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LiveWorld Reports Year-Over-Year Growth For the First Quarter of 2006

Los Gatos, Calif., May 2, 2006 – LiveWorld, Inc. (LVWD.PK), a leading online community agency, today reported first quarter results for the quarter ended March 31, 2006.  Revenue grew 9.4% year-over-year, driven by new clients and an expanding platform of online community services.

“We had a strong start to 2006, as we continue to build online communities and create solutions that improve brand loyalty for our clients,” said Peter Friedman, Chairman and CEO of LiveWorld. “We have received an encouraging number of new agreements for advanced services that are launching throughout 2006.”

Revenue: Revenues for the first quarter of 2006 were $ 2,447,089 , representing 9.4% growth over first quarter 2005 revenues of $ 2,235,207 and approximately in line with the fourth quarter 2005 revenues of $2,472,754.

Net Income Excluding the Impact of Stock Option Expense: Net ordinary income for the first quarter of 2006, excluding stock option expense, was $70,827 , compared to net ordinary income of $249,763 for the first quarter of 2005 and compared to $160,346 for the fourth quarter of 2005.  Net income including net other income and excluding stock option expense for first quarter of 2006 was $88,784 resulting in a $0.0033 EPS compared to $476,481 and an EPS of $0.0179 for first quarter 2005 and compared to $183,809 and an EPS of $0.0068 for fourth quarter 2005. 

Net Income Including the Impact of Stock Option Expense: Net ordinary income for first quarter 2006, including stock option expense, was $70,311 compared to $24,709 for first quarter 2005 and compared to $352,941 for the fourth quarter of 2005. Net income including net other income and including stock option expense for the first quarter of 2006 was $88,268 resulting in an EPS of $0.0033 compared to $251,427 and an EPS of $0.0095 for the first quarter of 2005 and compared to $376,404 and an EPS of $0.0140 for fourth quarter 2005. 

To note, first quarter 2005 net income had a $226,718 favorable impact due to a one time legal settlement.  Fourth quarter, 2005 net income, including stock option expense had a $192,595 favorable impact of stock option expense credits.

Cash: The Company ended Q1 2006 with approximately $1.4 million in cash.  

The Company stated that the decrease in net ordinary income (aside from the impact of stock option expense) was the direct result of its strategy to invest in product development as a foundation for future growth.

Business Outlook:  The Company reiterated its 2006 guidance and business outlook issued in the Company’s February 14, 2006 press release.  

A detailed quarterly financial history and additional notes are available at http://www.liveworld.com/company/financials.html

About LiveWorld, Inc. LiveWorld (Pinksheets: LVWD.PK, www.liveworld.com ) is a leading full service online community agency that creates, operates, and manages loyalty marketing, customer support, and business intelligence communities based on the Company’s unique community applications platform and strategic community model. LiveWorld solutions enable Fortune 1000 companies to strengthen customer relationships, increase revenues, and reduce costs. Clients include companies such as America Online, A&E Television Networks, AOL UK, BEA Systems, eBay, The Campbell Soup Company, Discovery Communications, Dove, HBO, Intel, Intuit Inc., MINI Cooper USA , PayPal, QVC, Tulane University, TV Guide, and Warner Brothers. LiveWorld is headquartered in Los Gatos, California and deploys its services in over 30 country-language combinations.

Public Relations Contact: Peter Friedman, 800-514-2060, friedman@liveworld.com Investor Relations Contact: Brinlea Johnson, The Blueshirt Group, 212-867-259, brinlea@blueshirtgroup.com

Safe Harbor" Statement Under The Private Securities Litigation Reform Act: This press release contains financial results that have not been audited or reviewed by an outside accountant and are subject to change upon such review. This press release also contains forward-looking information concerning LiveWorld’s future expectations, forecasts and prospects. These statements include those regarding LiveWorld’s current or future financial performance including, but not limited to revenue and profit growth, use of cash, investments, relationships and the actual or potential impact of stock option expense. Actual results may differ materially from those expressed in the forward looking statements made by LiveWorld as a result of, among other things, the state of the economy, LiveWorld’s ability to successfully deliver upon its contractual commitments, clients continuing their ongoing relationships with the Company, LiveWorld’s ability to acquire new customers, changing accounting treatments, and other risks applicable to the Company.  (See the Company’s Q3, 2002 10Q filing for a list that includes other possible risk factors.)