| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|---|-----------------------------------------------------------------------------------------|

|  ̈ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
|--------|------------------------------------------------------------------------------------------|

| Delaware                                                               |   | 11-3447894                                |
|------------------------------------------------------------------------|--------|-------------------------------------------|
| (State or Other Jurisdiction of                                        |   | (I.R.S. Employer                          |
| Incorporation or Organization)                                         |   | Identification No.)                       |
|                                                                   |   |                                      |
| 26 West 17th Street, 2nd Floor, New York, New York |   |    10011    |
| (Address of Principal Executive Offices)                               |   | (Zip Code)                                |

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

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|                           |                                                                                                                                     |   | Page   |
|--------------------------------|------------------------------------------------------------------------------------------------------------------------------------------|--------|--------|
| PART I - FINANCIAL INFORMATION |
|                           |                                                                                                                                     |   |   |
| Item 1.                        | Financial Statements                                                                                                                |   | 3      |
|                           | Consolidated Balance Sheets - As of March 31, 2011 (unaudited) and December 31, 2010                                                     |   | 3      |
|                           | Consolidated Statements of Operations and Comprehensive Loss - For the three months ended March 31, 2011 and 2010 (unaudited)  |   | 4      |
|                           | Consolidated Statements of Stockholders’ Equity - For the three months ended March 31, 2011 (unaudited)                       |   | 5      |
|                           | Consolidated Statements of Cash Flows - For the three months ended March 31, 2011 and 2010 (unaudited)                              |   | 6      |
|                           | Notes to Consolidated Financial Statements (unaudited)                                                                                   |   | 8      |
| Item 2.                        | Management’s Discussion and Analysis of Financial Condition and Results of Operations                                         |   | 22     |
| Item 3.                        | Quantitative and Qualitative Disclosures About Market Risk                                                                          |   | 25     |
| Item 4.                        | Controls and Procedures                                                                                                                  |   | 25     |
|                           |                                                                                                                                     |   |   |
| PART II - OTHER INFORMATION    |
|                           |                                                                                                                                     |   |   |
| Item 1.                        | Legal Proceedings                                                                                                                   |   | 26     |
| Item 1A.                       | Risk Factors                                                                                                                             |   | 26     |
| Item 2.                        | Unregistered Sales of Equity Securities and Use of Proceeds                                                                         |   | 26     |
| Item 3.                        | Defaults Upon Senior Securities                                                                                                     |   | 26     |
| Item 4.                        | Removed and Reserved                                                                                                                |   | 26     |
| Item 5.                        | Other Information                                                                                                                   |   | 26     |
| Item 6.                        | Exhibits                                                                                                                            |   | 26     |
|                           |                                                                                                                                     |   |   |
| SIGNATURES                     |                                                                                                                                     | 27     |

----

|                                                                                                                               |   | March 31, |     |   | December 31, |    |
|------------------------------------------------------------------------------------------------------------------------------------|--------|----------------|----------|--------|-------------------|---------|
|                                                                                                                               |   | 2011           |     |   | 2010 (A)          |    |
|                                                                                                                               |   | (Unaudited)    |     |   |              |    |
| Assets:                                                                                                                            |   |           |     |   |              |    |
| Current assets:                                                                                                                    |   |           |     |   |              |    |
| Cash and cash equivalents                                                                                                          |   | $              | 109,665  |   |              | $       | 141,233 |   |
| Restricted cash                                                                                                                    |   |           | 2,000    |   |              |    | 2,000 |   |
| Investment                                                                                                                         |   |           | 1,349    |   |              |    | 1,050 |   |
| Accounts receivable, net                                                                                                           |   |           | 34,037   |   |              |    | 29,349 |   |
| Unbilled revenue                                                                                                                   |   |           | 6,105    |   |              |    | 537 |   |
| Inventory, net                                                                                                                     |   |           | 423      |   |              |    | 301 |   |
| Loan receivable, current portion                                                                                                   |   |           | 2,938    |   |              |    | 2,486 |   |
| Other current assets                                                                                                               |   |           | 10,089   |   |              |    | 5,104 |   |
| Total current assets                                                                                                               |   |           | 166,606  |   |              |    | 182,060 |   |
|                                                                                                                               |   |           |     |   |              |    |   |   |
| Property and equipment, net                                                                                                        |   |           | 8,459    |   |              |    | 5,987 |   |
| Loan receivable, net of current                                                                                                    |   |           | 7,684    |   |              |    | 8,361 |   |
| Intangible assets                                                                                                                  |   |           | 18,691   |   |              |    | 13,248 |   |
| Goodwill                                                                                                                           |   |           | 151,075  |   |              |    | 89,004 |   |
| Total assets                                                                                                                       |   | $              | 352,515  |   |              | $       | 298,660 |   |
|                                                                                                                               |   |           |     |   |              |    |   |   |
| Liabilities and Stockholders' Equity:                                                                                              |   |           |     |   |              |    |   |   |
| Current liabilities:                                                                                                               |   |           |     |   |              |    |   |   |
| Capital lease and other obligations, current portion                                                                               |   | $              | 438      |   |              |  $ | 608 |   |
| Secured notes payable, net of debt discount, current portion                                                                       |   |           | 1,983    |   |              |    | 1,709 |   |
| Accounts payable                                                                                                                   |   |           | 15,588   |   |              |    | 12,740 |   |
| Accrued expenses                                                                                                                   |   |           | 11,058   |   |              |    | 6,411 |   |
| Deferred revenue                                                                                                                   |   |           | 4,163    |   |              |    | 4,223 |   |
| Income tax payable                                                                                                                 |   |           | 271      |   |              |    | 858 |   |
| Deferred tax liability                                                                                                             |   |           | 682      |   |              |    | 682 |   |
| Acquisition liabilities, current portion                                                                                           |   |           | 7,613    |   |              |    | 2,115 |   |
| Derivative liability                                                                                                               |   |           | 3,487    |   |              |    | 6,096 |   |
| Other current liabilities                                                                                                          |   |           | 5,898    |   |              |    | 2,887 |   |
| Total current liabilities                                                                                                          |   |           | 51,181   |   |              |    | 38,329 |   |
|                                                                                                                               |   |           |     |   |              |    |   |   |
| Capital lease and other obligations, net of current                                                                                |   |           | 176      |   |              |    | 175 |   |
| Secured notes payable, net of current                                                                                              |   |           | 3,606    |   |              |    | 4,127 |   |
| Acquisition liabilities, net of current                                                                                            |   |           | 13,285   |   |              |    | 10,405 |   |
| Total liabilities                                                                                                                  |   |           | 68,248   |   |              |    | 53,036 |   |
|                                                                                                                               |   |           |     |   |              |    |   |   |
| Stockholders' Equity:                                                                                                              |   |           |     |   |              |    |   |   |
| Common stock, $0.0001 par value: authorized 80,000,000 shares; issued and outstanding 37,941,419 and 33,196,952, respectively |   |           | 4        |   |              |    | 3 |   |
| Additional paid-in capital                                                                                                         |   |           | 425,814  |   |              |    | 375,578 |   |
| Accumulated deficit                                                                                                                |   |           | (141,704 | )      |              |    | (129,203 | ) |
| Accumulated other comprehensive loss                                                                                               |   |           | 153      |   |              |    | (754 | ) |
| Total stockholders' equity                                                                                                         |   |           | 284,267  |   |              |    | 245,624 |   |
| Total liabilities and stockholders' equity                                                                                         |   | $              | 352,515  |   |              | $       | 298,660 |   |

----

|                                                                                                                     |   | Three months ended March 31, |       |
|--------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------------------|------------|
|                                                                                                                     |   | 2011                                             |       |   | 2010 |   |
| Revenue                                                                                                                  |   | $                                                | 34,450     |   |   | $ | 17,364 |   |
|                                                                                                                     |   |                                             |       |   |   |   |   |   |
| Variable and direct third party costs:                                                                                   |   |                                             |       |   |   |   |   |   |
| Cost of goods and services                                                                                               |   |                                             | 10,747     |   |   |   | 4,352 |   |
| Hosting, delivery and reporting                                                                                          |   |                                             | 1,086      |   |   |   | 1,074 |   |
| Content costs                                                                                                            |   |                                             | 276        |   |   |   | 235 |   |
| Direct third party creative production costs                                                                             |   |                                             | 365        |   |   |   | 890 |   |
| Total variable and direct third party costs                                                                              |   |                                             | 12,474     |   |   |   | 6,551 |   |
|                                                                                                                     |   |                                             |       |   |   |   |   |   |
| Gross profit                                                                                                             |   |                                             | 21,976     |   |   |   | 10,813 |   |
|                                                                                                                     |   |                                             |       |   |   |   |   |   |
| Selling, general and administrative expenses:                                                                            |   |                                             |       |   |   |   |   |   |
| Compensation, travel and associated costs (including non-cash stock-based compensation of $2,027 and $552, respectively) |   |                                             | 12,307     |   |   |   | 5,650 |   |
| Legal, accounting, audit and other professional service fees                                                             |   |                                             | 637        |   |   |   | 690 |   |
| Office, marketing and other corporate costs                                                                              |   |                                             | 3,991      |   |   |   | 2,064 |   |
| Merger and acquisition related expenses                                                                                  |   |                                             | 5,250      |   |   |   | 1,219 |   |
| Depreciation and amortization                                                                                            |   |                                             | 2,434      |   |   |   | 1,654 |   |
| Restructuring charges                                                                                                    |   |                                             | 3,318      |   |   |   | 3,693 |   |
| Integration expenses                                                                                                     |   |                                             | 8,688      |   |   |   | 2,921 |   |
| Total selling, general and administrative expenses                                                                       |   |                                             | 36,625     |   |   |   | 17,891 |   |
|                                                                                                                     |   |                                             |       |   |   |   |   |   |
| Loss from operations                                                                                                     |   |                                             | (14,649    | ) |   |   | (7,078 | ) |
|                                                                                                                     |   |                                             |       |   |   |   |   |   |
| Interest income                                                                                                          |   |                                             | 72         |   |   |   | 1 |   |
| Interest expense                                                                                                         |   |                                             | (270       | ) |   |   | (92 | ) |
| Amortization of deferred financing costs and debt discount                                                               |   |                                             | (19        | ) |   |   | - |   |
| Derivative income (expense)                                                                                              |   |                                             | 2,610      |   |   |   | (11,443 | ) |
| Other income (expense), net                                                                                              |   |                                             | (106       | ) |   |   | 184 |   |
|                                                                                                                     |   |                                             |       |   |   |   |   |   |
| Net loss before income taxes                                                                                             |   |                                             | (12,362    | ) |   |   | (18,428 | ) |
| Income tax expense                                                                                                       |   |                                             | (139       | ) |   |   | (14 | ) |
|                                                                                                                     |   |                                             |       |   |   |   |   |   |
| Net loss available to common shareholders                                                                                |   | $                                                | (12,501    | ) |   | $ | (18,442 | ) |
|                                                                                                                     |   |                                             |       |   |   |   |   |   |
| Basic and diluted net loss per common share                                                                              |   | $                                                | (0.34      | ) |   | $ | (1.33 | ) |
| Basic and diluted weighted average common shares outstanding                                                             |   |                                             | 36,573,031 |   |   |   | 13,878,912 |   |
|                                                                                                                     |   |                                             |       |   |   |   |   |   |
| Comprehensive loss:                                                                                                      |   |                                             |       |   |   |   |   |   |
| Net loss                                                                                                                 |   | $                                                | (12,501    | ) |   | $ | (18,442 | ) |
| Foreign currency translation                                                                                             |   |                                             | 858        |   |   |   | (432 | ) |
| Change in unrealized gain on investments, net                                                                            |   |                                             | 49         |   |   |   | 69 |   |
| Comprehensive loss                                                                                                       |   | $                                                | (11,594    | ) |   | $ | (18,805 | ) |

----

|                                                           |   | CommonStock |       |   | CommonStockPar Value |   |    | AdditionalPaid-inCapital |   |
|----------------------------------------------------------------|--------|-------------|------------|--------|---------------------------|--------|---------|--------------------------|--------|
|                                                           |   |        |       |   |                      |   |    |                     |   |
| Balance – December 31, 2010                              |   |        | 33,196,952 |   |                      | $      | 3       |                     |   | $ | 375,578 |   |
| Issue of stock for exercise of stock options                   |   |        | 52,354     |   |                      |   | — |                     |   |   | 390 |   |
| Issue of stock for exercise of warrants                        |   |        | 57,251     |   |                      |   | — |                     |   |   | — |   |
| Issue of stock for acquisitions                                |   |        | 4,634,862  |   |                      |   | 1       |                     |   |   | 47,407 |   |
| Issue of warrants for services                                 |   |        | —    |   |                      |   | — |                     |   |   | 412 |   |
| Stock-based compensation                                       |   |        | —    |   |                      |   | — |                     |   |   | 2,027 |   |
| Foreign currency translation adjustment                        |   |        | —    |   |                      |   | — |                     |   |   | — |   |
| Fair market value adjustment for available for sale securities |   |        | —    |   |                      |   | — |                     |   |   | — |   |
| Net loss                                                       |   |        | —    |   |                      |   | — |                     |   |   | — |   |
|                                                           |   |        |       |   |                      |   |    |                     |   |   |   |   |
| Balance – March 31, 2011                                 |   |        | 37,941,419 |   |                      | $      | 4       |                     |   | $ | 425,814 |   |

|                                                           |   | Accumulated(Deficit) |     |   | AccumulatedOtherComprehensiveIncome(Loss) |   |    | TotalShareholders’Equity |   |
|----------------------------------------------------------------|--------|----------------------|----------|--------|-------------------------------------------|--------|---------|--------------------------------|--------|
|                                                           |   |                 |     |   |                                      |   |    |                           |   |
| Balance – December 31, 2010                              |   | $                    | (129,203 | )      |                                      | $      | (754    | )                              |   | $ | 245,624 |   |
| Issue of stock for exercise of stock options                   |   |                 | —  |   |                                      |   | — |                           |   |   | 390 |   |
| Issue of stock for exercise of warrants                        |   |                 | —  |   |                                      |   | — |                           |   |   | — |   |
| Issue of stock for acquisitions                                |   |                 | —  |   |                                      |   | — |                           |   |   | 47,408 |   |
| Issue of warrants for services                                 |   |                 | —  |   |                                      |   | — |                           |   |   | 412 |   |
| Stock-based compensation                                       |   |                 | —  |   |                                      |   | — |                           |   |   | 2,027 |   |
| Foreign currency translation adjustment                        |   |                 |     |   |                                      |   | 858     |                           |   |   | 858 |   |
| Fair market value adjustment for available for sale securities |   |                 | —  |   |                                      |   | 49      |                           |   |   | 49 |   |
| Net loss                                                       |   |                 | (12,501  | )      |                                      |   | — |                           |   |   | (12,501 | ) |
|                                                           |   |                 |     |   |                                      |   |    |                           |   |   |   |   |
| Balance – March 31, 2011                                 |   | $                    | (141,704 | )      |                                      | $      | 153     |                           |   | $ | 284,267 |   |

----

|                                                                        |   | Three months ended March 31, |    |
|-----------------------------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                                        |   | 2011                                             |    |   | 2010 |   |
| Operating Activities:                                                       |   |                                             |    |   |   |   |
| Net loss                                                                    |   | $                                                | (12,501 | ) |   | $ | (18,442 | ) |
| Adjustments to reconcile net loss to net cash used by operating activities: |   |                                             |    |   |   |   |   |   |
| Provision for doubtful accounts                                             |   |                                             | 1,005   |   |   |   | 84 |   |
| Depreciation                                                                |   |                                             | 985     |   |   |   | 927 |   |
| Amortization of intangible assets                                           |   |                                             | 1,448   |   |   |   | 727 |   |
| Less: merger and acquisition expenses                                       |   |                                             | 1,535   |   |   |   | 460 |   |
| Amortization of debt discount                                               |   |                                             | 17      |   |   |   | - |   |
| Derivative (income) expense                                                 |   |                                             | (2,610  | ) |   |   | 11,443 |   |
| Non-cash stock based compensation                                           |   |                                             | 2,027   |   |   |   | 552 |   |
| Non-cash warrants for services                                              |   |                                             | 412     |   |   |   | 451 |   |
| Non-cash stock for services                                                 |   |                                             | -       |   |   |   | 235 |   |
| Changes in assets and liabilities:                                          |   |                                             |    |   |   |   |   |   |
| Accounts receivable                                                         |   |                                             | (437    | ) |   |   | (6,828 | ) |
| Unbilled revenue                                                            |   |                                             | (5,496  | ) |   |   | 553 |   |
| Inventories                                                                 |   |                                             | (122    | ) |   |   | 49 |   |
| Other assets                                                                |   |                                             | (2,632  | ) |   |   | (181 | ) |
| Accounts payable                                                            |   |                                             | 521     |   |   |   | 4,439 |   |
| Accrued expenses                                                            |   |                                             | 4,255   |   |   |   | 1,030 |   |
| Income tax payable                                                          |   |                                             | (591    | ) |   |   | (11 | ) |
| Deferred revenue                                                            |   |                                             | 1,034   |   |   |   | (163 | ) |
| Other liabilities                                                           |   |                                             | 2,085   |   |   |   | (804 | ) |
| Total adjustments                                                           |   |                                             | 3,436   |   |   |   | 12,963 |   |
|                                                                        |   |                                             |    |   |   |   |   |   |
| Net cash used by operating activities – forward                       |   |                                             | (9,065  | ) |   |   | (5,479 | ) |
|                                                                        |   |                                             |    |   |   |   |   |   |
| Investing Activities:                                                       |   |                                             |    |   |   |   |   |   |
| Cash paid into investment                                                   |   |                                             | (250    | ) |   |   | (700 | ) |
| Cash paid in acquisitions                                                   |   |                                             | (21,512 | ) |   |   | (4,746 | ) |
| Cash received in acquisitions                                               |   |                                             | 865     |   |   |   | 396 |   |
| Receipt of payment on notes receivable                                      |   |                                             | 224     |   |   |   | - |   |
| Merger and acquisition expenses                                             |   |                                             | (1,535  | ) |   |   | (460 | ) |
| Purchase of equipment                                                       |   |                                             | (1,170  | ) |   |   | (310 | ) |
|                                                                        |   |                                             |    |   |   |   |   |   |
| Net cash used by investing activities - forward                             |   | $                                                | (23,378 | ) |   | $ | (5,820 | ) |

----

|                                                    |   | Three months ended March 31, |    |
|---------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                    |   | 2011                                             |    |   | 2010 |   |
|                                                    |   |                                             |    |   |   |   |
| Net cash used by operating activities – forwarded |   | $                                                | (9,065  | ) |   | $ | (5,479 | ) |
|                                                    |   |                                             |    |   |   |   |   |   |
| Net cash used by investing activities – forwarded |   |                                             | (23,378 | ) |   |   | (5,820 | ) |
|                                                    |   |                                             |    |   |   |   |   |   |
| Financing Activities:                                   |   |                                             |    |   |   |   |   |   |
| Proceeds from public offering, net                      |   |                                             | -       |   |   |   | 48,487 |   |
| Proceeds from exercise of stock options                 |   |                                             | 389     |   |   |   | 41 |   |
| Proceeds from exercise of warrants                      |   |                                             | -       |   |   |   | 1,448 |   |
| Payments for warrant buybacks                           |   |                                             | -       |   |   |   | (1,158 | )  |
| Bank overdraft and other obligations                    |   |                                             | -       |   |   |   | (386 | ) |
| Payments of secured notes                               |   |                                             | (264    | ) |   |   | (1,020 | ) |
| Repayments of notes payable                             |   |                                             | -       |   |   |   | (4,500 | )  |
| Payments on capital leases                              |   |                                             | (184    | ) |   |   | (261 | ) |
|                                                    |   |                                             |    |   |   |   |   |   |
| Net cash (used) provided by financing activities        |   |                                             | (59     | ) |   |   | 42,651 |   |
|                                                    |   |                                             |    |   |   |   |   |   |
| Effect of exchange rate changes on cash                 |   |                                             | 934     |   |   |   | (320 | ) |
|                                                    |   |                                             |    |   |   |   |   |   |
| Net (decrease) increase in cash and cash equivalents    |   |                                             | (31,568 | )  |   |   | 31,032 |   |
| Cash and cash equivalents - beginning of period         |   |                                             | 141,233 |   |   |   | 6,791 |   |
| Cash and cash equivalents - end of period               |   | $                                                | 109,665 |   |   | $ | 37,823 |   |
|                                                    |   |                                             |    |   |   |   |   |   |
| Supplemental disclosures of cash flow information:      |   |                                             |    |   |   |   |   |   |
| Cash paid during the period for:                        |   |                                             |    |   |   |   |   |   |
| Income taxes                                            |   | $                                                | 139     |   |   | $ | - |   |
| Interest                                                |   | $                                                | 270     |   |   | $ | 92 |   |
|                                                    |   |                                             |    |   |   |   |   |   |
| Non-cash investing and financing activities:            |   |                                             |    |   |   |   |   |   |
| Common stock issued in connection with acquisitions     |   | $                                                | 47,408  |   |   | $ | 13,120 |   |

----

----

----

|                            |   | Goodwill |    |
|---------------------------------|--------|----------|---------|
| Balance as of December 31, 2010 |   | $        | 89,004  |   |
| Acquisitions                    |   |     | 62,071  |   |
| Balance as of March 31, 2011    |   | $        | 151,075 |   |

|                                  |   | March 31, 2011                                |   |
|--------------------------------------------|--------|---------------------------------------------------------|--------|
|                                       |   | WeightedAverageRemainingAmortizationPeriod (Years) |   |   | GrossCarryingAmount |   |   | AccumulatedAmortization |   |   | Net CarryingAmount |   |
| Intangible assets with determinable lives: |   |                                                    |   |   |   |   |   |   |   |   |   |   |
| Software                                   |   | 4.3                                                     |   |   | $ | 10,320 |   |   | $ | (4,560 | ) |   | $ | 5,760 |   |
| Customer list                              |   | 5.25                                                    |   |   |   | 18,424 |   |   |   | (5,809 | ) |   |   | 12,615 |   |
| Trademarks                                 |   | 4.75                                                    |   |   |   | 133 |   |   |   | (52 | ) |   |   | 81 |   |
| Other                                      |   | 1.25                                                    |   |   |   | 376 |   |   |   | (141 | ) |   |   | 235 |   |
| Total                                      |   |                                                    |   |   | $ | 29,253 |   |   | $ | (10,562 | ) |   | $ | 18,691 |   |

----

|                                  |   | December 31, 2010                             |   |
|--------------------------------------------|--------|---------------------------------------------------------|--------|
|                                       |   | WeightedAverageRemainingAmortizationPeriod (Years) |   |   | GrossCarryingAmount |   |   | AccumulatedAmortization |   |   | Net CarryingAmount |   |
| Intangible assets with determinable lives: |   |                                                    |   |   |   |   |   |   |   |   |   |   |
| Software                                   |   | 3.25                                                    |   |   | $ | 6,747 |   |   | $ | (4,057 | ) |   | $ | 2,690 |   |
| Customer list                              |   | 5.5                                                     |   |   |   | 15,106 |   |   |   | (4,944 | ) |   |   | 10,162 |   |
| Trademarks                                 |   | 4.5                                                     |   |   |   | 133 |   |   |   | (35 | ) |   |   | 98 |   |
| Other                                      |   | 1.5                                                     |   |   |   | 376 |   |   |   | (78 | ) |   |   | 298 |   |
| Total                                      |   |                                                    |   |   | $ | 22,362 |   |   | $ | (9,114 | ) |   | $ | 13,248 |   |

|       |   | Software |   |   | CustomerList |   |   | Trademarks |   |   | Other  |   |   | Total  |   |
|------------|--------|----------|--------|--------|--------------|--------|--------|------------|--------|--------|--------|--------|--------|--------|--------|
|       |   |     |   |   |         |   |   |       |   |   |   |   |   |   |   |
| 2011       |   | $        | 1,124  |   |         | $      | 2,018  |       |   | $      | 12     |   |   | $      | 178    |   |   | $ | 3,332 |   |
| 2012       |   |     | 1,500  |   |         |   | 2,375  |       |   |   | 17     |   |   |   | 33     |   |   |   | 3,925 |   |
| 2013       |   |     | 1,298  |   |         |   | 2,256  |       |   |   | 17     |   |   |   | 24     |   |   |   | 3,595 |   |
| 2014       |   |     | 1,013  |   |         |   | 2,230  |       |   |   | 17     |   |   |   | -      |   |   |   | 3,260 |   |
| 2015       |   |     | 764    |   |         |   | 2,089  |       |   |   | 17     |   |   |   | -      |   |   |   | 2,870 |   |
| Thereafter |   |     | 61     |   |         |   | 1,647  |       |   |   | 1      |   |   |   | -      |   |   |   | 1,709 |   |
| Totals     |   | $        | 5,760  |   |         | $      | 12,615 |       |   | $      | 81     |   |   | $      | 235    |   |   | $ | 18,691 |   |

----

| Current assets                                          |   | $      | 2,356  |   |
|---------------------------------------------------------|--------|--------|--------|--------|
| Property and equipment                                  |   |   | 1,326  |   |
| Intangible assets – internally developed software |   |   | 500    |   |
| Intangible assets – customer list                 |   |   | 2,500  |   |
| Goodwill                                                |   |   | 28,906 |   |
| Total assets acquired                                   |   |   | 35,588 |   |
|                                                    |   |   |   |   |
| Current liabilities                                     |   |   | (2,753 | )      |
|                                                    |   |   |   |   |
| Net assets acquired                                     |   | $      | 32,835 |   |

| Current assets                               |   | $      | 464    |   |
|----------------------------------------------|--------|--------|--------|--------|
| Property and equipment                       |   |   | 71     |   |
| Intangible assets – developed software |   |   | 1,000  |   |
| Intangible assets – customer list      |   |   | 400    |   |
| Goodwill                                     |   |   | 5,137  |   |
| Total assets acquired                        |   |   | 7,072  |   |
|                                         |   |   |   |   |
| Current liabilities                          |   |   | (98    | )      |
|                                         |   |   |   |   |
| Net assets acquired                          |   | $      | 6,974  |   |

----

| Current assets                               |   | $      | 10,063 |   |
|----------------------------------------------|--------|--------|--------|--------|
| Property and equipment                       |   |   | 388    |   |
| Intangible assets – developed software |   |   | 500    |   |
| Intangible assets – customer list      |   |   | 2,001  |   |
| Goodwill                                     |   |   | 21,332 |   |
| Total assets acquired                        |   |   | 34,284 |   |
|                                         |   |   |   |   |
| Current liabilities                          |   |   | (6,367 | )      |
|                                         |   |   |   |   |
| Net assets acquired                          |   | $      | 27,917 |   |

| Current assets        |   | $      | 89     |   |
|-----------------------|--------|--------|--------|--------|
| Goodwill              |   |   | 6,595  |   |
| Total assets acquired |   |   | 6,684  |   |
|                  |   |   |   |   |
| Current liabilities   |   |   | (-     | )      |
|                  |   |   |   |   |
| Net assets acquired   |   | $      | 6,684  |   |

----

| Current assets                          |   | $      | 2,797  |    |
|-----------------------------------------|--------|--------|--------|---------|
| Property and equipment                  |   |   | 908    |    |
| Intangible assets – customer list |   |   | 3,000  |    |
| Intangible assets – noncompete    |   |   | 100    |    |
| Goodwill                                |   |   | 9,013  |    |
| Total assets acquired                   |   |   | 15,818 |    |
|                                    |   |   |   |    |
| Deferred tax liability                  |   |   | (654   | )  |
| Current liabilities and assumed debt    |   |   | (3,027 | )       |
|                                    |   |   |   |    |
| Net assets acquired                     |   | $      | 12,137 |    |

| Total revenue |   | $ | 31,127  |   |
|---------------|--------|---|---------|--------|
| Net loss      |   | $ | (23,845 | )      |

| Total revenue |   | $ | 36,949  |    |
|---------------|--------|---|---------|---------|
| Net loss      |   | $ | (13,334 | )  |

----

|                                     |   | March 31, 2011 |   |   | December 31, 2010 |   |
|------------------------------------------|--------|----------------|--------|--------|-------------------|--------|
| Acquisition liabilities, current portion |   |           |   |   |              |   |
| Benchmark                                |   | $              | 5,497  |   |              | $      | 2,115 |   |
| Kyte                                     |   |           | 1,000  |   |              |   | - |   |
| WWB                                      |   |           | 1,116  |   |              |   | - |   |
|                                     |   | $              | 7,613  |   |              | $      | 2,115 |   |
|                                     |   |           |   |   |              |   |   |   |
| Acquisition liabilities, net of current  |   |           |   |   |              |   |   |   |
| Benchmark                                |   | $              | 6,872  |   |              | $      | 7,382 |   |
| Brickbox                                 |   |           | 3,023  |   |              |   | 3,023 |   |
| WWB                                      |   |           | 3,390  |   |              |   | - |   |
|                                     |   | $              | 13,285 |   |              | $      | 10,405 |   |

----

|                                                 |   | March31, 2011 |   |    | December31, 2010 |   |   | Re-measurementdateJanuary 1, 2009 |   |
|------------------------------------------------------|--------|--------------------|--------|---------|-----------------------|--------|--------|---------------------------------------------|--------|
| Fair value of warrants with anti-dilution provisions |   | $                  | (3,487 | )       |                  | $      | (6,096 | )                                           |   | $ | (15,736 | ) |
|                                                 |   |               |   |    |                  |   |   |                                        |   |   |   |   |
| Significant assumptions (or ranges):                 |   |               |   |    |                  |   |   |                                        |   |   |   |   |
| Trading market values  (1)                 |   | $                  | 12.04  |    |                  | $      | 16.04  |                                        |   |   | 5.25 |   |
| Term (years)                                         |   |               | 2.11   |    |                  | 2.35   |   |                                        | $      | 4.35 to 5.00 |   |
| Volatility   (1)                      |   |               | 53.10  | %  |                  |   | 57.73  | %                                      |   |   | 101.98 | %  |
| Risk-free rate   (2)                  |   |               | 0.80   | %  |                  |   | 0.61   | %                                      |   |   | 1.55 | % |
| Effective Exercise price  (3)              |   | $                  | 7.00   |    |                  | $      | 7.00   |                                        |   | $ | 5.92 |   |

|   | (1) | Level 1 inputs are quoted prices in active markets for identical assets and liabilities, or derived there from. Our trading market values and the volatilities that are calculated thereupon are level 1 inputs. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Level 2 inputs are inputs other than quoted prices that are observable. We use the current published yields for zero-coupon US Treasury Securities, with terms nearest the remaining term of the warrants for our risk free rate. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Level 3 inputs are unobservable inputs. Inputs for which any parts are level 3 inputs are classified as level 3 in their entirety. The remaining term used equals the remaining contractual term as our best estimate of the expected term and the effective exercise price which is based on the stated exercise price adjusted for anti-dilution provisions. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

----

|                     |   | ThreeMonths EndedMarch 31,2011 |   |   | ThreeMonths EndedMarch 31,2010 |   |
|--------------------------|--------|------------------------------------------|--------|--------|------------------------------------------|--------|
| Expected life (in years) |   |                                     | 4.00   |   |                                     |   | 5.00 |   |
| Risk-free interest rate  |   |                                     | 1.64   | %      |                                     |   | 2.35 | % |
| Volatility               |   |                                     | 78.11  | %      |                                     |   | 31.50 | % |
| Dividend yield           |   |                                     | 0      | %      |                                     |   | 0 | % |

|                               |   | Shares |      |   | WeightedAverageExercisePrice |   |   | WeightedAverageRemainingContractualLife (Years) |   |   | IntrinsicValue |   |
|------------------------------------|--------|--------|-----------|--------|------------------------------|--------|--------|------------------------------------------------------|--------|--------|----------------|--------|
|                               |   |   |      |   |                         |   |   |                                                 |   |   |           |   |
| Outstanding at December 31, 2010   |   |   | 3,903,424 |   |                         |   | 10.54  |                                                 |   |   |           |   |   |   |
| Granted                            |   |   | 1,496,500 |   |                         |   | 13.63  |                                                 |   |   |           |   |   |   |
| Exercised                          |   |   | (52,354   | )      |                         |   | 7.43   |                                                 |   |   |           |   |   |   |
| Cancelled, expired, or forfeited   |   |   | (108,173  | )      |                         |   | 8.64   |                                                 |   |   |           |   |   |   |
| Outstanding at March 31, 2011 |   |   | 5,239,397 |   |                         |   | 10.00  |                                                 |   |   | 4.24           |   |   | $ | 10,713 |   |
| Exercisable at March 31, 2011 |   |   | 1,236,299 |   |                         |   | 8.22   |                                                 |   |   | 3.63           |   |   | $ | 4,717 |   |

----

|                            |   | EmployeeTerminationCosts |   |   | ContractSettlements |   |   | FacilityClosing Costs |   |   | Total  |   |
|---------------------------------|--------|--------------------------|--------|--------|---------------------|--------|--------|----------------------------|--------|--------|--------|--------|
| Balance as of December 31, 2010 |   | $                        | 1,212  |   |                | $      | 13     |                       |   | $      | 518    |   |   | $ | 1,743 |   |
|                            |   |                     |   |   |                |   |   |                       |   |   |   |   |   |   |   |   |
| Additions                       |   |                     | -      |   |                |   | -      |                       |   |   | -      |   |   |   | - |   |
| Reversal                        |   |                     | (654   | )      |                |   | -      |                       |   |   | -      |   |   |   | (654 | ) |
| Cash payments                   |   |                     | (558   | )      |                |   | (2     | )                          |   |   | (96    | )      |   |   |  (656 | ) |
| Balance as of March 31, 2011    |   | $                        | -      |   |                | $      | 11     |                       |   | $      | 422    |   |   | $ | 433 |   |

|                         |   | EmployeeTerminationCosts |   |   | ContractSettlements |   |   | FacilityClosing Costs |   |   | Total |   |
|------------------------------|--------|--------------------------|--------|--------|---------------------|--------|--------|----------------------------|--------|--------|-------|--------|
| Additions                    |   | $                        | 3,972  |   |                | $      | -      |                       |   | $      | -     |   |   | $ | 3,972 |   |
| Cash payments                |   |                     | -      |   |                |   | -      |                       |   |   | -     |   |   |   | - |   |
| Balance as of March 31, 2011 |   | $                        | 3,972  |   |                | $      | -      |                       |   | $      | -     |   |   | $ | 3,972 |   |

|                        |   | Three months ended |   |   | Three months ended |   |
|-----------------------------|--------|------------------------------|--------|--------|------------------------------|--------|
|                        |   | March 31, 2011     |   |   | March 31, 2010     |   |
| Employee termination costs  |   | $                            | 3,318  |   |                         | $      | 2,632 |   |
| Contract settlements        |   |                         | -      |   |                         |   | 41 |   |
| Facility closing costs      |   |                         | -      |   |                         |   | 1,020 |   |
| Total restructuring charges |   | $                            | 3,318  |   |                         | $      | 3,693 |   |

----

|          |   | Three months ended |   |
|---------------|--------|------------------------------|--------|
|          |   | March 31,               |   |
|          |   | 2011                         |   |   | 2010 |   |
| Revenue:      |   |                         |   |   |   |   |
| EMEA          |   | $                            | 17,272 |   |   | $ | 12,043 |   |
| AsiaPac       |   |                         | 8,678  |   |   |   | 2,817 |   |
| Americas      |   |                         | 8,500  |   |   |   | 2,504 |   |
|          |   |                         |   |   |   |   |   |   |
| Total revenue |   | $                            | 34,450 |   |   | $ | 17,364 |   |

|         |   | March 31, |    |   | December 31, |   |
|--------------|--------|----------------|---------|--------|-------------------|--------|
|         |   | 2011           |    |   | 2010              |   |
| Assets:      |   |           |    |   |              |   |
| EMEA         |   | $              | 53,842  |   |              | $      | 41,574 |   |
| AsiaPac      |   |           | 13,149  |   |              |   | 10,861 |   |
| Americas     |   |           | 15,499  |   |              |   | 9,119 |   |
| Corporate    |   |           | 270,025 |   |              |   | 237,106 |   |
| Total assets |   | $              | 352,515 |   |              | $      | 298,660 |   |

----

----

----

----

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| Exhibit No. |   | Description                                                                                                                                        |
|------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|
|             |   |                                                                                                                                               |
| 31.1             |   | Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                |
|             |   |                                                                                                                                               |
| 31.2             |   | Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.                                                |
|             |   |                                                                                                                                               |
| 32.1             |   | Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
|             |   |                                                                                                                                               |
| 32.2             |   | Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |

----

|                      | KIT DIGITAL, INC.                                                 |
|---------------------------|-------------------------------------------------------------------|
|                      |                                                              |   |
| Dated:  May 10, 2011 | By:                                                          | /s/ Kaleil Isaza Tuzman |
|                      | Kaleil Isaza Tuzman                                               |
|                      | Chairman and Chief Executive Officer(principal executive officer) |

| Dated:  May 10, 2011 | By:                                                            | /s/ Robin Smyth |
|---------------------------|---------------------------------------------------------------------|-----------------|
|                      | Robin Smyth                                                         |
|                      | Chief Financial Officer(principal financial and accounting officer) |

----