LivePerson on Track for Fourth Quarter Profitability
Oct 3, 2001

NEW YORK, NY - October 3, 2001 - LivePerson, Inc. (NASDAQ: LPSN), a leading Application Service Provider (ASP) of technology facilitating real-time sales and customer service for companies doing business on the Internet, today announced that it is on track to achieve monthly pro forma operating profitability, as previously projected, during the fourth quarter of 2001. Pro forma operating profit excludes costs related to restructuring, amortization of non-cash stock compensation, goodwill amortization and depreciation, and includes all cash operating costs.

The Company has taken specific steps over the last three quarters to reduce projected operating costs below current revenue levels. Key changes include a significant reduction in network infrastructure costs, reduction in rent expense of approximately $240,000 monthly due to the termination of unneeded property leases in New York City, personnel reductions related to the integration of HumanClick Ltd. acquired in October 2000, and a greater leverage of the Internet and LivePerson's own product line to acquire new paying clients at low cost.

The Company expects to achieve its third quarter pro forma target loss of $0.10 per share as outlined in July 2001, although revenues for the third quarter are expected to be approximately 10% below the prior quarter. As a result of the successful integration of two technology platforms, LivePerson expects to take a significant non-cash restructuring charge in the third quarter related primarily to obsolete hardware and software. This integration and the Company's continuing transition to an online sales process also enabled the company to eliminate 13 sales, marketing and product development positions during September.

"Since the fourth quarter of last year, we've projected operating profitability would occur during the last quarter of 2001. The results of the past quarter indicate that our financially disciplined approach has been successful and we are on track to fulfill that commitment," said Robert LoCascio, CEO of LivePerson. "We anticipate being able to generate positive cash flow by continuing to focus on the growth of our application sales, marketing initiatives and new product launches. Our continued emphasis on refining a solid business model will also equip us to weather whatever market challenges lie ahead."

The Company also announced it has been notified by Nasdaq that the hearing process related to the Company's continued listing on the Nasdaq National Market has been terminated due to the temporary lifting of certain listing requirements. These Nasdaq requirements are suspended until the beginning of next year, thereby postponing any potential delisting of the Company's common stock until at least the second quarter of 2002.

In addition, on September 11, 2001, LivePerson's stockholders approved a 1-for-15 reverse split of the Company's common stock by a vote of 26,848,619 shares in favor and 190,763 shares against, with 2,580 shares abstaining. The principal purpose of the reverse split is to increase the market price of the common stock above Nasdaq's minimum bid price requirement of $1.00 per share. The Company's Board of Directors will determine if and when such a split should be effected.

About LivePerson

LivePerson ( is a leading Application Service Provider (ASP) of technology facilitating real-time sales and customer service for companies doing business on the Internet. The LivePerson service enables online businesses to communicate with Internet users in real time, thereby enhancing the online experience. With LivePerson Exchange, consisting of Chat, FAQ, Email and Document Management, LivePerson offers clients the opportunity to increase sales, reduce customer service costs and increase responsiveness to customer needs. LivePerson is headquartered in New York City, with R&D facilities in Tel Aviv, Israel.

Statements in this press release regarding LivePerson, Inc. that are not historical facts are forward-looking statements and are subject to risks and uncertainties that could cause such statements to differ materially from actual future events or results. 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 the Company bases its 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. The following factors, among others, could cause LivePerson's actual results to differ materially from those described in a forward-looking statement: our possible delisting from Nasdaq and our proposed reverse stock split; the limited history of providing the LivePerson services; our limited historical annual revenue and history of losses; the possible unavailability of financing as and if needed; an unproven business model; our dependence on the success of the LivePerson chat service; continued use by our clients of the LivePerson services; potential fluctuations in our quarterly and annual results; risks related to adverse business conditions experienced by our clients; risks related to managing our expanding operations and staff attrition; integration of acquisitions, including the acquisition of HumanClick Ltd. and other potential acquisitions; our dependence on key employees; risks related to our international operations; competition both for qualified personnel and in the market for real-time sales and customer service technology; building awareness of the LivePerson brand name; technology systems beyond LivePerson's control and technology-related defects that could disrupt the LivePerson services; our dependence on the growth of the Internet as a medium for commerce and the viability of the infrastructure of the Internet; and responding to rapid technological change. 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 LivePerson 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.

   Maria Gomez
   LivePerson, Inc.


SOURCE: LivePerson, Inc.

CONTACT: Younjee Kim, +1-212-609-4222,


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