UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
  Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2010o

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number
    000-51644
 VOCUS, INC.
 (Exact Name of Registrant as
    Specified in Its Charter)
  Delaware

58-1806705(State or Other Jurisdiction
    of
    Incorporation or Organization)

(I.R.S. Employer
    Identification No.)   4296 Forbes Boulevard
 Lanham, Maryland 20706
 (301) 459-2590
 (Address including zip code, and
    telephone number, including area code, of principal executive
    offices)
  Securities registered pursuant to Section 12(g) of the
    Act:
 None
  Securities registered pursuant to Section 12(b) of the
    Act:
  Common Stock, par value $.01 per share
  (Title of Class)
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      Documents
    Incorporated by Reference
  Form 10-K, Form 10-K.




---



##### 





TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


3Item 1A.


Risk Factors


13Item 1B.


Unresolved Staff Comments


26Item 2.


Properties


26Item 3.


Legal Proceedings


26Item 4.


Reserved


26PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


27Item 6.


Selected Financial Data


30Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


32Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


41Item 8.


Financial Statements and Supplementary Data


41Item 9.


Changes In and Disagreements With Accountants on
    Accounting and Financial Disclosure


41Item 9A.


Controls and Procedures


42Item 9B.


Other Information


44PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


44Item 11.


Executive Compensation


44Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


44Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


44Item 14.


Principal Accountant Fees and Services


44PART IVItem 15.


Exhibits and Financial Statement Schedules


44Signatures


45   1




---



##### 



CAUTIONARY
    NOTES REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K
  
    our plans to develop and market new products and the timing of
    these development programs;
    our estimates regarding our capital requirements and our needs
    for additional financing;
    our estimates of expenses and future revenues and profitability;
    our estimates of the size of the markets for our solutions;
    the rate and degree of market acceptance of our
    solutions; and
    the success of other competing technologies that may become
    available.     2




---



##### 



PART I  Item 1.
    Business  Overview
            Our
    Company
    Industry
    Background
  Public
    Relations
    word-of-mouth
 3




---



##### 



Public
    Relations and the Cloud-Based Software Market
   4




---



##### 



Our
    Solutions
          
    Improved effectiveness of public
    relations.  Our cloud-based software helps
    organizations maximize effectiveness through the automation and
    integration of disconnected processes. Our solutions help
    organizations manage large amounts of information, deliver
    consistent and well-executed communications, collaborate among
    large or geographically dispersed teams and analyze and report
    on the effectiveness of their PR.
    Increased productivity of PR functions.  Our
    cloud-based software incorporates features and best practices
    that automate PR functions to reduce or eliminate manual,
    paper-based and discrete business activities. Our solutions
    allow customers to maximize the investment in their PR resources
    and often lead to a redeployment of PR professionals from
    repetitive, low-value tasks to high-value strategic initiatives.
    In addition, we provide capabilities that help our customers
    significantly reduce the time it takes to monitor, analyze and
    summarize large volumes of news and other information.
    Enhanced collaboration.  The growth of global
    brands and large or geographically dispersed PR teams has
    increased the need for organizations to quickly and easily share
    critical business information and plan well coordinated
    communications. Our on-demand solutions provide shared,
    real-time access to a central repository of information related
    to media contacts, relationship history, PR activities, news,
    documents 5




---



##### 



and reporting. We believe that by improving the management,
    control, retention and sharing of this information, our
    solutions enable companies to deliver more effective and
    consistent communications.  
    Lower total cost of ownership.  Our cloud-based
    delivery model enables our customers to achieve significant
    savings relative to a traditional enterprise software model. Our
    customers do not spend time installing or maintaining the
    servers, network and storage equipment, security products, or
    other infrastructure hardware and software necessary to ensure a
    scalable and reliable service. In addition, because all upgrades
    are implemented on our servers the product enhancements
    automatically become part of our offering, allowing customers to
    immediately benefit from the upgrade.
    Rapid deployment and scalability.  Our
    cloud-based software can be deployed rapidly and provisioned
    easily, without our customers having to make large and risky
    upfront investments in software, hardware, implementation
    services and dedicated IT staff. The delivery platform for our
    software allows it to scale to suit customers needs.
    Additional users with defined privileges can be provisioned with
    minimal implementation time and new modules, such as
    analytics & measurement, can be deployed quickly and
    transparently to existing customers.  Our
    Strategy
    
    Expand our direct sales force.  We believe that
    the public relations market represents a significant opportunity
    that will allow us to continue our growth for the foreseeable
    future. We also believe that our recent expansion into social
    media creates an opportunity for us to expand our on-demand
    software suite beyond PR into marketing to help organizations
    reach and influence buyers. We expect organizations will
    continue to spend and commit substantial resources on the
    processes that our solutions automate, and that competition is
    fragmented and specialized. We believe our focus on producing a
    suite of integrated applications for PR and marketing will allow
    us to capitalize on this opportunity. As a result, we intend to
    expand our direct sales force to increase our coverage and
    penetration in this market.
    Expand international market presence.  We also
    believe that the public relations market represents a
    significant global opportunity. We intend to expand our
    international business, which accounted for approximately 13% of
    our 2010 revenues. To suit individual markets, our software is
    currently available in seven languages. We expect to deploy our
    solutions in additional languages in the future.
    Penetrate the small business market.  We
    believe the small business market represents a significant
    opportunity to sell our solutions to over 5 million
    prospect organizations. We expect these organizations will
    utilize our news distribution services as a means to communicate
    directly with customers and to enhance their marketing
    strategies. We intend to expand our solutions and our direct
    sales force to increase our coverage and penetration in the
    small business market.
    Selectively pursue strategic acquisitions.  The
    fragmented nature of our market provides opportunities for
    selective acquisitions. We have acquired and integrated several
    private companies to date, and we will continue to identify and
    may acquire companies which would either expand our
    solutions functionality, provide access to new customers
    or markets, or both.  Our
    Products
  On-Demand
    Public Relations Management
    6




---



##### 




    Media Relations.  Allows customers easy access
    to our database of journalists, media outlets and publicity
    opportunities. Customers can quickly create targeted lists; send
    messages by email, fax or mail and track meetings, telephone
    calls and other important activities.
    News Monitoring.  Continuously monitors over
    50,000 news sources, including print, broadcast, Internet news
    sites and key blogs to identify and deliver relevant news
    coverage to customers based on their individual criteria. News
    clippings are stored in a searchable database, for easy viewing,
    printing, sharing and analysis.
    News Distribution.  Allows organizations to
    increase their online visibility by distributing their news
    directly to online news sites such as Yahoo! News and directly
    to the public through millions of daily RSS feeds and other
    social media tools. Online press releases are optimized for
    search engines such as Google to help ensure that the press
    releases are prominently displayed on search results and drive
    traffic to an organizations website.
    Social Media.  Continuously monitors major
    social media sites, such as Facebook and Twitter, to measure
    trends and to identify and engage with customers and influencers
    on social networks. 7




---



##### 




    Small Business Edition.  Designed primarily for
    small organizations and includes news distribution and basic
    news monitoring capabilities.
    Standard Edition.  Designed primarily for small
    and mid-sized organizations and includes contact management and
    basic reporting capabilities.
    Professional Edition.  Designed primarily for
    mid-sized and large organizations and includes contact
    management, news management and expanded reporting capabilities.
    Enterprise Edition.  Designed primarily for
    large organizations. Enterprise Edition is our most fully
    featured edition and includes all of the functionality of the
    Professional Edition, along with project management, collateral
    management, comprehensive reporting and configuration
    capabilities.
    Government Relations Edition.  Designed to meet
    an organizations government relations needs, including
    communications with public officials and grassroots advocates,
    compliance reporting and issues and legislation management.    Technology,
    Development and Operations
  Technology
        Development
   8




---



##### 



Site
    Operations
    back-up.
    Customer
    Support
  on-site, on-site
    Sales and
    Marketing
       9




---



##### 



Our
    Customers
  not-for-profit
  year-to-year
  Competition
    
    generic desktop software and other commercially available
    software not specifically designed for PR;
    PR solution providers offering products specifically designed
    for PR;
    outsourced PR service providers;
    custom-developed solutions; and
    press release distribution providers.       10




---



##### 




    broad product functionality and depth of integration;
    ease of use;
    low total cost of ownership and easily demonstrable
    cost-effective benefits for customers;
    flexibility and configurability to meet complex customer
    requirements;
    rapid deployment and adoption;
    speed, reliability and functionality;
    system performance, security, scalability and reliability;
    ease of integration with existing applications and data;
    availability and quality of implementation, training and
    help-desk services; and
    competitive sales and marketing capabilities.  Intellectual
    Property and Proprietary Content
     11




---



##### 



Employees
    Executive
    Officers and Key Employees
    Name

Age

PositionRichard Rudman*


49


Chief Executive Officer, President and ChairmanStephen Vintz*


42


Executive Vice President, Chief Financial Officer, Treasurer and
    SecretaryWilliam Wagner*


44


Executive Vice President and Chief Operating OfficerNorman Weissberg*


49


Senior Vice President, North American SalesDarren Stewart


42


Senior Vice President, Customer ServicesMark Heys


39


Chief Technology OfficerJames Bruno


46


Senior Vice President, Corporate DevelopmentYou Mon Tsang


45


Senior Vice President, Products     *
    
    Denotes an executive officer  Richard Rudman
  Stephen Vintz
  William Wagner
 12




---



##### 



Norman Weissberg
  Darren Stewart
  Mark Heys Point-of-Sale
  James Bruno
  You Mon Tsang
  Available
    Information
  Form 10-K, Form 10-Q, Form 8-K www.vocus.com.
  Item 1A.
    Risk
    Factors   13




---



##### 



Risks
    Related to Our Business and Industry
  Our
    quarterly results of operations may fluctuate in the future. As
    a result, we may fail to meet or exceed the expectations of
    investors or securities analysts which could cause our stock
    price to decline.
    
    our ability to retain and increase sales to existing customers
    and attract new customers;
    changes in the volume and mix of subscriptions sold and press
    releases distributed in a particular quarter;
    seasonality of our business cycle, given that our subscription
    volumes are normally lowest in the first quarter and highest in
    the fourth quarter;
    the timing and success of new product introductions or upgrades
    by us or our competitors;
    changes in our pricing policies or those of our competitors;
    changes in the payment terms for our products and services;
    the amount and timing of non-recurring charges or expenditures
    related to expanding our operations;
    changes in accounting policies or the adoption of new accounting
    standards, including guidance on revenue arrangements with
    multiple deliverables;
    our policy of expensing sales commissions at the time our
    customers are invoiced for a subscription agreement, while the
    majority of our revenue is recognized ratably over future
    periods;
    changes in the estimates and assumptions used to determine the
    fair value of contingent consideration associated with our
    acquisitions;
    fluctuations in our effective tax rate including changes in the
    mix of earnings in the various jurisdictions in which we
    operate, the valuation of deferred tax assets and liabilities
    and the deductibility of certain expenses and changes in
    uncertain tax positions;
    foreign currency exchange rates; and
    the purchasing and budgeting cycles of our customers.    quarter-to-quarter
  The
    markets for our cloud-based software and solutions are emerging,
    which makes it difficult to evaluate our business and future
    prospects and may increase the risk of your
    investment.
   14




---



##### 




    generating sufficient revenue to maintain profitability;
    managing growth in our operations;
    managing the risks associated with developing new services and
    modules;
    attracting and retaining customers; and
    attracting and retaining key personnel.    A
    majority of our on-demand solutions are sold pursuant to
    subscription agreements, and if our existing subscription
    customers elect either not to renew these agreements or renew
    these agreements for fewer modules or users, our business,
    financial condition and results of operations will be adversely
    affected.
    Because
    we recognize subscription revenue over the term of the
    applicable subscription agreement, the lack of subscription
    renewals or new subscription agreements may not be immediately
    reflected in our operating results.
    We
    might not generate increased business from our current
    customers, which could limit our revenue in the
    future.
   15




---



##### 



Our
    business model continues to evolve, which may cause our results
    of operations to fluctuate or decline.
    As
    more of our sales efforts are targeted at small business
    customers that are more substantively affected by economic
    conditions than the large and medium-size business sectors,
    economic downturns may cause potential and existing small
    business customers to fail to purchase our solutions, which
    could limit our revenue in the future.
    We
    depend on search engines to attract new customers, and if those
    search engines change their listings or our relationship with
    them deteriorates or terminates, we may be unable to attract new
    customers and our business may be harmed.
    Failure
    to effectively develop and expand our sales and marketing
    capabilities could harm our ability to increase our customer
    base and achieve broader market acceptance of our
    solutions.
   16




---



##### 



If we
    fail to develop our brands, our business may
    suffer.
    If our
    information databases do not maintain market acceptance, our
    business, financial condition and results of operations could be
    adversely affected.
    We
    rely on third-parties to provide certain content for our
    solutions, and if those third-parties discontinue providing
    their content, our business, financial condition and results of
    operations could be adversely affected.
    We
    depend on search engines for the placement of our
    customers online news releases, and if those search
    engines change their listings or our relationship with them
    deteriorates or terminates, our reputation will be harmed and we
    may lose customers or be unable to attract new
    customers.
    We
    have incurred operating losses in the past and may incur
    operating losses in the future.
    Unanticipated
    changes in our effective tax rate could adversely affect our
    future results.
   17




---



##### 



We
    face competition, and our failure to compete successfully could
    make it difficult for us to add and retain customers and could
    reduce or impede the growth of our business.
    
    generic desktop software and other commercially available
    software not specifically designed for PR;
    PR solution providers offering products specifically designed
    for PR;
    outsourced PR service providers;
    custom-developed solutions; and
    press release distribution providers.        If we
    fail to respond to evolving industry standards, our on-demand
    solutions may become obsolete or less competitive.
   18




---



##### 



If
    there are interruptions or delays in providing our on-demand
    solutions due to third-party error, our own error or the
    occurrence of unforeseeable events, delivery of our solutions
    could become impaired, which could harm our relationships with
    customers and subject us to liability.
        Acquisitions
    could prove difficult to integrate, disrupt our business, dilute
    stockholder value and consume resources that are necessary to
    sustain our business.
    
    issue additional equity securities that would dilute the
    ownership of our stockholders;
    use cash that we may need in the future to operate our business;
    incur or assume debt on terms unfavorable to us or that we are
    unable to repay;
    incur large charges or substantial liabilities; 19




---



##### 




    encounter difficulties retaining key employees of an acquired
    company or integrating diverse business cultures; and
    become subject to adverse tax consequences, substantial
    depreciation or deferred compensation charges.      We may
    be liable to our customers and may lose customers if we provide
    poor service, if our solutions do not comply with our agreements
    or if there is a loss of data.
        If our
    solutions fail to perform properly or if they contain technical
    defects, our reputation will be harmed, our market share would
    decline and we could be subject to product liability
    claims.
     20




---



##### 



Privacy
    concerns and laws or other domestic or foreign regulations may
    reduce the effectiveness of our solution and adversely affect
    our business.
      Changes
    in laws and/or regulations related to the Internet or changes in
    the Internet infrastructure itself may cause our business to
    suffer.
      If we
    are unable to protect our proprietary technology and other
    intellectual property rights, it will reduce our ability to
    compete for business.
   21




---



##### 



If a
    third-party asserts that we are infringing its intellectual
    property, whether successful or not, it could subject us to
    costly and time-consuming litigation or expensive licenses, and
    our business may be harmed.
    
    divert managements attention;
    result in costly and time-consuming litigation;
    require us to enter into royalty or licensing agreements, which
    may not be available on acceptable terms, or at all; or
    require us to redesign our solutions to avoid infringement.    Our
    growth could strain our personnel and infrastructure resources,
    and if we are unable to implement appropriate controls and
    procedures to manage our growth, we may not be able to
    successfully implement our business plan.
     22




---



##### 



We are
    dependent on our executive officers and other key personnel, and
    the loss of any of them may prevent us from implementing our
    business plan in a timely manner if at all.
    We may
    not be able to attract and retain the highly skilled employees
    we need to support our planned growth.
    Because
    we conduct operations in foreign jurisdictions, which accounted
    for approximately 11% of our 2010 revenues, and because our
    business strategy includes expanding our international
    operations, our business is susceptible to risks associated with
    international operations.
    
    fluctuations in currency exchange rates;
    unexpected changes in foreign regulatory requirements;
    difficulties in managing and staffing international operations;
    potentially adverse tax consequences, including the complexities
    of foreign value added tax systems and restrictions on the
    repatriation of earnings; and
    the burdens of complying with a wide variety of foreign laws and
    different legal standards.    We
    might require additional capital to support business growth, and
    this capital might not be available.
   23




---



##### 



Economic
    and market conditions may adversely affect our business,
    financial condition and results of operations.
    
    reductions in the corporate budgets, including technology
    spending of our customers and potential customers;
    declines in demand for our solutions;
    decreases in collections of our customer receivables;
    insolvency of our key vendors and suppliers; and
    volatility in interest rates and decreases in investment income.    Our
    reported financial results may be adversely affected by changes
    in accounting principles generally accepted in the United
    States.
    Compliance
    with new regulations governing public company corporate
    governance and reporting is uncertain and
    expensive.
    Risks
    Related to our Common Stock and the Securities Markets
  If
    securities analysts do not publish research or reports about our
    business or if they downgrade our stock, the price of our stock
    could decline.
   24




---



##### 



Volatility
    of our stock price could adversely affect
    stockholders.
    
    quarterly variations in our operating results;
    seasonality of our business cycle;
    interest rate changes;
    changes in the markets expectations about our operating
    results;
    our operating results failing to meet the expectation of
    securities analysts or investors in a particular period;
    changes in financial estimates and recommendations by securities
    analysts concerning our company or the on-demand software
    industry in general;
    operating and stock price performance of other companies that
    investors deem comparable to us;
    news reports relating to trends in our markets;
    changes in laws and regulations affecting our business;
    material announcements by us or our competitors including new
    product or service introductions;
    sales of substantial amounts of common stock by our directors,
    executive officers or significant stockholders or the perception
    that such sales could occur;
    economic conditions including a slowdown in economic growth and
    uncertainty in equity and credit markets; and
    general political conditions such as acts of war or terrorism.  Provisions
    in our amended and restated certificate of incorporation and
    bylaws or Delaware law might discourage, delay or prevent a
    change of control of our company or changes in our management
    and, therefore, depress the trading price of our
    stock.
    
    establish a classified board of directors so that not all
    members of our board of directors are elected at one time;
    provide that directors may only be removed for cause
    and only with the approval of 66 2/3 percent of our
    stockholders;
    require super-majority voting to amend our bylaws or specified
    provisions in our amended and restated certificate of
    incorporation;
    authorize the issuance of blank check preferred
    stock that our board of directors could issue to increase the
    number of outstanding shares and to discourage a takeover
    attempt;
    limit the ability of our stockholders to call special meetings
    of stockholders;
    prohibit stockholder action by written consent, which requires
    all stockholder actions to be taken at a meeting of our
    stockholders;
    provide that the board of directors is expressly authorized to
    adopt, amend, or repeal our bylaws; and 25




---



##### 




    establish advance notice requirements for nominations for
    election to our board of directors or for proposing matters that
    can be acted upon by stockholders at stockholder meetings.    Future
    sales, or the availability for sale, of our common stock may
    cause our stock price to decline.
  Rule 10b5-1
  Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties      Item 3.
    Legal
    Proceedings      Item 4.
    Reserved.  26




---



##### 



PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities  Market
    for Common Stock
  mark-up,
  High


LowFiscal Year Ended December 31, 2009First Quarter


19.50



11.66Second Quarter


20.27



13.66Third Quarter


21.23



14.99Fourth Quarter


21.65



16.34Fiscal Year Ended December 31, 2010First Quarter


18.80



14.09Second Quarter


18.41



14.41Third Quarter


18.48



13.56Fourth Quarter


27.94



17.81     Dividends
    Uses of
    Proceeds From Registered Securities
  Form S-1 (No. 333-125834),
   27




---



##### 



Issuer
    Purchases of Equity Securities
   28




---



##### 



Performance
    Graph
    
  12/31/2005


12/31/2006


12/31/2007


12/31/2008


12/31/2009


12/31/2010Vocus, Inc.

$
100.00


$
161.69


$
332.34


$
175.26


$
173.24


$
266.22Nasdaq Composite


100.00



109.52



120.27



71.51



102.89



120.29Nasdaq Computer and Data Processing Index


100.00



106.15



129.35



68.96



117.79



138.34  29




---



##### 



Item 6.
    Selected
    Financial Data    Year Ended December 31,2006(2)


2007


2008


2009


2010(2)(In thousands, except per share data)Consolidated Statement of Operations:Revenues

$
40,328


$
58,076


$
77,520


$
84,579


$
96,760Cost of revenues(1)


8,293



10,922



14,675



15,461



18,932Gross profit


32,035



47,154



62,845



69,118



77,828Operating expenses:(1)Sales and marketing


18,912



26,548



35,140



41,123



49,620Research and development


2,896



3,822



4,998



4,675



5,891General and administrative


9,626



14,743



20,356



21,018



23,587Amortization of intangible assets


1,705



2,862



2,651



1,926



2,298Total operating expenses


33,139



47,975



63,145



68,742



81,396Income (loss) from operations


(1,104
)


(821
)


(300
)


376



(3,568
)Other income (expense):Interest and other income


1,819



2,541



2,136



485



224Interest and other expense


(88
)


(47
)


(27
)


(31
)


(153
)Total other income (expense)


1,731



2,494



2,109



454



71Income (loss) before provision (benefit) for income taxes


627



1,673



1,809



830



(3,497
)Provision (benefit) for income taxes


185



674



(5,119
)


2,854



178Net income (loss)

$
442


$
999


$
6,928


$
(2,024
)

$
(3,675
)Net income (loss) per share, basic

$
0.03


$
0.06


$
0.38


$
(0.11
)

$
(0.21
)Net income (loss) per share, diluted

$
0.03


$
0.05


$
0.37


$
(0.11
)

$
(0.21
)     (1)
    
    Cost of revenues and operating expenses include stock-based
    compensation expense from equity awards in the following amounts:  Year Ended December 31,2006


2007


2008


2009


2010(In thousands)Cost of revenues

$
69


$
581


$
1,262


$
1,453


$
1,590Sales and marketing


530



1,498



3,212



3,753



3,253Research and development


219



548



769



989



1,506General and administrative


1,042



3,025



5,929



6,697



6,453Total

$
1,860


$
5,652


$
11,172


$
12,892


$
12,802  30




---



##### 



(2)
    
    The consolidated statements of operations include financial
    results in the relevant periods since the acquisition dates of
    PRWeb in August 2006, Datapresse and BDL Media in April 2010,
    HARO in June 2010 and Engine140 in December 2010. See
    Note 3 to the Consolidated Financial Statements for further
    discussion of our recent acquisitions.  December 31,2006

2007

2008

2009

2010(In thousands)Balance Sheet Data:Cash, cash equivalents and investments

$
29,863


$
67,480


$
87,187


$
104,669


$
100,414Working capital


8,521



42,013



58,427



70,594



60,015Total assets


74,770



114,243



139,979



159,240



174,497Total debt


762



335



373



245



344Total deferred revenue


26,631



34,964



42,854



47,750



56,576Stockholders equity


41,007



71,004



91,408



104,381



104,434  31




---



##### 



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  The following discussion and analysis of our financial
    condition and results of operations should be read in
    conjunction with our consolidated financial statements and
    related notes that appear elsewhere in this report. In addition
    to historical consolidated financial information, the following
    discussion contains forward-looking statements that reflect our
    plans, estimates and beliefs. Our actual results could differ
    materially from those discussed in the forward-looking
    statements. Factors that could cause or contribute to these
    differences include those discussed below and elsewhere in this
    report, particularly in Risk Factors in
    Item 1A.
  Overview
    not-for-profit
      Acquisitions
     32




---



##### 



Sources
    of Revenues
        Cost of
    Revenues and Operating Expenses
  Cost of Revenues.
 33




---



##### 



Sales and Marketing.
    Research and Development.
  General and Administrative.
  Amortization of Intangible Assets. not-to-complete
  Critical
    Accounting Policies
      Revenue Recognition.
 34




---



##### 



Sales Commissions.
  Stock-Based Compensation.
  Business Combinations. not-to-compete
  Goodwill and Long-Lived Assets.
 35




---



##### 



Income taxes.
     36




---



##### 



Results
    of Operations
    Year Ended December 31,2008


2009


2010Revenues


100
%


100
%


100
%Cost of revenues


19



18



20Gross profit


81



82



80Operating expenses:Sales and marketing


45



49



51Research and development


7



6



6General and administrative


26



25



25Amortization of intangible assets


3



2



2Total operating expenses


81



82



84Income (loss) from operations










(4
)Other income, net


3



1



Income (loss) before provision (benefit) for income taxes


3



1



(4
)Provision (benefit) for income taxes


(6
)


3



Net income (loss)


9
%


(2
)%


(4
)%   Years
    Ended December 31, 2010 and 2009
  Revenues.
  Cost of Revenues.
  Sales and Marketing Expenses.
 37




---



##### 



Research and Development Expenses.
  General and Administrative Expenses.
  Amortization of Intangible
    Assets.
  Other Income (Expense).
  Provision (Benefit) for Income Taxes.
  Years
    Ended December 31, 2009 and 2008
  Revenues.
  Cost of Revenues.
  Sales and Marketing Expenses.
 38




---



##### 



Research and Development Expenses.
  General and Administrative Expenses.
  Amortization of Intangible
    Assets.
  Other Income (Expense).
  Provision (Benefit) for Income Taxes.
  Liquidity
    and Capital Resources
    Operating Activities.
 39




---



##### 



Investing Activities.
  Financing Activities.
  Subsequent Events Form 10-K.
             40




---



##### 



Payments Due by periodLess than


1-3


3-5


More thanContractual Obligations

Total


1 Year


Years


Years


5 YearsOperating leases

$
24,650


$
1,933


$
4,228


$
3,973


$
14,516Contractual commitments


4,902



3,061



1,612



229



Long-term debt under note payable


259



94



132



33



Interest on long-term debt under note payable


29



14



14



1



Capital lease obligations


93



64



25



4



Total obligations

$
29,933


$
5,166


$
6,011


$
4,240


$
14,516     Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Foreign
    Currency Exchange Risk
    Interest
    Rate Sensitivity
      Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure   41




---



##### 



Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Changes
    in Internal Controls
    Managements
    Report on Internal Control Over Financial Reporting
  Rules 13a-15(f).
         42




---



##### 



Report of
    Independent Registered Public Accounting Firm
    on Internal Control Over Financial Reporting
                    43




---



##### 



Item 9B.
    Other
    Information    PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Form 10-K.
  Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services    PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  Documents filed as part of this report:
    
    Report of Independent Registered Public Accounting Firm;
    Consolidated balance sheets as of December 31, 2009 and
    2010;
    Consolidated statements of operations for the years ended
    December 31, 2008, 2009 and 2010;
    Consolidated statements of stockholders equity for the
    years ended December 31, 2008, 2009 and 2010;
    Consolidated statements of cash flows for the years ended
    December 31, 2008, 2009 and 2010; and
    Notes to consolidated financial statements.    
    Schedule II  Valuation and Qualifying Accounts.    Exhibits
   44




---



##### 



SIGNATURES    VOCUS, INC.
  By:
    /s/  Richard
    Rudman       POWER OF
    ATTORNEY
  Form 10-K,
    Signature

Title

Date/s/  Richard
    RudmanRichard
    Rudman

Chief Executive Officer, President and Chairman (Principal
    Executive Officer)

March 16, 2011/s/  Stephen
    VintzStephen
    Vintz

Chief Financial Officer, Executive Vice President and Treasurer
    (Principal Financial and Accounting Officer)

March 16, 2011/s/  Kevin
    BurnsKevin
    Burns

Director

March 16, 2011/s/  Gary
    GoldingGary
    Golding

Director

March 16, 2011/s/  Gary
    GreenfieldGary
    Greenfield

Director

March 16, 2011/s/  Ronald
    KaiserRonald
    Kaiser

Director

March 16, 2011/s/  Robert
    LentzRobert
    Lentz

Director

March 16, 2011/s/  Richard
    MooreRichard
    Moore

Director

March 16, 2011  45




---



##### 



Vocus,
    Inc. and Subsidiaries
  Index to
    Financial Statements
   
 Report of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets as of
    December 31, 2009 and 2010


F-3Consolidated Statements of Operations for the
    years ended December 31, 2008, 2009 and 2010


F-4Consolidated Statements of Stockholders
    Equity for the years ended December 31, 2008, 2009 and
    2010


F-5Consolidated Statements of Cash Flows for the
    years ended December 31, 2008, 2009 and 2010


F-6Notes to Consolidated Financial Statements


F-7   F-1




---



##### 



Report of
    Independent Registered Public Accounting Firm                F-2




---



##### 



Vocus,
    Inc. and Subsidiaries
  Consolidated Balance Sheets
  December 31,2009


2010(Dollars in thousands, except per share data)Current assets:Cash and cash equivalents

$
85,817


$
94,918Short-term investments


17,851



5,496Accounts receivable, net of allowance for doubtful accounts of
    $212 and $182 at December 31, 2009 and December 31,
    2010, respectively


18,245



20,846Current portion of deferred income taxes


685



365Prepaid expenses and other current assets


1,753



3,790Total current assets


124,351



125,415Long-term investments


1,001



Property, equipment and software, net


4,666



6,183Intangible assets, net


3,980



7,534Goodwill


17,090



26,895Deferred income taxes, net of current portion


7,459



8,314Other assets


693



156Total assets

$
159,240


$
174,497Current liabilities:Accounts payable

$
1,148


$
652Accrued compensation


2,384



3,375Accrued expenses


3,239



5,499Current portion of notes payable and capital lease obligations


197



152Current portion of deferred revenue


46,789



55,722Total current liabilities


53,757



65,400Notes payable and capital lease obligations, net of current
    portion


48



192Other liabilities


93



2,552Deferred income taxes, net of current portion






1,065Deferred revenue, net of current portion


961



854Total liabilities


54,859



70,063Commitments and contingenciesStockholders equity:Preferred stock, $0.01 par value, 10,000,000 shares
    authorized; no shares issued and outstanding at
    December 31, 2009 and December 31, 2010






Common stock, $0.01 par value, 90,000,000 shares
    authorized; 19,854,585 and 20,374,267 issued at
    December 31, 2009 and December 31, 2010, respectively;
    18,173,444 and 17,982,425 shares outstanding at
    December 31, 2009 and December 31, 2010, respectively


199



204Additional paid-in capital


149,279



166,985Treasury stock, 1,681,141 and 2,391,842 shares at
    December 31, 2009 and December 31, 2010, respectively,
    at cost


(14,914
)


(28,417
)Accumulated other comprehensive income (loss)


305



(175
)Accumulated deficit


(30,488
)


(34,163
)Total stockholders equity


104,381



104,434Total liabilities and stockholders equity

$
159,240


$
174,497    F-3




---



##### 



Vocus,
    Inc. and Subsidiaries
  Consolidated Statements of
    Operations
  Year Ended December 31,2008


2009


2010(Dollars in thousands, except per share data)Revenues

$
77,520


$
84,579


$
96,760Cost of revenues


14,675



15,461



18,932Gross profit


62,845



69,118



77,828Operating expenses:Sales and marketing


35,140



41,123



49,620Research and development


4,998



4,675



5,891General and administrative


20,356



21,018



23,587Amortization of intangible assets


2,651



1,926



2,298Total operating expenses


63,145



68,742



81,396Income (loss) from operations


(300
)


376



(3,568
)Other income (expense):Interest and other income


2,136



485



224Interest and other expense


(27
)


(31
)


(153
)Total other income (expense)


2,109



454



71Income (loss) before provision (benefit) for income taxes


1,809



830



(3,497
)Provision (benefit) for income taxes


(5,119
)


2,854



178Net income (loss)

$
6,928


$
(2,024
)

$
(3,675
)Net income (loss) per share:Basic

$
0.38


$
(0.11
)

$
(0.21
)Diluted

$
0.37


$
(0.11
)

$
(0.21
)Weighted average shares outstanding used in computing per share
    amounts:Basic


17,997,123



18,077,616



17,921,238Diluted


18,958,500



18,077,616



17,921,238    F-4




---



##### 



Vocus,
    Inc. and Subsidiaries
  Consolidated Statements of Stockholders
    Equity
  AccumulatedAdditional





Other





TotalCommon Stock


Paid-In


Treasury


Comprehensive


Accumulated


StockholdersShares


Amount


Capital


Stock


Income (Loss)


Deficit


Equity(Dollars in thousands)Balance at December 31, 2007


18,656,415


$
186


$
109,553


$
(3,283
)

$
(60
)

$
(35,392
)

$
71,004Issuance of common stock to directors


210







6















6Exercise of stock options


709,490



8



7,218















7,226Tax benefit from equity awards










1,951















1,951Repurchase of 404,960 shares of common stock














(7,500
)










(7,500
)Stock-based compensation


14,751







11,169















11,169Comprehensive income:Foreign currency translation


















601







601Net unrealized gain on available for sale securities, net of tax


















23







23Net income






















6,928



6,928Total comprehensive income


























7,552Balance at December 31, 2008


19,380,866



194



129,897



(10,783
)


564



(28,464
)


91,408Exercise of stock options


264,133



3



2,400















2,403Vesting of restricted stock awards


209,586



2



(2
)














Tax benefit from equity awards










4,088















4,088Repurchase of 265,404 shares of common stock














(4,131
)










(4,131
)Stock-based compensation










12,896















12,896Comprehensive loss:Foreign currency translation


















(225
)






(225
)Net unrealized loss on available for sale securities, net of tax


















(34
)






(34
)Net loss






















(2,024
)


(2,024
)Total comprehensive loss


























(2,283
)Balance at December 31, 2009


19,854,585



199



149,279



(14,914
)


305



(30,488
)


104,381Exercise of stock options


349,208



3



4,160















4,163Vesting of restricted stock awards


170,474



2



(2
)














Tax benefit from equity awards










681















681Repurchase of 918,681 shares of common stock














(13,503
)










(13,503
)Stock-based compensation










12,867















12,867Comprehensive loss:Foreign currency translation


















(474
)






(474
)Net unrealized loss on available for sale securities, net of tax


















(6
)






(6
)Net loss






















(3,675
)


(3,675
)Total comprehensive loss


























(4,155
)Balance at December 31, 2010


20,374,267


$
204


$
166,985


$
(28,417
)

$
(175
)

$
(34,163
)

$
104,434    F-5




---



##### 



Vocus,
    Inc. and Subsidiaries
  Consolidated Statements of Cash
    Flows
  Year Ended December 31,2008


2009


2010(Dollars in thousands)Cash flows from operating activitiesNet income (loss)

$
6,928


$
(2,024
)

$
(3,675
)Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization of property, equipment and software


1,821



1,658



1,971Amortization of intangible assets


2,722



1,926



2,440Loss on disposal of assets


10



3



8Impairment of long-lived assets


68







Stock-based compensation


11,172



12,892



12,802Adjustment to fair value of contingent consideration










548Provision for doubtful accounts


237



265



118Deferred income taxes


(7,154
)


(1,631
)


(835
)Excess tax benefit from equity awards


(1,951
)


(5,048
)


(883
)Changes in operating assets and liabilities:Accounts receivable


(1,075
)


(3,642
)


(1,730
)Prepaid expenses and other current assets


(1,532
)


1,621



(1,270
)Other assets


(145
)


(93
)


4Accounts payable


(405
)


616



(760
)Accrued compensation


(712
)


75



609Accrued expenses


1,422



4,814



899Deferred revenue


8,836



4,624



7,043Other liabilities


(18
)


23



441Net cash provided by operating activities


20,224



16,079



17,730Cash flows from investing activitiesBusiness acquisitions, net of cash acquired










(9,851
)Purchases of property, equipment and software


(1,742
)


(1,445
)


(2,602
)Software development costs


(74
)


(156
)


(446
)Proceeds from disposal of assets










5Purchases of
    available-for-sale
    securities


(46,008
)


(32,332
)


(10,034
)Sales of
    available-for-sale
    securities


800







Maturities of
    available-for-sale
    securities


34,437



35,183



23,379Net cash provided by (used in) investing activities


(12,587
)


1,250



451Cash flows from financing activitiesRepurchases of common stock


(7,500
)


(4,131
)


(13,503
)Proceeds from exercises of stock options


7,226



2,403



4,163Excess tax benefit from equity awards


1,951



5,048



883Payments on notes payable and capital lease obligations


(360
)


(218
)


(317
)Net cash provided by (used in) financing activities


1,317



3,102



(8,774
)Effect of exchange rate changes on cash and cash equivalents


(66
)


(43
)


(306
)Net increase in cash and cash equivalents


8,888



20,388



9,101Cash and cash equivalents at beginning of year


56,541



65,429



85,817Cash and cash equivalents at end of year

$
65,429


$
85,817


$
94,918Supplemental disclosure of cash flow information:Cash paid for interest

$
29


$
31


$
39Cash paid for income taxes

$
621


$
101


$
1,126Supplemental disclosure of non-cash investing and financing
    activities:Assets acquired under capital leases and other financing
    arrangements

$
514


$
90


$
11    F-6




---



##### 



Vocus,
    Inc. and SubsidiariesNotes to Consolidated Financial Statements
  1.
    Business
    Description  Organization
    and Description of Business
    2.
    Summary
    of Significant Accounting Policies  Principles
    of Consolidation
    Use of
    Estimates
    Cash
    and Cash Equivalents
    Investments
  available-for-sale available-for-sale available-for-sale other-than-temporary
  Fair
    Value Measurements
   F-7




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Level 1



Inputs are quoted prices in active markets for identical assets
    or liabilities.Level 2



Inputs are quoted prices for similar assets or liabilities in
    active markets, quoted prices for identical or similar assets or
    liabilities in markets that are not active, inputs other than
    quoted prices that are observable and market-corroborated inputs
    which are derived principally from or corroborated by observable
    market data.Level 3



Inputs are derived from valuation techniques in which one or
    more significant inputs or value drivers are unobservable.   Allowance
    for Doubtful Accounts
    Software
    Development and Information Database Costs
    Property,
    Equipment and Software
    Long-Lived
    Assets
  not-to-compete
 F-8




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Business
    Combinations
    Goodwill
      Foreign
    Currency and Operations
    Comprehensive
    Income (Loss)
   F-9




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  available-for-sale
  As ofDecember 31,2009


2010Foreign currency translation adjustment


299



(175
)Unrealized net gain on
    available-for-sale
    securities, net of tax


6



Accumulated other comprehensive income (loss)

$
305


$
(175
)   Revenue
    Recognition
          Deferred
    Revenue
  12-month
  Sales
    Commissions
    Advertising
    Costs
   F-10




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Stock-Based
    Compensation
    Concentrations
    of Credit Risk
      Income
    Taxes
     F-11




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Earnings
    Per Share
    Year Ended December 31,2008


2009


2010Net income (loss)

$
6,928


$
(2,024
)

$
(3,675
)Weighted average shares outstanding, basic


17,997,123



18,077,616



17,921,238Dilutive effect of:Options to purchase common stock


961,377







Nonvested shares of restricted stock










Weighted average shares outstanding, diluted


18,958,500



18,077,616



17,921,238Net income (loss) per share:Basic

$
0.38


$
(0.11
)

$
(0.21
)Diluted

$
0.37


$
(0.11
)

$
(0.21
)     Segment
    Data
    Recent
    Accounting Pronouncements
   F-12




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    3.
    Business
    Combinations        Cash consideration

$
9,723Fair value of contingent consideration


572Total purchase consideration at date of acquisition

$
10,295        F-13




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Estimated


EstimatedUseful Life


Fair ValueCash and cash equivalents





$
2,798Accounts receivable and other current assets






1,389Other assets






442Trade name


5 years



218Customer relationships


7 years



3,617Purchased technology


5 years



842Goodwill






5,941Accounts payable and accrued liabilities






(1,200
)Notes payable and capital lease obligations






(418
)Deferred income taxes






(1,409
)Deferred revenue






(1,793
)Other liabilities






(132
)Total purchase price





$
10,295     Year Ended December 31,2009


2010(unaudited)Pro forma revenue

$
89,860


$
99,836Pro forma net loss

$
(1,433
)

$
(2,329
)Pro forma net loss per share:Basic and diluted

$
(0.08
)

$
(0.13
)        F-14




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
        4.
    Cash
    Equivalents and Investments    Unrealized


Fair MarketCost


Gains


Losses


ValueCash equivalents:Money market funds

$
7,045


$



$



$
7,045Commercial paper


37,144











37,144Certificates of deposit


2,900











2,900Short-term investments:Commercial paper


6,497



2







6,499Government-sponsored agency debt securities


8,746



5







8,751Certificates of deposit


700











700Corporate notes and bonds


1,900



1







1,901Long-term investments:Government-sponsored agency debt securities


1,000



1







1,001Total

$
65,932


$
9


$



$
65,941     Unrealized


Fair MarketCost


Gains


Losses


ValueCash equivalents:Money market funds

$
23,826


$



$



$
23,826Commercial paper


31,294











31,294Government-sponsored agency debt securities


5,199











5,199Certificates of deposit


2,294











2,294Short-term investments:Government-sponsored agency debt securities


5,497







(1
)


5,496Total

$
68,110


$



$
(1
)

$
68,109  F-15




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    5.
    Fair
    Value Measurements    Total


Level 1


Level 2


Level 3Assets:Cash equivalents

$
62,613


$
31,319


$
31,294


$
Short-term investments


5,496



5,496







Total assets measured at fair value

$
68,109


$
36,815


$
31,294


$
   Total


Level 1


Level 2


Level 3Liabilities:Accrued contingent consideration

$
1,937


$



$



$
1,937Total liabilities measured at fair value

$
1,937


$



$



$
1,937         Balance as of January 1, 2010

$
Acquisition date fair value measurement


1,383Adjustments to fair value measurement


548Effect of foreign currency translation


6Balance as of December 31, 2010

$
1,937  F-16




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  6.
    Property,
    Equipment and Software    December 31,2009


2010Purchased software, computer and office equipment

$
5,474


$
7,166Office furniture


1,117



1,188Leasehold improvements


1,317



1,803Equipment under capital lease obligations


603



655Capitalized software development costs


1,025



1,536Information database costs


2,565



2,56512,101



14,913Less accumulated depreciation and amortization


(7,435
)


(8,730
)Property, equipment and software, net

$
4,666


$
6,183     7.
    Goodwill
    and Intangible Assets    Balance as of January 1, 2010

$
17,090Goodwill acquired


9,957Effects of foreign currency translation


(152
)Balance as of December 31, 2010

$
26,895     Weighted-Average


GrossAmortization


Carrying





Net CarryingPeriod


Amount


Amortization


AmountCustomer relationships


5.0


$
3,041


$
(2,326
)

$
715Trade name


7.0



3,946



(1,920
)


2,026Agreements
    not-to-compete


5.0



3,913



(2,674
)


1,239Total





$
10,900


$
(6,920
)

$
3,980     Weighted-Average


GrossAmortization


Carrying





Net CarryingPeriod


Amount


Amortization


AmountCustomer relationships


6.0


$
7,231


$
(3,241
)

$
3,990Trade names


6.9



4,325



(2,529
)


1,796Agreements
    not-to-compete


5.0



3,913



(3,456
)


457Purchased technology


3.9



1,431



(140
)


1,291Total





$
16,900


$
(9,366
)

$
7,534  F-17




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    2011

$
2,4212012


1,6972013


1,1822014


8332015


6792016 and thereafter


722Total

$
7,534   8.
    Debt  Term
    Loans and Equipment Line of Credit
    Note
    Payable
      2011

$
942012


662013


662014


33Total future minimum principal payments

$
259   9.
    Stockholders
    Equity  Common
    Stock Repurchases
    10.
    Stock-Based
    Compensation   F-18




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  10-year
    Year Ended December 31,2008


2009


2010Cost of revenues

$
1,262


$
1,453


$
1,590Sales and marketing


3,212



3,753



3,253Research and development


769



989



1,506General and administration


5,929



6,697



6,453Total

$
11,172


$
12,892


$
12,802   Stock
    Option Awards
    Year Ended December 31,2008


2009


2010Stock price volatility


54
%


62
%


59
%Expected term (years)


6.1



6.2



6.2Risk-free interest rate


3.0
%


2.5
%


2.6
%Dividend yield


0
%


0
%


0
%     AggregateWeighted-


Weighted-


IntrinsicAverage


Average


Value as ofNumber of


Range of


Exercise Price per


Contractual


December 31,Options


Exercise Prices


Share


Term


2010(In thousands)Balance outstanding at January 1, 2010


2,134,979


$
0.30 - $35.98


$
14.35Granted


715,901



14.23 - 26.94



15.85Exercised


(349,208
)


0.30 - 24.00



11.92Forfeited or cancelled


(22,749
)


0.30 - 21.41



18.52Balance outstanding at December 31, 2010


2,478,923


$
2.46 - $35.98


$
15.09



6.7


$
31,327Vested and expected to vest at December 31, 2010


2,417,898


$
2.46 - $35.98


$
15.03



6.6


$
30,703Balance exercisable at December 31, 2010


1,454,822


$
2.46 - $35.98


$
13.81



5.5


$
20,268  F-19




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
        Options Outstanding


Options ExercisableWeighted-


Weighted-





Weighted-Average


Average





AverageOutstanding


Remaining


Exercise


Exercisable


Exerciseas of


Contractual


Price per


as of


Price perRange of Exercise Prices

12/31/10


Term


Share


12/31/10


Share$ 2.46 - $ 7.19


45,569



3.9


$
4.66



45,569


$
4.66$ 7.20 - $10.78


683,625



4.9



9.00



683,625



9.00$10.79 - $14.38


72,500



5.8



13.20



67,500



13.13$14.39 - $17.99


702,193



9.1



14.95



19,500



16.19$18.00 - $21.58


829,246



6.1



18.77



581,976



18.76$21.59 - $35.98


145,790



8.1



27.56



56,652



28.242,478,923



6.7


$
15.09



1,454,822


$
13.81   Restricted
    Stock Awards
      Number of Shares


Weighted-AverageUnderlying Stock


Grant Date FairAwards


ValueBalance nonvested at January 1, 2010


1,229,358


$
20.94Awarded


609,451



15.32Vested


(378,454
)


21.07Forfeited


(41,624
)


20.63Balance nonvested at December 31, 2010


1,418,731


$
18.50    F-20




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  11.
    Employee
    Benefit Plans    12.
    Income
    Taxes    2008


2009


2010Current expenseFederal

$
1,683


$
4,020


$
580State


352



657



245Foreign










188Deferred expense (benefit)Federal


(6,517
)


(1,681
)


(333
)State


(637
)


(142
)


(149
)Foreign










(353
)Total provision (benefit) for income taxes

$
(5,119
)

$
2,854


$
178     2008


2009


2010Statutory federal tax rate


35
%


35
%


(35
)%State income taxes, net of benefit


9



29



Effect of foreign losses


13



24



Non-deductible compensation


30



145



28Other non-deductible expenses


4



14



11Effect of uncertain tax positions










3Changes in valuation allowance


(374
)


97



(2
)(283
)%


344
%


5
%      F-21




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    December 31,2009


2010Deferred tax assets:NOL carryforwards

$
2,728


$
1,894Allowance for doubtful accounts


66



31Deferred revenue


226



297Accrued expenses


239



394Depreciation


303



(282
)Intangible asset amortization


3,339



2,183Stock-based compensation


5,572



7,359Other


633



403Total deferred tax assets


13,106



12,279Valuation allowance


(2,728
)


(1,997
)Net deferred tax assets


10,378



10,282Deferred tax liabilities:Capitalized software development


(743
)


(510
)Goodwill


(1,487
)


(1,910
)Other


(4
)


(268
)Total deferred tax liabilities


(2,234
)


(2,688
)Net deferred tax asset

$
8,144


$
7,594         Balance as of January 1, 2010

$
Additions based on tax positions taken in the current year


50Additions for tax positions of prior years


566Balance as of December 31, 2010

$
616    F-22




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
  13.
    Commitments
    and Contingencies  Leases
        Operating


CapitalLeases


Leases2011

$
1,933


$
642012


2,124



192013


2,104



62014


2,098



22015


1,875



22016 and thereafter


14,516



Total future minimum payments

$
24,650



93Less amount representing interest






(8
)Less current portion






(58
)Long-term capital lease obligations





$
27   Letters
    of Credit
     F-23




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Purchase
    Commitments
    Litigation
    and Claims
    14.
    Subsequent
    Events    15.
    Quarterly
    Financial Information  (Unaudited)  March 31,


June 30,


September 30,


December 31,


March 31,


June 30,


September 30,


December 31,2009


2009


2009


2009


2010


2010


2010


2010Summary consolidated statement of operations data:Revenues

$
20,411


$
21,079


$
21,042


$
22,047


$
22,271


$
23,781


$
24,701


$
26,007Gross profit


16,504



17,232



17,181



18,201



17,836



19,058



19,795



21,139Net loss


(478
)


(343
)


(382
)


(821
)


(579
)


(1,957
)


(742
)


(397
)Net loss per share:Basic and diluted

$
(0.03
)

$
(0.02
)

$
(0.02
)

$
(0.05
)

$
(0.03
)

$
(0.11
)

$
(0.04
)

$
(0.02
)Weighted average shares outstanding used in computing per share
    amounts:Basic and diluted


18,026,397



18,051,243



18,092,595



18,138,830



18,062,306



17,955,925



17,836,960



17,833,206  F-24




---



##### 



Vocus,
    Inc.
  Schedule II 
    Valuation and Qualifying Accounts
  Balance


Charged to





Balance atBeginning of


Costs or





End ofPeriod


Expense


Deductions(1)


PeriodAllowance for doubtful accounts:Year ended December 31, 2008


251



224



(181
)


294Year ended December 31, 2009


294



265



(347
)


212Year ended December 31, 2010


212



118



(148
)


182     (1)
    
    Includes actual accounts written-off, net of recoveries. II-1




---



##### 



Index to
    Exhibits
  ExhibitNumbers

Exhibits3
.1(6)

Fifth Amended and Restated Certificate of Incorporation.3
.2(14)

Amended and Restated Bylaws.4
.1(4)

Specimen common stock certificate.10
.1(1)

1999 Stock Option Plan.10
.2(1)

Form of Option Agreement under Registrants 1999 Stock
    Option Plan.10
.3(5)

2005 Stock Award Plan.10
.4(10)

Form of Option Agreement for executive officers under
    Registrants 2005 Stock Award Plan.10
.5(10)

Form of Option Agreement for non-employee directors under
    Registrants 2005 Stock Award Plan.10
.6(1)

Agreement of Lease, dated December 21, 2000, between MOR
    FORBES LLLP and Registrant as amended.10
.7(12)

Deed of Lease dated March 30, 2010 between Indian Creek
    Investors, LLC and Registrant10
.8(5)

Form of Indemnification Agreement entered into by the Registrant
    and each of its executive officers and directors.10
.9(2)

License Agreement between the Registrant and PR Newswire
    Association LLC, dated August 1, 2003, as amended.10
.10(10)

Amended and Restated Agreement between the Registrant and PR
    Newswire Association, Inc., dated August 1, 2006.10
.11(3)

OEM License Agreement between the Registrant and Moreover
    Technologies, Inc., dated March 1, 2006, as amended.10
.12(7)

Form of Employment Agreement for Richard Rudman and Stephen
    Vintz, and schedule of details omitted therefrom.10
.13(7)

Form of Employment Agreement for Norman Weissberg, and schedule
    of details omitted therefrom.10
.14(8)

Employment Agreement for William Wagner dated July 17, 2006.10
.15(8)

Indemnification Agreement for William Wagner dated July 17,
    2006.10
.16(9)

Asset Purchase Agreement, dated August 4, 2006, among the
    Registrant, Vocus PRW Holdings LLC, PRWeb, LLC and the sole
    stockholder of PRWeb International, Inc. and sole owner of
    PRWeb, LLC.10
.17(13)

Sale and Purchase Agreement dated April 16, 2010 between
    Registrant and Data Presse SAS.10
.18(15)

Asset Purchase Agreement between the Registrant and North
    Venture Partners, LLC dated February 24, 2011.10
.19(11)

Form of Restricted Stock Agreement for executive officers under
    Registrants 2005 Stock Award Plan.10
.20(11)

Form of Restricted Stock Agreement for non-employee directors
    under Registrants 2005 Stock Award Plan.10
.21(11)

Summary of board of directors compensation.21
.1*

List of subsidiaries.23
.1*

Consent of Ernst & Young LLP.24
.1*

Power of Attorney (included on the signature page to this
    report).31
.1*

Certification of Chief Executive Officer pursuant to
    Rules 13a-14
    and 15d-14 promulgated under the Securities Exchange Act of 1934.31
.2*

Certification of Chief Financial Officer pursuant to
    Rules 13a-14
    and 15d-14 promulgated under the Securities Exchange Act of 1934.32
.1**

Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to 18 U.S.C. Section 1350, as adopted
    pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.     *
    
    Filed herewith**
    
    Furnished herewith II-2




---



##### 



(1)
    
    Incorporated by reference to an exhibit to the Registration
    Statement on
    Form S-1
    of Vocus, Inc. (Registration
    No. 333-125834)
    filed with the Securities and Exchange Commission on
    June 15, 2005.(2)
    
    Incorporated by reference to an exhibit to Amendment No. 2
    to the Registration Statement on
    Form S-1
    of Vocus, Inc. (Registration
    No. 333-125834)
    filed with the Securities and Exchange Commission on
    August 5, 2005.(3)
    
    Incorporated by reference to an exhibit to the Current Report on
    Form 8-K
    of Vocus, Inc. filed with the Securities and Exchange Commission
    on March 1, 2006.(4)
    
    Incorporated by reference to an exhibit to Amendment No. 5
    to the Registration Statement on
    Form S-1
    of Vocus, Inc. (Registration
    No. 333-125834)
    filed with the Securities and Exchange Commission on
    November 9, 2005.(5)
    
    Incorporated by reference to an exhibit to Amendment No. 6
    to the Registration Statement on
    Form S-1
    of Vocus, Inc. (Registration
    No. 333-125834)
    filed with the Securities and Exchange Commission on
    December 6, 2005.(6)
    
    Incorporated by reference to an exhibit to the Registration
    Statement on
    Form S-8
    of Vocus, Inc. (Registration
    No. 333-132206)
    filed with the Securities and Exchange Commission on
    March 3, 2006.(7)
    
    Incorporated by reference to an exhibit to the Current Report on
    Form 8-K
    of Vocus, Inc. filed with the Securities and Exchange Commission
    on December 12, 2005.(8)
    
    Incorporated by reference to an exhibit to the Current Report on
    Form 8-K
    of Vocus, Inc. filed with the Securities and Exchange Commission
    on July 20, 2006.(9)
    
    Incorporated by reference to an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    filed with the Securities and Exchange Commission on
    August 14, 2006.(10)
    
    Incorporated by reference to an exhibit to the Registrants
    Annual Report on
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 2, 2007.(11)
    
    Incorporated by reference to an exhibit to the Registrants
    Annual Report on
    Form 10-K
    filed with the Securities and Exchange Commission on
    March 14, 2008.(12)
    
    Incorporated by reference to an exhibit to the Current Report on
    Form 8-K
    of Vocus, Inc. filed with the Securities and Exchange Commission
    on March 30, 2010.(13)
    
    Incorporated by reference to an exhibit to the Registrants
    Quarterly Report on
    Form 10-Q
    filed with the Securities and Exchange Commission on
    May 10, 2010.(14)
    
    Incorporated by reference to an exhibit to the Current Report on
    Form 8-K
    of Vocus, Inc. filed with the Securities and Exchange Commission
    on October 29, 2010.(15)
    
    Incorporated by reference to an exhibit to the Current Report on
    Form 8-K
    of Vocus, Inc. filed with the Securities and Exchange Commission
    on March 1, 2011. II-3