Media Centre

Call Genie Announces Agreement to Acquire PhoneSpots, Inc.

December 12, 2007

Call Genie Inc. (TSX: "GNE"), a leading provider of localized, voice-enabled search solutions to Yellow Pages publishers, directory assistance providers and wireless carriers, and PhoneSpots, Inc., a leading provider of advertising exchange and mobile content delivery solutions, today announced that they have signed a definitive agreement to merge PhoneSpots with a wholly owned subsidiary of Call Genie USA, Inc.

Under the terms of the acquisition agreement, the total consideration payable to the shareholders of PhoneSpots is $5.75 million, consisting of approximately $5.093 million worth of Call Genie common shares and a net cash payment of $711,000.  The acquisition agreement provides that the number of Call Genie shares to be issued in connection with the transaction will be determined based upon market conditions at the time of closing of the transaction, provided that the issue price of each Call Genie share will not be less than $0.95. 

The transaction is expected to close in early January 2008 and is subject to customary closing conditions and regulatory approvals.

Management of Call Genie views the transaction as a means to expand Call Genie’s presence in its core Yellow Pages and Directory Assistance markets as well as accelerate its market penetration in North America, Europe and Asia-Pacific. By combining the advertising capabilities and customer relationships of PhoneSpots and Call Genie, Call Genie will offer a single, comprehensive advertising solution for all types of local and mobile media.  This provides advertisers with access to a larger, consolidated inventory of advertising opportunities and service providers with access to a large network of advertisers. 

PhoneSpots has developed an advertising exchange and mobile content delivery solution which Call Genie believes will provide it with an opportunity to expand its voice-enabled local search products to include a more robust multi-modal directory solution. PhoneSpots customers and partners include: Ahhaaa AB, Interactive Corp / HSN, LeNumero, Newsphone, Orange, Telegate, Volt Delta, and Yellowpages.com. 

"By combining forces with Call Genie, we believe we will be able to accelerate PhoneSpots’ vision for an enhanced mobile local search experience that takes full advantage of a mobile phone’s unique targeting capabilities for local advertisers" said Tom Arthur, CEO of PhoneSpots. “Adding our mobile capabilities to Call Genie’s voice search solution will allow Call Genie to provide a more robust local mobile search tool."

"There are over two billion mobile phones in the world today and we see a significant opportunity for consumers to utilize these devices as the primary interface for the delivery of local mobile search results,” said Michael Durance, CEO of Call Genie.  "The combination of PhoneSpots local search and mobile advertising solution with Call Genie’s core voice search capabilities is expected to better position Call Genie to win new business and provide us with opportunities to cross-sell our existing customer base.”

Both Call Genie and PhoneSpots deliver enhanced mobile and local search solutions to yellow page publishers, directory assistance providers, and wireless carriers.  Following completion of the acquisition transaction, the customer base of Call Genie and its affiliates will include:

• North America:1-800inAcity, 1800SanDiego, CellWand, HSN / IAC, Ingenio, RHDonnelley, Say Hello, Telus, Verizon, Verizon Livesource, Yellowpages.com, Yellow Pages Group
• Europe: Eniro, Opplysningen, Orange, Ahhaaa AB, SNT Trefzeker, Telegate, TeleGreenland, Le Numero
• Rest of World: Batelco, Du, Etisalat, Newsphone, Omantel, Telecom Egypt

It is anticipated that the acquisition of PhoneSpots will be accretive to Call Genie.  Further, it is anticipated that revenues generated directly by PhoneSpots and through cross selling into Call Genie's customer base will be incremental to previously announced guidance provided by the Company on future financial performance.

Certain information set out in this News Release constitutes forward-looking information, including information relating to (i) anticipated timing of closing of the acquisition transaction; (ii) anticipated benefits of the acquisition transaction from Call Genie's perspective; (iii) the customer base of Call Genie and its affiliates following completion of the acquisition transaction; and (iv) the accretive nature of the transaction to Call Genie. Readers should review the cautionary statement respecting forward-looking information that appears at the end of this News Release.

About Call Genie, Inc.
Call Genie, Inc. is a leading provider of enhanced voice-enabled local search products and services to Yellow Pages publishers, directory assistance providers, and wireless carriers. Offered as a turnkey or ASP solution, Call Genie's Enhanced Voice Directory (EVD™) platform enables companies to offer a comprehensive, voice-enabled business category search service to customers. EVD™ is network, handset and location independent, and can be incorporated into any existing directory assistance service or deployed as a stand-alone offering. Call Genie won the 2006 Yellow Page Association Industry Excellence Award for Marketing Innovation in North America, the 2006 Whitaker Innovation Award in Europe, and the 2006 118 Tracker Award for Technology Innovation in the UK. For more information, visit http://www.callgenie.com/.

About PhoneSpots
PhoneSpots is a leading provider of mobile local search and advertising solutions. The PhoneSpots technology enables directory assistance and yellow pages providers to deliver local search results along with contextual advertising to users of mobile phones. PhoneSpots is venture-backed and headquartered in Oakland, California.

For More Information 

 The TSX Exchange has neither approved nor disapproved the contents of this News Release. 

###