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, 2008ORo

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(b) of the
    Act:
  Common Stock, par value $.01 per share
 (Title of Class)
  Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large accelerated filer
    o

Accelerated filer
    þ

Non-accelerated filer

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


25Item 2.


Properties


25Item 3.


Legal Proceedings


26Item 4.


Submissions of Matters to a Vote of Security
    Holders


26PART IIItem 5.


Market for Registrants 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




---



##### 



CAUTIONARY
    NOTES REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K forward-looking
  
    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
  web-based
        Our
    Company
    Industry
    Background
  Public
    Relations
     3




---



##### 



Public
    Relations and the On-Demand Software Market
   4




---



##### 



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, 5




---



##### 



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 solution provides shared,
    real-time access to a central repository of information related
    to media contacts, relationship history, PR activities, news,
    documents 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 the solution 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 distribution channels to increase our
    international business, which accounted for approximately 10% of
    our 2008 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 6




---



##### 



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
    
      
    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 7




---



##### 



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.
    PRWeb Online Newswire.  Allows organizations to
    increase their online visibility by distributing their news
    directly to online news sites such as Google News and Yahoo!
    News and directly to the public through millions of daily RSS
    feeds and other social media tools. Optimizes press releases for
    search engines 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
    25,000 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 to
    meet the needs of mid-sized and large organizations and provides
    contact management, news management and expanded reporting
    capabilities.
    Enterprise Edition.  Provides increased
    flexibility and functionality typically required by 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. 8




---



##### 



Technology,
    Development and Operations
  Technology
        Development
    Site
    Operations
    back-up.
   9




---



##### 



Customer
    Support
  on-site, on-site
    Sales and
    Marketing
          Our
    Customers
    Competition
  on-demand
 10




---



##### 




    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; and
    custom-developed solutions; and
    press release distribution providers.              
    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; 11




---



##### 




    availability and quality of implementation, training and
    help-desk services; and
    competitive sales and marketing capabilities.  Intellectual
    Property and Proprietary Content
          Employees
    Executive
    Officers and Key Employees
    Name

Age

PositionRichard Rudman*


47


Chief Executive Officer, President and ChairmanStephen Vintz*


40


Chief Financial Officer, Treasurer and SecretaryWilliam Wagner*


42


Chief Marketing OfficerNorman Weissberg*


47


Senior Vice President, North American SalesDarren Stewart


40


Senior Vice President, Customer ServicesMark Heys


37


Chief Technology Officer     *
    
    Denotes an executive officer 12




---



##### 



Richard Rudman
  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   13




---



##### 



Risks
    Related to Our Business and Industry
  Current
    global market and economic conditions may adversely affect our
    business, financial condition and results of
    operations.
  sub-prime
  
    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
    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;
    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. 14




---



##### 



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.
    
    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.
   15




---



##### 



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.
    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.
   16




---



##### 



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.
    If we
    fail to develop our brands, our business may
    suffer.
      If our
    information database does not achieve and maintain market
    acceptance, 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.
   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.
    
    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.
   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.
        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.
   19




---



##### 




    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.    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




---



##### 



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.
      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; 21




---



##### 




    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.
      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.
   22




---



##### 



Because
    we conduct operations in foreign jurisdictions, which accounted
    for approximately 10% of our 2008 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.
    Our
    reported financial results may be adversely affected by changes
    in accounting principles generally accepted in the United
    States.
   23




---



##### 



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.
    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. 24




---



##### 



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
    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   25




---



##### 



Item 3.
    Legal
    Proceedings      Item 4.
    Submission
    of Matters to a Vote of Security Holders   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, 2007First Quarter

$
21.49


$
16.86Second Quarter


27.31



19.53Third Quarter


30.12



23.10Fourth Quarter


37.30



29.96Fiscal Year Ended December 31, 2008First Quarter

$
35.14


$
21.44Second Quarter


34.01



22.97Third Quarter


39.21



31.08Fourth Quarter


33.30



14.20     Dividends
   26




---



##### 



Uses of
    Proceeds From Registered Securities
  Form S-1 (No. 333-125834),
        Issuer
    Purchases of Equity Securities
    MaximumTotal Number


Dollar Value ofof Shares


Shares ThatTotal Number


Average


Purchased as


May Yet beof Shares


Price Paid


Part of Publicly


PurchasedPurchased(1)


per Share


Announced Plan


Under the PlanOctober 1  October 31














November 1  November 30


1,900


$
16.22



1,900


$
29,969,173December 1  December 31


403,060


$
18.53



403,060


$
22,500,142     (1)
    
    All shares were purchased though our publicly announced share
    repurchase program. On November 25, 2008, our Board of
    Directors authorized us to purchase up to
    $30,000,000 shares of our common stock. There is no
    expiration date specified for the program. 27




---



##### 



Performance
    Graph
    
  12/7/2005


12/31/2005


12/31/2006


12/31/2007


12/31/2008Vocus, Inc.

$
100.00


$
115.44


$
186.67


$
383.67


$
202.33Nasdaq Composite


100.00



97.93



107.25



117.77



70.03Nasdaq Computer and Data Processing Index


100.00



97.03



103.00



125.51



66.91  28




---



##### 



Item 6.
    Selected
    Financial Data    Year Ended December 31,2004(4)


2005


2006(5)


2007


2008(In thousands, except per share data)Consolidated Statement of Operations:Revenues

$
20,393


$
28,062


$
40,328


$
58,076


$
77,520Cost of revenues(1)(2)


4,368



6,537



8,293



10,922



14,675Accelerated amortization of prepaid royalty fees and contract
    termination costs






1,399











Gross profit


16,025



20,126



32,035



47,154



62,845Operating expenses:(2)(3)Sales and marketing


11,708



14,837



18,912



26,548



35,140Research and development


2,064



2,515



2,896



3,822



4,998General and administrative


3,942



6,051



9,626



14,743



20,356Amortization of intangible assets


976



1,605



1,705



2,862



2,651Total operating expenses


18,690



25,008



33,139



47,975



63,145Loss from operations


(2,665
)


(4,882
)


(1,104
)


(821
)


(300
)Other income (expense):Interest and other income


99



177



1,819



2,541



2,136Interest expense


(35
)


(359
)


(88
)


(47
)


(27
)Total other income (expense)


64



(182
)


1,731



2,494



2,109Income (loss) before provision (benefit) for income taxes


(2,601
)


(5,064
)


627



1,673



1,809Provision (benefit) for income taxes










185



674



(5,119
)Net income (loss)


(2,601
)


(5,064
)


442



999



6,928Accretion of preferred stock


(1,582
)


(1,900
)










Net income (loss) attributable to common stockholders

$
(4,183
)

$
(6,964
)

$
442


$
999


$
6,928Net income (loss) attributable to common stockholders per share,
    basic

$
(1.04
)

$
(1.43
)

$
0.03


$
0.06


$
0.38Net income (loss) attributable to common stockholders per share,
    diluted

$
(1.04
)

$
(1.43
)

$
0.03


$
0.05


$
0.37     (1)
    
    Cost of revenues includes amortization of intangible assets in
    the following amounts:  Year Ended December 31,2004

2005

2006

2007

2008Amortization of intangible assets

$
397


$
402


$
344


$
120


$
71  29




---



##### 



(2)
    
    Cost of revenues and operating expenses include stock-based
    compensation from equity awards pursuant to
    SFAS No. 123R, Share-Based Payment, in the
    following amounts:  Year Ended December 31,2004

2005

2006

2007

2008Cost of revenues

$



$



$
69


$
581


$
1,262Sales and marketing










530



1,498



3,212Research and development










219



548



769General and administrative










1,042



3,025



5,929Total

$



$



$
1,860


$
5,652


$
11,172   (3)
    
    Operating expenses include stock-based compensation related to
    purchases of our common stock in the following amounts:  Year Ended December 31,2004

2005

2006

2007

2008General and administrative

$



$
1,006


$



$



$
   (4)
    
    On November 8, 2004, we acquired Gnossos Software, Inc., a
    provider of software to manage corporate communications and
    government relations. The operating results of Gnossos have been
    included in our results of operations since the date of
    acquisition.(5)
    
    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 31,2004

2005

2006

2007

2008(In thousands)Balance Sheet Data:Cash and cash equivalents

$
7,554


$
40,027


$
26,506


$
56,541


$
65,429Working capital (deficit)


(5,442
)


24,915



8,521



42,013



58,427Total assets


19,618



55,836



74,770



114,243



139,979Total debt


3,001



1,407



762



335



373Total deferred revenue


16,052



20,696



26,631



34,964



42,854Redeemable stock


28,830



189



33







Stockholders equity (deficit)


(31,738
)


30,387



40,974



71,004



91,408  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
          Sources
    of Revenues
     31




---



##### 



Cost of
    Revenues and Operating Expenses
  Cost of Revenues.
    Sales and Marketing.
    Research and Development.
  General and Administrative.
  Amortization of Intangible Assets.
  Critical
    Accounting Policies
   32




---



##### 



Revenue Recognition. Revenue Recognition in Financial Statements Revenue
    Recognition.
    No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21),
    Sales Commissions.
  Stock-Based Compensation. Share-Based
    Payment
  Business Combinations.
 33




---



##### 



Goodwill and Long-Lived Assets.
      Income taxes.
     34




---



##### 



Results
    of Operations
    Year Ended December 31,2006


2007


2008Revenues


100
%


100
%


100
%Cost of revenues


21



19



19Gross profit


79



81



81Operating expenses:Sales and marketing


47



46



45Research and development


7



6



7General and administrative


24



25



26Amortization of intangible assets


4



5



3Total operating expenses


82



82



81Loss from operations


(3
)


(1
)


Other income, net


4



4



3Income before provision (benefit) for income taxes


1



3



3Provision (benefit) for income taxes






1



(6
)Net income


1
%


2
%


9
%     Year Ended December 31,2006


2007


2008Total deferred revenue (in thousands at year end)

$
26,631


$
34,964


$
42,854Net cash provided by operating activities (in thousands)

$
10,412


$
16,032


$
20,224Active subscription customers


1,727



2,427



3,379   Years
    Ended December 31, 2008 and 2007
  Revenues.
  Cost of Revenues.
 35




---



##### 



Sales and Marketing Expenses.
  Research and Development Expenses.
  General and Administrative Expenses.
  Amortization of Intangible
    Assets.
  Other Income (Expense).
  Provision (Benefit) for Income Taxes.
  Years
    Ended December 31, 2007 and 2006
  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 for Income Taxes.
  Liquidity
    and Capital Resources
    Operating Activities.
 37




---



##### 



Investing Activities.
  Financing Activities.
        Payments Due by periodLess than


1-3


3-5


More thanContractual Obligations

Total


1 Year


Years


Years


5 YearsOperating leases

$
2,494


$
1,074


$
1,226


$
194


$
Contractual commitments


2,234



1,866



368







Long-term debt under notes payable


32



32











Capital lease obligations


385



174



195



16



Total obligations

$
5,145


$
3,146


$
1,789


$
210


$
     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:
    
    Report of Independent Registered Public Accounting Firm;
    Consolidated balance sheets as of December 31, 2007 and
    2008;
    Consolidated statements of operations for the years ended
    December 31, 2006, 2007 and 2008;
    Consolidated statements of stockholders equity for the
    years ended December 31, 2006, 2007 and 2008;
    Consolidated statements of cash flows for the years ended
    December 31, 2006, 2007 and 2008; and
    Notes to consolidated financial statements.    
    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 13, 2009/s/  Stephen
    VintzStephen
    Vintz

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

March 13, 2009/s/  Kevin
    BurnsKevin
    Burns

Director

March 13, 2009/s/  Gary
    GoldingGary
    Golding

Director

March 13, 2009/s/  Gary
    GreenfieldGary
    Greenfield

Director

March 13, 2009/s/  Ronald
    KaiserRonald
    Kaiser

Director

March 13, 2009/s/  Robert
    LentzRobert
    Lentz

Director

March 13, 2009/s/  Richard
    MooreRichard
    Moore

Director

March 13, 2009  42




---



##### 



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


F-2Consolidated Balance Sheets as of
    December 31, 2007 and 2008


F-3Consolidated Statements of Operations for years
    ended December 31, 2006, 2007 and 2008


F-4Consolidated Statements of Stockholders
    Equity for years ended December 31, 2006, 2007 and 2008


F-5Consolidated Statements of Cash Flows for years
    ended December 31, 2006, 2007 and 2008


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 31,2007


2008(Dollars in thousands, except per share data)Current assets:Cash and cash equivalents

$
56,541


$
65,429Short-term investments


10,939



21,758Accounts receivable, net of allowance for doubtful accounts of
    $251 and $294 at December 31, 2007 and December 31,
    2008, respectively


14,354



14,739Current portion of deferred income taxes






394Prepaid expenses and other current assets


1,957



3,340Total current assets


83,791



105,660Property, equipment and software, net


4,236



4,615Intangible assets, net


8,628



5,906Goodwill


17,090



17,090Deferred income taxes, net of current portion






6,097Other assets


498



611Total assets

$
114,243


$
139,979Current liabilities:Accounts payable

$
1,043


$
497Accrued compensation


3,057



2,297Accrued expenses


3,112



2,479Current portion of notes payable and capital lease obligations


233



185Current portion of deferred revenue


34,333



41,775Total current liabilities


41,778



47,233Notes payable and capital lease obligations, net of current
    portion


102



188Deferred income taxes


639



Other liabilities


89



71Deferred revenue, net of current portion


631



1,079Total liabilities


43,239



48,571Commitments and contingenciesStockholders equity:Preferred stock, $0.01 par value, 10,000,000 shares
    authorized; no shares issued and outstanding at
    December 31, 2007 and December 31, 2008






Common stock, $0.01 par value, 90,000,000 shares
    authorized; 18,656,415 and 19,380,866 issued at
    December 31, 2007 and December 31, 2008, respectively;
    17,645,638 and 17,965,129 shares outstanding at
    December 31, 2007 and December 31, 2008, respectively


186



194Additional paid-in capital


109,553



129,897Treasury stock, 1,010,777 and 1,415,737 shares at
    December 31, 2007 and December 31, 2008, respectively
    at cost


(3,283
)


(10,783
)Accumulated other comprehensive income (loss)


(60
)


564Accumulated deficit


(35,392
)


(28,464
)Total stockholders equity


71,004



91,408Total liabilities and stockholders equity

$
114,243


$
139,979    F-3




---



##### 



Vocus,
    Inc. and Subsidiaries
 Consolidated
    Statements of Operations  Year Ended December 31,2006


2007


2008(Dollars in thousands, except per share data)Revenues

$
40,328


$
58,076


$
77,520Cost of revenues, including amortization expense of $344, $120,
    and $71 for the years ended December 31, 2006, 2007, and
    2008, respectively


8,293



10,922



14,675Gross profit


32,035



47,154



62,845Operating expenses:Sales and marketing


18,912



26,548



35,140Research and development


2,896



3,822



4,998General and administrative


9,626



14,743



20,356Amortization of intangible assets


1,705



2,862



2,651Total operating expenses


33,139



47,975



63,145Loss from operations


(1,104
)


(821
)


(300
)Other income (expense):Interest and other income


1,819



2,541



2,136Interest expense


(88
)


(47
)


(27
)Total other income (expense)


1,731



2,494



2,109Income before provision (benefit) for income taxes


627



1,673



1,809Provision (benefit) for income taxes


185



674



(5,119
)Net income

$
442


$
999


$
6,928Net income per share:Basic


0.03


$
0.06


$
0.38Diluted


0.03


$
0.05


$
0.37Weighted average shares outstanding used in computing per share
    amounts:Basic


15,367,851



17,147,889



17,997,123Diluted


16,339,254



18,267,020



18,958,500    F-4




---



##### 



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








Other





TotalCommon Stock


Paid-In


Treasury


Deferred


Comprehensive


Accumulated


StockholdersShares


Amount


Capital


Stock


Compensation


Income (Loss)


Deficit


Equity(Dollars in thousands)Balance at December 31, 2005


15,805,018


$
158


$
70,470


$
(3,283
)

$
(19
)

$
52


$
(36,991
)

$
30,387Cumulative effect of the adoption of SAB No. 108


























158



158Reclassification of deferred compensation upon adoption of
    SFAS No. 123R










(19
)






19











Initial public offering, costs










(48
)


















(48
)Issuance of common stock in connection with acquisition


494,543



5



7,200



















7,205Issuance of common stock to directors


5,343







56



















56Exercise of stock options


664,483



7



893



















900Accretion of redeemable common stock










(5
)


















(5
)Forfeiture of common stock redemption right


24,128







161



















161Stock-based compensation










1,818



















1,818Comprehensive income:Foreign currency translation






















(104
)






(104
)Net unrealized gain on available for sale securities, net of tax






















4







4Net income


























442



442Total comprehensive income






























342Balance 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



















1,598Income tax benefit from stock option exercises










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



















7,226Income tax benefit from stock option exercises










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
)

$
91,408    F-5




---



##### 



Vocus,
    Inc. and Subsidiaries
 Consolidated
    Statements of Cash Flows  Year Ended December 31,2006


2007


2008(Dollars in thousands)Cash flows from operating activitiesNet income

$
442


$
999


$
6,928Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization of property, equipment and software


1,171



1,480



1,821Amortization of intangible assets


2,049



2,982



2,722Loss (gain) on disposal of assets


7



(26
)


10Impairment of long-lived assets


28



24



68Stock-based compensation


1,874



5,657



11,172Provision for doubtful accounts


182



75



237Gain on extinguishment of debt


(128
)






Deferred income taxes


185



454



(7,154
)Income tax benefit from the exercise of stock options






(78
)


(1,951
)Changes in operating assets and liabilities:Accounts receivable


(4,250
)


(4,277
)


(1,075
)Prepaid expenses and other current assets


95



(744
)


(1,532
)Other assets


(58
)


(25
)


(145
)Accounts payable


1,180



(416
)


(405
)Accrued compensation


568



1,020



(712
)Accrued expenses


1,167



599



1,422Deferred revenue


5,900



8,304



8,836Other liabilities






4



(18
)Net cash provided by operating activities


10,412



16,032



20,224Cash flows from investing activitiesCash paid for acquisitions


(21,264
)






Purchases of property and equipment


(790
)


(1,046
)


(1,742
)Software development costs


(217
)


(322
)


(74
)Proceeds from disposal of assets






34



Purchases of short-term investments


(5,475
)


(14,237
)


(46,008
)Sales of short-term investments


2,401



625



800Maturities of short-term investments


1,121



6,043



34,437Net cash used in investing activities


(24,224
)


(8,903
)


(12,587
)Cash flows from financing activitiesProceeds from public offerings, net of offering costs


(48
)


21,657



Repurchase of common stock










(7,500
)Proceeds from exercise of stock options and warrants


900



1,598



7,226Proceeds from notes payable


235







Payments on notes payable and capital lease obligations


(825
)


(427
)


(360
)Income tax benefit from the exercise of stock options






78



1,951Net cash provided by financing activities


262



22,906



1,317Effect of exchange rate changes on cash and cash equivalents


29







(66
)Net increase (decrease) in cash and cash equivalents


(13,521
)


30,035



8,888Cash and cash equivalents at beginning of year


40,027



26,506



56,541Cash and cash equivalents at end of year

$
26,506


$
56,541


$
65,429Supplemental disclosure of cash flow information:Cash paid for interest

$
85


$
44


$
29Cash paid for income taxes

$



$
20


$
621Supplemental disclosure of non-cash investing and financing
    activities:Assets acquired under capital leases and other financing
    arrangements

$
45


$



$
514Forfeiture of common stock redemption right

$
161


$
34


$
Issuance of common stock in connection with acquisition

$
7,205


$



$
    F-6




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes 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
    Short-term
    Investments
    Allowance
    for Doubtful Accounts
    Software
    Development and Information Database Costs
   F-7




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes to
    Consolidated Financial
    Statements  (Continued)
    Property,
    Equipment and Software
    Business
    Combinations and Intangible Assets
  Business Combinations
    Long-Lived
    Assets
    Goodwill
   F-8




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes to
    Consolidated Financial
    Statements  (Continued)
  Fair
    Value of Financial Instruments
  Fair Value
    Measurements No. 157-2.
  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.     Foreign
    Currency and Operations
    Comprehensive
    Income (Loss)
    Revenue
    Recognition
     F-9




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes to
    Consolidated Financial
    Statements  (Continued)
  No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21),
    Deferred
    Revenue
  12-month
  Sales
    Commissions
    Advertising
    Costs
  The Company expenses advertising costs as
    incurred.
  Stock-Based
    Compensation
  Share-Based Payment Accounting for Stock Issued to Employees
  No. 96-18, Accounting for Equity Based Instruments
 F-10




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes to
    Consolidated Financial
    Statements  (Continued)
  That Are Issued to Other Than Employees for Acquiring, or in
    Conjunction with Selling, Goods or Services.
    Concentrations
    of Credit Risk
        Income
    Taxes
    Accounting for Uncertainty
    in Income Taxes
   F-11




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes to
    Consolidated Financial
    Statements  (Continued)
  Earnings
    Per Share
    2006


2007


2008Net income

$
442


$
999


$
6,928Weighted average shares outstanding, basic


15,367,851



17,147,889



17,997,123Dilutive effect of:Options to purchase common stock


757,600



1,046,643



961,377Warrants to purchase common stock


213,803



72,488



Weighted average shares outstanding, diluted


16,339,254



18,267,020



18,958,500Net income per share:Basic

$
0.03


$
0.06


$
0.38Diluted

$
0.03


$
0.05


$
0.37     Segment
    Data
    Adoption
    of SAB No. 108
  Considering the Effects of Prior
    Year Misstatements when Quantifying Misstatements in Current
    Year Financial Statements
  Recent
    Accounting Pronouncements
  The Fair Value Option for
    Financial Assets and Financial Liabilities
 F-12




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes to
    Consolidated Financial
    Statements  (Continued)
  Business Combinations
  3.
    Public
    Offerings of Common Stock    4.
    Acquisition      Cash

$
20,940Common stock


7,205Transaction costs


324Total purchase consideration

$
28,469     AmortizationPeriodTrade name


7 years


$
3,946Agreements not-to-compete


5 years



3,913Customer relationships


5 years



3,041Purchased technology


2 years



240Property and equipment


3 - 5 years



341Goodwill






17,090Assumed liabilities






(102
)Total purchase price





$
28,469    F-13




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes to
    Consolidated Financial
    Statements  (Continued)
  5.
    Cash
    Equivalents and Short-Term Investments    Unrealized


Fair MarketCost


Gains


Losses


ValueMoney market funds

$
4,816


$



$



$
4,816Commercial paper


22,891











22,891Government-sponsored agency debt securities


12,216



21



(5
)


12,232Certificates of deposit


4,250



1







4,251Corporate notes and bonds


500











500Total

$
44,673


$
22


$
(5
)

$
44,690     Unrealized


Fair MarketCost


Gains


Losses


ValueMoney market funds

$
4,056


$



$



$
4,056Commercial paper


33,345











33,345Government-sponsored agency debt securities


19,448



76



(10
)


19,514Certificates of deposit


7,097



1



(1
)


7,097Corporate notes and bonds


1,450







(1
)


1,449Total

$
65,396


$
77


$
(12
)

$
65,461       Total


Level 1


Level 2


Level 3Cash equivalents(1)

$
43,703


$
10,358


$
33,345


$
Short-term investments(2)


21,758



21,758







Total

$
65,461


$
32,116


$
33,345


$
     (1)
    
    Cash equivalents consist of money market funds and corporate
    debt securities with original maturity dates of three months or
    less.(2)
    
    Short-term investments consist of corporate and
    government-sponsored agency debt securities, with original
    maturity dates greater than three months. F-14




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes to
    Consolidated Financial
    Statements  (Continued)
   6.
    Property,
    Equipment and Software    December 31,2007


2008Purchased software, computer and office equipment

$
3,788


$
4,440Office furniture


743



965Leasehold improvements


896



1,117Equipment under capital lease obligations


155



534Capitalized software development costs


788



865Information database costs


2,327



2,5658,697



10,486Less accumulated depreciation and amortization


(4,461
)


(5,871
)Property, equipment and software, net

$
4,236


$
4,615     7.
    Intangible
    Assets    GrossUseful Life


Carrying





Net Carryingin Years


Amount


Amortization


AmountCustomer relationships


3 - 5


$
8,352


$
(5,753
)

$
2,599Trade name


7



3,946



(792
)


3,154Agreements not-to-compete


2 - 5



4,195



(1,391
)


2,804Purchased technology


2



1,667



(1,596
)


71Total





$
18,160


$
(9,532
)

$
8,628     GrossUseful Life


Carrying





Net Carryingin Years


Amount


Amortization


AmountCustomer relationships


3 - 5


$
8,352


$
(7,058
)

$
1,294Trade name


7



3,946



(1,356
)


2,590Agreements not-to-compete


2 - 5



4,195



(2,173
)


2,022Purchased technology


2



1,667



(1,667
)


Total





$
18,160


$
(12,254
)

$
5,906  F-15




---



##### 



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

$
1,9262010


1,8212011


1,2602012


5642013


335$
5,906   8.
    Debt  Term
    Loans and Equipment Line of Credit
    Note
    Payable
    9.
    Stockholders
    Equity  Common
    Stock Repurchases
    10.
    Stock-Based
    Compensation  10-year
 F-16




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes to
    Consolidated Financial
    Statements  (Continued)
    Year Ended December 31,2006


2007


2008Cost of revenues

$
69


$
581


$
1,262Sales and marketing


530



1,498



3,212Research and development


219



548



769General and administration


1,042



3,025



5,929Total

$
1,860


$
5,652


$
11,172   Stock
    Option Awards
      Year Ended December 31,2006

2007

2008Stock price volatility


53
%


52
%


54
%Expected term (years)


6.3



6.2



6.1Risk-free interest rate


5.0
%


4.8
%


3.0
%Dividend yield


0
%


0
%


0
%     Weighted-


Aggregate IntrinsicWeighted-


Average


Value as ofNumber of


Range of


Average


Contractual


December 31,Options


Exercise Prices


Exercise Price


Term


2008(In thousands)Outstanding at January 1, 2008


3,351,363


$
0.30 - 35.98


$
13.03Granted


89,286



20.38 - 29.42



28.03Exercised


(709,490
)


0.30 - 26.66



10.18Forfeited or cancelled


(164,085
)


3.99 - 29.42



17.53Outstanding at December 31, 2008


2,567,074


$
0.30 - 35.98


$
14.05



7.3


$
12,313Expected to vest at December 31, 2008


2,407,394


$
0.30 - 35.98


$
13.86



7.2


$
11,933Exercisable at December 31, 2008


1,040,503


$
0.30 - 35.98


$
10.61



6.6


$
8,117  F-17




---



##### 



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





Options ExercisableAverage


Weighted-





Weighted-Range of

Outstanding


Remaining


Average


Exercisable


AverageExercise

as of


Contractual


Exercise


as of


ExercisePrices

12/31/08


Term


Price


12/31/08


Price$ 0.30 - $ 3.59


15,774



2.7


$
1.60



15,774


$
1.60$ 3.60 - $ 7.19


186,029



6.0



4.78



104,871



4.74$ 7.20 - $10.78


939,660



6.6



9.00



686,410



9.00$10.79 - $14.38


156,250



7.5



13.10



16,250



13.15$14.39 - $17.99


44,500



7.5



15.97



17,000



15.97$18.00 - $21.58


1,124,946



7.9



18.77



189,698



18.78$21.59 - $35.98


99,915



8.7



28.35



10,500



28.162,567,074



7.3


$
14.05



1,040,503


$
10.61   Restricted
    Stock Awards
      Number of Shares


Weighted-AverageUnderlying Stock


Grant Date FairAwards


ValueNonvested at January 1, 2008





$
Awarded


695,201



29.46Vested


(14,751
)


29.11Forfeited


(4,000
)


29.42Nonvested at December 31, 2008


676,450


$
29.46  F-18




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes to
    Consolidated Financial
    Statements  (Continued)
    11.
    Employee
    Benefit Plans    12.
    Income
    Taxes    2006


2007


2008Current expense

$



$
220


$
2,035Deferred expense


185



454



(7,154
)Provision for income taxes

$
185


$
674


$
(5,119
)     2006


2007


2008Statutory federal tax rate


35
%


35
%


35
%State income taxes


11



7



9Effect of foreign losses


6



8



13Non-deductible stock-based compensation


24



11



30Other non-deductible expenses


6



4



4Changes in valuation allowance


(53
)


(25
)


(374
)29
%


40
%


(283
)%  F-19




---



##### 



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


2008Deferred tax assets:NOL carryforwards

$
4,035


$
1,921Allowance for doubtful accounts


96



96Deferred revenue


109



105Accrued expenses


200



165Depreciation


230



258Intangible asset amortization


2,576



3,088Stock-based compensation


2,382



4,478Other


172



189Total deferred tax assets


9,800



10,300Valuation allowance


(9,044
)


(1,921
)Net deferred tax assets


756



8,379Deferred tax liabilities:Capitalized software development


(756
)


(810
)Goodwill


(639
)


(1,054
)Other






(24
)Total deferred tax liabilities


(1,395
)


(1,888
)Net deferred tax asset (liability)

$
(639
)

$
6,491        F-20




---



##### 



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


CapitalLeases


Leases2009

$
1,074


$
1742010


838



1682011


388



272012


179



132013


15



3Total future minimum payments

$
2,494



385Less amount representing interest






(44
)Less current portion






(153
)Long-term capital lease obligations





$
188   Letter
    of Credit
    Litigation
    and Claims
   F-21




---



##### 



Vocus,
    Inc. and Subsidiaries
 Notes to
    Consolidated Financial
    Statements  (Continued)
  14.
    Quarterly
    Financial Information (Unaudited)  March 31,


June 30,


September 30,


December 31,


March 31,


June 30,


September 30,


December 31,2007


2007


2007


2007


2008


2008(1)


2008


2008Summary consolidated statement of operations data:Revenues

$
12,597


$
14,080


$
15,072


$
16,327


$
17,867


$
19,085


$
19,953


$
20,615Gross profit


10,117



11,275



12,372



13,390



14,435



15,458



16,252



16,700Net income (loss)


2



(3
)


475



525



(403
)


5,664



218



1,449Net income (loss) per share:Basic

$
0.00


$
(0.00
)

$
0.03


$
0.03


$
(0.02
)

$
0.32


$
0.01


$
0.08Diluted

$
0.00


$
(0.00
)

$
0.03


$
0.03


$
(0.02
)

$
0.30


$
0.01


$
0.08Weighted average shares outstanding used in computing per share
    amounts:Basic


16,016,478



17,364,691



17,563,147



17,625,002



17,682,504



17,868,247



18,193,456



18,239,463Diluted


16,598,471



17,364,691



18,629,400



19,184,725



17,682,504



18,957,313



19,349,935



18,523,210     (1)
    
    During the three months ended June 30, 2008, the Company
    reversed the valuation allowance against its U.S. deferred tax
    assets resulting in an income tax benefit of $4.9 million
    in the quarter. F-22




---



##### 



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, 2006

$
193


$
182


$
(95
)

$
280Year ended December 31, 2007


280



75



(104
)


251Year ended December 31, 2008


251



224



(181
)


294Deferred tax valuation allowance:Year ended December 31, 2006

$
11,937


$
(1,916
)

$



$
10,021Year ended December 31, 2007


10,021



(977
)






9,044Year ended December 31, 2008


9,044



(7,123
)






1,921     (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(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 William Donnelly and Norman
    Weissberg, and schedule of details omitted therefrom.10
.13(11)

Summary of board of directors compensation.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(11)

Employment Agreement for Andrew Muir, dated April 14, 200410
.18(11)

Form of Restricted Stock Agreement for executive officers under
    Registrants 2005 Stock Award Plan.10
.19(11)

Form of Restricted Stock Agreement for non-employee directors
    under Registrants 2005 Stock Award Plan.10
.20(12)

Separation Agreement and Release, dated February 8, 2008,
    between the Company and Robert Lentz.10
.21(12)

First Amendment to Separation Agreement and Release, dated April
    17, 2008, between the Company and Robert Lentz21
.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 Registrants
    Quarterly Report on
    Form 10-Q
    filed with the Securities and Exchange Commission on
    May 12, 2008. II-3