Greetings to all for a healthy, peaceful and prosperous 2007!

Here is an update and a look forward as Horn Group enters its 16th year. In 2006, the company grew back to pre-bubble levels and is well on its way to $10mm. In our quest to become a more full-service communications firm, I'm quite pleased that over 25% of our business came from fully integrated communications programs containing both public relations and interactive services. More and more, we see the market looking for that one-stop-shopping experience, and selecting the boutique as the provider of those services. These developments support our position as a strategic communications firm specializing in public relations and digital marketing for technology companies.

Software-as-a-Service became a category in our own portfolio with market-leading companies like BlueRoads, CollabNet, RightNow, Taleo, WebEx and Workday. We successfully expanded our portfolio by adding a healthy gathering of digital media companies including QuickPlay, RightMedia, WeeWorld and projects with ClubMom and Glam.com. And, we began work with several highly respected venture capital firms: New Venture Partners, StarVest Partners, Valhalla Partners and Venrock Associates.

Last year, the agency was awarded the Web Marketing Association's 2006 WebAward for website design and the 2006 Bell Ringer Award for media relations. Another achievement: in November, we partnered with CollabNet to sponsor "Staying Ahead in a Flat World" in New York. The exclusive panel featured distinguished author and journalist Thomas L. Friedman (The World is Flat), Tim O'Reilly (O'Reilly Media founder and Web 2.0 luminary) and was moderated by Fortune's David Kirkpatrick. We expanded internationally with the introduction of the Constella Network, co-founded with our UK partner Brands2Life. Constella is a network of 15 independent communications agencies in 20 countries throughout The Americas, Europe and Asia/Pacific. We look forward to extending this network to our clients in 2007.

Looking ahead, we see tremendous opportunity for the software industry within the venture and private equity communities. While the IPO market in the US isn't rocking the charts, there will be plenty of M&A activity, particularly within the mid-sized software market. We stand ready to help our clients and other companies at every stage of growth, be it their first go-to-market launch, their repositioning and re-branding, or expansion into new markets. We expect integrated communications to become even more fundamental to our business, both in terms of client service as well as professional development for our own people. As the blogosphere becomes mainstream this year, we will round out our Media Practice with specialists and experts in the field to better help our clients engage this audience of influencers.

Our business strategy is simple and remains the same: great client service for great companies provided by great people. We continue focus on the B2B software market as well as interesting companies in emerging technologies and digital media. In an industry where one tends to over-complicate, we intend to simplify. Often, the best brands are based on the simplest strategy, conceived and implemented at just the right time. But key to the essence of any brand is the emotional connection created among its consumers. The originality and freshness of our thinking remain paramount, the execution is a given and must be flawless. We have planted all the right seeds and they have sprouted. This year is the year they grow tall and strong. For my part, I can't wait to get up every day and make a difference for our fearless clients, our fantastic employees and our wider circle of friends. Here's to all of you and your continued success. We thank you for your business, support and friendship. And here's to Horn Group and our 16th year!

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