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LiveWorld Reports Second Quarter 2006 Results: Growth in Diversified Revenue Mix and Formation of LiveWorld-WPP Joint Venture

Los Gatos, Calif., August 15, 2006 – LiveWorld, Inc. (OTC Pink Sheets: LVWD.PK), a leading social networking and online customer community agency, today reported second quarter results for the quarter ended June 30, 2006.

“During the quarter, we achieved a number of major milestones, including the planned diversification of our revenue mix with the launch of our new Community Center service for clients such as TV Guide, MTV Latin America, HBO and BlogSafety.com,” said Peter Friedman, Chairman and CEO of LiveWorld. “We were pleased to announce we closed a joint venture with WPP Group (see July 13, 2006 press release) that expands our opportunities into new global accounts. We have resumed auditing of our financials and are strategically positioned to capitalize on the growing social networking and online community market and will continue to invest in our business to drive future growth. ”

Revenue: Revenues for the second quarter of 2006 were $ 2,133,512 , down from second quarter 2005 revenues of $ 2,431,298 and first quarter 2006 revenues of $2,464,426. Revenue declined primarily due to the expected conclusion of one of the Company’s three contracts with its largest client. Presently this client is placing additional orders for services from the Company

Net Income Excluding the Impact of Stock Option Expense: Net ordinary income for the second quarter of 2006, excluding stock option expense, was ( $183,493) , compared to net ordinary income of $373,791 for the second quarter of 2005 and compared to $87,649 for the first quarter of 2006.  Net income including net other income and excluding stock option expense for second quarter of 2006 was ($103,368) resulting in a ($0.0039) EPS compared to $381,359 and an EPS of $0.0143 for second quarter of 2005 and compared to $105,605 and an EPS of $0.0039 for first quarter of 2006. 

Net Income Including the Impact of Stock Option Expense: Net ordinary income for the second quarter of 2006, including stock option expense, was ( $198,424) compared to $218,325 for the second quarter of 2005 and compared to $87,649 for the first quarter of 2006. Net income, including net other income and including stock option expense for the second quarter of 2006 ,was ($118,299) resulting in an EPS of ($0.0044) compared to $225,893 and an EPS of $0.0085 for the second quarter of 2005 and compared to $105,605 and an EPS of $0.0039 for first quarter of 2006. 

Cash: The Company ended the second quarter of 2006 with approximately $1.4 million in cash, which is approximately the same level of cash reported at the end of first quarter of 2006.   The Company stated that the decrease in net ordinary income was the direct result of its strategy to invest in product development as a foundation for future growth, one time legal fees associated with the preparation of its recently announced joint venture with WPP Group, one time fees associated with its resumption of auditing (costs of audits currently in progress for Years 2004 and 2005), and the expected end of one of the Company’s three contracts with its largest client. Approximately $200,000 in cash was used during second quarter 2006 for the joint venture legal fees and the audit costs. 

Business Outlook “As we look ahead to the second half of 2006 and into 2007, we are focused on growing and diversifying our revenue base by signing new marquee clients and expanding our services internationally. We will continue to build on our new joint venture with WPP to increase our sales and marketing leverage to leading brands around the world,” stated Mr. Friedman. “We believe that we will excel by providing our clients with social networking and online communities that go beyond mere application functionality to become effective engagement marketing tools.  In particular, we are investing in quality and scale of services, moderation and reporting tools, community management services and LiveWorld’s new Community Center. These are the foundation of our unique leading model that builds a community to be the living embodiment of our clients’ brands as realized in their customers’ voice.”

The Company stated that revenues currently in place for year 2006 are now estimated at $9.5 million (including booked revenue, expected renewals, and deals far along in discussion).  This figure has increased from the $8.6 million revenue projection the Company provided in its February 14, 2006 guidance.

Based on that revenue forecast and the continuation of its investment strategy, the Company expects to be in the range of a $500,000 profit to a $500,000 loss for year 2006 (excluding the impact of stock option expense).  The Company may additionally increase investment in its operations and strategic alliances which in turn might further reduce profitability.

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

About LiveWorld, Inc. LiveWorld (OTC Pink Sheets: LVWD.PK, www.liveworld.com ) is the leading interactive marketing agency specializing in online customer communities and social networking for Fortune 1000 companies. LiveWorld creates, operates, and manages custom customer communities based on its unique community applications and moderation platform. LiveWorld solutions enable companies to strengthen customer relationships, increase revenues, and reduce costs. With twenty years of experience, an extensive applications platform, over 1 Million hours of delivered moderation and nearly $10 Million in revenue, LiveWorld is the trusted partner of leading brands worldwide. Clients include America Online, A&E Television Networks, AOL UK, BEA Systems, eBay, The Campbell Soup Company, Discovery Communications, Dove, HBO, Intel, MINI Cooper USA , MTV, QVC, Tulane University and TV Guide. LiveWorld is headquartered in Los Gatos, California and deploys its services in over 30 country-language combinations.

For further information, visit www.liveworld.com

Safe Harbor" Statement Under The Private Securities Litigation Reform Act: This press release may contain forward-looking information concerning LiveWorld’s plans, objectives, future expectations and prospects. This press release may also contain 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 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.)  LiveWorld recently announced that it has resumed auditing its financials and currently expects to begin releasing audited results as of the end of the third quarter of 2006.   LiveWorld Contacts PR Contact: Betty Taylor, bettyt@krause-taylor.com , Ph: 408-918-9080 IR Contact: Brinlea Johnson: The Blueshirt Group, for LiveWorld, 212 867-2593