During the three months ended March 31, 2007 and 2006, the Company generated approximately $1,777 and $1,558 of revenue from its Canadian operations.

9. SUBSEQUENT EVENTS

Acquisitions—Subsequent to March 31, 2007 and through July 19, 2007, the Company completed twelve acquisitions, primarily consisting of community websites, for an aggregate amount, net of cash acquired, of $33,325. Purchase prices ranged from $320 to $17,277.

Notes Receivable—On May 17, 2007, the Board of Directors authorized key employee incentive programs, which included the conversion of certain notes receivables from full-recourse to non-recourse, to retain key management. The notes mature on the earlier to occur of: i) the last business day prior to the filing of an S-1 Registration Statement with the SEC, ii) twelve months after termination, or iii) the ninth anniversary of the grant date. On or before July 18, 2007 members of management who had outstanding notes payable to the Company paid off those notes in full, including accrued interest through that date. Of the $2,346 outstanding liability, $283 was paid in cash; the balance was paid through the surrender of 436,809 shares of Class A common stock.

Intention to go public—On July 18, 2007, the Board of Directors voted to authorize the filing of a registration statement on Form S-1 with the SEC with the intention of taking the Company public.

Options granted—The Company granted 367,741 options under the 1998 Stock Plan at a weighted-average exercise price of $4.06.