Customers Opting for Subscription Model as Budgets Tighten; May Impact Quarterly Software Revenue

PHOENIX, Ariz. (January 29, 2008) –

iLinc Communications, Inc. (AMEX:ILC), a leading developer of Web conferencing software, today announced another customer win with a large securities and financial advisory services firm. The agreement will provide the multi-billion dollar company with best-in-class Web-based software for use by their employees and customers for both Web conferencing and online training.

The annual subscription agreement provides iLinc with $100,000 of an annually recurring revenue stream under iLinc’s Software-as-a-Service (SaaS) model. The Fortune 500 financial services firm will have access to the full iLinc Suite(TM) on an unlimited use basis for its training and educational purposes. The new customer joins a who’s who list of financial organizations that are long-term customers of iLinc, including such notable names as JPMorgan Chase, Citigroup, Travelers Insurance and Aetna.

“Financial services is a key vertical that is part of our recent sales and marketing efforts focused around a four-vertical approach, which is building a good foundation for long-term sales momentum,” said James M. Powers, Jr., President and Chief Executive Officer of iLinc. “Our marketplace continues to change with increased adoption of SaaS or subscription-based offerings, and we are adapting to those changes. Our customers appreciate iLinc’s robust feature set, enterprise scalability and unmatched security in addition to the licensing flexibility that we offer. We see many of those enterprise-class customers increasingly choosing the SaaS license model, and this new Fortune 500 customer is just the most recent example. Despite this marketplace change, we remain one of the few tier-one providers of Web collaboration software that still offers a software purchase licensing model, in combination with the choice of hosting by iLinc or self-hosting behind their firewall,” added Dr. Powers.

“We see continued change in the Web conferencing market and the economy, including increasingly tighter capital budgets, so we are opting to close transactions on a SaaS basis, which is a change for iLinc,” continued Dr. Powers. “The upside provided is continued growth in our customer base and continued sales opportunities within these organizations as we expand our footprint across the enterprise. That part of our sales strategy has not changed and is working well. Through increasing use of the SaaS model, we reap the long-term benefits of more predictable and recurring revenue, yet retain the benefits of up-front payments. The natural consequence of migrating some quarterly transactions to a longer-term SaaS model is a reduction in short-term quarterly software license revenue. Even with this shift to more SaaS transactions, we will continue to promote our long standing and industry unique software purchase licensing model, especially in larger enterprise-wide sales opportunities or where software licensing and behind the firewall installation provides iLinc a competitive advantage,” concluded Dr. Powers.

“The shift in increased subscription sales has deferred several large transactions that we had anticipated closing in the December quarter using our traditional software purchase model,” said James L. Dunn, Jr., Chief Financial Officer of iLinc. “We expect to close those transactions in January, which would permit iLinc to remain in-line with its annual revenue guidance. However, these sales may continue to delay or instead opt for a subscription or SaaS license model, which would require an adjustment to our annual revenue and net income guidance,” added Mr. Dunn. “We will provide more definitive information about the December quarter and our expectations for the remainder of the 2008 fiscal year during our quarterly earnings call,” concluded Mr. Dunn.
About iLinc Communications, Inc.
iLinc Communications, Inc. is a leading developer of Web conferencing software and audio conferencing solutions for highly secure and cost-effective online meetings, presentations, and training sessions. The Company’s technology allows people in diverse locations to communicate and collaborate online while avoiding the expense, environmental damage, and productivity losses associated with travel. iLinc provides an award-winning, enterprise-wide suite of Web, audio and video conferencing solutions that can be scaled up or down to meet the needs of any size organization. Offering the industry’s most flexible pricing models, iLinc gives organizations the power to choose an on-premise installed, on-demand hosted, or hybrid solution–whichever model delivers the highest ROI for the customer. iLinc is headquartered in Phoenix, Arizona, with offices in Troy, New York and Salt Lake City, Utah.

iLinc, iLinc Communications, iLinc Suite, MeetingLinc, LearnLinc, ConferenceLinc, SupportLinc, EventPlus, and their respective logos are trademarks of iLinc Communications, Inc. All other company names and products may be trademarks of their respective companies.

This press release contains information that constitutes forward-looking statements made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Any such forward-looking statements involve risk and uncertainties that could cause actual results to differ materially from any future results described within the forward-looking statements. Factors that could contribute to such differences are disclosed in the Company’s annual report on Form 10-K, quarterly reports on Form 10-Q, and other reports filed with the Securities and Exchange Commission. The forward-looking information provided herein represents the Company’s estimates and expectations as of the date of the press release, and subsequent events and developments may cause the Company’s estimates and expectations to change. The Company specifically disclaims any obligation to update the forward-looking information in the future. Therefore, this forward-looking information should not be relied upon as representing the Company’s estimates and expectations of its future financial performance as of any date subsequent to the date of this press release.
Media Contacts:

Hala Elsherbini, for iLinc
Halliburton Investor Relations
(972) 458-8000

James L. Dunn, Jr.
Chief Financial Officer
(602) 952-1200

Source: iLinc