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Tell us about your company.

Yaron Adler, Founder and CEO: Incredimail (Nasdaq: MAIL) is an Israeli company, founded in late 1999. Incredimail is our flagship product for email. The product allows users to customize and personalize traditional email communication, in a way that brings life and excitement to applications they regularly use. We enable you to send emails with 3D effects, funny animations and customized backgrounds. We aren’t re-inventing the wheel. We take existing applications, like email, and make them fun to use.

Giving away free content is not a great business. What’s the business model?

YA: The business model is based on what I like to call “the large numbers game.” We are working hard on two fronts: we are working to bring millions of new users to our products and working on how to best monetize them. We started by using viral marketing to promote our content. Every email sent from Incredimail has a link included on the bottom to bring the recipient of that email to our website. This strategy has worked very well. To date we have 80 million users of which 11 million are active (defined as at least 1 usage event per quarter). Over 300 million emails are sent per month with Incredimail. We get 300,000 new visits to our website daily just from the viral links we include in our emails.

How are your revenues?

YA: For the first nine months of 2007 revenues increased 94% to $13.3 million from $6.9 million for the first nine months of 2006. Net income for the nine-month period was $1.8 million versus $1.6 million for the same period in ’06. Again, we’re focused on two things: accelerating growth to get more users plus trying to better monetize our users. To do this, we need increased R&D to make new products for our users to interact with and we need to improve our revenue sources.

You’ve said search revenues are going to play a bigger role in your revenue model. Can you explain how?

YA: You can grow search revenues in two ways: more searches + more profitable searches. We’re just in the early stages of doing this. We’re directing searches to our search engine (powered by Google) by suggesting to our users to replace their homepage with MyStart page with value added Incredimail content. A soon-to-be-released browser toolbar increases searches away from Incredimail. We can find a way to promote suggested searches and ultimately, as our search traffic increases, negotiate a better deal with Google.

We’ve just started optimizing our search revenues. Our growth continues to accelerate, driven by increased revenues from all streams: products and subscriptions on the one hand, which used to be our big revenue driver, and advertising and search on the other hand, which now accounts for almost 46% of our revenue.

How are your content deals with movie studios coming along?

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