United States Securities and Exchange Commission

Washington, D.C. 20549

Form 10-Q

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2008

or

o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES

EXCHANGE ACT OF 1934

For the transition period from _____ to _____

Commission File Number 0-21989

Medialink Worldwide Incorporated

(Exact name of registrant as specified in its charter)

Delaware	52-1481284
(State or other jurisdiction of	(I.R.S. Employer
incorporation or organization)	Identification Number)

708 Third Avenue, New York, NY	10017
(Address of principal executive offices)	(Zip Code)

(212) 682-8300

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See definitions of “large accelerated filer”, “accelerated filer”, and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer o	Accelerated filer o
Non-accelerated filer o (Do not check if a smaller reporting company)	Smaller reporting company x

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.) Yes o  No x

The number of shares of the issuer's common stock outstanding as of July 31, 2008, was 6,428,059.

PART I - FINANCIAL INFORMATION

Item 1. Financial Statements

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

(Unaudited)

(In thousands of dollars, except share and per-share amounts)

	June 30,			December 31,
	2008			2007
ASSETS
Current Assets:
Cash and cash equivalents	$	8,275		$	12,732
Accounts receivable, net of allowance for doubtful accounts of
$184 and $219		4,103			4,965
Prepaid expenses		494			519
Prepaid and refundable taxes		1,235			743
Deferred income taxes		34			169
Other current assets		30			91
Total current assets		14,171			19,219
Property and equipment - net		1,552			4,542
Goodwill		-			3,429
Deferred income taxes		44			217
Other assets		713			738
Total assets	$	16,480		$	28,145
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable	$	1,605		$	2,186
Accrued expenses and other current liabilities		4,582			5,140
Total current liabilities		6,187			7,326
Convertible debentures, net of unamortized discount of $313 and $422		4,037			3,928
Other long-term liabilities		547			765
Total liabilities		10,771			12,019
Commitments and contingencies
Stockholders' Equity:
Series A Preferred stock: $.01 par value, authorized 50,000 shares; none
issued and outstanding		-			-
Common stock: $.01 par value, authorized 15,000,000 shares; issued
6,529,180 shares in 2008 and 2007		65			65
Additional paid-in capital		28,666			28,490
Accumulated deficit		(22,403	)		(11,826	)
Accumulated other comprehensive loss		(276	)		(260	)
Common stock in treasury (at cost, 101,121 shares)		(343	)		(343	)
Total stockholders' equity		5,709			16,126
Total liabilities and stockholders' equity	$	16,480		$	28,145

See notes to unaudited consolidated financial statements

2

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

(In thousands, except per-share amounts)

	For the six months ended						For the three months ended
	June 30,						June 30,
	2008			2007			2008			2007
Revenues	$	14,137		$	16,304		$	7,036		$	8,319
Operating expenses:
Direct costs		6,111			7,944			2,936			4,063
Selling, general, and administrative expenses		11,472			12,177			5,689			6,030
Depreciation and amortization		1,077			955			539			459
Goodwill impairment		3,429			-			3,429			-
Other impairment charges		2,413			-			2,413			-
Charge for exit activities		119			-			-			-
Total operating expenses		24,621			21,076			15,006			10,552
Operating loss		(10,484	)		(4,772	)		(7,970	)		(2,233	)
Interest income (expense) - net		(248	)		61			(145	)		21
Loss from continuing operations before taxes		(10,732	)		(4,711	)		(8,115	)		(2,212	)
Income tax benefit		(155	)		(1,246	)		(59	)		(528	)
Loss from continuing operations		(10,577	)		(3,465	)		(8,056	)		(1,684	)
Income from discontinued operations, net of tax		-			2,618			-			-
Net loss	$	(10,577	)	$	(847	)	$	(8,056	)	$	(1,684	)
Net loss	$	(10,577	)	$	(847	)	$	(8,056	)	$	(1,684	)
Other comprehensive income (loss)		(16	)		36			(11	)		29
Comprehensive loss	$	(10,593	)	$	(811	)	$	(8,067	)	$	(1,655	)
Basic and diluted income (loss) per common share:
Loss from continuing operations	$	(1.65	)	$	(0.54	)	$	(1.25	)	$	(0.26	)
Income from discontinued operations		-			0.41			-			-
Net loss	$	(1.65	)	$	(0.13	)	$	(1.25	)	$	(0.26	)
Weighted average number of common shares:
Basic and diluted		6,428			6,363			6,428			6,406

See notes to unaudited consolidated financial statements

3

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

(In thousands of dollars)

	For the six months ended
	June 30,
	2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$	(10,577	)	$	(847	)
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization		1,077			955
Deferred income taxes		308			449
Income from discontinued operations		-			(2,618	)
Goodwill impairment		3,429			-
Other impairment charges		2,413			-
Other		453			352
Changes in operating assets and liabilities:
Accounts receivable		876			92
Prepaid expenses and other assets		89			744
Prepaid and refundable taxes		(492	)		(3,242	)
Accounts payable and accrued expenses		(1,270	)		(1,194	)
Other liabilities		(261	)		(194	)
Net cash used in operating activities		(3,955	)		(5,503	)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment		(501	)		(782	)
Proceeds from sale of division		-			4,513
Net cash provided by (used in) investing activities		(501	)		3,731
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock in connection
with the exercise of stock options and warrants		-			213
Net cash provided by financing activities		-			213
Net decrease in cash and cash equivalents		(4,456	)		(1,559	)
Effect of exchange rate changes on cash and cash equivalents		(1	)		19
Cash and cash equivalents at the beginning of period		12,732			17,031
Cash and cash equivalents at end of period	$	8,275		$	15,491

See notes to unaudited consolidated financial statements

4

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS

(In thousands of dollars, except per-share amounts)

1. Basis of Presentation

The accompanying unaudited consolidated financial statements of Medialink Worldwide Incorporated and its subsidiaries (the “Company”), which have been prepared in accordance with the instructions to Form 10-Q and therefore do not include all information and footnotes necessary for a fair presentation of financial position, results of operations, and cash flows in conformity with generally accepted accounting principles, should be read in conjunction with the notes to the consolidated financial statements contained in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. The Company believes that all adjustments, consisting primarily of normal recurring accruals, necessary for a fair presentation have been included in the financial statements. The operating results of any quarter are not necessarily indicative of the results for the entire year or any future period.

Certain prior-period amounts in the accompanying financial statements have been reclassified to conform to the 2008 presentation.

2. Subsequent Events

In August 2008, the Company’s board of directors approved an offer from Koninklijke Philips Electronics N.V. (“Philips”) to transfer the Company’s ownership interest in its Teletrax subsidiaries,upon consummation of which the Company will have no further involvement in the digital video monitoring business. The transaction, which is subject to standard due diligence procedures, is expected to be consummated by the end of the August 2008. Under the terms of the offer, Philips, which currently owns 24% of each Teletrax subsidiary, would receive the Company’s 76% ownership stake in both Teletrax subsidiaries for a reimbursement of up to approximately $275 of certain net operating costs incurred by the Company prior to closing, subject to certain post-closing adjustments. Upon closing of the transaction, Philips will own 100% of the Teletrax entities and the Company will have no further funding obligations.

Also in August 2008, the Company’s board of directors approved an offer it received from World Television Group plc (“World”) to acquire certain assets of the media communications services business operated by the Company’s subsidiary in the United Kingdom. Under the terms of the offer, the Company would receive from World a percentage of the gross profit derived from certain client revenue for a period of eighteen months from the closing date.

3. Discontinued Operations

In September 2006, the Company sold the assets of U.S. Newswire, its wire distribution and photography services division. In February 2007, the sale price of U.S. Newswire was finalized and determined to be $22,577. The Company received additional cash proceeds in February 2007 totaling $4,427, of which $3,307 represented additional sale price received directly from the buyer, $1,000 represented the release of an escrow balance representing deferred purchase price at closing, and $120 represented an adjustment for additional working capital. In connection with finalizing the sale price, the Company recognized an additional gain on the sale of U.S. Newswire, which is presented as a discontinued operation for the six months ended June 30, 2007, as follows:

Gain on sale of division before income taxes	$	4,513
Income tax expense		1,895
Income from discontinued operations	$	2,618

5

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued

4. Goodwill

Based on changes that will result from consummation of the transactions proposed in connection with the Company’s digital video tracking services business and its media communications services business operated in the United Kingdom (see Note 2) and the continued decline in the media communications services business operated in the United States, the Company determined that its goodwill, all of which relates to the media communication services business, should be tested for impairment prior to the annual testing date of September 30 in accordance with Statement of Financial Accounting Standards (“SFAS”) No. 142, “Goodwill and Other Intangible Assets.” Consummation of the proposed or similar transactions will result in the Company having a single operating segment. Accordingly, the determination of fair value for purposes of the goodwill impairment test was based on quoted market prices for the Company’s common stock. Based on this goodwill impairment test, the Company determined that the carrying value of its goodwill exceeded its fair value. Accordingly, the Company incurred a goodwill impairment charge of $3,429, resulting in no goodwill remaining at June 30, 2008.

5. Other Impairment Charges

Based on offers it received and other market factors related to the Company’s digital video tracking services business and its media communications services business operated in the United Kingdom (see Note 2), the Company determined that the carrying value of the long-lived assets used in these businesses is not recoverable and exceeds the fair value of such assets. In accordance with SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets,” the Company recognized impairment charges totaling $2,413, which consisted of an impairment charge of $1,808 related to property and equipment used in the digital video tracking services business and an impairment charge of $605 related to property and equipment used in the media communications services business operated in the United Kingdom.

6. Earnings (Loss) per Share

Basic earnings (loss) per share of common stock is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding. There were no reconciling items to net income (loss) to arrive at income (loss) available to common stockholders for the year-to-date and quarterly periods ended June 30, 2008 and 2007. Diluted earnings (loss) per share of common stock is computed by giving effect to all dilutive potential common shares. The number of shares used in the calculation of diluted earnings (loss) per share for the periods ended June 30, 2008 and 2007, excluded incremental shares related to stock options and warrants and incremental shares related to convertible debentures as follows:

	Six months ended June 30,				Three months ended June 30,
	2008		2007		2008		2007
Shares related to stock options and warrants		493		396,468		-		276,638
Shares related to convertible debentures		1,074,074		1,099,904		1,074,074		1,074,074

All such incremental shares were excluded from the calculation of diluted earnings (loss) per share due to their antidilutive effect on income from continuing operations.

6

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued

7. Exit Activities

In January 2008, the Company completed a plan to vacate a portion of its facility in New York (the “2008 Q1 Plan”). The results of operations for the six months ended June 30, 2008, include a charge of $119 related to the 2008 Q1 Plan, which consisted entirely of contract termination costs associated with the lease. In addition, during 2007 the Company initiated and completed two separate exit activities in connection with the sale of U.S. Newswire (the “2007 Q3 Plan” and the “2007 Q4 Plan”) and in September 2003 initiated and completed an exit activity relating to one of its office locations in Norwalk, CT (the “2003 Plan”). The remaining liability for future payments for these plans and the amounts charged against the liability were as follows:

	Total			2003 Plan			2007 Q3 Plan			2007 Q4 Plan			2008 Q1 Plan
Balance at January 1, 2008	$	132		$	22		$	56		$	54
Charge for exit activities		119											$	119
Facility closure cost payments		(178	)		(22	)		(56	)		(25	)		(75	)
Balance at June 30, 2008	$	73		$	-		$	-		$	29		$	44

Final consummation of a transaction under the proposed terms for the Company’s digital video tracking services business and its media communications services business operated in the United Kingdom (see Note 2) may result in additional charges for exit activities, including contract termination costs for real estate and employee termination costs.

8. Stock Options

The Company administers two stock option plans, one covering employees and other eligible participants (the “Employee Plan”) and one covering members of its board of directors (the “Directors’ Plan”). At June 30, 2008, 1,030,147 and 179,400 shares remained available for the issuance of stock options under the Employee Plan and the Directors’ Plan, respectively.

During the first six months of 2008, the Company granted 21,000 stock options under the Employee Plan, of which 15,000 that vest ratably over a four-year period were granted to an employee and 6,000 that vest ratably over a three-year period were granted to non-employee directors of the Company’s Teletrax subsidiaries. During the first six months of 2008, the Company granted 24,000 stock options under the Directors’ Plan to non-employee directors, all of which vest ratably over a three-year period.

7

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued

The following weighted average assumptions were used in calculating the fair value of stock options granted under the Employee Plan and the Directors’ Plan during the six months ended June 30, 2008:

	Employee Plan	Directors’ Plan
Expected term	3.82	3.81
Expected volatility	.5818	.5630
Expected dividends	0%	0%
Risk-free interest rate	3.00%	3.63%

For the six months ended June 30, 2008 and 2007, the Company recognized $176 and $169, respectively, of compensation expense related to stock options. For the three months ended June 30, 2008 and 2007, the Company recognized $87 and $85, respectively, of compensation expense related to stock options. Such amounts were based on the fair value of the stock options at the grant date. The Company did not recognize any tax benefit related to the stock-based compensation expense incurred during the six and three months ended June 30, 2008 and 2007, respectively.

Information relating to activity in the Employee Plan for the six months ended June 30, 2008, is summarized in the following table. All stock option grants included in the following table had exercise prices equal to the market price on the grant date.

	Number of shares			Weighted Average Exercise Price		Weighted Average Fair Value		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term
Options outstanding at January 1, 2008		762,080		$	4.83
Options granted		21,000		$	2.86	$	1.32
Options forfeited and expired		(101,965	)	$	6.66
Options outstanding at June 30, 2008		681,115		$	4.49			$	0		6.89
Options exercisable at June 30, 2008		338,170		$	4.66			$	0		5.25

Information relating to activity in the Directors’ Plan for the six months ended June 30, 2008, is summarized in the following table. All stock option grants included in the following table had exercise prices equal to the market price on the grant date.

	Number of shares			Weighted Average Exercise Price		Weighted Average Fair Value		Aggregate Intrinsic Value		Weighted Average Remaining Contractual Term
Options outstanding at January 1, 2008		240,600		$	5.11
Options granted		24,000		$	4.25	$	1.94
Options forfeited and expired		(47,400	)	$	7.25
Options outstanding at June 30, 2008		217,200		$	4.55			$	0		6.30
Options exercisable at June 30, 2008		159,867		$	4.61			$	0		5.38

8

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued

Compensation expense related to non-vested stock options under both the Employee Plan and the Directors’ Plan that was not recognized as of June 30, 2008, totaled $704 and is expected to be recognized over a weighted average period of 2.4 years. During the six months ended June 30, 2007, the Company received $29 from the exercise of stock options. No options were exercised during the six months ended June 30, 2008. The Company has a policy of issuing new shares of common stock upon the exercise of stock options.

9. Supplemental Cash Flow Information:

Cash paid for interest and income taxes during the six months ended June 30, 2008 and 2007, was as follows:

	2008		2007
Interest paid	$	213	$	218
Income taxes paid - net	$	29	$	1,570

Non-cash investing and financing activities for the six months ended June 30, 2007, consisted entirely of the conversion of $650 of convertible debentures into 160,494 shares of the Company’s common stock. There were no such non-cash investing and financing activities for the six months ended June 30, 2008.

10. Segment Information

The Company measures profit or loss of its segments based on operating income exclusive of any goodwill impairment charges (see Note 4), other impairment charges (see Note 5), or charges for exit activities (see Note 7). Segment information relating to the Company’s results of continuing operations was as follows:

	Six months ended June 30,						Three months ended June 30,
	2008			2007			2008			2007
Revenues:
Media communications services	$	11,667		$	14,828		$	5,711		$	7,562
Digital video tracking services		2,470			1,476			1,325			757
Total	$	14,137		$	16,304		$	7,036		$	8,319
Operating income (loss):
Media communications services	$	(537	)	$	94		$	(211	)	$	37
Digital video tracking services		(1,631	)		(2,054	)		(806	)		(998	)
Total		(2,168	)		(1,960	)		(1,017	)		(961	)
Corporate and other business activities		(2,355	)		(2,812	)		(1,111	)		(1,272	)
Goodwill impairment		(3,429	)					(3,429	)
Other impairment charges		(2,413	)		-			(2,413	)		-
Charges for exit activities		(119	)		-			-			-
Interest income (expense) - net		(248	)		61			(145	)		21
Loss from continuing operations before taxes	$	(10,732	)	$	(4,711	)	$	(8,115	)	$	(2,212	)

9

MEDIALINK WORLDWIDE INCORPORATED AND SUBSIDIARIES

NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS - Continued

Segment information related to the Company’s assets was as follows:

	June 30,		December 31,
	2008		2007
Total assets:
Media communications services	$	5,974	$	11,405
Digital video tracking services		1,806		3,579
Corporate and other business activities		8,700		13,161
Total	$	16,480	$	28,145

10

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Certain statements made in this Quarterly Report on Form 10-Q are “forward looking” statements (within the meaning of the Private Securities Litigation Reform Act of 1995, as amended). Such statements involve known and unknown risks, uncertainties, and other factors that may cause actual results, performance, or achievements of the Company to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. Although the Company believes that the expectations reflected in such forward-looking statements are based upon reasonable assumptions, the Company’s actual results could differ materially from those set forth in the forward-looking statements. See Part II Item 1A “Risk Factors” below and Item I Part 1A in the Company’s annual report on Form 10-K for the year ended December 31, 2007, for a description of certain factors that might cause such a difference.

In August 2008, the Company’s board of directors approved an offer from Koninklijke Philips Electronics N.V. (“Philips”) to transfer the Company’s ownership interest in its Teletrax subsidiaries,upon consummation of which the Company will have no further involvement in the digital video monitoring business. The transaction, which is subject to standard due diligence procedures, is expected to be consummated by the end of the August 2008. Under the terms of the offer, Philips, which currently owns 24% of each Teletrax subsidiary, would receive the Company’s 76% ownership stake in both Teletrax subsidiaries for a reimbursement of up to approximately $275,000 of certain net operating costs incurred by the Company prior to closing, subject to certain post-closing adjustments. Upon closing of the transaction, Philips will own 100% of the Teletrax entities and the Company will have no further funding obligations.

Also in August 2008, the Company’s board of directors approved an offer it received from World Television Group plc (“World”) to acquire certain assets of the media communications services business operated by the Company’s subsidiary in the United Kingdom. Under the terms of the offer, the Company would receive from World a percentage of the gross profit derived from certain client revenue for a period of eighteen months from the closing date.

The unaudited consolidated financial statements contained in this Form 10-Q include the results of operations and financial position of the Company’s digital video tracking services business and its international media communications services business as a component of continuing operations. The following discussion and analysis (in thousands of dollars) should be read in conjunction with the Company’s unaudited consolidated financial statements and notes thereto.

Results of Operations

Six months ended June 30, 2008, compared to six months ended June 30, 2007

Revenues for the six months ended June 30, 2008, decreased by $2,167, or 13.3%, as compared to the 2007 period. Revenues from media communications services in the first six months of 2008 decreased by $3,161, or 21.3%, to $11,667 primarily from a general decline in business. International media communications services revenues decreased by $2,119, or 50.8%, and domestic media communications services revenues decreased by $1,042, or 9.8%. Revenues from Teletrax® digital video tracking services in the first six months of 2008 increased by $994, or 67.3%, to $2,470 due to an increase in the number of clients and additional services provided to existing clients.

Direct costs decreased by $1,833 in the first six months of 2008, and as a percentage of revenue decreased to 43.2% from 48.7% in the comparable 2007 period. Such decreases in both dollars and percentage of revenue were primarily the result of higher margin projects on lower volumes of business during the 2008 period in the Company’s international media communications services business.

SG&A expenses in the first six months of 2008 decreased by $705 as compared to the 2007 period, but as a percentage of revenue increased to 81.1% from 74.7%. SG&A expenses in the first six months of 2007 included $178 of transaction-specific compensation related to the sale of U.S. Newswire, the Company’s wire distribution and photography services division, in September 2006.

11

Exclusive of the transaction-specific compensation in the 2007 period, SG&A expenses in the first six months of 2008 decreased by $527 as compared to the 2007 period, and as a percent of revenue were 81.1% in the first six months of 2008 as compared to 73.6% in the 2007 period. SG&A expenses related to Teletrax® digital video tracking services increased in the first six months of 2008 by $305 primarily as a result of an increase in payroll-related costs associated with the continued expansion of the business. Non-Teletrax® SG&A expenses decreased by $832 primarily as a result of cost reductions achieved in the international media communications services business from a decrease in occupancy costs resulting from a move into new offices in 2007 and lower marketing and staffing costs incurred in the 2008 period.

Based on changes that will result from consummation of the proposed transactions approved by the Company’s board of directors in August 2008 and the continued decline in the media communications services business operated in the United States, the Company determined that its goodwill, all of which relates to the media communications services business, should be tested for impairment prior to the annual testing date of September 30. Based on this goodwill impairment test, the Company determined that the carrying value of its goodwill exceeded its fair value. Accordingly, the Company incurred a goodwill impairment charge of $3,429, resulting in no goodwill remaining at June 30, 2008.

Based on the offers it received and other market factors related to the Company’s digital video tracking services business and its media communications services business operated in the United Kingdom, the Company determined that the carrying value of the long-lived assets used in these businesses is not recoverable and exceeds the fair value of such assets. Accordingly, the Company recognized impairment charges totaling $2,413, which consisted of an impairment charge of $1,808 related to property and equipment used in the digital video tracking services business and an impairment charge of $605 related to property and equipment used in the media communications services business operated in the United Kingdom.

The Company had an operating loss of $10,484 in the first six months of 2008 as compared to an operating loss of $4,772 in the comparable period in 2007. The operating losses in 2008 and 2007 included operating losses of $1,631 and $2,054, respectively, from the Company’s 76%-owned Teletrax subsidiaries. The Company’s results of operations include 100% of the losses from the Teletrax subsidiaries since the minority shareholder has no future funding obligations.

The Company had net interest expense of $248 in the first six months of 2008, as compared to net interest income of $61 in the 2007 period. This decrease is due primarily to a reduction in interest income as a result of the Company’s declining cash balances.

In February 2007, the sale price of U.S. Newswire, which was sold in September 2006, was finalized and determined to be $22,577. The Company received additional cash proceeds in February 2007 totaling $4,427, of which $3,307 represented additional sale price received directly from the buyer, $1,000 represented the release of an escrow balance representing deferred purchase price at closing, and $120 represented an adjustment for additional working capital. The results of operations for the first six months of 2007 included a gain on the sale of U.S. Newswire, net of tax, of $2,618.

Three months ended June 30, 2008, compared to three months ended June 30, 2007

Revenues for the three months ended June 30, 2008, decreased by $1,283, or 15.4%, as compared to the 2007 period. Revenues from media communications services in the second quarter of 2008 decreased by $1,851, or 24.5%, to $5,711 primarily from a general decline in business. International media communications services revenues decreased by $1,295, or 59.1%, and domestic media communications services revenues decreased by $556, or 10.4%. Revenues from Teletrax® digital video tracking services in the second quarter of 2008 increased by $568, or 75.0%, to $1,325 due to an increase in the number of clients and additional services provided to existing clients.

Direct costs decreased by $1,127 in the second quarter of 2008, and as a percentage of revenue decreased to 41.7% from 48.8% in the comparable 2007 quarter. Such decreases in both dollars and percentage of revenue were primarily the result of higher margin projects on lower volumes of business during the 2008 quarter in the Company’s international media communications services business.

12

SG&A expenses in the second quarter of 2008 decreased by $341 as compared to the 2007 quarter, but as a percentage of revenue increased to 80.9% from 72.5%. SG&A expenses related to Teletrax® digital video tracking services increased in the second quarter of 2008 by $183 primarily as a result of the continued expansion of the business. Non-Teletrax® SG&A expenses decreased by $524 primarily as a result of cost reductions achieved in the international media communications services business from a decrease in occupancy costs resulting from a move into new offices in 2007 and lower marketing and staffing costs incurred in the 2008 period.

The Company incurred a goodwill impairment charge of $3,429 in the second quarter of 2008. The Company also incurred other impairment charges totaling $2,413 related to the long-lived assets of its digital video tracking services business and its international media communications services business.

The Company had an operating loss of $7,970 in the second quarter of 2008 as compared to an operating loss of $2,233 in the comparable quarter in 2007. The operating losses in 2008 and 2007 included operating losses of $806 and $998, respectively, from the Company’s 76%-owned Teletrax subsidiaries.

The Company had net interest expense of $145 in the second quarter of 2008, as compared to net interest income of $21 in the 2007 quarter. This decrease is due primarily to a reduction in interest income as a result of the Company’s declining cash balances.

Financial Condition

The Company continues to finance its operations and capital investment requirements from its existing cash balances, which totaled $8,275 at June 30, 2008. Working capital in the first six months of 2008 decreased by $3,909 primarily as a result of the Company funding operating losses and capital investments during the period.

Cash flows from operating activities during the first six months of 2008 increased by $1,548 as compared to the comparable period in 2007 due primarily to tax payments in the 2007 period associated with the gain on sale of U.S. Newswire and increased accounts receivable collections in the 2008 period, partially offset by a decrease in cash generated from operations. During the first six months of 2008 the Company invested $501 in new equipment and software development.

The Company expects to spend approximately $600 over the remaining six months of 2008 for capital improvements primarily for modernization of its domestic media communications services business. The Company intends to finance these expenditures with working capital. The Company believes that its cash balances and working capital will be sufficient to fund its cash needs through the end of 2008. The Company’s subordinated debentures, which have a face value of $4,350 at June 30, 2008, are due in November 2009. The Company is currently in negotiations with the holders of its subordinated debentures to, among other things, extend the maturity date. There can be no assurances that the Company will be able to successfiully conclude these negotiations. If the Company is unable to successfully conclude these negotiations, and based on the Company’s recent history of operating losses, its projected losses, and other cash requirements for future periods, including any costs related to exit activities associated with the Company’s disposal of its digital video tracking services business and its media communications services business operated in the United Kingdom, there can be no assurance that the Company will have sufficient resources to fully repay these debentures on the current due date.

Critical Accounting Policies

Management must make certain estimates and assumptions in preparing the financial statements of the Company. Certain of these estimates and assumptions relate to matters that are inherently uncertain as they pertain to future events. Management believes that the estimates and assumptions used in preparing the financial statements of the Company were the most appropriate at that time, although actual results could differ significantly from those estimates under different conditions. Note 2, “Summary of Significant Accounting Policies,” to the consolidated financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007, provides a detailed discussion of the various accounting policies of the Company. In addition, a summary of critical accounting policies is included in Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007. There have been no significant changes to the critical accounting policies previously disclosed.

13

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Not applicable to smaller reporting companies.

Item 4T. Controls and Procedures

The Company’s management evaluated, with the participation of the Company’s principal executive and principal financial officers, the effectiveness of the Company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) as of June 30, 2008. Based on their evaluation, the Company’s principal executive and principal financial officers concluded that the Company’s disclosure controls and procedures were effective as of June 30, 2008. The design of any system of controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote.

There have been no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the fiscal quarter ended June 30, 2008, that have materially affected, or is reasonably likely to affect, the Company’s internal control over financial reporting.

14

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, the Company becomes involved in various legal matters that the Company considers to be in the ordinary course of business. While the Company is not presently able to determine the potential liability, if any, related to any such matters, the Company believes that no such matters, individually or in the aggregate, will have a material adverse effect on its financial position.

Item 1A. Risk Factors

There have been no material changes to the risk factors disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2007.

Item 4. Submission of Matters to a Vote of Security Holders

The annual meeting of the stockholders of Medialink Worldwide Incorporated was held on June 19, 2008. The stockholders voted on the following matters.

1. To elect the following three directors of the Company for terms expiring at the annual meeting of stockholders in 2011:

	Shares Voted For	Shares Withheld
Harold Finelt	4,598,275	484,953
Laurence Moskowitz	4,598,275	484,953
Jeffrey Stone	4,598,275	484,953

2. To ratify the appointment of KPMG LLP as the Company’s independent registered public accounting firm for the fiscal year ending December 31, 2008.

Shares Voted For	Shares Voted Against	Shares Withheld
4,933,786	149,342	100

Item 6. Exhibits

See Exhibit Index.

15

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	MEDIALINK WORLDWIDE INCORPORATED
	(Registrant)
	By: /s/ Laurence Moskowitz
	Laurence Moskowitz
	Chairman of the Board, Chief Executive Officer, and President
	(Principal Executive Officer)
Dated: August 19, 2008
	By: /s/ Kenneth G. Torosian
	Kenneth G. Torosian
	Chief Financial Officer, Treasurer, and Secretary (Principal Financial Officer and Principal Accounting Officer)

Dated: August 19, 2008

EXHIBIT INDEX

Exhibit No.	Description
2.1	Asset Purchase Agreement dated as of September 29, 2006, between Medialink Worldwide Incorporated and PR Newswire Association, LLC (Incorporated by reference to Exhibit 2.1 of the Registrant’s Current Report on Form 8-K filed on October 5, 2006).
3.1	Amended and Restated Certificate of Incorporation of Medialink Worldwide Incorporated (Incorporated by reference to Exhibit No. 2.5 of Registrant’s Registration Statement on Form 8-A filed on January 16, 1997 (File No. 000-21989)).
3.2	Amended and Restated By-Laws of Medialink Worldwide Incorporated dated November 8, 2007 (Incorporated by reference to Exhibit No. 3.2 of Registrant’s Current Report on Form 8-K filed on November 13, 2007).
4.1	Preferred Stock Rights Agreement, dated as of August 16, 2001, between Medialink Worldwide Incorporated and Mellon Investor Services, LLC, including the Certificate of Designation, the form of Rights Certificate and the Summary of Rights attached thereto as Exhibits A, B, and C, respectively (Incorporated by reference to Exhibit No. 4.1 of Registrant’s Registration Statement on Form 8-A filed on August 16, 2001 (File No. 000-21989)).
10.1	Amended and Restated Employment Agreement, dated as of December 31, 2005, by and between Medialink Worldwide Incorporated and Laurence Moskowitz (Incorporated by reference to Exhibit No. 10.1 of the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005).
10.2	Amended and Restated Employment Agreement, dated as of August 28, 2001, by and between Medialink Worldwide Incorporated and J. Graeme McWhirter (Incorporated by reference to Exhibit No. 10.2 of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2001).
10.3	Separation Agreement and General Release, dated as of December 30, 2005, by and between Medialink Worldwide Incorporated and J. Graeme McWhirter (Incorporated by reference to Exhibit No. 10.3 of the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2005).
10.4	Asset Purchase Agreement, dated December 31, 2004, by and between Medialink Worldwide Incorporated and Bacon’s Information Inc. (Incorporated by reference to Exhibit No. 10.1 of the Registrant’s Current Report on Form 8-K/A filed on March 14, 2005).
10.5	Agreement for the Sale and Purchase of Certain Assets of Medialink UK Limited forming part of the Delahaye Business, dated December 31, 2004, by and between Medialink UK Limited and Romeike Limited (Incorporated by reference to Exhibit No. 10.2 of the Registrant’s Current Report on Form 8-K/A filed on March 14, 2005).
10.7	Medialink Worldwide Incorporated 401(k) Employee Savings Plan (Incorporated by reference to Exhibit No. 10.7 of the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2006).
10.8	Medialink Worldwide Incorporated Amended and Restated Stock Option Plan (Incorporated by reference to Exhibit No. 10.8 of the Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2006).
10.9	Medialink Worldwide Incorporated Amended and Restated 1996 Directors Stock Option Plan (Incorporated by reference to Exhibit No. 10.9 of the Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2006).
10.12	Employment Agreement, dated as of July 11, 2005, by and between Medialink Worldwide Incorporated and Kenneth G. Torosian (Incorporated by reference to Exhibit No. 10.12 of Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005).
10.13	Employment Agreement, dated as of September 9, 2005, by and between Medialink Worldwide Incorporated and Lawrence A. Thomas (Incorporated by reference to Exhibit No. 10.13 of Registrant’s Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2005).
10.14(a)	Technology License Agreement dated as of April 8, 2002, by and between Koninklijke Philips Electronics, N.V., and TTX Limited (Incorporated by reference to Exhibit No. 10.14(a) of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007).
10.14(b)	Joinder and First Amendment to the Technology License Agreement dated as of January 1, 2003, by and among Koninklijke Philips Electronics, N.V., TTX Limited, and TTX (US) LLC (Incorporated by reference to Exhibit No. 10.14(b) of Registrant’s Annual Report on Form 10-K for the fiscal year ended December 31, 2007).
31.1	Certification of the principal executive officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
31.2	Certification of the principal financial officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended.
32	Certification of the principal executive officer and principal financial officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.