Question-and-Answer Session
Operator
(Operator Instructions). And we will take our first question from Youssef Squali with Jefferies & Company
Youssef Squali - Jefferies & Company
Thank you very much. Good Afternoon. Two questions: First, Tom. Your comparison shopping business, obviously you did better than expected, some commentary out of some of your competitors like Shopping.com and others were pointing to a much, much dire scenario, can you kind of carve out how much of the improvement that you've done are one-time in nature? How much of the other is sustainable? I'm trying to figure out what baked into your Q1 and then hopefully '09 guidance?
And second, in terms of margins, the midpoint of your guidance for EBITDA for Q1 implies margins of about 23%, I think, John, you mentioned something to the fact that some of these costs tend to be front-end loaded, yet if I look at the last couple of years, your EBITDA margin in Q1 was actually higher than the average for the year. So if you can help us reconcile that, that'll be great, trying to really just figure out your ability effectively to protect margins in this kind of environment. Thanks.
John Pitstick
Sure. I'll start off with the margins. If you look back to the first quarter of 2008, as well as 2007, we had some very strong performance in those areas. Should we call first quarter of '08, our if Comparison Shopping and Search business had a tremendous quarter, and we called out last year some one-time revenue events, which helped the quarter on the top line, as well as the margin.
And looking back to the first quarter of 2007, we actually have record revenues that quarter in our lead gen business and that also contributed to the margins for the quarter.
Though I think the market performance in the fourth quarter, was a bit stronger than we expected. So we do anticipate a little bit of higher level of expenses in the first quarter of '09, but the 23% operating or EBITDA margin, that we can call that, we don't see that as a longer term EBITDA margin.
Youssef Squali - Jefferies & Company
Are you sure, you do you expect margins to kind of move up from that base level throughout the year?
John Pitstick
We would, yes.
Youssef Squali - Jefferies & Company
Thank you. And, Tom?
Tom Vadnais
Yes, regarding the Comparison Shopping and Search business, first of all, there always is a, we expect some uplift in Q4 in this business, which we did see, so some of that of course is seasonal. But there are also a number of things, that we did with our two platforms in comparison shopping that contribute I think to longer term sustained growth outside of the seasonal uplifts.
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