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,
    2009o

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.




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TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


3Item 1A.


Risk Factors


13Item 1B.


Unresolved Staff Comments


25Item 2.


Properties


25Item 3.


Legal Proceedings


25Item 4.


Reserved


25PART IIItem 5.


Market for Registrants Common Equity, Related
    Stockholder Matters and Issuer Purchases of Equity Securities


26Item 6.


Selected Financial Data


29Item 7.


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


31Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


38Item 8.


Financial Statements and Supplementary Data


39Item 9.


Changes In and Disagreements With Accountants on
    Accounting and Financial Disclosure


39Item 9A.


Controls and Procedures


39Item 9B.


Other Information


41PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


41Item 11.


Executive Compensation


41Item 12.


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


41Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


41Item 14.


Principal Accountant Fees and Services


41PART IVItem 15.


Exhibits and Financial Statement Schedules


41   1




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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




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




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Public
    Relations and the On-Demand Software Market
   4




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Our
    Solutions
        
    Improved effectiveness of public
    relations.  Our on-demand 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
    on-demand 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 web-based solutions provide shared,
    real-time access to a central repository of information related
    to media contacts, relationship history, PR activities, news,
    documents 5




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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 on-demand
    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
    on-demand 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 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 that our focus on producing a suite of integrated
    applications for this market 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 the PR 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 9% of
    our 2009 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 online 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




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
    Contact Management.  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.
    Collateral Management.  Provides a central and
    easily accessible repository in which to store all PR
    information that needs to be shared internally or externally
    throughout the organization. Can include documents or files of
    any type, such as media kits, photographs, videos, executive
    biographies, annual reports and other PR materials.
    Project Management.  Helps organize PR
    projects, including press releases, speaking engagements, or
    publicity events. A graphical dashboard shows the status of all
    open projects, allowing users to check milestones, reminders,
    allocated and used resources, team assignments and other tasks
    from the planning stage through execution and
    follow-up
    reporting.
    Newsrooms.  Provides journalists, analysts,
    public officials and other key audiences 24/7 access to an
    organizations breaking news, press releases, digital
    collateral, grassroots advocacy tools and other critical public
    information. Matches the look and feel of the
    organizations website and allows PR professionals to
    quickly and easily update content when and where they want,
    without the need for IT support. 7




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
    PRWeb Online Newswire.  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. PRWeb releases are optimized for search
    engines such as Google to help ensure that press releases are
    prominently displayed on search results and drive traffic to an
    organizations website.
    Email Campaigns.  Enables organizations to
    deliver interactive communications that provide online access to
    related collateral material and to track and measure response
    rates and other campaign metrics. Provides a simple process for
    delivering information to journalists, analysts, legislators and
    other key audiences. Also provides valuable metrics on campaign
    initiatives, including emails opened, documents downloaded and
    options selected.
    Analytics &
    Measurement.  Automatically transforms relevant
    data about news coverage, PR activities and online newsroom
    statistics into valuable insight about a PR departments
    programs and results. Provides executive-level dashboards,
    allowing an organizations senior management to better
    understand the impact of relevant news, monitor the competitive
    landscape and recognize trends emerging in the media.
    News On-Demand.  Continuously monitors over
    40,000 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 and sharing.    
    Small Business Edition.  Designed primarily for
    small organizations and includes online press release
    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
   8




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Development
    Site
    Operations
    back-up.
    Customer
    Support
  on-site, on-site
 9




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Sales and
    Marketing
          Our
    Customers
  not-for-profit
  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




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
    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




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Employees
    Executive
    Officers and Key Employees
    Name

Age

PositionRichard Rudman*


48


Chief Executive Officer, President and ChairmanStephen Vintz*


41


Chief Financial Officer, Treasurer and SecretaryWilliam Wagner*


42


Chief Marketing OfficerNorman Weissberg*


48


Senior Vice President, North American SalesDarren Stewart


41


Senior Vice President, Customer ServicesMark Heys


38


Chief Technology Officer     *
    
    Denotes a named executive officer  Richard Rudman
 12




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Stephen Vintz
  William Wagner
  Norman Weissberg
  Darren Stewart
  Mark Heys Point-of-Sale
  Available
    Information
  Form 10-K, Form 10-Q, Form 8-K www.vocus.com.
  Item 1A.
    Risk
    Factors    Risks
    Related to Our Business and Industry
  Current
    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; 13




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
    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
    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;
    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;
    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;
    the amount and timing of expenditures related to expanding our
    operations;
    changes in accounting policies or the timing of non-recurring
    charges;
    changes in the payment terms for our products and services;
    changes in foreign currency exchange rates;
    unforeseen fluctuations in our effective tax rate including
    changes in the mix of earnings in the various countries in which
    we operate, the valuation of deferred tax assets and liabilities
    and the deductibility of certain expenses;
    foreign currency exchange rates; and
    the purchasing and budgeting cycles of our customers.    quarter-to-quarter
  The
    markets for our on-demand 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




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
    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.    If our
    on-demand solutions are not widely accepted, our business will
    be harmed.
    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.
   15




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We
    might not generate increased business from our current
    customers, which could limit our revenue in the
    future.
    Our
    business model continues to evolve, which may cause our results
    of operations to fluctuate or decline.
    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




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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 distribution, 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.
    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.
   17




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
    PR solution providers offering products specifically designed
    for PR;
    generic desktop software and other commercially available
    software not specifically designed for PR;
    outsourced PR service providers; and
    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.
    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.
   18




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The market for our solutions among large customers may be
    limited if they require customized features or functions that we
    do not currently intend to provide in our solutions or that
    would be difficult for individual customers to customize within
    our solutions.
    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;
    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.   19




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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.
        Changes
    in laws and/or regulations related to the Internet or changes in
    the Internet infrastructure itself may cause our business to
    suffer.
   20




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If we
    are unable to protect our proprietary technology and other
    intellectual property rights, it will reduce our ability to
    compete for business.
      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.   21




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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.
      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 9% of our 2009 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; 22




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
    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.
    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.
   23




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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;
    sales of substantial amounts of common stock by our directors,
    executive officers or significant stockholders or the perception
    that such sales could occur; and
    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 662/3 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 24




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
    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 25




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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, 2008First Quarter

$
35.14


$
21.44Second Quarter


34.01



22.97Third Quarter


39.21



31.08Fourth Quarter


33.30



14.20Fiscal Year Ended December 31, 2009First Quarter


19.50



11.66Second Quarter


20.27



13.66Third Quarter


21.23



14.99Fourth Quarter


21.65



16.34     Dividends
    Uses of
    Proceeds From Registered Securities
  Form S-1 (No. 333-125834),
     26




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Issuer
    Purchases of Equity Securities
   27




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Performance
    Graph
     
  12/7/2005


12/31/2005


12/31/2006


12/31/2007


12/31/2008


12/31/2009Vocus, Inc.

$
100.00


$
115.44


$
186.67


$
383.67


$
202.33


$
200.00Nasdaq Composite


100.00



97.93



107.25



117.77



70.03



100.76Nasdaq Computer and Data Processing Index


100.00



97.03



103.00



125.51



66.91



114.29  28




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Item 6.
    Selected
    Financial Data    Year Ended December 31,2005


2006(3)


2007


2008


2009(In thousands, except per share data)Consolidated Statement of Operations:Revenues

$
28,062


$
40,328


$
58,076


$
77,520


$
84,579Cost of revenues(1)


6,537



8,293



10,922



14,675



15,461Accelerated amortization of prepaid royalty fees and contract
    termination costs


1,399















Gross profit


20,126



32,035



47,154



62,845



69,118Operating expenses:(1)(2)Sales and marketing


14,837



18,912



26,548



35,140



41,123Research and development


2,515



2,896



3,822



4,998



4,675General and administrative


6,051



9,626



14,743



20,356



21,018Amortization of intangible assets


1,605



1,705



2,862



2,651



1,926Total operating expenses


25,008



33,139



47,975



63,145



68,742Income (loss) from operations


(4,882
)


(1,104
)


(821
)


(300
)


376Other income (expense):Interest and other income


177



1,819



2,541



2,136



485Interest expense


(359
)


(88
)


(47
)


(27
)


(31
)Total other income (expense)


(182
)


1,731



2,494



2,109



454Income (loss) before provision (benefit) for income taxes


(5,064
)


627



1,673



1,809



830Provision (benefit) for income taxes






185



674



(5,119
)


2,854Net income (loss)


(5,064
)


442



999



6,928



(2,024
)Accretion of preferred stock


(1,900
)














Net income (loss) attributable to common stockholders

$
(6,964
)

$
442


$
999


$
6,928


$
(2,024
)Net income (loss) attributable to common stockholders per share,
    basic

$
(1.43
)

$
0.03


$
0.06


$
0.38


$
(0.11
)Net income (loss) attributable to common stockholders per share,
    diluted

$
(1.43
)

$
0.03


$
0.05


$
0.37


$
(0.11
)     (1)
    
    Cost of revenues and operating expenses include stock-based
    compensation expense from equity awards in the following amounts:  29




---



##### 



Year Ended December 31,2005


2006


2007


2008


2009Cost of revenues

$



$
69


$
581


$
1,262


$
1,453Sales and marketing






530



1,498



3,212



3,753Research and development






219



548



769



989General and administrative






1,042



3,025



5,929



6,697Total

$



$
1,860


$
5,652


$
11,172


$
12,892   (2)
    
    Operating expenses include stock-based compensation expense
    related to purchases of our common stock in the following
    amounts:  Year Ended December 31,2005

2006

2007

2008

2009General and administrative

$
1,006


$



$



$



$
   (3)
    
    On August 4, 2006, we acquired PRWeb International, Inc.,
    an online distributor of press releases. The operating results
    of PRWeb have been included in our results of operations since
    the date of acquisition.  December 31,2005

2006

2007

2008

2009(In thousands)Balance Sheet Data:Cash, cash equivalents and investments

$
41,427


$
29,863


$
67,480


$
87,187


$
104,669Working capital


24,915



8,521



42,013



58,427



70,594Total assets


55,836



74,770



114,243



139,979



159,240Total debt


1,407



762



335



373



245Total deferred revenue


20,696



26,631



34,964



42,854



47,750Redeemable stock


189



33











Stockholders equity


30,387



40,974



71,004



91,408



104,381  30




---



##### 



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
      Sources
    of Revenues
  year-to-year
 31




---



##### 



Cost of
    Revenues and Operating Expenses
  Cost of Revenues.
    Sales and Marketing.
    Research and Development.
  General and Administrative.
  Amortization of Intangible Assets. not-to-complete
 32




---



##### 



Critical
    Accounting Policies
      Revenue Recognition.
    Sales Commissions.
  Stock-Based Compensation.
  Goodwill and Long-Lived Assets.
 33




---



##### 



not-to-compete
  Income taxes.
     34




---



##### 



Results
    of Operations
    Year Ended December 31,2007


2008


2009Revenues


100
%


100
%


100
%Cost of revenues


19



19



18Gross profit


81



81



82Operating expenses:Sales and marketing


46



45



49Research and development


6



7



6General and administrative


25



26



25Amortization of intangible assets


5



3



2Total operating expenses


82



81



82Income (loss) from operations


(1
)






Other income, net


4



3



1Income before provision (benefit) for income taxes


3



3



1Provision (benefit) for income taxes


1



(6
)


3Net income (loss)


2
%


9
%


(2
)%   Years
    Ended December 31, 2009 and 2008
  Revenues.
  Cost of Revenues.
  Sales and Marketing Expenses.
 35




---



##### 



Research and Development Expenses.
  General and Administrative Expenses.
  Amortization of Intangible
    Assets.
  Other Income (Expense).
  Provision (Benefit) for Income Taxes.
  Years
    Ended December 31, 2008 and 2007
  Revenues.
  Cost of Revenues.
 36




---



##### 



Sales and Marketing Expenses.
  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.
  Investing Activities.
 37




---



##### 



Financing Activities.
          Payments Due by periodLess than


1-3


3-5


More thanContractual Obligations

Total


1 Year


Years


Years


5 YearsOperating leases

$
4,367


$
1,485


$
1,101


$
875


$
906Contractual commitments


3,139



2,334



761



44



Capital lease obligations


274



221



49



4



Total obligations

$
7,780


$
4,040


$
1,911


$
923


$
906     Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Foreign
    Currency Exchange Risk
    Interest
    Rate Sensitivity
   38




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  Form 10-K.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    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).
         39




---



##### 



Report of
    Independent Registered Public Accounting Firm
    on Internal Control Over Financial Reporting
                    40




---



##### 



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:
  1.
    Consolidated Financial Statements:  
    Report of Independent Registered Public Accounting Firm;
    Consolidated balance sheets as of December 31, 2008 and
    2009;
    Consolidated statements of operations for the years ended
    December 31, 2007, 2008 and 2009;
    Consolidated statements of stockholders equity for the
    years ended December 31, 2007, 2008 and 2009;
    Consolidated statements of cash flows for the years ended
    December 31, 2007, 2008 and 2009; and
    Notes to consolidated financial statements.  2.
    Consolidated Financial Statement Schedule:  
    Schedule II  Valuation and Qualifying Accounts.    Exhibits
   41




---



##### 



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 9, 2010/s/  Stephen
    VintzStephen
    Vintz

Chief Financial Officer and Treasurer (Principal Financial and
    Accounting Officer)

March 9, 2010/s/  Kevin
    BurnsKevin
    Burns

Director

March 9, 2010/s/  Gary
    GoldingGary
    Golding

Director

March 9, 2010/s/  Gary
    GreenfieldGary
    Greenfield

Director

March 9, 2010/s/  Ronald
    KaiserRonald
    Kaiser

Director

March 9, 2010/s/  Robert
    LentzRobert
    Lentz

Director

March 9, 2010/s/  Richard
    MooreRichard
    Moore

Director

March 9, 2010  42




---



##### 



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


F-2Consolidated Balance Sheets as of
    December 31, 2008 and 2009


F-3Consolidated Statements of Operations for years
    ended December 31, 2007, 2008 and 2009


F-4Consolidated Statements of Stockholders
    Equity for years ended December 31, 2007, 2008 and 2009


F-5Consolidated Statements of Cash Flows for years
    ended December 31, 2007, 2008 and 2009


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 31,2008


2009(Dollars in thousands, except per share data)Current assets:Cash and cash equivalents

$
65,429


$
85,817Short-term investments


21,758



17,851Accounts receivable, net of allowance for doubtful accounts of
    $294 and $212 at December 31, 2008 and December 31,
    2009, respectively


14,739



18,245Current portion of deferred income taxes


394



685Prepaid expenses and other current assets


3,340



1,753Total current assets


105,660



124,351Long-term investments






1,001Property, equipment and software, net


4,615



4,666Intangible assets, net


5,906



3,980Goodwill


17,090



17,090Deferred income taxes, net of current portion


6,097



7,459Other assets


611



693Total assets

$
139,979


$
159,240Current liabilities:Accounts payable

$
497


$
1,148Accrued compensation


2,297



2,384Accrued expenses


2,479



3,239Current portion of notes payable and capital lease obligations


185



197Current portion of deferred revenue


41,775



46,789Total current liabilities


47,233



53,757Notes payable and capital lease obligations, net of current
    portion


188



48Other liabilities


71



93Deferred revenue, net of current portion


1,079



961Total liabilities


48,571



54,859Commitments and contingenciesStockholders equity:Preferred stock, $0.01 par value, 10,000,000 shares
    authorized; no shares issued and outstanding at
    December 31, 2008 and December 31, 2009






Common stock, $0.01 par value, 90,000,000 shares
    authorized; 19,380,866 and 19,854,585 issued at
    December 31, 2008 and December 31, 2009, respectively;
    17,965,129 and 18,173,444 shares outstanding at
    December 31, 2008 and December 31, 2009, respectively


194



199Additional paid-in capital


129,897



149,279Treasury stock, 1,415,737 and 1,681,141 shares at
    December 31, 2008 and December 31, 2009, respectively,
    at cost


(10,783
)


(14,914
)Accumulated other comprehensive income


564



305Accumulated deficit


(28,464
)


(30,488
)Total stockholders equity


91,408



104,381Total liabilities and stockholders equity

$
139,979


$
159,240    F-3




---



##### 



Vocus,
    Inc. and Subsidiaries
  Consolidated Statements of
    Operations
  Year Ended December 31,2007


2008


2009(Dollars in thousands, except per share data)Revenues

$
58,076


$
77,520


$
84,579Cost of revenues


10,922



14,675



15,461Gross profit


47,154



62,845



69,118Operating expenses:Sales and marketing


26,548



35,140



41,123Research and development


3,822



4,998



4,675General and administrative


14,743



20,356



21,018Amortization of intangible assets


2,862



2,651



1,926Total operating expenses


47,975



63,145



68,742Income (loss) from operations


(821
)


(300
)


376Other income (expense):Interest and other income


2,541



2,136



485Interest expense


(47
)


(27
)


(31
)Total other income (expense)


2,494



2,109



454Income before provision (benefit) for income taxes


1,673



1,809



830Provision (benefit) for income taxes


674



(5,119
)


2,854Net income (loss)

$
999


$
6,928


$
(2,024
)Net income (loss) per share:Basic

$
0.06


$
0.38


$
(0.11
)Diluted

$
0.05


$
0.37


$
(0.11
)Weighted average shares outstanding used in computing per share
    amounts:Basic


17,147,889



17,997,123



18,077,616Diluted


18,267,020



18,958,500



18,077,616    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


EquityBalance at December 31, 2006


16,993,515


$
170


$
80,526


$
(3,283
)

$
(48
)

$
(36,391
)

$
40,974Public offering, net of costs


1,217,137



12



21,645















21,657Issuance of common stock to directors


5,196







110















110Exercise of stock options and warrants


435,567



4



1,594















1,598Tax benefit from equity awards










78















78Accretion of redeemable common stock










(1
)














(1
)Forfeiture of common stock redemption right


5,000







34















34Stock-based compensation










5,567















5,567Comprehensive income:Foreign currency translation


















(25
)






(25
)Net unrealized gain on available for sale securities, net of tax


















13







13Net income






















999



999Total comprehensive income


























987Balance 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
)

$
104,381    F-5




---



##### 



Vocus,
    Inc. and Subsidiaries
  Consolidated Statements of Cash
    Flows
  Year Ended December 31,2007


2008


2009(Dollars in thousands)Cash flows from operating activitiesNet income (loss)

$
999


$
6,928


$
(2,024
)Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization of property, equipment and software


1,480



1,821



1,658Amortization of intangible assets


2,982



2,722



1,926Loss (gain) on disposal of assets


(26
)


10



3Impairment of long-lived assets


24



68



Stock-based compensation


5,657



11,172



12,892Provision for doubtful accounts


75



237



265Deferred income taxes


454



(7,154
)


(1,631
)Excess tax benefit from equity awards


(78
)


(1,951
)


(5,048
)Changes in operating assets and liabilities:Accounts receivable


(4,277
)


(1,075
)


(3,642
)Prepaid expenses and other current assets


(744
)


(1,532
)


1,621Other assets


(25
)


(145
)


(93
)Accounts payable


(416
)


(405
)


616Accrued compensation


1,020



(712
)


75Accrued expenses


599



1,422



4,814Deferred revenue


8,304



8,836



4,624Other liabilities


4



(18
)


23Net cash provided by operating activities


16,032



20,224



16,079Cash flows from investing activitiesPurchases of property and equipment


(1,046
)


(1,742
)


(1,445
)Software development costs


(322
)


(74
)


(156
)Proceeds from disposal of assets


34







Purchases of
    available-for-sale
    securities


(14,237
)


(46,008
)


(32,332
)Sales of
    available-for-sale
    securities


625



800



Maturities of
    available-for-sale
    securities


6,043



34,437



35,183Net cash provided by (used in) investing activities


(8,903
)


(12,587
)


1,250Cash flows from financing activitiesProceeds from public offerings, net of offering costs


21,657







Repurchases of common stock






(7,500
)


(4,131
)Proceeds from exercises of stock options and warrants


1,598



7,226



2,403Excess tax benefit from equity awards


78



1,951



5,048Payments on notes payable and capital lease obligations


(427
)


(360
)


(218
)Net cash provided by financing activities


22,906



1,317



3,102Effect of exchange rate changes on cash and cash equivalents






(66
)


(43
)Net increase in cash and cash equivalents


30,035



8,888



20,388Cash and cash equivalents at beginning of year


26,506



56,541



65,429Cash and cash equivalents at end of year

$
56,541


$
65,429


$
85,817Supplemental disclosure of cash flow information:Cash paid for interest

$
44


$
29


$
31Cash paid for income taxes

$
20


$
621


$
101Supplemental disclosure of non-cash investing and financing
    activities:Assets acquired under capital leases and other financing
    arrangements

$



$
514


$
90Forfeiture of common stock redemption right

$
34


$



$
    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
  available-for-sale
 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)
  Goodwill
    Foreign
    Currency and Operations
    Comprehensive
    Income (Loss)
  available-for-sale
  Year EndedDecember 31,2008


2009Foreign currency translation adjustment


524



299Unrealized net gain on
    available-for-sale
    securities, net of tax


40



6Accumulated other comprehensive income

$
564


$
305   Revenue
    Recognition
     F-9




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
      Deferred
    Revenue
  12-month
  Sales
    Commissions
    Advertising
    Costs
    Stock-Based
    Compensation
    Concentrations
    of Credit Risk
       F-10




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Income
    Taxes
      Earnings
    Per Share
    Year Ended December 31,2007


2008


2009Net income (loss)

$
999


$
6,928


$
(2,024
)Weighted average shares outstanding, basic


17,147,889



17,997,123



18,077,616Dilutive effect of:Options to purchase common stock


1,046,643



961,377



Warrants to purchase common stock


72,488







Nonvested shares of restricted stock










Weighted average shares outstanding, diluted


18,267,020



18,958,500



18,077,616Net income (loss) per share:Basic

$
0.06


$
0.38


$
(0.11
)Diluted

$
0.05


$
0.37


$
(0.11
)    F-11




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Segment
    Data
    Recent
    Accounting Pronouncements
    3.
    Cash
    Equivalents and Investments    Unrealized


Fair MarketCost


Gains


Losses


ValueCash equivalents:Money market funds

$
4,056


$



$



$
4,056Commercial paper


33,345











33,345Government-sponsored agency debt securities


1,504











1,504Certificates of deposit


4,798











4,798Short-term investments:Government-sponsored agency debt securities


17,944



76



(10
)


18,010Certificates of deposit


2,299



1



(1
)


2,299Corporate notes and bonds


1,450







(1
)


1,449Total

$
65,396


$
77


$
(12
)

$
65,461  F-12




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    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     4.
    Fair
    Value Measurements    Total


Level 1


Level 2


Level 3Cash equivalents

$
47,089


$
9,945


$
37,144


$
Short-term investments


17,851



11,352



6,499



Long-term investments


1,001



1,001







Total

$
65,941


$
22,298


$
43,643


$
    F-13




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
   5.
    Property,
    Equipment and Software    December 31,2008


2009Purchased software, computer and office equipment

$
4,440


$
5,474Office furniture


965



1,117Leasehold improvements


1,117



1,317Equipment under capital lease obligations


534



603Capitalized software development costs


865



1,025Information database costs


2,565



2,56510,486



12,101Less accumulated depreciation and amortization


(5,871
)


(7,435
)Property, equipment and software, net

$
4,615


$
4,666     6.
    Intangible
    Assets    Weighted-Average


GrossAmortization


Carrying





Net CarryingPeriod


Amount


Amortization


AmountCustomer relationships


5.0


$
3,041


$
(1,747
)

$
1,294Trade name


7.0



3,946



(1,356
)


2,590Agreements
    not-to-compete


5.0



3,913



(1,891
)


2,022Total





$
10,900


$
(4,994
)

$
5,906     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     2010

$
1,8212011


1,2602012


5642013


335$
3,980  F-14




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
   7.
    Debt  Term
    Loans and Equipment Line of Credit
    8.
    Stockholders
    Equity  Public
    Offerings of Common Stock
    Common
    Stock Repurchases
    9.
    Stock-Based
    Compensation  10-year
 F-15




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Year Ended December 31,2007


2008


2009Cost of revenues

$
581


$
1,262


$
1,453Sales and marketing


1,498



3,212



3,753Research and development


548



769



989General and administration


3,025



5,929



6,697Total

$
5,652


$
11,172


$
12,892   Stock
    Option Awards
    Year Ended December 31,2007


2008


2009Stock price volatility


52
%


54
%


62
%Expected term (years)


6.2



6.1



6.2Risk-free interest rate


4.8
%


3.0
%


2.5
%Dividend yield


0
%


0
%


0
%     Weighted-


Weighted-


Aggregate IntrinsicAverage


Average


Value as ofNumber of


Range of


Exercise Price


Contractual


December 31,Options


Exercise Prices


per Share


Term


2009(In thousands)Balance outstanding at January 1, 2009


2,567,074


$
0.30 - $35.98


$
14.05Granted


62,689



16.64 - 19.78



17.23Exercised


(264,133
)


0.30 - 18.65



9.10Forfeited or cancelled


(230,651
)


0.30 - 34.53



17.84Balance outstanding at December 31, 2009


2,134,979


$
0.30 - 35.98


$
14.35



6.6


$
9,404Vested and expected to vest at December 31, 2009


2,053,774


$
0.30 - $35.98


$
14.17



6.6


$
9,362Balance exercisable at December 31, 2009


1,441,223


$
0.30 - $35.98


$
12.24



6.3


$
8,972      F-16




---



##### 



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


Options ExercisableWeighted-


Weighted-





Weighted-Average


Average





AverageRange of

Outstanding


Remaining


Exercise


Exercisable


ExerciseExercise

as of


Contractual


Price per


as of


Price perPrices

12/31/09


Term


Share


12/31/09


Share$ 0.30 - $ 3.59


9,710



2.3


$
2.09



9,710


$
2.09$ 3.60 - $ 7.19


102,303



5.0



4.77



102,303



4.77$ 7.20 - $10.78


786,241



5.9



9.00



786,241



9.00$10.79 - $14.38


141,250



6.5



13.10



71,250



13.11$14.39 - $17.99


84,689



8.3



16.49



20,750



16.09$18.00 - $21.58


922,496



7.1



18.80



415,957



18.78$21.59 - $35.98


88,290



7.8



27.92



35,012



27.832,134,979



6.6


$
14.35



1,441,223


$
12.24   Restricted
    Stock Awards
      Number of Shares


Weighted-AverageUnderlying Stock


Grant Date FairAwards


ValueBalance nonvested at January 1, 2009


676,450


$
29.46Awarded


867,433



16.73Vested


(209,586
)


28.27Forfeited


(104,939
)


26.36Balance nonvested at December 31, 2009


1,229,358


$
20.94     10.
    Employee
    Benefit Plans   F-17




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
   11.
    Income
    Taxes    2007


2008


2009Current expense

$
220


$
2,035


$
4,677Deferred expense (benefit)


454



(7,154
)


(1,823
)Provision (benefit) for income taxes

$
674


$
(5,119
)

$
2,854     2007


2008


2009Statutory federal tax rate


35
%


35
%


35
%State income taxes


7



9



29Effect of foreign losses


8



13



24Non-deductible compensation


11



30



145Other non-deductible expenses


4



4



14Changes in valuation allowance


(25
)


(374
)


9740
%


(283
)%


344
%      F-18




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
    December 31,2008


2009Deferred tax assets:NOL carryforwards

$
1,921


$
2,728Allowance for doubtful accounts


96



66Deferred revenue


105



226Accrued expenses


165



239Depreciation


258



303Intangible asset amortization


3,088



3,339Stock-based compensation


4,478



5,572Other


189



633Total deferred tax assets


10,300



13,106Valuation allowance


(1,921
)


(2,728
)Net deferred tax assets


8,379



10,378Deferred tax liabilities:Capitalized software development


(810
)


(743
)Goodwill


(1,054
)


(1,487
)Other


(24
)


(4
)Total deferred tax liabilities


(1,888
)


(2,234
)Net deferred tax asset

$
6,491


$
8,144       12.
    Commitments
    and Contingencies  Leases
   F-19




---



##### 



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


CapitalLeases


Leases2010

$
1,485


$
2212011


670



362012


431



132013


443



42014


432



2015 and thereafter


906



Total future minimum payments

$
4,367



274Less amount representing interest






(29
)Less current portion






(197
)Long-term capital lease obligations





$
48   Purchase
    Commitments
    Letter
    of Credit
    Litigation
    and Claims
   F-20




---



##### 



Vocus,
    Inc. and Subsidiaries
  Notes to
    Consolidated Financial
    Statements  (Continued)
   13.
    Quarterly
    Financial Information (Unaudited)  March 31,


June 30,


September 30,


December 31,


March 31,


June 30,


September 30,


December 31,2008


2008(1)


2008


2008


2009


2009


2009


2009(2)Summary consolidated statement of operations data:Revenues

$
17,867


$
19,085


$
19,953


$
20,615


$
20,411


$
21,079


$
21,042


$
22,047Gross profit


14,435



15,458



16,252



16,700



16,504



17,232



17,181



18,201Net income (loss)


(403
)


5,664



218



1,449



(478
)


(343
)


(382
)


(821
)Net income (loss) per share:Basic

$
(0.02
)

$
0.32


$
0.01


$
0.08


$
(0.03
)

$
(0.02
)

$
(0.02
)

$
(0.05
)Diluted

$
(0.02
)

$
0.30


$
0.01


$
0.08


$
(0.03
)

$
(0.02
)

$
(0.02
)

$
(0.05
)Weighted average shares outstanding used in computing per share
    amounts:Basic


17,682,504



17,868,247



18,193,456



18,239,463



18,026,397



18,051,243



18,092,595



18,138,830Diluted


17,682,504



18,957,313



19,349,935



18,523,210



18,026,397



18,051,243



18,092,595



18,138,830     (1)
    
    During the three months ended
    June 30, 2008, the Company reversed the valuation allowance
    against its U.S. deferred tax assets in the amount of
    $8.0 million.(2)
    
    See Note 11 for discussion of
    certain items impacting the provision for income taxes. F-21




---



##### 



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








Balance atBeginning of


Charged to





End ofPeriod


Expense


Deductions(1)


PeriodAllowance for doubtful accounts:Year ended December 31, 2007

$
280


$
75


$
(104
)

$
251Year ended December 31, 2008


251



224



(181
)


294Year ended December 31, 2009


294



265



(347
)


212Deferred tax valuation allowance:Year ended December 31, 2007

$
10,021


$
(977
)

$



$
9,044Year ended December 31, 2008


9,044



(7,123
)






1,921Year ended December 31, 2009


1,921



807







2,728     (1)
    
    Includes actual write-off of accounts written-off, net of
    recoveries. II-1




---



##### 



Index to
    Exhibits
  ExhibitNumbers

Exhibits3
.1(6)

Fifth Amended and Restated Certificate of Incorporation.3
.2(6)

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(5)

Form of Indemnification Agreement entered into by the Registrant
    and each of its executive officers and directors.10
.8(2)

License Agreement between the Registrant and PR Newswire
    Association LLC, dated August 1, 2003, as amended.10
.9(10)

Amended and Restated Agreement between the Registrant and PR
    Newswire Association, Inc., dated August 1, 2006.10
.10(3)

OEM License Agreement between the Registrant and Moreover
    Technologies, Inc., dated March 1, 2006, as amended.10
.11(7)

Form of Employment Agreement for Richard Rudman and Stephen
    Vintz, and schedule of details omitted therefrom.10
.12(7)

Form of Employment Agreement for Norman Weissberg, and schedule
    of details omitted therefrom.10
.13(8)

Employment Agreement for William Wagner dated July 17, 2006.10
.14(8)

Indemnification Agreement for William Wagner dated July 17,
    2006.10
.15(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
.16(11)

Form of Restricted Stock Agreement for executive officers under
    Registrants 2005 Stock Award Plan.10
.17(11)

Form of Restricted Stock Agreement for non-employee directors
    under Registrants 2005 Stock Award Plan.10
.18(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(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. II-2




---



##### 



(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 Registrants
    Quarterly Report on
    Form 10-Q
    filed with the Securities and Exchange Commission on
    May 12, 2008. II-3