##### 



UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, D.C.
    20549
  Form 10-Q
  QUARTERLY REPORT PURSUANT TO
    SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the Quarter Ended September 30, 2006
    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)
    þ o
  Rule 12b-2
 o o þ
  Rule 12b-2
 o þ




---



##### 



TABLE OF
    CONTENTS
  PagePART I 
    FINANCIAL INFORMATIONItem 1.


Consolidated
    Financial Statements


3Consolidated
    Balance Sheets as of December 31, 2005 and
    September 30, 2006


3Consolidated
    Statements of Operations for the three and nine months ended
    September 30, 2005 and 2006


4Consolidated
    Statements of Cash Flows for the nine months ended
    September 30, 2005 and 2006


5Notes to
    Consolidated Financial Statements


6Item 2.


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


17Item 3.


Quantitative and
    Qualitative Disclosures about Market Risk


25Item 4.


Controls and
    Procedures


25PART II 
    OTHER INFORMATIONItem 1.


Legal
    Proceedings


26Item 1A.


Risk
    Factors


26Item 2.


Unregistered Sales
    of Equity Securities and Use of Proceeds


37Item 6.


Exhibits


38SIGNATURES


39   2




---



##### 



PART I  Item 1.
    Consolidated
    Financial Statements  Vocus,
    Inc. and Subsidiaries
 Consolidated Balance Sheets  December 31,


September 30,2005


2006(Unaudited)(Dollars in thousands, exceptper share data)ASSETSCurrent assets:Cash and cash equivalents

$
40,027


$
22,209Short-term investments


1,400



3,203Accounts receivable, net of
    allowance for doubtful accounts of $193 and $240 at
    December 31, 2005 and September 30, 2006, respectively


6,012



6,854Prepaid royalty fees


493



326Other current assets


695



800Total current assets


48,627



33,392Property and equipment, net


4,161



4,271Intangible assets:Customer relationships, net


2,217



4,501Trade name, net






3,858Agreements
    not-to-compete,
    net


8



3,783Purchased technology, net


294



251Intangible assets, net


2,519



12,393Goodwill






16,989Other assets


529



545Total assets

$
55,836


$
67,590LIABILITIES, REDEEMABLE COMMON
    STOCK AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
268


$
685Accrued compensation


1,451



1,303Accrued expenses


1,333



2,346Current portion of notes payable
    and capital lease obligations


642



864Current portion of deferred revenue


20,018



21,812Total current liabilities


23,712



27,010Notes payable and capital lease
    obligations, net of current portion


765



438Other liabilities


105



81Deferred revenue, net of current
    portion


678



539Total liabilities


25,260



28,068Redeemable common stock,
    $0.01 par value, 29,128 shares issued and outstanding
    at December 31, 2005 and September 30, 2006


189



194Commitments and contingenciesStockholders equity:Preferred stock, $0.01 par
    value, 10,000,000 shares authorized; no shares issued and
    outstanding at December 31, 2005 and September 30, 2006






Common stock, $0.01 par
    value, 90,000,000 shares authorized; 15,805,018 and
    16,713,734 shares issued at December 31, 2005 and
    September 30, 2006, respectively; 14,794,241 and
    15,702,957 shares outstanding at December 31, 2005 and
    September 30, 2006, respectively


158



167Additional paid-in capital


70,470



79,481Treasury stock,
    1,010,777 shares at cost


(3,283
)


(3,283
)Deferred compensation


(19
)


Accumulated other comprehensive
    income (loss)


52



(12
)Accumulated deficit


(36,991
)


(37,025
)Total stockholders equity


30,387



39,328Total liabilities, redeemable
    common stock and stockholders equity

$
55,836


$
67,590    3




---



##### 



Vocus,
    Inc. and Subsidiaries
 Consolidated Statements of Operations  Three Months Ended September 30,


Nine Months Ended September 30,2005


2006


2005


2006(Unaudited)(Dollars in thousands except per share data)Revenues

$
7,297


$
10,757


$
20,191


$
28,208Cost of revenues, including
    amortization expense of $88 and $107 for the three months ended
    September 30, 2005 and 2006, respectively and $313 and $284
    for the nine months ended September 30, 2005 and 2006,
    respectively


1,699



2,137



4,687



6,049Accelerated amortization of
    prepaid royalty fees and contract termination costs


1,449







1,449



Gross profit


4,149



8,620



14,055



22,159Operating expenses:Sales and marketing


3,689



4,887



10,809



13,381Research and development


667



785



1,866



2,210General and administrative


2,295



2,685



4,676



7,038Amortization of intangible assets


405



531



1,201



982Total operating expenses


7,056



8,888



18,552



23,611Loss from operations


(2,907
)


(268
)


(4,497
)


(1,452
)Interest and other income


29



416



54



1,424Interest expense


(92
)


(23
)


(206
)


(64
)Total other income (expense)


(63
)


393



(152
)


1,360Income (loss) before benefit for
    income taxes


(2,970
)


125



(4,649
)


(92
)Benefit for income taxes






25







58Net income (loss)


(2,970
)


150



(4,649
)


(34
)Accretion on preferred stock


(514
)






(1,530
)


Net income (loss) attributable to
    common stockholders

$
(3,484
)

$
150


$
(6,179
)

$
(34
)Net income (loss) attributable to
    common stockholders per share:Basic

$
(0.86
)

$
0.01


$
(1.48
)

$
0.00Diluted

$
(0.86
)

$
0.01


$
(1.48
)

$
0.00Weighted average shares
    outstanding used in computing per share amounts:Basic


4,031,908



15,498,524



4,175,647



15,184,546Diluted


4,031,908



16,320,518



4,175,647



15,184,546    4




---



##### 



Vocus,
    Inc. and Subsidiaries
 Consolidated Statements of Cash Flows  Nine Months Ended September 30,2005


2006(Unaudited)(Dollars in thousands)Cash flows from operating
    activities:Net loss

$
(4,649
)

$
(34
)Adjustments to reconcile net loss
    to net cash provided by operating activities:Depreciation and amortization of
    property and equipment


507



850Amortization of intangible assets


1,514



1,266Stock-based compensation


1,017



1,347Provision for doubtful accounts


54



103Impairment of software development
    costs






18Changes in operating assets and
    liabilities:Accounts receivable


(939
)


(921
)Prepaid royalty fees


778



167Other current assets


117



(306
)Other assets


35



(13
)Accounts payable


149



643Accrued compensation


(293
)


(155
)Accrued expenses


697



622Deferred revenue


1,701



1,582Other liabilities


15



(25
)Net cash provided by operating
    activities


703



5,144Cash flows from investing
    activities:Cash paid for acquisition






(20,891
)Purchases of short-term investments






(4,628
)Sales of short-term investments






2,401Maturities of short-term
    investments






425Software development and
    information database costs


(2,222
)


(71
)Purchases of property and equipment


(1,211
)


(514
)Net cash used in investing
    activities


(3,433
)


(23,278
)Cash flows from financing
    activities:Repurchase of common stock


(2,769
)


Proceeds from exercise of stock
    options and warrants


149



461Public offering transaction costs


(782
)


Proceeds from borrowings under
    revolving line of credit


4,416



Proceeds from notes payable


862



235Payments on notes payable and
    capital lease obligations


(176
)


(385
)Net cash provided by financing
    activities


1,700



311Effect of exchange rate changes on
    cash and cash equivalents


(15
)


5Net decrease in cash and cash
    equivalents


(1,045
)


(17,818
)Cash and cash equivalents,
    beginning of period


7,554



40,027Cash and cash equivalents, end of
    period

$
6,509


$
22,209    5




---



##### 



Vocus,
    Inc.Notes to Consolidated Financial Statements
  1.
    Business
    Description  Organization
    and Description of Business
      2.
    Summary
    of Significant Accounting Policies  Basis
    of Presentation
  Form 10-Q Regulation S-X. Form 10-K
  Principles
    of Consolidation
    Use of
    Estimates
    Cash
    and Cash Equivalents
    Short-term
    Investments
  Available-for-sale available-for-sale held-to-maturity
 6




---



##### 



Vocus,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Intangible
    Assets
    Revenue
    Recognition
      No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21),
       7




---



##### 



Vocus,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Deferred
    Revenue
  12-month
  Royalty
    Fees
      Sales
    Commissions
    Stock-Based
    Compensation
  Accounting for Stock Issued to Employees Accounting for
    Stock-Based Compensation
 8




---



##### 



Vocus,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Three Months Ended


Nine Months EndedSeptember 30, 2005Net loss attributable to common
    stockholders, as reported

$
(3,484
)

$
(6,179
)Stock-based compensation, as
    reported


1,010



1,017Pro forma stock-based compensation


(31
)


(85
)Pro forma net loss attributable to
    common stockholders

$
(2,505
)

$
(5,247
)Basic and Diluted net loss
    attributable to common stockholders per share:As reported

$
(0.86
)

$
(1.48
)Pro forma

$
(0.62
)

$
(1.26
)   Share-Based Payment
  Income
    Taxes
     9




---



##### 



Vocus,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Net
    Income (Loss) Attributable to Common Stockholders Per
    Share
      Three Months Ended


Nine Months EndedSeptember 30,


September 30,2005


2006


2005


2006Net income (loss) attributable to
    common stockholders

$
(3,484
)

$
150


$
(6,179
)

$
(34
)Weighted average shares
    outstanding, basic


4,031,908



15,498,524



4,175,647



15,184,546Dilutive effect of:Options to purchase common stock






602,363







Warrants to purchase common stock






219,631







Weighted average shares
    outstanding, diluted


4,031,908



16,320,518



4,175,647



15,184,546Net income (loss) attributable to
    common stockholders per share:Basic

$
(0.86
)

$
0.01


$
(1.48
)

$
0.00Diluted

$
(0.86
)

$
0.01


$
(1.48
)

$
0.00     September 30,2005


2006Options to purchase common stock


1,239,763



2,363,020Warrants to purchase common stock


361,446



334,928Shares of common stock into which
    outstanding preferred stock is convertible


5,826,668



Total options, warrants and
    preferred stock convertible into common stock


7,427,877



2,697,948    10




---



##### 



Vocus,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  Comprehensive
    Income (Loss)
  available-for-sale
  Three Months Ended


Nine Months EndedSeptember 30,


September 30,2005


2006


2005


2006Net income (loss)

$
(2,970
)

$
150


$
(4,649
)

$
(34
)Other comprehensive income (loss):Foreign currency translation
    adjustment


23



(31
)


12



(65
)Unrealized net gain on
    available-for-sale
    investments






1







1Comprehensive income (loss)

$
(2,947
)

$
120


$
(4,637
)

$
(98
)   Recent
    Accounting Pronouncements
  Accounting for Uncertainty in Income
    Taxes
  Fair Value Measurements
  Considering the Effects of Prior Year Misstatements when
    Quantifying Misstatements in Current Year Financial
    Statements
  3.
    Initial
    Public Offering of Common Stock  one-for-one one-for-one
 11




---



##### 



Vocus,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  4.
    PRWeb
    Acquisition      Cash

$
20,891Common stock


7,205Transaction costs


298Total purchase consideration

$
28,394     Amortization PeriodTrade 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






16,989Assumed liabilities






(76
)Total purchase price





$
28,394    12




---



##### 



Vocus,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Three Months Ended


Nine Months EndedSeptember 30,


September 30,2005


2006


2005


2006Revenues

$
8,353


$
11,443


$
22,989


$
31,945Net income (loss)

$
(3,517
)

$
508


$
(6,336
)

$
2,905Accretion on preferred stock


(514
)






(1,530
)


Net income (loss) attributable to
    common stockholders

$
(4,031
)

$
508


$
(7,866
)

$
2,905Basic net income (loss)
    attributable to common stockholders per share

$
(0.89
)

$
0.03


$
(1.68
)

$
0.19Diluted net income (loss)
    attributable to common stockholders per share

$
(0.89
)

$
0.03


$
(1.68
)

$
0.18     5.
    Stock-Based
    Compensation  10-year
    Three Months Ended


Nine Months EndedSeptember 30, 2006Cost of revenues

$
16


$
54Sales and marketing


177



332Research and development


55



164General and administration


276



787Total

$
524


$
1,337      13




---



##### 



Vocus,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
  paid-in-capital.
      Three Months Ended


Nine Months EndedSeptember 30, 2006Stock price volatility


53
%


52
%Expected term (years)


6.3



6.3Risk-free interest rate


5.0
%


4.9
%Dividend yield


0.0
%


0.0
%      14




---



##### 



Vocus,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Weighted-





AggregateAverage





IntrinsicExercise


Weighted-


Value as ofNumber of


Range of


Price per


Average


September 30,Options


Exercise Prices


Share


Contractual Term


2006(In thousands)Balance outstanding at
    December 31, 2005


2,468,351


$
0.30 - $9.00


$
5.92Granted


325,833



12.42 - 15.74



13.38Exercised


(388,886
)


0.30 - 9.00



1.31Forfeited or cancelled


(42,278
)


2.46 - 12.42



5.03Balance outstanding at
    September 30, 2006


2,363,020


$
0.30 - $15.74


$
7.73



8.3


$
19,032Expected to vest at
    September 30, 2006


2,205,859


$
0.30 - $15.74


$
7.66



8.3


$
17,905Exercisable at September 30,
    2006


446,767


$
0.30 - $15.74


$
2.25



5.0


$
6,043     Weighted-


Weighted-


Exercisable


Weighted-Outstanding as of


Average


Average


as of


AverageRange of

September 30,


Remaining


Exercise


September 30,


ExerciseExercise Price

2006


Contractual Life


Price


2006


Price$ 0.30 - $ 1.57


165,293



3.2


$
0.30



165,293


$
0.30$ 1.58 - $ 3.15


185,235



4.8



2.46



176,478



2.46$ 3.16 - $ 4.72


29,950



7.9



3.99



11,570



3.99$ 4.73 - $ 6.30


387,422



8.3



4.80



86,640



4.80$ 6.31 - $ 7.87


4,662



8.5



7.05



1,287



7.05$ 7.88 - $ 9.44


1,265,625



9.2



9.00



5,250



9.00$ 9.45 - $12.59


10,000



9.4



12.42







$12.60 - $14.17


282,500



9.8



13.15







$14.18 - $15.74


32,333



9.6



15.74



249



15.742,363,020



8.3


$
7.73



446,767


$
2.25        15




---



##### 



Vocus,
    Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
    Common
    Stock Repurchases
    6.
    Debt  Equipment
    Line of Credit    7.
    Commitments
    and Contingencies   16




---



##### 



Item 2.
    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 and in our
    annual report on
    Form 10-K
    for the year ended December 31, 2005. 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
    of Part II.
  Overview
    not-for-profit
      Sources
    of Revenues
     17




---



##### 



e-Mail
    Cost of
    Revenues and Operating Expenses
  Cost of Revenues.
    Sales and Marketing.
    Research and Development.
  General and Administrative.
 18




---



##### 



Amortization of Intangible Assets.
  Repurchase of Common Stock.
  Critical
    Accounting Policies
    Form 10-K
  Revenue Recognition. Revenue Recognition in Financial Statements Revenue
    Recognition.
    No. 00-21, Revenue Arrangements with Multiple Deliverables (EITF 00-21),
    Stock-Based Compensation. Accounting for Stock Issued to Employees
 19




---



##### 



Accounting for Stock-Based Compensation
  Share-Based
    Payment
        Business Combinations. not-to-compete
  Impairment of Long-Lived Assets.
 20




---



##### 



Results
    of Operations
    Three Months


Nine MonthsEnded September 30,


Ended September 30,2005


2006


2005


2006Revenues


100
%


100
%


100
%


100
%Cost of revenues


23



20



23



21Accelerated amortization of
    prepaid royalty fees and contract termination costs


20







7



Gross profit


57



80



70



79Operating expenses:Sales and marketing


51



45



54



47Research and development


9



7



9



8General and administrative


31



25



23



25Amortization of intangible assets


6



5



6



4Total operating expenses


97



82



92



84Loss from operations


(40
)


(2
)


(22
)


(5
)Interest and other income
    (expense), net


(1
)


3



(1
)


5Income (loss) before benefit for
    income taxes


(41
)


1



(23
)


Benefit for income taxes














Net income (loss)


(41
)%


1
%


(23
)%



%     Three Months Ended


Nine Months EndedSeptember 30,


September 30,2005


2006


2005


2006Total deferred revenue (in
    thousands)

$
17,711


$
22,351


$
17,711


$
22,351Active customers


1,292



1,603



1,292



1,603Net cash (used in) provided by
    operating activities (in thousands)

$
(23
)

$
1,763


$
703


$
5,144   Three
    Months Ended September 30, 2006 and 2005
  Revenues.
 21




---



##### 



Cost of Revenues.
  Accelerated Amortization of Prepaid Royalty Fees and Contract
    Termination Costs.
  Sales and Marketing Expenses.
  Research and Development Expenses.
  General and Administrative Expenses.
 22




---



##### 



Amortization of Intangible
    Assets.
  Other Income (Expense).
  Benefit for Income Taxes.
  Nine
    Months Ended September 30, 2006 and 2005
  Revenues.
  Cost of Revenues.
  Accelerated Amortization of Prepaid Royalty Fees and Contract
    Termination Costs.
 23




---



##### 



Sales and Marketing Expenses.
  Research and Development Expenses.
  General and Administrative Expenses.
  Amortization of Intangible
    Assets.
  Other Income (Expense).
  Benefit for Income Taxes.
  Liquidity
    and Capital Resources
   24




---



##### 



and/or
    Item 3.
    Quantitative
    and Qualitative Disclosures about Market Risk  Form 10-K
  Item 4.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
  Rule 13a-15 Rule 13a-15(e) 15d-15(e)
 25




---



##### 



Changes
    in Internal Controls
   PART II  Item 1.
    Legal
    Proceedings    Item 1A.
    Risk
    Factors    Risks
    Related to Our Business and Industry
  We
    operate in emerging markets which makes it difficult to evaluate
    our business and future prospects and may increase the risk of
    your investment.
    
    Generating sufficient revenue to achieve and maintain
    profitability;
    managing growth in our operations;
    managing the risks associated with developing new modules;
    attracting and retaining customers; and
    attracting and retaining key personnel. 26




---



##### 



The
    market for on-demand software is at an early stage of
    development, and if it does not develop or develops more slowly
    than we expect, our business will be harmed.
    Principally
    all of our on-demand software solutions are sold pursuant to
    subscription agreements, and if our existing customers elect
    either not to renew these agreements or renew these agreements
    for fewer modules or seats, our business, financial condition
    and results of operations will be adversely
    affected.
    Because
    we recognize 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.
   27




---



##### 



If our
    information database does not maintain market acceptance, our
    business, financial condition and results of operations could be
    adversely affected.
    We
    have incurred operating losses in the past and may incur
    operating losses in the future.
    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 the payment terms for our products and
    services; and
    the purchasing and budgeting cycles of our customers.   28




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##### 



quarter-to-quarter
  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.      If we
    fail to respond to evolving industry standards, our on-demand
    software may become obsolete or less competitive.
    If
    there are interruptions or delays in our services due to
    third-party error, our own error or the occurrence of
    unforeseeable events, delivery of our solutions and the use of
    our services could become impaired, which could harm our
    relationships with customers and subject us to
    liability.
   29




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The
    market for our on-demand software 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
    and future acquisitions could prove difficult to integrate,
    disrupt our business, dilute stockholder value and consume
    resources that are necessary to sustain our
    business.
    
    issue additional equity securities that would dilute the
    ownership of our stockholders;
    use cash that we may need in the future to operate our business;
    incur debt on terms unfavorable to us or that we are unable to
    repay;
    incur large charges or substantial liabilities; 30




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
    encounter difficulties retaining key employees of an acquired
    company or integrating diverse business cultures; and
    become subject to adverse tax consequences, substantial
    depreciation, impairment of intangible assets or deferred
    compensation charges.    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 cost-effectively, our business may
    suffer.
    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.
   31




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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.
      The
    success of our business depends on the continued growth and
    acceptance of the Internet as a business and communications
    tool, and the related expansion and regulation of the Internet
    infrastructure.
        If we
    are unable to protect our proprietary technology and other
    intellectual property rights, it will reduce our ability to
    compete for business.
   32




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If a
    third-party asserts that we are infringing its intellectual
    property, whether successful or not, it could subject us to
    costly and time-consuming litigation or expensive licenses, and
    our business may be harmed.
    
    divert managements attention;
    result in costly and time-consuming litigation;
    require us to enter into royalty or licensing agreements, which
    may not be available on acceptable terms, or at all; or
    require us to redesign our solutions to avoid infringement.    Our
    growth could strain our personnel and infrastructure resources,
    and if we are unable to implement appropriate controls and
    procedures to manage our growth, we may not be able to
    successfully implement our business plan.
     33




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We are
    dependent on our executive officers, and the loss of any of them
    may prevent us from implementing our business plan in a timely
    manner if at all.
    We may
    not be able to attract and retain the highly skilled employees
    we need to support our planned growth.
    Because
    we conduct operations in foreign jurisdictions, which accounted
    for approximately 6% of our 2005 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.   34




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We
    might require additional capital to support business growth, and
    this capital might not be available.
    Our
    reported financial results may be adversely affected by changes
    in accounting principles generally accepted in the United
    States.
      Compliance
    with new regulations governing public company corporate
    governance and reporting is uncertain and
    expensive.
   35




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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
    general economic and political conditions such as recessions and
    acts of war or terrorism.  The
    concentration of our capital stock ownership with insiders will
    likely limit your ability to influence corporate
    matters.
    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; 36




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
    provide that directors may only be removed for cause
    and only with the approval of 66 2 / 3 percent of our
    stockholders;
    require super-majority voting to amend our bylaws or specified
    provisions in our amended and restated certificate of
    incorporation;
    authorize the issuance of blank check preferred
    stock that our board of directors could issue to increase the
    number of outstanding shares and to discourage a takeover
    attempt;
    limit the ability of our stockholders to call special meetings
    of stockholders;
    prohibit stockholder action by written consent, which requires
    all stockholder actions to be taken at a meeting of our
    stockholders;
    provide that the board of directors is expressly authorized to
    adopt, amend, or repeal our bylaws; and
    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.
  lock-up Rule 10b5-1
  Item 2.
    Unregistered
    Sales of Equity Securities and Use of Proceeds  Sale of
    Unregistered Securities
  and/or
  Use of
    Proceeds
  Form S-1 333-125834),
   37




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Item 6.  Exhibits
  ExhibitNumber

Exhibit3
.1

Fifth Amended and Restated
    Certificate of Incorporation.(1)3
.2

Amended and Restated Bylaws.(1)10
.1

Asset Purchase Agreement, dated as
    of August 4, 2006, between the Company, Vocus PRW Holdings
    LLC, PRWeb International, Inc., PRWeb, LLC and David McInnis(2)31
.1*

Certification of Chairman and
    Chief Executive Officer pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a),
    promulgated under the Securities Exchange Act of 1934, as
    amended.31
.2*

Certification of Chief Financial
    Officer pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a),
    promulgated under the Securities Act of 1934, as amended.32
.1*

Certification of Chairman and
    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(1)
    
    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.(2)
    
    Incorporated by reference to an exhibit to the Companys
    Quarterly Report on
    Form 10-Q
    filed with the Securities and Exchange Commission on
    August 14, 2006. 38




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SIGNATURES      By:
    /s/ Richard Rudman        By:
    /s/ Stephen Vintz         39




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##### 



INDEX TO
    EXHIBITS
  ExhibitNumber

Exhibit3
.1

Fifth Amended and Restated
    Certificate of Incorporation.(1)3
.2

Amended and Restated Bylaws.(1)10
.1

Asset Purchase Agreement, dated as
    of August 4, 2006 between the Company, Vocus PRW Holdings
    LLC, PRWeb International, Inc., PRWeb, LLC and David McInnis.(2)31
.1*

Certification of Chairman and
    Chief Executive Officer pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a),
    promulgated under the Securities Exchange Act of 1934, as
    amended.31
.2*

Certification of Chief Financial
    Officer pursuant to
    Rule 13a-14(a)
    and
    Rule 15d-14(a),
    promulgated under the Securities Act of 1934, as amended.32
.1*

Certification of Chairman and
    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(1)
    
    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.(2)
    
    Incorporated by reference to an exhibit to the Companys
    Quarterly Report on
    Form 10-Q
    filed with the Securities and Exchange Commission on
    August 14, 2006.