Jim Friedland (Cowen and Company): Are you going to see anything new on your brand building efforts, maybe branching out into TV or more offline type spending Or is it the same sort of blocking and tackling that you have been doing online?

Diane Irvine: We are disciplined in how we look at our marketing. We want every dollar of marketing to pay back, so I do not see us doing things that are not in line with that philosophy, such as other campaigns. We are building our business literally one customer at a time and that is how we build the brand.

Mark C. Vadon: We have no intention of being on TV anytime soon. At least any TV where we have to pay the bill to have it happen.

Jim Friedland (Cowen and Company): What you are seeing on your lower price point items in terms of demand in the non-engagement part of the business?

Diane Irvine: We saw softness across all the product categories, and so we talked about some of the stand-outs in diamonds, the price points below $5,000 and then the $25,000 to $50,000. It was just a different type of quarter from that standpoint where every category has of softness.

Mark C. Vadon: The one category that performed better than we were expecting was diamond bands and wedding bands. We do not know exactly what that means but to some degree, the diamond bands category is doing well because there may be some consumers that are trading down rather than buying a traditional solitaire engagement ring, they are getting a diamond band to use as their engagement ring. I think that was the one stand-out category and other than that, everything was relatively uniform.

Lorraine Maikis (Merrill Lynch): Do you still expect to be able to push days payable higher in this credit environment?

Diane Irvine: We have been doing that and that is a result of the volume that we are doing with our suppliers, where we dominate this category and so we have that ability and we think we will continue to have that ability as we go forward in the next several years.

Mark C. Vadon: We continue to have suppliers lining up to work with us and I think one other aspect of that is right now there are not many retailers buying anything out there. I think as people had a relatively weak Christmas, they are in a position where they have got more than enough inventory and they are not buying and vendors are looking for an outlet for their merchandise. So with the volume we are doing and the fact that we turn our inventory fast, so we are buying every month and in diamonds, we are literally buying every day. I think we are in a position to be the retailer of choice for the supply chain to work with.

Lorraine Maikis (Merrill Lynch): Do you have any comment on keyword pricing and any movement there since the economy has started to deteriorate?

Diane Irvine: No, I think if you look at online marketing prices, we have seen what we have been seeing for the past several years, which is you continue to see rising prices. I think it takes longer probably for some of that to factor in, if it will, in terms of the marketing environment. Our focus is on managing well in terms of looking at the payback on our investment for any of our keywords.

Kristine Koerber (JMP Securities): As you look at international, can you talk about what your next major step or investment would be to build out the international business?

Mark C. Vadon: We have a lot of work left to do in front of us. We spent a couple of years working hard on building Canada and the U.K. into more robust businesses and we have the infrastructure in place there now where we are able to deploy marketing dollars and continue to drive the growth of those businesses. With the other countries we are shipping to, and those range from Western Europe to a few weeks ago we launched some in Eastern Europe and a number of markets in the Asia-Pacific region, across all of those markets there is a tremendous amount of work left to do. Those businesses are in a beta stage and are right now a test to see where we are finding demand so that we can then go behind there and start building up the infrastructure.

Marianne Wolk (Susquehanna Financial Group): Given the relatively large inventory balance you held exiting the fourth quarter, do you assume the bulk of the spike in commodity prices that occurred over the last few months is going to be felt in the second quarter gross margin, especially if you are not passing along the price increase to consumers?

Diane Irvine: You should not assume that. That is something that we continue to manage. We are focused on gross margin. Every product category is different in terms of when we have inventory receipts but our goal is we do take our time to increase prices and we manage that carefully.

Marianne Wolk (Susquehanna Financial Group): Your guidance does seem to forecast acceleration in growth to 15% in the second half. Can you give a better feel for some of the variables that would drive that improved growth rate?

Diane Irvine: Our goal is to grow by 10%. We do not have a better view of what the economy will be like in the U.S. in the second half. We have no better view of what the holiday season will be like, which will drive the number overall. International is growing well so our hope and expectation there is to continue to see great results. And beyond that, it is focus on the customer and conversion and so as long as we are doing all the right things internally, regardless of the economic environment externally, I feel that we will do a good job. We want to put out our goals so that everyone can see that we have set a higher bar for ourselves and we will hope to achieve it.

Mark C. Vadon: We are fighting our way through comps in the first and second quarter of 2007. Those were successful quarters. For instance in the second quarter, we had a single order from one customer that was $1.52 million. We had a promotion with a partner that drove a significant amount of revenue around Mother’s Day of last year. Even with those things, those types of things happen in the first and second quarter. We had those higher growth rates and then the comps get easier as you get into the back half of the year. As you look at the fourth quarter of 2007, that is when the market started to slow down, so as we start to anniversary that, I think we are going to have easier comps to build on. The other part of it is we have international building nicely underneath us, which gives us an increasing amount of growth leverage. If you look even a year ago I would as saying it would take a couple of years before international was at a scale where it could meaningfully contribute to growth. We are getting there sooner than we had thought we would.

Marianne Wolk (Susquehanna Financial Group): On the international front, this was the first seasonal or sequential decline you have seen in a while. Is it seasonality or are you seeing softness say in the U.K., where they are also reporting some economic pressure?

Mark C. Vadon: The fourth quarter has Christmas and we do not have one in the first quarter, so it is hard to comp those numbers. You would need a growth rate much, much faster than 120% to flow through the seasonality of Christmas.