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The Knot Reports Second Quarter 2008 Financial Results
    --Technology Upgrades on Track for Completion in 2008--

    Conference Call Today at 4:30 p.m. ET Dial-In 800-638-7172 (ID#

NEW YORK--(BUSINESS WIRE)--Aug. 7, 2008--The Knot, Inc. (NASDAQ: KNOT,, a leading lifestage media company targeting couples planning their weddings and future lives together, today reported financial results for its second quarter and six months ended June 30, 2008.

Second Quarter 2008 Results

For the second quarter ended June 30, 2008, The Knot reported net revenues of $28.7 million compared with net revenues of $28.5 million for the second quarter of 2007. Revenue from national and local online advertising programs increased 8% over the prior year's second quarter, while merchandise revenue from the sale of wedding supplies was up 10%. Registry services commissions remained relatively flat compared to 2007. Publishing and other revenues declined by 22% in the recent quarter with the majority of the decrease resulting from the timing of the release of The Knot Best of Weddings publication. This magazine was released in the first quarter of this year and published in the second quarter of 2007. Publishing and other revenues declined 7% in the first six months of 2008 compared to the first half of 2007.

Net income for the second quarter of 2008 was $2.3 million or $0.07 per basic and diluted share. Net income for the second quarter of 2007 was $4.8 million or $0.15 per basic and diluted share.

"The second quarter proved to be challenging on a number of fronts. Given the weak economic environment and recent revenue results, we're taking a conservative stance and lowering our guidance for percentage revenue growth for 2008 from mid-teens to 9 to 11%." said David Liu, Chief Executive Officer of The Knot. "We've made considerable progress toward completing our platform investments and upgrades. We look forward to successfully concluding this investment cycle, and we expect that the changes we're implementing today will support sustained long-term growth and profitability for The Knot in the years to come."

Six-Month Results

For the six months ended June 30, 2008, The Knot reported net revenues of $52.5 million and net income of $2.9 million or $0.09 per basic and diluted share as compared to net revenues of $49.5 million and net income of $6.4 million or $0.21 per basic and $0.19 per diluted share in 2007.

    Second Quarter and Year-to-Date 2008 Financial Highlights:

    --  National online revenues were $5.4 million and $10.1 million
        for the three and six months ended June 30, 2008,
        respectively, compared to $4.9 million and $8.4 million for
        the corresponding periods in 2007.

    --  Local online revenues were $8.0 million and $16.3 million for
        the three and six months ended June 30, 2008, respectively, as
        compared to $7.6 million and $14.9 million for the
        corresponding periods in 2007.

    --  Gross profit margins approximated 80% for each of the three
        and six months ended June 30, 2008 and 2007.

    --  Operating expenses were $20.1 million and $39.6 million for
        the three and six months ended June 30, 2008, respectively, as
        compared to $15.9 million and $31.2 million for corresponding
        periods in 2007. The Knot currently expects operating expenses
        to approximate $21.3 million for each of the three-month
        periods ended September 30 and December 31, 2008.

    --  Stock-based compensation expense was $1.1 million and $1.9
        million for the three and six months ended June 30, 2008,
        respectively, as compared to $577,000 and $1.0 million for the
        corresponding periods in 2007.

    --  Net cash provided by operating activities was $13.7 million
        for the six months ended June 30, 2008 while capital
        expenditures amounted to $3.6 million.

    --  For the six months ended June 30, 2008, The Knot has recorded
        a temporary impairment charge of $3.1 million with respect to
        its investments in auction rate securities. The charge was
        reflected in other comprehensive loss in stockholders' equity.

    Recent Highlights:

    --  In April, the Company launched a Baby Registry Service, which
        enables future parents to create and monitor their baby
        registries through its website for first-time parents, Through this patented multi-registry search
        system, gift givers can easily locate and purchase a baby gift
        off of a registry at a variety of retailers, including Pottery
        Barn Kids, Right Start, Land of Nod, giggle and

    --  In May, Carol Koh Evans rejoined The Knot as Chief Operating
        Officer. Ms. Evans worked at The Knot in corporate development
        and was instrumental in the execution of the Company's
        successful IPO in December 1999 and the acquisition of
        Weddingpages, Inc. in 2000. Most recently, she was General
        Manager for Massive Incorporated, a subsidiary of Microsoft
        Corporation and leading network for video game advertising,
        where she directed operations for the past two years.

    --  In June, closed the month with a record-breaking
        116,000 new members. This is the highest number of new members
        for June on record, 13 percent above the site's past record of
        103,000 in June of 2006.

    Conference Call and Replay Information

The Knot will host a conference call with investors at 4:30 p.m. ET on Thursday, August 7, 2008, to discuss its second quarter 2008 financial results. Participants should dial in 800-638-7172 Reference # 57168714 at least 10 minutes before the call is scheduled to begin. Participants can also access the live broadcast over the Internet on the Investor Relations section of The Knot website, accessible at To access the webcast, participants should visit The Knot website at least 15 minutes prior to the conference call in order to download or install any necessary audio software.

A replay of the webcast will also be archived on The Knot website approximately two hours after the conference call ends for a period of two weeks and will also be available at 800-642-1687 Reference # 57168714.

About The Knot, Inc.

The Knot, Inc. (NASDAQ: KNOT;, is a leading lifestage media company. The Company's flagship brand, The Knot, is the nation's leading wedding resource, reaching well over a million engaged couples each year through the #1 wedding website Other products from The Knot include The Knot national and local magazines, The Knot books (published by Random House and Chronicle) and television programming bearing The Knot name (aired on Style Network and Comcast). The Company also owns, the most visited wedding gift registry website. The Company focuses on the newlywed-to-pregnancy lifestage with The Nest brand, with the popular lifestyle website, a home decor book series with Clarkson Potter and The Nest magazine. Expecting and new parents are engaged by and local baby services and community site, and The Bump and LilaGuide print guides. Also under The Knot, Inc. umbrella are;; party planning site; and teen-oriented The Knot, Inc. is based in New York and has several other offices across the country.

This release may contain projections or other forward-looking statements regarding future events or the future financial performance of The Knot. These statements are only predictions and reflect the current beliefs and expectations of The Knot. Actual events or results may differ materially from those contained in the projections or forward-looking statements. It is routine for internal projections and expectations to change as the quarter progresses, and therefore it should be clearly understood that the internal projections and beliefs upon which The Knot bases its expectations may change prior to the end of the quarter. Although these expectations may change, The Knot will not necessarily inform you if they do. The Knot's policy is to provide its expectations not more than once per quarter, and not to update that information until the next quarter. Some of the factors that could cause actual results to differ materially from the forward-looking statements contained herein include, without limitation, (i) The Knot's unproven business model, (ii) The Knot's history of losses, (iii) the significant fluctuation to which The Knot's quarterly revenues and operating results are subject, (iv) the seasonality of the wedding industry, (v) the dependence of our registry services business on the continued use of the WeddingChannel website by our retail partners and (vi) other factors detailed in documents The Knot files from time to time with the Securities and Exchange Commission. Forward-looking statements in this release are made pursuant to the safe harbor provisions contained in the Private Securities Litigation Reform Act of 1995.

                            The Knot, Inc.
                     Consolidated Balance Sheets
                            (in thousands)

                                               June 30,   December 31,
                                                 2008         2007
                                              (Unaudited)  (Audited)
                                              ----------- ------------

Current assets:
    Cash and cash equivalents                   $ 62,438     $ 33,127
    Short-term investments                            --       72,649
    Accounts receivable, net                      10,327       14,927
    Accounts receivable from affiliate             1,134        1,327
    Inventories                                    2,971        1,878
    Deferred production and marketing costs          724          483
    Deferred tax assets, current portion           3,748        3,388
    Other current assets                           1,629        1,623
                                              ----------- ------------
Total current assets                              82,971      129,402

Long-term investments                             50,900           --
Property and equipment, net                        9,301        8,497
Intangible assets, net                            29,768       30,953
Goodwill                                          33,770       32,105
Deferred tax assets                               20,304       22,018
Other assets                                         230          278
                                              ----------- ------------
Total assets                                    $227,244     $223,253
                                              =========== ============

Liabilities and stockholders' equity
Current liabilities:
    Accounts payable and accrued expenses       $  8,363     $  7,616
    Deferred revenue                              14,786       14,665
    Current portion of long-term debt                 55           55
                                              ----------- ------------
Total current liabilities                         23,204       22,336
Deferred tax liabilities                          13,746       14,178
Other liabilities                                    424          456
                                              ----------- ------------
Total liabilities                                 37,374       36,970

Stockholders' equity:
    Common stock                                     321          316
    Additional paid-in-capital                   196,706      192,893
    Accumulated deficit                           (4,057)      (6,926)
    Accumulated other comprehensive loss          (3,100)          --
                                              ----------- ------------
Total stockholders' equity                       189,870      186,283
                                              ----------- ------------
Total liabilities and stockholders' equity      $227,244     $223,253
                                              =========== ============
                            The Knot, Inc.
                Consolidated Statements of Operations
               (in thousands, except per share amounts)

                         Three months ended       Six months ended
                              June 30,                June 30,
                       ----------------------- -----------------------
                          2008        2007        2008        2007
                       ----------- ----------- ----------- -----------
                       (Unaudited) (Unaudited) (Unaudited) (Unaudited)
Net revenues:
Online sponsorship and
 advertising           $    13,463 $    12,521 $    26,374 $    23,298
Registry Services            3,289       3,356       5,067       5,117
Merchandise                  7,133       6,500      11,727      11,130
Publishing and other         4,786       6,109       9,304       9,970
                       ----------- ----------- ----------- -----------
Total net revenues          28,671      28,486      52,472      49,515

Cost of revenues             5,765       5,651      10,236       9,667
                       ----------- ----------- ----------- -----------

Gross profit                22,906      22,835      42,236      39,848

Operating expenses:
Product and content
 development                 5,037       3,306       9,989       6,450
Sales and marketing          7,617       6,447      15,196      12,337
General and
 administrative              5,213       3,987      10,022       8,072
Depreciation and
 amortization                2,238       2,198       4,439       4,306
                       ----------- ----------- ----------- -----------
Total operating
 expenses                   20,105      15,938      39,646      31,165

Income from operations       2,801       6,897       2,590       8,683

Interest and other
 income, net                   880       1,236        2083       2,223
                       ----------- ----------- ----------- -----------

Income before income
 taxes                       3,681       8,133       4,673      10,906

Provision for income
 taxes                       1,390       3,373       1,803       4,512
                       ----------- ----------- ----------- -----------

Net income             $     2,291 $     4,760 $     2,870 $     6,394
                       =========== =========== =========== ===========

Basic earnings per
 share                 $      0.07 $      0.15 $      0.09 $      0.21
                       =========== =========== =========== ===========
Diluted earnings per
 share                 $      0.07 $      0.15 $      0.09 $      0.19
                       =========== =========== =========== ===========

Weighted average number
 of common shares
   Basic                31,445,490  30,898,378  31,348,660  30,855,336
                       =========== =========== =========== ===========
   Diluted              32,592,425  32,759,935  32,592,375  32,795,590
                       =========== =========== =========== ===========

Note: Certain prior year amounts have been reclassified to conform to
 the current year's presentation.

    CONTACT: VMW Corporate & Investor Relations
             Vicki Weiner/Sylvia Dresner

    SOURCE: The Knot, Inc.

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