Lorraine Maikis (Merrill Lynch): Could you just talk about the different marketing channels you're using in the UK and what you've found to be the most effective?

Diane Irvine: We're just beginning in the UK. The online marketing vehicles are what we're doing there; it is the same things that we're doing in the US; obviously building the brand there, starting to take hold. There's a lot of opportunity for us there but we've started out just trying to build that program.

Mark Vadon: We're at the very early stages of that business so there's not a tremendous amount of marketing that we're doing there yet. That is all things we will start doing as we build into the fourth quarter we'll be implementing more marketing. But up until now it's been mostly a little bit of search both on the paid and unpaid side and then referral. That business there looks a lot like the US business looked; obviously a smaller version of it, but a lot like the US business looked like in 1999 when we really weren't doing much marketing on the Blue Nile business.

Dan Geiman (McAdams Wright and Ragen): Did you see any noticeable variance in your growth rates from region to region across the country or from market to market? Were some geographic markets notably healthier than others? What was your sales growth in your top tier markets this quarter?

Mark Vadon: We're seeing strong growth nationally. As you look at it, our smallest markets are the ones that are growing the fastest, where we're the least penetrated. Then as you go to our largest markets like San Francisco, those would be growing slightly slower. But even in those largest markets our growth was still only several points lower than the overall business. What we're seeing is that we're not reaching any level of saturation in even our strongest markets. The markets are growing roughly 20% a year. As you get to the smaller markets, they're growing faster.

Marianne Wolk (Susquehanna): You mentioned your plans of expanding throughout the EU. Can you talk about your timeframe? Is that something we should expect perhaps in 2008 as the Irish center scales? Should we expect that over time your tax rate will go down as you leverage that Irish center?

Mark Vadon: We're not disclosing any timeline for those markets other than to say that you should expect to see us continue to enter other markets internationally for the foreseeable future.

Diane Irvine: In terms of tax rate, while there's potential for that, the biggest impacts on the tax rates these days can tend to be related to things like stock options. There can be variability. But especially being a new taxpayer, we don't want to be giving out expectations for future tax rates.

Kristine Koerber (JMP Securities): Can you talk about the competition and are you seeing any changes offline and online?

Diane Irvine: There is a lot of competition on the US alone, 29,000 independent retailers. But the way we feel about the business is we continue to enhance our leadership position. We feel like we need to continue to do a great job for our customers and those customers are telling others about us and the brand continues to grow. We feel we're in a very strong position from that standpoint.

Kristine Koerber: Can you talk about what you're seeing in terms of commodity pricing?

Diane Irvine: If you consider metal pricing, platinum, gold and silver, movement upward there; nothing significant to note in terms of where we are in our gross margin and the pricing today but if you look at the past couple of years, those prices have all moved up. In diamonds, it's a little bit of a mix at the high end. There continues to be more demand than there is supply there and so you see that price rise. For some smaller size diamonds, prices are relatively stable or perhaps even a bit declining; but nothing real dramatic on any of those fronts. If you look at the commodities, we're in a good place.