August 23, 2006
VIA EDGAR
Mr. Jorge Bonilla
Senior Staff Accountant, Division of Corporation Finance
Securities and Exchange Commission
100 F Street, N.E.
Washington, DC 20549
| Re: | HouseValues, Inc. |
Form 10-K for the Fiscal Year Ended December 31, 2005
File No. 000-51032
Dear Mr. Bonilla:
This letter sets forth our response to the comment of the Securities and Exchange Commission staff (the “Staff”) relating to our Annual Report on Form 10-K for the fiscal year ended December 31, 2005 (the “Form 10-K”), contained in your letter dated August 10, 2006 (the “Comment Letter”).
Comment
FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 2005
Item 6 – Selected Consolidated Financial Data, pages 30-31: Quarterly Consolidated Statements and Operational Data, page 42
| 1. | We have read your response to comment 1. Your response has not demonstrated the usefulness of adjusting EBITDA for stock based compensation in evaluating your performance. We believe the facts and circumstances do not support the adjustment of stock based compensation in accordance to Item 10(e) of Regulation S-K and Question eight and nine of the Frequently Asked Questions Regarding the use of Non-GAAP Measures. In this regard, we note the disclosure that you have incurred stock based compensation expense in each of the last five years and expect it to increase substantially in 2006 upon adoption of SFAS 123(R). In future filings, please revise to exclude your adjustment for stock based compensation. |
Response
As of June 30, 2006, we have revised our filings to exclude the disclosure of Adjusted EBITDA.
Mr. Jorge Bonilla
August 23, 2006
Page 2
If you have any further comments or questions regarding this letter, please contact me at (425) 952-5510.
Very truly yours,
|
| /s/ Jackie Davidson |
Jackie Davidson Chief Financial Officer and Vice President of Finance |
| cc: | Eric DeJong, Perkins Coie LLP |
Brent Johnson, KPMG LLP
