SEATTLE–(EMWNews)–Marchex, Inc. (NASDAQ:MCHX) (NASDAQ:MCHXP), a local search and

advertising company, today reported its results for the second quarter

ended June 30, 2008.

Second Quarter 2008 Consolidated Financial Results

• Revenue was $37.4 million for the second quarter of 2008, compared to

  $34.7 million for the same period of 2007.

• GAAP net income applicable to common stockholders was $509,000 for the

  second quarter of 2008 or $0.01 per diluted share. This compares to

  GAAP net income applicable to common stockholders of $354,000 or $0.01

  per diluted share for the same period of 2007. The second quarter 2008

  results included non-cash stock-based compensation expense recorded

  under the fair value method of $2.7 million, compared to non-cash

  stock-based compensation expense of $2.3 million for the same period

  in 2007.

• We provide a reconciliation of GAAP diluted EPS to Adjusted Non-GAAP

  EPS in the financial tables attached to this press release and

  encourage investors to examine the reconciling adjustments between the

  GAAP and non-GAAP measures. Adjusted non-GAAP EPS for the second

  quarter of 2008 was $0.09, compared to $0.10 for the same period of

  2007. Some Wall Street analysts use non-GAAP measures to analyze our

  operating results, which may include adjusted non-GAAP EPS, adjusted

  operating income before amortization and adjusted EBITDA. We present

  GAAP measures with equal or greater prominence than non-GAAP measures

  and such non-GAAP measures should not be considered a substitute for,

  or superior to, GAAP results.

• Adjusted operating income before amortization was $5.4 million for the

  second quarter of 2008, compared to $6.4 million for the same period

  of 2007. A reconciliation of non-GAAP adjusted operating income before

  amortization to GAAP operating income and GAAP net income is included

  in the financial tables attached to this release.

• Adjusted EBITDA was $8.0 million in the second quarter of 2008,

  compared to $8.6 million for the same period of 2007. A reconciliation

  of operating income before taxes, depreciation, amortization and

  gain/loss on sales and disposals of intangible assets to GAAP net cash

  provided by operating activities is included in the financial tables

  attached to this release.

“Marchex’s execution

on our local mission continues to drive growth in our business, which

led to our positive financial results in the second quarter,”

said Russell C. Horowitz, Marchex Chairman and CEO. “We

remain laser-focused on making Marchex the most relevant integration

point for connecting local advertisers – large and small – to consumers

with local intent. Continued execution on our operational, strategic and

financial goals will drive our growth for the balance of 2008 and

beyond, and further position Marchex as a leader in the online local

advertising market.”

Operating Highlights

Local Advertising Services: For the second quarter of 2008, revenue from

Local Advertising Services was $20.8 million. In the second quarter,

Marchex added more than 10,000 new advertisers through its local

aggregator partnerships and direct sales channel. Marchex now has more

than 75,000 advertisers using its products and services and, based on

current growth rates, is ahead of pace to reach its previously stated

goal of 100,000 advertisers using Marchex products and services by the

end of 2009.

Local Search Network (proprietary traffic sources): For the second

quarter of 2008, revenue from Marchex’s Local Search Network was $16.6

million. Additionally, Marchex attracted more than 32 million unique

visitors for the month of June 2008 and delivered more than 125 million

revenue-generating events and referrals in the second quarter. Unique

visitor statistics are based on internal traffic logs, which calculate

unique IP (Internet protocol) addresses on an unduplicated basis during

a given month.

Non-Operating Highlights

Marchex today announced that it is increasing its stock repurchase

program by 1 million shares. This allows Marchex to purchase up to a

total of 6 million shares, which is up from the 5 million shares

previously authorized, less shares repurchased to date.

During the second quarter of 2008, Marchex purchased 845,000 shares of

its outstanding Class B common stock for a total price of $10.0 million,

bringing its total shares repurchased under its stock repurchase program

to 3.8 million shares, or 10% of its outstanding common stock.

Marchex Financial Guidance

The following forward-looking statements reflect Marchex’s expectations

as of August 5, 2008.

Marchex is reiterating its guidance for fiscal year 2008 (Year ending

December 31, 2008):

Revenue estimate:		$152 million or more
Adjusted operating income before amortization estimate:		$22 million or more

Adjusted EBITDA: For adjusted EBITDA, Marchex anticipates

add-backs of $9 million or more in additional depreciation and

amortization to its adjusted operating income before amortization range,

implying an adjusted EBITDA of $31 million or more for 2008.

Guidance for third quarter 2008:

Revenue estimate:		$37.5 million to $38.5 million
Adjusted operating income before amortization estimate:		Approximately $5.5 million

Adjusted EBITDA: For adjusted EBITDA, Marchex anticipates

add-backs of approximately $2.5 million in additional depreciation and

amortization to its adjusted operating income before amortization range,

implying an adjusted EBITDA of approximately $8.0 million for the third

quarter 2008.

For the third quarter of 2008, Marchex anticipates revenue from

proprietary traffic sources will be in a similar range to or slightly

better than the second quarter of 2008.

Conference Call and Webcast Information

Management will hold a conference call, starting at 5:00 p.m. EDT on

Tuesday, August 5, 2008 to discuss its second quarter 2008 financial

results and other company updates. To access the call by live Webcast,

please log onto the Investor Relations section of the Marchex Web site (www.marchex.com/investors/earningsreleases.html).

An archived version of the Webcast will also be available, beginning two

hours after completion of the call, at the same location.

About Marchex, Inc.

Marchex (www.marchex.com) is a

local search and advertising company. Marchex’s innovative advertising

platform delivers search- and call-based marketing products and services

for local and national advertisers. Marchex’s local search network, one

of the largest online, helps consumers make better, more informed local

decisions through its content-rich Web sites that reach tens of millions

of unique visitors each month.

Forward Looking Statements

This press release contains forward-looking statements that involve

substantial risks and uncertainties. All statements, other than

statements of historical facts, included in this press release regarding

our strategy, future operations, future financial position, future

revenues and other financial guidance, acquisitions, projected costs,

prospects, plans and objectives of management are forward-looking

statements. We may not actually achieve the plans, intentions or

expectations disclosed in our forward-looking statements and you should

not place undue reliance on our forward-looking statements. Actual

results or events could differ materially from the plans, intentions and

expectations disclosed in the forward-looking statements we make. There

are a number of important factors that could cause Marchex’s actual

results to differ materially from those indicated by such

forward-looking statements which are described in the “Risk

Factors” section of our most recent periodic

report and registration statement filed with the SEC. All of the

information provided in this release is as of August 5, 2008 and Marchex

undertakes no duty to update the information provided herein.

Non-GAAP Financial Information

To supplement Marchex’s consolidated financial statements presented in

accordance with GAAP and to provide clarity internally and externally,

Marchex uses certain non-GAAP measures of financial performance and

liquidity, including OIBA, Adjusted OIBA, Adjusted EBITDA and Adjusted

non-GAAP EPS. Marchex also provides Pro Forma Revenue information for

the three and six months ended June 30, 2007 and 2008 as if the

VoiceStar acquisition in September 2007 occurred as of January 1, 2007.

OIBA represents income (loss) from operations plus (1) stock-based

compensation expense and (2) amortization of acquired intangible assets.

This measure, among other things, is one of the primary metrics by which

Marchex evaluates the performance of its business. Additionally,

Marchex’s management uses Adjusted OIBA which excludes (1) any gain/loss

on sales and disposals of intangible assets and (2) facility relocation

as these are viewed as non-recurring in nature. Adjusted OIBA is the

basis on which Marchex’s internal budgets are based and by which

Marchex’s management is currently evaluated. Marchex believes these

measures are useful to investors because they represent Marchex’s

consolidated operating results, taking into account depreciation and

other intangible amortization, which Marchex believes is an ongoing cost

of doing business, but excluding the effects of certain other non-cash

and non-recurring expenses. Adjusted EBITDA represents income before

interest, income taxes, depreciation, amortization, stock compensation

expense, and gain/loss on sales of intangible assets. Marchex believes

that Adjusted EBITDA is another alternative measure of liquidity to GAAP

net cash provided by operating activities that provides meaningful

supplemental information regarding liquidity and is used by Marchex’s

management to measure its ability to fund operations and its financing

obligations.

Adjusted non-GAAP EPS represents Adjusted Net Income divided by weighted

average fully diluted shares outstanding for Adjusted non-GAAP EPS

purposes. Adjusted Net Income generally captures those items on the

statement of operations that have been, or ultimately will be, settled

in cash exclusive of certain non-recurring items and represents net

income (loss) available to common stockholders plus: (1) stock based

compensation expense, (2) amortization of acquired intangible assets,

(3) gain/loss on sales and disposals of intangible assets, (4) other

income (expense), (5) facility relocation and less (6) discount on

preferred stock redemption. Adjusted non-GAAP EPS includes dilution from

options and warrants per the treasury stock method, includes the

weighted average number of all potential common shares relating to

convertible preferred stock and restricted stock and excludes the

weighted average common share equivalents for redeemed preferred shares.

Shares outstanding for Adjusted non-GAAP EPS purposes are therefore

higher than shares outstanding for GAAP EPS purposes. Financial analysts

and investors may use Adjusted non-GAAP EPS to analyze Marchex’s

financial performance since these groups have historically used EPS

related measures, along with other measures, to estimate the value of a

company, to make informed investment decisions and to evaluate a

company’s operating performance compared to that of other companies in

its industry.

Marchex’s management believes that investors should have access to, and

Marchex is obligated to provide, the same set of tools that management

uses in analyzing the company’s results. These non-GAAP measures should

be considered in addition to results prepared in accordance with GAAP,

and should not be considered in isolation, as a substitute for, or

superior to, GAAP results. These non-GAAP terms, as defined by Marchex,

may not be comparable to similarly titled measures used by other

companies. Marchex endeavors to compensate for the limitations of the

non-GAAP measures presented by providing the comparable GAAP measure

with equal or greater prominence, GAAP financial statements and detailed

descriptions of the reconciling items and adjustments, including

quantifying such items, to derive the non-GAAP measure.

MARCHEX, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
					Three Months Ended
					June 30,
						2007				2008
Revenue					$	34,665,637			$	37,363,887
Expenses:
Service costs (1)						16,764,588				17,414,301
Sales and marketing (1)						7,112,929				7,896,035
Product development (1)						2,662,779				4,252,469
General and administrative (1)						4,057,643				5,074,875
Amortization of intangible assets from acquisitions						4,074,254				3,661,275
Facility relocation						121,124				–
Total operating expenses						34,793,317				38,298,955
Gain on sales and disposals of intangible assets, net						123,246				2,010,576
Income (loss) from operations						(4,434	)			1,075,508
Interest income and other, net						748,314				133,080
Income before provision for income taxes						743,880				1,208,588
Income tax expense						412,978				733,229
Net income						330,902				475,359
Convertible preferred stock dividends and discount on preferred stock redemption, net						(23,482	)			(33,697	)
Net income applicable to common stockholders					$	354,384			$	509,056
Basic and diluted net income applicable to common stockholders					$	0.01			$	0.01
Shares used to calculate basic net income per share applicable to common stockholders						39,597,600				36,580,610
Shares used to calculate diluted net income per share applicable to common stockholders						40,534,319				37,504,686
(1) Includes stock-based compensation allocated as follows:
Service costs					$	31,741			$	86,087
Sales and marketing						89,800				326,004
Product development						450,692				396,289
General and administrative						1,770,488				1,860,856
Total					$	2,342,721			$	2,669,236

MARCHEX, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(unaudited)
					Six Months Ended
					June 30,
						2007				2008
Revenue					$	68,889,038			$	74,406,214
Expenses:
Service costs (1)						32,005,816				36,301,616
Sales and marketing (1)						14,622,850				14,867,783
Product development (1)						5,260,435				8,439,573
General and administrative (1)						8,238,418				10,033,984
Amortization of intangible assets from acquisitions						8,597,388				7,713,637
Facility relocation						121,124				–
Total operating expenses						68,846,031				77,356,593
Gain on sales and disposals of intangible assets, net						155,510				2,155,267
Income (loss) from operations						198,517				(795,112	)
Interest income and other, net						1,460,301				417,406
Income (loss) before provision for income taxes						1,658,818				(377,706	)
Income tax expense			Marchex Investor Relations Trevor Caldwell Telephone: 206-331-3600 Email: ir(at)marchex.com or Marchex Public Relations P. Kevin Horn Telephone: 206-331-3474 Email: khorn(at)marchex.com Major Newsire & Press Release Distribution with Basic Starting at only $19 and Complete OTCBB / Financial Distribution only $89 Get Unlimited Organic Website Traffic to your Website  TheNFG.com now offers Organic Lead Generation & Traffic Solutions