Perion Network Ltd. ( PERI) Q4 2011 Earnings Conference Call March 06, 2012, 10:00 a.m. ET Executi ve s Rob Fink - IR, KCSA Strategic Communications Josef Mandelbaum - CEO Yacov Kaufman - CFO Analysts Jared Schramm - Roth Capital Partners Jay Kumar - Midsouth Investment Fund Presentation [Will be posted shortly] Question-and-Answer Session Operator Thank you. (Operator Instructions) The first question is from Jared Schramm of Roth Capital Partners. Please go ahead. Jared Schramm - Roth Capital Partners
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For us in particular what we are seeing is there is on the tablet side and the research we are doing, our consumers in particular are adopting tablets at a much higher rate in terms of usage and they were smartphones. So, we are putting a lot more emphasis there and in terms of R&D and focus in terms of product managers and marketing, we are probably spending I don’t know exact percentage is, but I’d say 20% of the people in the company are now focused on trying to build great applications, looking to understand the industry better and how we can really relate to our consumers better for products on this platform.Jared Schramm - Roth Capital Partners Okay. And with the launch of PhotoJoy and Fixie recently could you describe what customer reaction has been like to that versus your expectations originally? Josef Mandelbaum Sure. The reaction to PhotoJoy overall has been actually positive, the challenge with PhotoJoy we have been having is monetizing it as effectively as we would like. Right now it's only an advertising search driven model, and the industry and the advertising the search driven model as people are following it is competitive. And PhotoJoy is a bigger download and we are working on trying to solve that. So, that the take rate is little bit lower than we would like in terms of the completion rate when you started which effects the lifetime value and the cost per acquisition. So, economically, on PhotoJoy we are struggling a little bit to make it really work, so we haven’t we deemphasized a little bit in terms of our marketing on that until we get it right. But the consumer reaction to PhotoJoy is actually been very positive. And that’s why we launched an iPad 2, it just started on iPad but really on the desktop, I think whoever has it, they really like the application. So, we know we have a nice product. We are trying to figure out how to really accelerate it through a monetization. Until we really understand that, we are going to be conservative with that.
On Fixie, again just started in Q4 of last year. I think what we are seeing is this is one of the good examples of doing cross marketing against our base, and we have nice pickup on our existing base where we’re marketing Fixie to them. So, that’s doing well and the overall consumer reaction to Fixie, I’d say overall it's positive. These are the use, people like it, it's helping them. It's just the first of our forays into this category. We hope to do a lot more in the security space, in the next comings months to years. I think Fixie was just our toe in the water.With regards to external acquisition efforts, like we did earlier in last year, we are taking our time; we are doing a lot of testing. I think some things are showing some good positive signs and some things are showing its competitive out there. So, the good news is, we are leveraging our base and that’s helping establish a base of users and revenue for Fixie. We are not yet at the point where we’re really putting pedal to the metal so to speak to kind of really increase that on the customer acquisition basis as much as we would like in the future, but right now it's going according to plan. We are not planning in Q1 to really spend a lot of money on Fixie, we are doing a lot of testing there and hopefully in the next one or two quarters we can give updates on how that’s going. Jared Schramm - Roth Capital Partners And now that you’ve had the Smilebox property under your belt for a couple of months here. Could you discuss some of the success with the cross marketing efforts you had between Smilebox and the IncrediMail product? Read the rest of this transcript for free on seekingalpha.com