 the Company recognized a pretax
      gain on the sale of U.S. Newswire of approximately $7,566 based on the minimum
      sale price of $18,000, with the remaining gain on sale of approximately $4,513
      recognized in 2007.





In
      connection with the sale of U.S Newswire, the Company entered into a three-year
      services agreement with PR Newswire under which PR Newswire committed to
      purchase media communications services aggregating a minimum of $750, $600,
      and
      $500 for the fiscal years ended September 30, 2007, 2008, and 2009,
      respectively, and the Company committed to provided PR Newswire with wire and
      photography services work aggregating a minimum of $200 for each of the fiscal
      years then ended. Each party is entitled to retain the full commitment amount
      for each fiscal year irrespective of the amount of work performed under the
      services agreement. For the year ended December 31, 2007, the Company recognized
      $631 of revenue under this arrangement with PR Newswire for which no services
      were provided.





In
      December 2004, the Company sold substantially all of the assets and liabilities
      of its research division, Delahaye, for approximately $8,000, of which $7,700
      was collected at closing and $300 was collected during 2005. The Company also
      received an additional $224 related to a purchase price adjustment based on
      working capital at closing. In connection with the settlement of all outstanding
      claims and contingencies the Company recorded additional gain, net of tax,
      of
      $64 in 2006 on the sale of Delahaye.





The
      operations of U.S. Newswire are reported as discontinued operations for all
      periods presented in the accompanying consolidated financial statements. The
      operating results of U.S. Newswire are reflected separately from the results
      of
      continuing operations through the dates of sale. The results of operations
      and
      the gain on sale of U.S. Newswire and Delahaye are presented as discontinued
      operations for the years ended December 31, 2007 and 2006, respectively, as
      follows:




**For
                the years ended December 31,****2007**
            
            **2006**Revenues
            
            $
            -
            
            $
            4,457Income
                (loss) from operations before income taxes
            
            $
            (22
            )
            $
            1,602Income
                tax expense (benefit)
            
            
            (9
            )
            
            681Income
                (loss) from operations
            
            
            (13
            )
            
            921Gain
                on sale of division before income taxes
            
            
            4,513
            
            
            7,678Income
                tax expense
            
            
            1,910
            
            
            3,224Gain
                on sale of division
            
            
            2,603
            
            
            4,454Income
                from discontinued operations
            
            $
            2,590
            
            $
            5,375




F-10
 
 **MEDIALINK
          WORLDWIDE INCORPORATED**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


In
      connection with the sale of U.S. Newswire, the Company completed certain exit
      activities in September 2006 (the “Third Quarter Plan”) that included
      terminating one employee and vacating the portion of its facility in Washington,
      DC, that served as the primary facility for providing wire distribution and
      photography services. The Company also completed certain exit activities in
      the
      fourth quarter of 2006 (the “Fourth Quarter Plan”) that included terminating one
      employee and vacating the portion of its facility in Norwalk, CT, that served
      as
      a satellite location for certain activities of U.S. Newswire.





The
      results of operations from discontinued operations for the year ended December
      31, 2006, include charges of $226 and $138 related to the Third Quarter Plan
      and
      the Fourth Quarter Plan, respectively. The Third Quarter Plan consisted of
      $11
      for employee termination costs and $215 for contract termination costs
      associated with the lease for the Washington, DC, facility. The Company
      continues to occupy a portion of the Washington, DC, facility for use by its
      media communications services business. The Fourth Quarter Plan consisted of
      $60
      for employee termination costs and $78 for contract termination costs associated
      with the lease for the Norwalk, CT, facility. The Company continues to occupy
      a
      portion of the Norwalk, CT, facility for use as its information technology
      base.
      The results of operations from discontinued operations for the year ended
      December 31, 2007, include a charge of $22 related the Fourth Quarter Plan
      resulting from a change in estimate of the Company’s future building lease
      obligations.





**4.
      Property and Equipment**





Property
      and equipment at December 31 consisted of the following:




**2007**
            
            **2006**Equipment
            
            $
            8,867
            
            $
            8,242Furniture
                and fixtures
            
            
            896
            
            
            1,322Licenses
                and software
            
            
            2,452
            
            
            2,095Leasehold
                improvements
            
            
            3,315
            
            
            3,528Total
            
            
            15,530
            
            
            15,187Less:
                Accumulated depreciation and amortization
            
            
            10,988
            
            
            10,891Net
            
            $
            4,542
            
            $
            4,296





F-11


**MEDIALINK
        WORLDWIDE INCORPORATED**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**5.
      Goodwill**





The
      Company’s intangible assets not subject to amortization under SFAS No. 142
      consisted entirely of goodwill, all of which related to the media communications
      services segment. In connection with the sale of U.S. Newswire in September
      2006, the Company allocated $9,577 of the segment’s goodwill to discontinued
      operations based on the relative fair value of the division sold to the fair
      value of the remainder of the segment on the date of sale. The remaining
      goodwill of $3,429 was subjected to the Company’s annual impairment test, which
      resulted in no impairment for the years ended December 31, 2007 and
      2006.





**6.
      Accrued Expenses**





Accrued
      expenses and other current liabilities at December 31 consisted of the
      following:




**2007**
            
            **2006**Salaries
                and benefits
            
            $
            1,401
            
            $
            1,405Direct
                costs
            
            
            990
            
            
            1,710Client
                prepayments
            
            
            167
            
            
            400Deferred
                revenue
            
            
            740
            
            
            789Other
                taxes
            
            
            452
            
            
            117Professional
                fees
            
            
            326
            
            
            280Abandoned
                lease obligations
            
            
            117
            
            
            325Leasehold
                refurbishments
            
            
            -
            
            
            343Other
                accruals
            
            
            947
            
            
            1,027Total
            
            $
            5,140
            
            $
            6,396




**7.
      Liabilities for Disposal Activities**





In
      addition to the Third Quarter Plan and the Fourth Quarter Plan that the Company
      initiated in connection with the sale of U.S. Newswire (see Note 3), the Company
      completed a plan in September 2003 (the “2003 Plan”) to shut down one of its
      office locations in Norwalk, CT, by subleasing the abandoned space. The
      remaining liability for future payments for these plans and the amounts charged
      against the liability were as follows:




**Total**
            
            **2003
                Plan**
            
            **Third
                Quarter Plan**
            
            **Fourth
                Quarter Plan**Balance
                at January 1, 2006
            
            $
            292
            
            $
            292Charge
                for disposal activities
            
            
            364
            
            
            
            
            $
            226
            
            $
            138Facility
                closure cost payments
            
            
            (148
            )
            
            (135
            )
            
            (13
            )Employee
                termination cost payments
            
            
            (60
            )
            
            
            
            
            
            
            
            (60
            )Balance
                at December 31, 2006
            
            
            448
            
            
            157
            
            
            213
            
            
            78Facility
                closure cost payments
            
            
            (338
            )
            
            (135
            )
            
            (157
            )
            
            (46
            )Adjustment
                to liability
            
            
            22
            
            
            -
            
            
            
            
            
            22Balance
                at December 31, 2007
            
            $
            132
            
            $
            22
            
            $
            56
            
            $
            54





The
      adjustment to the liability for the Fourth Quarter Plan in 2007 resulted from
      a
      change in estimate of the Company’s future building lease obligations. All
      remaining liabilities at December 31, 2007, pertain to facility closure costs.




F-12


**MEDIALINK
        WORLDWIDE INCORPORATED**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


At
      December 31, 2007, the liabilities for the various disposal plans were included
      in the Company’s balance sheet as follows:




**Total**
            
            **Current
                Liabilities**
            
            **Non-current
                Liabilities**2003
                Plan
            
            $
            22
            
            $
            22Third
                Quarter Plan
            
            
            56
            
            
            56Fourth
                Quarter Plan
            
            
            54
            
            
            39
            
            $
            15Total
            
            $
            132
            
            $
            117
            
            $
            15




**8.
      Long-term Debt**





Long-term
      debt at December 31 consisted of the following:




**2007**
            
            **2006**Convertible
                debentures
            
            $
            4,350
            
            $
            5,000Unamortized
                discount
            
            
            (422
            )
            
            (727
            )Net
            
            $
            3,928
            
            $
            4,273





In
      November 2004, the Company issued redeemable subordinated convertible debentures
      with a face value of $5,000. The convertible debentures, which are unsecured
      and
      mature in November 2009, bear interest at a rate equal to the higher of 7%
      or
      the 6-month LIBOR rate (as defined) plus 4.5% for the first three years and
      at
      an adjustable rate thereafter. The convertible debentures provide each holder
      with the option to convert their securities into shares of the Company’s common
      stock at a price of $4.05 per share. In addition, as part of the issuance of
      the
      convertible debentures, each holder received detachable warrants to purchase
      an
      aggregate of 582,929 shares of the Company’s common stock at a price of $3.99
      per share. The Company was able to call the outstanding convertible debentures
      at the end of the first, second, and third years at a price equal to 115%,
      110%,
      and 100%, respectively, of the face value. In addition, the Company can force
      the holders of the convertible debentures to convert into shares of the
      Company’s common stock if the market price of the common stock exceeds $7.09 per
      share, subject to certain other conditions.





The
      gross
      proceeds of $5,000 from the issuance of the convertible debentures and the
      detachable warrants were allocated between the two financial instruments based
      on their relative fair values at the date of issuance. The fair value of the
      warrants of $1,200 was estimated using the Black-Scholes option pricing model
      and the following assumptions: expected volatility of 81.1%, expected life
      of
      five years, risk free interest rate of 3.51%, and no dividend yield. The fair
      value of the warrants was recorded as additional paid-in capital and a discount
      on the convertible debentures, which is being amortized as a component of
      interest expense over the life of the convertible debentures. The remaining
      gross proceeds of $3,800 were ascribed to the fair value of the convertible
      debentures, which accretes in value as the discount is amortized.





In
      connection with the issuance of the convertible debentures, the Company incurred
      fees totaling $256, which are being amortized as a component of interest expense
      over the term of the convertible debentures. Interest expense for the years
      ended December 31, 2007 and 2006, included $213 and $228, respectively, from
      the
      amortization of the discount and $45 and $51, respectively, from the
      amortization of the deferred financing fees. The average interest rate on the
      convertible debentures was 9.8% for each of the years ended December 31, 2007
      and 2006.





In
      2007,
      convertible debentures with an aggregate face value of $650 were converted
      into
      160,494 shares of the Company’s common stock. In addition, warrants to purchase
      46,200 shares of the Company’s common stock were exercised, generating proceeds
      of $184.





F-13


**MEDIALINK
        WORLDWIDE INCORPORATED**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**9.
      Leases**





The
      Company leases certain property used in its operations under agreements that
      are
      classified as operating leases. Such agreements generally include provisions
      for
      inflation-based rate adjustments and, in the case of leases for buildings and
      office space, payments of certain operating expenses and property
      taxes.





Future
      minimum rental payments required under the operating leases that have initial
      or
      remaining non-cancelable lease terms in excess of one year are as
      follows:





2008
            
            $
            2,4092009
            
            
            1,9612010
            
            
            1,5822011
            
            
            24Total
                minimum lease payments
            
            $
            5,976





The
      Company has non-cancelable subleases related to certain properties under which
      it will receive minimum sublease rental payments through 2009 totaling
      approximately $455. Total rental expense under operating leases amounted to
      $2,592 and $2,359 for the years ended December 31, 2007 and 2006,
      respectively.




**10.
      Preferred Stock**





During
      2001, the Company’s Board of Directors approved the adoption of a Preferred
      Stock Rights Agreement (the “Rights Agreement”), under which a dividend
      distribution of one preferred stock purchase right (the “Purchase Right”) was
      declared for each outstanding share of the Company’s common stock, payable to
      common stockholders of record at the close of business on August 30, 2001.
      Each
      Purchase Right has an exercise price of $50.00 and entitles the holder to
      purchase one one-thousandth of a share of the Company’s Series A Participating
      Preferred Stock (the “Series A Preferred”). The Purchase Rights continue to be
      represented by, and trade with, the Company's common stock certificates unless
      the Purchase Rights become exercisable, which will only occur, with certain
      exceptions, in the event that a person or group acquires, or announces a tender
      or exchange offer to acquire, a beneficial ownership of 15% or more of the
      Company's common stock then outstanding. As of December 31, 2007 and 2006,
      the
      Company’s Board of Directors had authorized 50,000 shares of the Series A
      Preferred, none of which was issued or outstanding.





F-14


**MEDIALINK
        WORLDWIDE INCORPORATED**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**11.
      Income Taxes**





The
      components of the provision (benefit) for income taxes were as
      follows:




**2007**
            
            **2006****Current:**Federal
            
            $
            (1,946
            )
            $
            (3,260
            )State
                and local
            
            
            (790
            )
            
            (1,322
            )Total
                current
            
            
            (2,736
            )
            
            (4,582
            )**Deferred:**Federal
            
            
            575
            
            
            1,263State
                and local
            
            
            233
            
            
            512Total
                deferred
            
            
            808
            
            
            1,775Total
                benefit for income taxes
            
            $
            (1,928
            )
            $
            (2,807
            )





The
      provision (benefit) for income taxes varied from the Federal statutory income
      tax rate due to the following:




**2007**
            
            **2006**Taxes
                at statutory rate
            
            $
            (3,100
            )
            $
            (3,104
            )State
                and local income taxes, net of Federal benefit
            
            
            (713
            )
            
            (730
            )Valuation
                allowance on deferred tax assets
            
            
            929
            
            
            213Benefit
                for foreign taxes at lower rates
            
            
            211
            
            
            196Non-deductible
                expenses and other
            
            
            745
            
            
            618Benefit
                for income taxes
            
            $
            (1,928
            )
            $
            (2,807
            )Federal
                statutory rate
            
            
            34.00
            %
            
            34.00
            %Effective
                rate
            
            
            21.14
            %
            
            30.75
            %





The
      Company generated losses from continuing operations before taxes for the years
      ended December 31, 2007 and 2006, as follows:




**2007**
            
            **2006**Domestic
            
            $
            (7,358
            )
            $
            (7,493
            )Foreign
            
            
            (1,761
            )
            
            (1,635
            )Total
            
            $
            (9,119
            )
            $
            (9,128
            )





F-15


**MEDIALINK
        WORLDWIDE INCORPORATED**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


The
      components of the net deferred tax asset at December 31 were as
      follows:





**2007**
            
            **2006**Deferred
                tax assets:Accounts
                receivable
            
            $
            14
            
            $
            66Property
                and equipment
            
            
            270
            
            
            97Goodwill
            
            
            469
            
            
            782Other
                intangible assets
            
            
            614
            
            
            748Minority
                interest
            
            
            341
            
            
            341Equity
                investments
            
            
            300
            
            
            300Accrued
                compensation
            
            
            558
            
            
            614Other
                accrued expenses
            
            
            32
            
            
            301Net
                operating loss carryforwards
            
            
            3,120
            
            
            2,348Total
                deferred tax assets
            
            
            5,718
            
            
            5,597Deferred
                tax liabilities:Other
                liabilities
            
            
            -
            
            
            362Total
                deferred tax liabilities
            
            
            -
            
            
            362Net
                deferred tax asset before valuation allowance
            
            
            5,718
            
            
            5,235Valuation
                allowance on deferred tax assets
            
            
            5,332
            
            
            4,403Net
                deferred tax asset
            
            $
            386
            
            $
            832





At
      December 31, 2007, the Company had domestic state net operating loss
      carryforwards of approximately $4,125 that expire in 2016 through 2021 and
      foreign net operating loss carryforwards of $9,300 that do not expire. The
      Company had no Federal net operating loss carryforwards at December 31, 2007.
      The Company established a valuation allowance to reserve for certain of its
      deferred tax assets based on its projections indicating that it is more likely
      than not that such benefit will not be fully realized. The gain on sale of
      U. S.
      Newswire, however, enabled the Company to realize certain deferred tax assets
      in
      future periods. Accordingly, the Company recognized net deferred tax assets
      totaling $386 and $832 at December 31, 2007 and 2006, respectively. The increase
      in the valuation allowance of $929 for the year ended December 31, 2007, was
      recognized as additional tax provision for the period.





On
      January 1, 2007, the Company adopted the provisions of Financial Accounting
      Standards Board Interpretation No. (“FIN”) 48, "Accounting for Uncertainty in
      Income Taxes - an interpretation of FASB Statement No. 109." FIN 48 prescribes
      a
      recognition threshold and measurement attribute for the financial statement
      recognition and measurement of a tax position taken or expected to be taken
      in a
      tax return. Under FIN 48, a two-step process is used to evaluate a tax position.
      The first step establishes a recognition criterion under which the tax position
      is recognized if it is more likely than not that it will be sustained upon
      examination. The second step establishes a measurement criterion under which
      the
      tax position is measured at the largest amount of benefit that is greater than
      50% likely of being realized upon ultimate settlement.





The
      changes in unrecognized tax positions during the year ended December 31, 2007,
      were as follows:





Unrecognized
                tax positions at January 1, 2007
            
            $
            241Increase
                in unrecognized tax benefits for tax positions taken during the
                year
            
            
            659Unrecognized
                tax positions at December 31, 2007
            
            $
            900





The
      total
      amount of unrecognized tax positions at December 31, 2007, is reflected as
      a
      reduction of “Prepaid and refundable taxes” in the Company’s balance sheet. In
      2007, the Internal Revenue Service commenced an examination of the Company’s
      Federal income tax returns for the years ended December 31, 2004 and
      2005.





F-16


**MEDIALINK
          WORLDWIDE INCORPORATED**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS
          (Continued)**


**12.
      Stock Options**





Under
      a
      stock option plan covering employees and other eligible participants (the
“Employee Plan”), the Company grants stock options to purchase shares of the
      Company’s common stock. Stock options granted under the Employee Plan generally
      become exercisable under two alternative vesting schedules over a four-year
      period. One vesting schedule provides for 20% of the stock options granted
      being
      exercisable on the grant date and an additional 20% becoming exercisable on
      the
      anniversary of the grant date in each of the next four years. The second vesting
      schedule provides for 25% of the stock options granted becoming exercisable
      on
      the anniversary of the grant date in each of the next four years. Incentive
      stock options granted under the Employee Plan generally have a term of ten
      years
      and an exercise price equal to the fair market value of the Company’s common
      stock on the grant date. Incentive stock options issued to employees who own
      more than 10% of the voting power of all classes of equity of the Company have
      a
      term of five years and an exercise price equal to at least 110% of the fair
      market value of the Company’s common stock on the grant date. Non-qualified
      stock options granted under the Employee Plan can have a term of up to fifteen
      years and an exercise price that is determined for each individual grant by
      a
      committee appointed by the Company’s board of directors. There are 2,270,808
      shares of the Company’s common stock reserved for the issuance of stock options
      under the Employee Plan. At December 31, 2007, 949,182 shares remained available
      for the issuance of stock options and 762,080 stock options were
      outstanding.





Under
      a
      stock option plan covering members of its board of directors (the “Directors’
Plan”), the Company grants stock options to non-employee directors. Newly
      appointed non-employee directors are granted 10,000 stock options upon their
      appointment or election to the board of directors, and all non-employee
      directors are granted 3,000 stock options on the first business day of each
      year. Additional grants of stock options may be made at the discretion of a
      committee appointed by the Company’s board of directors. Stock options granted
      under the Directors’ Plan generally vest ratably over a three-year period, have
      a term of ten years, but cannot have a term that exceeds fifteen years, and
      have
      an exercise price equal to the fair market value of the Company’s common stock
      on the grant date. There are 430,000 shares of the Company’s common stock
      reserved for the issuance of stock options under the Directors’ Plan. At
      December 31, 2007, 156,000 shares remained available for the issuance of stock
      options and 240,600 stock options were outstanding.





On
      January 1, 2006, the Company adopted the provisions SFAS No. 123R. The Company
      uses a binomial lattice model for determining the fair value of stock options
      granted subsequent to January 1, 2006. Prior to the adoption of SFAS No. 123R,
      the Company valued stock options using the Black-Scholes option-pricing model,
      which the Company used for the pro forma disclosure requirements of SFAS No.
      123, “Accounting for Stock-Based Compensation.” During 2007, the Company granted
      113,000 stock options under the Employee Plan, of which 80,000 stock options
      granted to employees vest ratably over a four-year period, 20,000 stock options
      granted to an employee vested 20% on the grant date and ratably over a four-year
      period thereafter, and 13,000 stock options granted to non-employee directors
      of
      the Teletrax subsidiaries vest ratably over a three-year period. Also during
      2007, the Company granted 34,000 stock options to non-employee directors of
      the
      Company that become exercisable over a three-year period, with one-third vesting
      on each anniversary of the grant date.





The
      following weighted average assumptions were used in calculating the fair value
      of stock options granted under the Employee Plan and the Directors’ Plan during
      the years ended December 31, 2007 and 2006:





**2007**
            
            **2006****Employee
                Plan**
            
            **Directors’
                Plan**
            
            **Employee
                Plan**
            
            **Directors’
                Plan**Expected
                term
            
            
            3.85
            
            
            4.23
            
            
            4.19
            
            
            4.23Expected
                volatility
            
            
            .5891
            
            
            .5969
            
            
            .6308
            
            
            .7052Expected
                dividends
            
            
            0
            %
            
            0
            %
            
            0
            %
            
            0
            %Risk-free
                interest rate
            
            
            4.38
            %
            
            4.48
            %
            
            4.67
            %
            
            4.64
            %





F-17
 
 **MEDIALINK
            WORLDWIDE INCORPORATED**
 **NOTES
            TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


The
      expected term of stock options is based on historical data used to estimate
      the
      exercise of options prior to their expiration. Such early exercises primarily
      result either from a termination, after which employees and non-employee
      directors generally have a period of 90 days and nine months, respectively,
      to
      exercise stock options, or from exercises occurring when the ratio of the market
      price of the Company’s common stock to the exercise price of a stock option is
      attractive to the holder of the stock option. The expected volatility is based
      on the historical volatility of the Company’s common stock. The expected
      dividends are based on the historical dividends paid and the dividends the
      Company expects to pay in future periods. The risk-free interest rate is based
      on the yields of United States Treasury Notes at the time stock options are
      granted.





Information
      relating to activity in the Employee Plan is summarized in the following table.
      All stock option grants included in the following table had exercise prices
      equal to market price on the grant date.





**Number
                of shares**
            
            **Weighted
                Average Exercise Price**
            
            **Weighted
                Average Fair Value**
            
            **Aggregate
                Intrinsic Value**
            
            **Weighted
                Average Remaining Contractual Term**Options
                outstanding at January 1, 2006
            
            
            873,319
            
            $
            4.80Options
                granted
            
            
            426,140
            
            $
            4.63
            
            $
            2.45Options
                exercised
            
            
            (134,626
            )
            $
            2.88
            
            
            
            
            $
            218Options
                forfeited and expired
            
            
            (376,643
            )
            $
            5.11Options
                outstanding at December 31, 2006
            
            
            788,190
            
            $
            4.89Options
                granted
            
            
            113,000
            
            $
            4.49
            
            $
            2.18Options
                exercised
            
            
            (32,500
            )
            $
            2.86
            
            
            
            
            $
            55Options
                forfeited and expired
            
            
            (106,610
            )
            $
            5.50Options
                outstanding at December 31, 2007
            
            
            762,080
            
            $
            4.83
            
            
            
            
            $
            338
            
            
            7.10Options
                exercisable at December 31, 2007
            
            
            363,023
            
            $
            5.27
            
            
            
            
            $
            263
            
            
            5.18





Information
      relating to options outstanding under the Employee Plan at December 31, 2007,
      is
      summarized as follows:





**Outstanding**
            
            **Exercisable****Range
                of Exercise Prices**
            
            **Options**
            
            **Weighted
                Average Exercise Price**
            
            **Weighted
                Average Remaining Life**
            
            **Options**
            
            **Weighted
                Average Exercise Price**$2.61
                - $3.30
            
            
            227,685
            
            $
            2.89
            
            
            5.46
            
            
            190,735
            
            $
            2.90$4.00
                - $4.99
            
            
            444,420
            
            $
            4.56
            
            
            8.91
            
            
            95,313
            
            $
            4.65$5.22
                - $6.08
            
            
            26,675
            
            $
            5.62
            
            
            5.38
            
            
            13,675
            
            $
            5.38$11.25
            
            
            33,850
            
            $
            11.25
            
            
            1.20
            
            
            33,850
            
            $
            11.25$15.00
                - $16.13
            
            
            29,450
            
            $
            15.74
            
            
            0.70
            
            
            29,450
            
            $
            15.74





Information
      relating to activity in the Directors’ Plan is summarized in the following
      table. All option grants included in the following table had exercise prices
      equal to market price on the grant date.




F-18


**MEDIALINK
        WORLDWIDE INCORPORATED**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**





**Number
                of shares**
            
            **Weighted
                Average Exercise Price**
            
            **Weighted
                Average Fair Value**
            
            **Aggregate
                Intrinsic Value**
            
            **Weighted
                Average Remaining Contractual Term**Options
                outstanding at January 1, 2006
            
            
            193,600
            
            $
            5.55Options
                granted
            
            
            68,600
            
            $
            3.90
            
            $
            2.25Options
                forfeited and expired
            
            
            (37,600
            )
            $
            3.54Options
                outstanding at December 31, 2006
            
            
            224,600
            
            $
            5.39Options
                granted
            
            
            34,000
            
            $
            4.92
            
            $
            2.52Options
                forfeited and expired
            
            
            (18,000
            )
            $
            8.20Options
                outstanding at December 31, 2007
            
            
            240,600
            
            $
            5.11
            
            
            
            
            $
            116
            
            
            5.99Options
                exercisable at December 31, 2007
            
            
            184,933
            
            $
            5.35
            
            
            
            
            $
            99
            
            
            5.21





Information
      relating to options outstanding under the Directors’ Plan at December 31, 2007,
      is summarized as follows:





**Outstanding**
            
            **Exercisable****Range
                of Exercise Prices**
            
            **Options**
            
            **Weighted
                Average Exercise Price**
            
            **Weighted
                Average Remaining Life**
            
            **Options**
            
            **Weighted
                Average Exercise Price**$2.61
                - $3.86
            
            
            124,000
            
            $
            3.35
            
            
            6.23
            
            
            99,333
            
            $
            3.30$4.15
                - $5.22
            
            
            80,600
            
            $
            4.47
            
            
            7.83
            
            
            49,600
            
            $
            4.20$8.06
            
            
            12,000
            
            $
            8.06
            
            
            2.00
            
            
            12,000
            
            $
            8.06$13.25
                - $16.50
            
            
            24,000
            
            $
            14.88
            
            
            0.58
            
            
            24,000
            
            $
            14.88





For
      the
      years ended December 31, 2007 and 2006, the Company recognized compensation
      expense related to stock options of $347 and $300, respectively, and recognized
      a tax benefit related to stock options exercised of $3 and $50, respectively.
      Compensation expense related to non-vested stock options under both the Employee
      Plan and the Directors’ Plan that was not recognized as of December 31, 2007,
      totaled $833 and is expected to be recognized over a weighted average period
      of
      2.5 years. During the years ended December 31, 2007 and 2006, the Company
      received $92 and $387, respectively, from the exercise of stock options. The
      Company has a policy of issuing new shares of common stock upon the exercise
      of
      stock options.





**13.
      Earnings per Share**





Basic
      earnings (loss) per share of common stock is computed by dividing income (loss)
      available to common stockholders by the weighted average number of common shares
      outstanding. There were no reconciling items to net loss to arrive at loss
      available to common stockholders for the years ended December 31, 2007 and
      2006.
      Diluted earnings (loss) per share of common stock is computed by giving effect
      to all dilutive potential common shares. The number of shares used in the
      calculation of diluted earnings (loss) per share for the years ended December
      31, 2007 and 2006, excluded 268,140 and 148,147, respectively, of incremental
      shares related to stock options and warrants and excluded 1,086,989 and
      1,234,567, respectively, of incremental shares related to convertible
      debentures. Such incremental shares were excluded from the calculation of
      diluted earnings (loss) per share due to their antidilutive effect on income
      from continuing operations.





F-19


**MEDIALINK
          WORLDWIDE INCORPORATED**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**14.
      Retirement Plan**





The
      Company has a defined contribution plan in which eligible employees who have
      attained 21 years of age may contribute on both a pretax and after-tax basis
      up
      to a maximum of 15% of their annual salary, subject to annual limits established
      by the Internal Revenue Service. The Company can make discretionary
      contributions. Employees are fully vested at all times in contributions they
      make to the plan, and employees who have completed at least one year of service
      and are employed with the Company on the last business day of the year fully
      vest in Company contributions. The Company made no discretionary contributions
      to its defined contribution plan for the years ended December 31, 2007 and
      2006.





**15.
      Commitments and Contingencies**





The
      Company is contingently liable for transactions arising in the ordinary course
      of business and from time to time may become involved in various legal
      proceedings in which damages and other remedies are sought. In the opinion
      of
      Company management, after review with legal counsel, the ultimate resolution
      of
      these matters will not have a material effect on the Company’s consolidated
      financial statements.





**16.
      Guarantees**





In
      connection with the sale of U.S. Newswire in 2006, the Company agreed to
      indemnify the purchaser for breaches of certain standard representations and
      warranties. In the event any such indemnification obligation were to be
      triggered, the Company may be liable when the damages incurred by the purchaser
      exceed $150. For certain such indemnification obligations, the Company would
      be
      liable for the amount of the damages incurred in excess of $150, with such
      damages limited to $5,000 in total. For certain other indemnification
      obligations, the Company would be liable for the full amount of the damages,
      including the first $150, with such damages limited to $5,000 in total. For
      still other indemnification obligations, there is no limit to the damages for
      which the Company would be ultimately liable. No amount has been recognized
      in
      connection with such potential obligations.





In
      connection with the sale of Delahaye, the Company agreed to indemnify the
      purchaser for breaches of certain standard representations and warranties.
      In
      the event any such indemnification obligation were to be triggered, the Company
      may be liable when the damages incurred by the purchaser exceed $100. The
      Company would be liable for the full amount of the damages incurred, including
      the first $100, with such damages limited to $2,000 in total. No amount has
      been
      recognized in connection with such potential liability.





The
      Company has entered into subleases with third parties relating to properties
      no
      longer occupied by the Company. Under an assignment of one of these subleases,
      the third party remits payment directly to the landlord, although the Company
      remains the primary obligor for the lease payments. If the third party ceased
      to
      remit payment directly to the landlord, the Company would be liable for such
      payments. The maximum potential amount for which the Company can be held liable
      is approximately $126. No amount has been recognized in connection with such
      potential liability.





**17.
      Concentration of Credit Risk**





Financial
      instruments that potentially subject the Company to concentrations of credit
      risk consist principally of cash equivalents and trade receivables. The Company
      maintains cash balances and cash equivalents with high credit quality financial
      institutions.





The
      Company provides credit to clients on an uncollateralized basis after evaluating
      client creditworthiness. The Company’s clients are not concentrated in any
      specific geographic region, but are concentrated in the automotive, insurance,
      pharmaceutical, consumer products, and public relations agency businesses.
      The
      Company’s five largest clients provided approximately 19% and 17% of revenues
      for the years ended December 31, 2007 and 2006, respectively. In addition,
      amounts due from these clients represented 18% and 17% of trade accounts
      receivable at December 31, 2007 and 2006, respectively. The Company does not
      believe that a significant reduction in business from any of its clients would
      have a material adverse effect on its results of operations or financial
      condition since no single client or group of clients is responsible for a
      significant portion of the Company’s revenues or represents a significant
      portion of the Company’s trade receivables.





F-20


**MEDIALINK
          WORLDWIDE INCORPORATED**
 **NOTES
          TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


**18.
      Supplemental Disclosure of Cash Flow Information**





Payments
      of interest and income taxes were as follows:




**2007**
            
            **2006**Interest
                paid
            
            $
            328
            
            $
            501Income
                taxes paid (refunded) - net
            
            $
            1,516
            
            $
            (221
            )





Non-cash
      investing and financing activities for the year ended December 31, 2007,
      consisted entirely of the conversion of $650 of subordinated debentures into
      160,494 shares of the Company’s common stock. There were no such non-cash
      investing and financing activities for the year ended December 31,
      2006.





**19.
      Fair Value of Financial Instruments**





The
      estimated fair values of financial instruments have been determined by the
      Company using available market information and appropriate valuation
      methodologies. However, considerable judgment is required in interpreting market
      data to develop estimates of fair value. Accordingly, the estimates presented
      herein are not necessarily indicative of the amounts the Company would realize
      in a current market exchange.





The
      carrying amounts of cash and cash equivalents and non-trade receivables included
      as part of other current assets at December 31, 2007 and 2006, are a reasonable
      approximation of their fair values due to the short-term nature of these
      instruments. The carrying amounts of the convertible debentures at December
      31,
      2007 and 2006, are a reasonable approximation of their fair values since the
      interest rates were above the fixed-rate minimum, resulting in the convertible
      debentures being variable-rate obligations. Non-trade receivables included
      as
      part of other non-current assets with a carrying amount of $11 at December
      31,
      2006, had a fair value of $10. The fair values of these instruments were
      estimated by discounting the future streams of payments at the interest rate
      on
      the convertible debentures, which is used as a surrogate for the Company’s
      incremental borrowing rate.





**20.
      Segment Information**





The
      Company has determined that its two reportable segments are media communications
      services and digital video tracking services. The media communications services
      segment provides broadcast services, including consultation, production,
      distribution, and monitoring services, to corporate entities and other
      organizations. Through majority-owned subsidiaries, the Company’s Teletrax®
digital video tracking services segment provides broadcast intelligence to
      video
      content providers such as entertainment companies, news organizations,
      television syndicators, direct-response marketing companies, and sports
      organizations.





The
      Company identifies its reportable segments based on the services provided by
      its
      various operations. The media communications services segment is an aggregation
      of such services provided by the Company’s media communications operations in
      the United States and the United Kingdom.




F-21


**MEDIALINK
        WORLDWIDE INCORPORATED**
 **NOTES
        TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**


Prior
      to
      its sale in September 2006, U.S. Newswire was an operating segment within the
      media communications services reportable segment and is currently reported
      as a
      discontinued operation (see Note 3).





The
      Company measures profit or loss of its segments based on operating income.
      The
      accounting policies used to measure operating income of the segments are the
      same as those outlined in Note 2 to the consolidated financial
      statements.





Segment
      information relating to results of continuing operations for the years ended
      December 31, 2007 and 2006, was as follows:





**2007**
            
            **2006***Revenues:*Media
                communications services
            
            $
            29,985
            
            $
            29,250Digital
                video tracking services
            
            
            3,420
            
            
            2,469Total
            
            $
            33,405
            
            $
            31,719*Operating
                income (loss):*Media
                communications services
            
            $
            576
            
            $
            514Digital
                video tracking services
            
            
            (3,939
            )
            
            (3,408
            )Total
            
            
            (3,363
            )
            
            (2,894
            )Corporate
                and other business activities
            
            
            (5,694
            )
            
            (5,845
            )Interest
                expense - net
            
            
            (62
            )
            
            (389
            )Loss
                from continuing operations before taxes
            
            $
            (9,119
            )
            $
            (9,128
            )*Depreciation
                and amortization expense*Media
                communications services
            
            $
            1,128
            
            $
            1,151Digital
                video tracking services
            
            
            780
            
            
            821Corporate
                and other business activities
            
            
            34
            
            
            -Total
            
            $
            1,942
            
            $
            1,972





F-22


**MEDIALINK
      WORLDWIDE INCORPORATED**


**NOTES
      TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)**




Segment
      information related to the Company’s assets at December 31, 2007 and 2006, was
      as follows:





**2007**
            
            **2006***Total
                assets:*Media
                communications services
            
            $
            11,405
            
            $
            11,684Digital
                video tracking services
            
            
            3,579
            
            
            3,279Corporate
                and other business activities
            
            
            13,161
            
            
            20,191Total
            
            $
            28,145
            
            $
            35,154*Expenditures
                on long-lived assets:*Media
                communications services
            
            $
            902
            
            $
            366Digital
                video tracking services
            
            
            539
            
            
            1,447Corporate
                and other business activities
            
            
            292
            
            
            2Discontinued
                operations
            
            
            -
            
            
            24Total
            
            $
            1,733
            
            $
            1,839




Segment
      information for continuing operations relating to geographic regions for the
      years ended December 31, 2007 and 2006, was as follows:





**2007**
            
            **2006***Revenues*United
                States
            
            $
            24,342
            
            $
            24,554United
                Kingdom
            
            
            9,063
            
            
            7,165Total
            
            $
            33,405
            
            $
            31,719*Long-lived
                assets:*United
                States
            
            $
            3,525
            
            $
            3,837United
                Kingdom
            
            
            1,017
            
            
            459Total
            
            $
            4,542
            
            $
            4,296





**21.
      Comprehensive Income**





Comprehensive
      income includes all changes to equity that are not the result of transactions
      with shareholders and is comprised of net income and other comprehensive income.
      For the years ended December 31, 2007 and 2006, other comprehensive income
      of
      $34 and $99, respectively, consisted entirely of foreign currency translation
      adjustments on which no tax effect is reported since they relate to indefinite
      investments in foreign subsidiaries. At December 31, 2007 and 2006, accumulated
      other comprehensive loss in the consolidated balance sheet of $260 and $294,
      respectively, consisted entirely of foreign currency translation
      adjustments.





F-23




**EXHIBIT
      INDEX**





Exhibit
                No.
            
            Description2.1
            
            Asset
                Purchase Agreement dated as of September 29, 2006, between Medialink
                Worldwide Incorporated and PR Newswire Association, LLC (Incorporated
                by
                reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K
                filed on October 5, 2006).3.1
            
            Amended
                and Restated Certificate of Incorporation of Medialink Worldwide
                Incorporated (Incorporated by reference to Exhibit No. 2.5 of Registrant’s
                Registration Statement on Form 8-A filed on January 16, 1997 (File
                No.
                000-21989)).3.2
            
            Amended
                and Restated By-Laws of Medialink Worldwide Incorporated dated November
                8,
                2007 (Incorporated by reference to Exhibit No. 3.2 of Registrant’s Current
                Report on Form 8-K filed on November 13, 2007).4.1
            
            Preferred
                Stock Rights Agreement, dated as of August 16, 2001, between Medialink
                Worldwide Incorporated and Mellon Investor Services, LLC, including
                the
                Certificate of Designation, the form of Rights Certificate and the
                Summary
                of Rights attached thereto as Exhibits A, B, and C, respectively
                (Incorporated by reference to Exhibit No. 4.1 of Registrant’s Registration
                Statement on Form 8-A filed on August 16, 2001 (File No.
                000-21989)).10.1
            
            Amended
                and Restated Employment Agreement, dated as of December 31, 2005,
                by and
                between Medialink Worldwide Incorporated and Laurence Moskowitz
                (Incorporated by reference to Exhibit No. 10.1 of the Registrant’s Annual
                Report on Form 10-K for the fiscal year ended December 31,
                2005).10.2
            
            Amended
                and Restated Employment Agreement, dated as of August 28, 2001, by
                and
                between Medialink Worldwide Incorporated and J. Graeme McWhirter
                (Incorporated by reference to Exhibit No. 10.2 of Registrant’s Annual
                Report on Form 10-K for the fiscal year ended December 31,
                2001).10.3
            
            Separation
                Agreement and General Release, dated as of December 30, 2005, by
                and
                between Medialink Worldwide Incorporated and J. Graeme McWhirter
                (Incorporated by reference to Exhibit No. 10.3 of the Registrant’s Annual
                Report on Form 10-K for the fiscal year ended December 31,
                2005).10.4
            
            Asset
                Purchase Agreement, dated December 31, 2004, by and between Medialink
                Worldwide Incorporated and Bacon’s Information Inc. (Incorporated by
                reference to Exhibit No. 10.1 of the Registrant’s Current Report on Form
                8-K/A filed on March 14, 2005).10.5
            
            Agreement
                for the Sale and Purchase of Certain Assets of Medialink UK Limited
                forming part of the Delahaye Business, dated December 31, 2004, by
                and
                between Medialink UK Limited and Romeike Limited (Incorporated by
                reference to Exhibit No. 10.2 of the Registrant’s Current Report on Form
                8-K/A filed on March 14, 2005).10.7
            
            Medialink
                Worldwide Incorporated 401(k) Employee Savings Plan (Incorporated
                by
                reference to Exhibit No. 10.7 of the Registrant’s Quarterly Report on Form
                10-Q for the quarterly period ended September 30,
                2006).10.8
            
            Medialink
                Worldwide Incorporated Amended and Restated Stock Option Plan
                (Incorporated by reference to Exhibit No. 10.8 of the Registrant’s Annual
                Report on Form 10-K for the fiscal year ended December 31,
                2006).10.9
            
            Medialink
                Worldwide Incorporated Amended and Restated 1996 Directors Stock
                Option
                Plan (Incorporated by reference to Exhibit No. 10.9 of the Registrant’s
                Quarterly Report on Form 10-Q for the quarterly period ended March
                31,
                2006).10.12
            
            Employment
                Agreement, dated as of July 11, 2005, by and between Medialink Worldwide
                Incorporated and Kenneth G. Torosian (Incorporated by reference to
                Exhibit
                No. 10.12 of Registrant’s Quarterly Report on Form 10-Q for the quarterly
                period ended September 30, 2005).10.13
            
            Employment
                Agreement, dated as of September 9, 2005, by and between Medialink
                Worldwide Incorporated and Lawrence A. Thomas (Incorporated by reference
                to Exhibit No. 10.13 of Registrant’s Quarterly Report on Form 10-Q for the
                quarterly period ended September 30, 2005).10.14(a)
            
            Technology
                License Agreement dated as of April 8, 2002, by and between Koninklijke
                Philips Electronics, N.V., and TTX Limited.10.14(b)
            
            Joinder
                and First Amendment to the Technology License Agreement dated as
                of
                January 1, 2003, by and among Koninklijke Philips Electronics, N.V.,
                TTX
                Limited, and TTX (US) LLC.21
            
            Subsidiaries
                of the Registrant.23
            
            Consent
                of KPMG LLP.31.1
            
            Certification
                of the principal executive officer pursuant to Rules 13a-14(a) and
                15d-14(a) of the Securities Exchange Act of 1934, as
                amended.31.2
            
            Certification
                of the principal financial officer pursuant to Rules 13a-14(a) and
                15d-14(a) of the Securities Exchange Act of 1934, as
                amended.32
            
            Certification
                of the principal executive officer and principal financial officer
                pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section
                906 of
                the Sarbanes-Oxley Act of 2002.





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**MEDIALINK
                WORLDWIDE INCORPORATED****SCHEDULE
                II - VALUATION AND QUALIFYING ACCOUNTS****For
                the years ended December 31, 2007 and 2006****(In
                thousands of dollars)**




AdditionsDescription
            
            Balance
                at beginning of period
            
            Charged
                to costs and expenses
            
            Charged
                to other accounts
            
            Deductions
                (1)
            
            Balance
                at end of periodAllowances
                deducted in the balance sheet from assets to which they
                apply:**For
                the year ended December 31, 2007:**Allowance
                for doubtful accounts
            
            $
            347
            
            $
            1
            
            $
            -
            
            $
            129
            
            $
            219Valuation
                allowance on deferred tax assets
            
            $
            4,403
            
            $
            929
            
            $
            -
            
            $
            -
            
            $
            5,332**For
                the year ended December 31, 2006:**Allowance
                for doubtful accounts
            
            $
            442
            
            $
            252
            
            $
            -
            
            $
            347
            
            $
            347Valuation
                allowance on deferred tax assets
            
            $
            4,190
            
            $
            213
            
            $
            -
            
            $
            -
            
            $
            4,403







(1)
                Represents amounts written off.





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