LivePerson Reports Third Quarter Revenue Increase of 55% to $8.9 million

Quarterly Revenue Increases 20% from Prior Quarter Including Impact of Proficient Acquisition

Organic Revenue Growth is 12% for the Quarter

Company Raises Annual Revenue Guidance for 2nd Time in 2006

NEW YORK, NY - November 2, 2006 - LivePerson, Inc. (NASDAQ: LPSN), a provider of online conversion solutions, today announced financial results for the third quarter ended September 30, 2006.

Revenue for the third quarter was $8.9 million, a 55% increase from the third quarter of 2005, and a 20% sequential increase as compared to the second quarter of 2006. Revenue growth was due primarily to sales of Timpani™ Sales & Marketing to new and existing customers, sales of LivePerson Pro and Contact Center to small and mid-size businesses, and the impact of the acquisition of Proficient Systems effective July 18. Approximately 40% of the sequential revenue growth impact in the quarter was a result of the acquisition. Excluding the impact of the acquisition, sequential revenue growth was 12% and annual revenue growth for the third quarter was 45%.

"We are very pleased with our results this quarter," said Robert LoCascio, CEO of LivePerson. "Our investments in sales and marketing continued to payoff in the quarter, as we added several new enterprise customers and realized a significant revenue contribution from both our small business and enterprise solutions. We believe strong momentum built in the third quarter will lead to similar solid revenue growth for the fourth quarter and are therefore revising our full year revenue guidance upward."

The company updated full year revenue guidance for the second time this year, and currently expects full year revenue growth to exceed 49%. The company's prior revenue guidance indicated an expected annual revenue growth rate of approximately 45%.

LivePerson signed several new blue-chip clients during the quarter and expanded business with several others. Within the travel and hospitality sector, LivePerson added Orbitz to its client roster. LivePerson furthered its presence in the communications sector by broadening ties with two of the largest wireless providers in North America while expanding business with existing customers Bell Canada and EarthLink. LivePerson is now deployed in seven of the ten largest telecommunications companies in North America.

LivePerson announced the formal launch of Timpani Voice in the quarter with initial deployments at The NASDAQ Stock Market, PR Newswire and Bell Canada. Timpani Voice, LivePerson's click-to-talk solution, enables LivePerson customers to connect via telephone with high-value website visitors. LivePerson has also expanded its market footprint in the United Kingdom, adding online insurers eSure and Liverpool Victoria.

Net income for the third quarter of 2006 was $0.3 million or $0.01 per share, as compared to $0.7 million and $0.02 per share in the third quarter of 2005. Included in these figures for the three months ended September 30, 2006 is the impact of amortization of stock-based compensation expense of $0.6 million related to the adoption of SFAS No. 123®. There was no stock-based compensation expense in the three months ended September 30, 2005 as the company was not required to adopt SFAS No. 123® until January 1, 2006.

Earnings before interest, taxes, depreciation, amortization and stock-based compensation (EBITDA) for the third quarter of 2006 was $1.3 million as compared to $1.2 million in the third quarter of 2005 and $1.0 million in the second quarter of 2006.

The company's cash balance was $19.8 million at September 30, 2006, up slightly as compared to the prior quarter.

The company reduced its valuation allowance against deferred tax assets resulting in an effective tax rate of zero for the nine months ended September 30, 2006.

The difference between EBITDA per share, a non-GAAP measure, and GAAP EPS, is interest, taxes, depreciation, amortization and stock-based compensation.

A reconciliation of the differences between EBITDA and the most comparable financial measure calculated and presented in accordance with generally accepted accounting principles (GAAP) is located under the heading "Reconciliation of Non-GAAP Financial Information to GAAP" immediately following the Condensed Consolidated Statements of Income included in this press release.

LivePerson considers EBITDA and cash from operations to be important financial indicators of the company's operational strength and the performance of its business. EBITDA should be considered in addition to results prepared in accordance with GAAP, but should not be considered a substitute for, or superior to, GAAP results. The non-GAAP measures included in this press release have been reconciled to the nearest GAAP measure in the table below.

  Financial Expectations
  The company currently expects the following financial results:

   * Revenue of $10.0-$10.1 million for the fourth quarter of 2006, or
     approximately 13% sequential revenue growth
   * EBITDA of $0.04-$0.05 per share and GAAP EPS of $0.02 for the fourth
     quarter of 2006
   * Revenue of $33.1-$33.2 million for the full year 2006
   * EBITDA of $0.12-$0.13 per share and GAAP EPS of $0.04 for the full year
     2006

GAAP EPS expectations include the estimated impact of a change in accounting policy related to adopting SFAS No. 123® as of January 1, 2006. The additional expense related to this change is expected to be $0.05 per share and $0.02 per share, for the full year 2006 and the fourth quarter of 2006, respectively, based upon the unamortized balance of stock-based compensation expense as of September 30, 2006 and the expected impact on stock-based compensation of the Proficient acquisition. This impact may change based upon additional stock option grants, if any, methodology refinement or other factors.

About LivePerson

LivePerson (NASDAQ: LPSN) is a provider of online conversion solutions. Our hosted software enables companies to identify and proactively engage online visitors-increasing sales, satisfaction and loyalty while reducing service costs. Combining web-interaction technology (chat, email, voice and a self-service knowledgebase) with a deep understanding of consumer behavior and industry best practices, LivePerson's Timpani™ platform engages the right customer, at the right time, with the right communications channel. This Engagement Marketing platform creates more relevant, compelling and personalized experiences-converting traffic into revenues, and facilitating real-time sales and customer service. More than 4,000 companies including EarthLink, Hewlett-Packard, Microsoft, Qwest and Verizon, rely on LivePerson to help maximize the return on their marketing and e-commerce investments. LivePerson is headquartered in New York City.

EBITDA Financial Disclosure

Investors are cautioned that the EBITDA, or earnings before interest, taxes, depreciation, amortization and non-cash compensation, information contained in this press release is not a financial measure under generally accepted accounting principles. In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with generally accepted accounting principles, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities, as there may be significant factors or trends that it fails to address. We present this financial information because we believe that it is helpful to some investors as one measure of our performance. We caution investors that non-GAAP financial information such as EBITDA, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our current results with our results from other reporting periods and with the results of other companies.

Safe Harbor Provision

Statements in this press release regarding LivePerson that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause actual future events or results to differ materially from such statements. Any such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. It is routine for our internal projections and expectations to change as the quarter progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which we base our expectations may change prior to the end of the quarter. Although these expectations may change, we are under no obligation to inform you if they do. Our company policy is generally to provide our expectations only once per quarter, and not to update that information until the next quarter. Actual events or results may differ materially from those contained in the projections or forward-looking statements. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation: risks related to the operational integration of acquisitions; risks related to our international operations, particularly our operations in Israel, and the current civil and political unrest in that region; our history of losses; potential fluctuations in our quarterly and annual results; responding to rapid technological change and changing client preferences; competition in the real-time sales, marketing and customer service solutions market; continued use by our clients of the LivePerson services and their purchase of additional services; technology systems beyond our control and technology-related defects that could disrupt the LivePerson services; risks related to adverse business conditions experienced by our clients; our dependence on key employees; competition for qualified personnel; the impact of new accounting rules, including the requirement to expense stock options; the possible unavailability of financing as and if needed; risks related to protecting our intellectual property rights or potential infringement of the intellectual property rights of third parties; our dependence on the continued use of the Internet as a medium for commerce and the viability of the infrastructure of the Internet; and risks related to the regulation or possible misappropriation of personal information. This list is intended to identify only certain of the principal factors that could cause actual results to differ from those discussed in the forward-looking statements. Readers are referred to the reports and documents filed from time to time by us with the Securities and Exchange Commission for a discussion of these and other important risk factors that could cause actual results to differ from those discussed in forward-looking statements.

                             LivePerson, Inc.
               Condensed Consolidated Statements of Income
             (In Thousands, Except Share and Per Share Data)
                                Unaudited

                                 Three Months Ended      Nine Months Ended
                                    September 30,           September 30,
                                  2006        2005        2006        2005
  Total revenue                  $8,881      $5,724     $23,174     $15,960

  Operating expenses:
    Cost of revenue               2,142       1,114       5,246       2,997
    Product development           1,381         663       3,280       2,027
    Sales and marketing           3,104       1,715       8,605       4,889
    General and administrative    1,750       1,034       4,689       3,400
    Amortization of other
     intangibles                    447         232         911         699
       Total operating expenses   8,824       4,758      22,731      14,012

  Income from operations             57         966         443       1,948

  Other income, net                 200          81         514         184

  Income before provision for
   income taxes                     257       1,047         957       2,132

  Provision for income taxes          -         358           -         738

  Net income                       $257        $689        $957      $1,394

  Basic net income per common
   share                          $0.01       $0.02       $0.02       $0.04

  Diluted net income per common
   share                          $0.01       $0.02       $0.02       $0.04

  Weighted average shares
   outstanding used in basic net
   income per common share
   calculation               40,547,309  37,555,696  39,242,174  37,492,285

  Weighted average shares
   outstanding used in
   diluted net income per
   common share calculation  43,854,202  39,839,001  42,981,377  39,528,089



                             LivePerson, Inc.
         Reconciliation of Non-GAAP Financial Information to GAAP
             (In Thousands, Except Share and Per Share Data)
                                Unaudited

  Unaudited Supplemental Data

The following information is not a financial measure under generally accepted accounting principles (GAAP). In addition, it should not be construed as an alternative to any other measures of performance determined in accordance with GAAP, or as an indicator of our operating performance, liquidity or cash flows generated by operating, investing and financing activities as there may be significant factors or trends that it fails to address. We present this financial information because we believe that it is helpful to some investors as one measure of our operations. We caution investors that non-GAAP financial information, by its nature, departs from traditional accounting conventions; accordingly, its use can make it difficult to compare our results with our results from other reporting periods and with the results of other companies.

                                  Three Months Ended      Nine Months Ended
                                     September 30,           September 30,
                                   2006        2005        2006        2005
  Net income in accordance with
   generally accepted accounting
   principles                      $257        $689        $957      $1,394
    Add/(less):
    (a) Amortization of intangibles 447         232         911         699
    (b) Stock-based compensation    557           -       1,580           -
    (c) Depreciation/Loss on
        disposal of fixed assets    259          23         450         115
    (d) Provision for income taxes    -         358           -         738
    (e) Interest income, net       (200)        (81)       (514)       (184)
  EBITDA (1)                     $1,320      $1,221      $3,384      $2,762
  Diluted EBITDA per common
   share                          $0.03       $0.03       $0.08       $0.07

  Weighted average shares used
   in diluted EBITDA per
   common share              43,854,202  39,839,001  42,981,377  39,528,089

  EBITDA                         $1,320      $1,221      $3,384      $2,762
    Add/(less):
    Changes in operating
     assets and liabilities      (1,151)        736      (1,679)          9
    Provision for doubtful
     accounts                        30           -          30          30
    Provision for income taxes        -        (358)          -        (738)
    Tax benefit from employee
     stock option exercises           -         345           -         697
    Interest income, net            200          81         514         184
  Net cash provided by
   operating activities            $399      $2,025      $2,249      $2,944


   (1) Earnings before interest, taxes, depreciation, amortization and
       stock-based compensation.



                             LivePerson, Inc.
                  Condensed Consolidated Balance Sheets
                              (In Thousands)
                                Unaudited

                                               September 30,    December 31,
                                                   2006            2005
  ASSETS

  Current assets:
    Cash and cash equivalents                    $19,786          $17,117
    Accounts receivable, net                       3,593            1,727
    Prepaid expenses and other current assets      1,037              591
    Deferred tax assets                            1,100                -
      Total current assets                        25,516           19,435

    Property and equipment, net                    1,121              575
    Intangibles, net                               3,113              790
    Goodwill                                       6,875                -
    Security deposits                                283              180
    Other assets                                     612              446
      Total assets                               $37,520          $21,426

  LIABILITIES AND STOCKHOLDERS' EQUITY

  Current liabilities:
    Accounts payable                                $544             $346
    Accrued expenses                               3,468            1,803
    Deferred revenue                               3,026            1,618
      Total current liabilities                    7,038            3,767

  Other liabilities                                  612              446

  Commitments and contingencies

  Total stockholders' equity                      29,870           17,213
        Total liabilities and stockholders'
         equity                                  $37,520          $21,426

SOURCE: LivePerson, Inc.

CONTACT: Younjee Kim, +1-212-609-4222, ykim@liveperson.com

Web site: http://www.liveperson.com/