##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, DC 20549
  Form 10-K
 (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2007oro

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    000-26679
  Art Technology Group,
    Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

04-3141918(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)One Main Street

02142Cambridge, Massachusetts

(Zip Code)(Address of principal executive
    offices)   (617) 386-1000
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock, $0.01 par value with Associated Preferred
    Stock Purchase Rights

The Nasdaq Stock Market, LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  o þ o o
  Rule 12b-2 o þ
      Documents
    Incorporated by Reference




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##### 





ART
    TECHNOLOGY GROUP, INC.
  INDEX TO
    FORM 10-K
  PagePART IItem 1.


Business


1Item 1A.


Risk Factors


9Item 1B.


Unresolved Staff Comments


16Item 2.


Properties


16Item 3.


Legal Proceedings


16Item 4.


Submission of Matters to a Vote of Security
    Holders


17PART IIItem 5.


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


17Item 6.


Selected Consolidated Financial Data


19Item 7.


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


21Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


39Item 8.


Consolidated Financial Statements and
    Supplementary Data


40Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


71Item 9A.


Controls and Procedures


71Item 9B.


Other Information


73PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


73Item 11.


Executive Compensation


73Item 12.


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


74Item 13.


Certain Relationships and Related Transactions
    and Director Independence


74Item 14.


Principal Accountant Fees and Services


74PART IVItem 15.


Exhibits and Financial Statement Schedules


75SIGNATURESSignatures


76EX-10.9 Offer Letter with John FedermanEX-10.10 Offer Letter with Andrew ReynoldsEx-10.11 Resignation Agreement - John FedermanEX-21.1 SubsidiariesEX-23.1 Consent of Ernst & Young LLPEX-31.1 Section 302 Certification of CEOEX-31.2 Section 302 Certification of CFOEX-32.1 Section 906 Certification of CEOEX-32.2 Section 906 Certification of CFO     i




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##### Table of Contents



PART I  Some of the information contained in this Report consists of
    forward-looking statements within the meaning of the
    Private Securities Litigation Reform Act of 1995. Use of words
    such as believes, expects,
    anticipates, intends, plans,
    estimates, should, likely or
    similar expressions indicate a forward-looking statement. These
    statements are subject to risks and uncertainties and are based
    on the beliefs and assumptions of our management based on
    information currently available to our management. Important
    factors that could cause actual results to differ materially
    from the forward-looking statements include, but are not limited
    to, those set forth below under the heading Risk
    Factors. We assume no obligation to update any
    forward-looking statements.
  Item 1.
    Business  Our
    Business
  e-commerce e-commerce e-commerce
  Corporate
    Information
  www.atg.com
  Overview
    e-commerce e-commerce e-commerce e-commerce e-commerce e-commerce Click-to-Call, Click-to-Chat
   1




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##### Table of Contents




    Until 1995, we functioned primarily as a professional services
    organization in the Internet commerce market.
    In 1996, we began offering Internet commerce and software
    solutions, initially focusing on infrastructure products.
    In 2004, we began to concentrate on developing application
    products, having concluded that the market for infrastructure
    products had become increasingly standards driven and that we
    could best differentiate ourselves by offering our clients
    advanced applications functionality.
    In November 2004, we acquired Primus Knowledge Solutions, Inc.
    (Primus), a provider of software solutions for
    customer service designed to help companies deliver a superior
    customer experience via contact centers,
    e-mail and
    web self-service. The Primus solution extended our offerings
    beyond commerce and marketing and into customer service.
    In 2004, we also began to offer our clients hosted SaaS services
    as an alternative delivery model for our application solutions.
    We believe that hosted services can provide significant
    advantages for our clients, and provide us with a substantial
    opportunity for growth.
    In 2005, we completed the integration of Primus applications
    into the ATG platform.
    In October 2006, we acquired eStara, Inc. (eStara),
    a provider of
    e-commerce
    optimization service solutions for enhancing online sales and
    support initiatives. The eStara solutions provided us with a new
    channel to help our clients convert web browsing activities into
    sales, as well as business opportunities independent of
    ATG-powered websites.
    In 2007, we initiated a strategy to sell site-independent
    OnDemand services to enable our customers to increase on-line
    sales. One result of this strategy is that we will recognize
    revenue from more of our transactions on a ratable basis. This
    increase in ratably recognized revenue should allow for more
    predictable revenue and earnings in future periods.
    In February 2008, we acquired CleverSet, a provider of automated
    personalization engines, used to optimize
    e-commerce
    experiences by presenting visitors with relevant recommendations
    and information. CleverSets next-generation technology has
    been shown to significantly lift
    e-commerce
    revenue by increasing conversion rates and order size. We will
    offer these services under our eStara brand.  e-commerce e-commerce
  e-commerce e-commerce e-commerce
  Our
    Strategy
    
    Deliver a commerce platform with leadership functionality,
    suitable for the most demanding enterprises.  Our
    clients tell us that, in some cases, our platform handles over
    100,000 orders per day in peak periods. Leading industry
    analysts rank our overall offering number one among commerce
    platforms for 2




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business-to-consumer
    sites on criteria, including reliability and scalability,
    administration and management, catalog/content management,
    campaign management and customer self-service. It is our
    objective to continue to provide leadership in
    e-commerce
    functionality and operational excellence.  
    Through our eStara
    e-commerce
    optimization services brand, deliver solutions independent of
    the choice of web platform.  Our eStara
    e-commerce
    optimization service solutions can be delivered to clients on a
    site-independent basis on any
    e-commerce
    platform, or custom-built websites, across all industries. This
    increases the size of our market opportunity and customer
    penetration.
    Through managed application hosting services, provide the
    same quality platform to mid-tier companies and others who opt
    to outsource their
    e-commerce
    operations.  By leveraging our experience with the
    pre-built OnDemand offerings, our Professional Services
    organization assists our clients with their ATG implementations,
    thus helping our clients quickly and economically launch their
    e-commerce
    and service projects.
    Differentiate by providing a more personalized, more
    relevant, more consistent shopping experience.  We
    give merchandisers and marketers the power and analytics to
    define offers and cross-sells, to follow up on abandoned
    shopping carts, to perform A/B split tests and to create
    multi-channel, multi-stage web and
    e-mail
    campaigns that match a companys selling strategy with
    information about a visitors browsing behavior, purchase
    and interaction history, preferences and profile. This increases
    basket size and the number of website visitors who go on to
    purchase items from that website, resulting in increased
    revenue. We use this same information to extend the consistent
    customer experience to the customer service agent in the call
    center, which can result in a more satisfied, loyal and
    profitable customer.
    Leverage existing sales channels.  We sell our
    products primarily through our direct sales organization. In
    addition, a significant portion of our product revenue is
    co-sold or influenced by a variety of business partners,
    including systems integrators, solution providers and other
    technology partners. We currently have a broad range of business
    alliances throughout the world, with companies such as
    Accenture, Capgemini, Deloitte Consulting, Sapient, Tata
    Consulting Services and Wipro as well as regional integrators
    and interactive agencies such as aQuantive, BlastRadius,
    imc2,
    CGI, LBi Group, McFadyen Consulting, Professional Access,
    Resource Interactive and D2C2. In most geographies and
    situations, our goal is both to maintain close relationships
    directly with our clients while also motivating systems
    integrators and other channel partners to implement our
    applications in their projects and solution sets.
    Leverage and expand our service
    capabilities.  We have extensive experience in web
    application development and integration services, as well as
    knowledge management design and call-center systems deployment.
    Through our Professional and Education Services organizations,
    we provide services to train our systems integrators, value
    added resellers and complementary software vendors in the use of
    our products and offer consulting services to assist with
    customer implementations. We seek to motivate our business
    partners to provide joint implementation services to our end
    user customers. We intend to continue to seek additional
    opportunities to increase revenues from product sales by
    expanding our base of business partners trained in the
    implementation and application of our products.
    International expansion.  We have seen an
    increase in sales and pipeline growth in Europe and India. We
    seek to invest resources into further developing our reach
    internationally. In support of this initiative we have entered
    into partnership agreements abroad that will support our
    continued growth. As the international market opportunity
    continues to develop we will adjust our strategy.  ATG
    Licensed Software Products
  e-commerce e-commerce
  ATG Commerce e-commerce
 3




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business-to-business
  The ATG Adaptive Scenario Engine e-commerce e-commerce
  ATG Commerce Search e-commerce
  ATG Merchandising
  ATG Content Administration
  ATG Outreach e-marketing
  ATG Self-Service
  ATG Commerce Service Center e-commerce
  ATG Knowledge
  ATG Campaign Optimizer
  ATG Customer Intelligence
   4




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##### Table of Contents



Recurring
    Revenue
  e-commerce e-Commerce
  eStara
    e-Commerce
    Optimization Services Offerings
  e-Commerce e-commerce e-commerce e-commerce
  eStara Click to Call e-mail PC-to-phone phone-to-phone
  eStara Click to Chat
  eStara Call Tracking
  eStara Recommendations (formerly CleverSet) e-commerce e-commerce
  ATG
    OnDemand
  e-commerce in-house,
    
    leveraging our experience to accelerate growth of the
    clients online business and allowing clients to focus on
    their core competencies;
    shifting the clients technology risks to us;
    shortening the time to market (vs. in-house development,
    deployment and maintenance); and
    avoiding upfront and ongoing expenditures required to purchase
    and maintain software and hardware. 5




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Customer
    Support and Maintenance Services
    Professional
    and Educational Services Revenue
    Professional Services.
  
    OnDemand Offerings.  By leveraging our
    experience with the pre-built OnDemand offerings, our
    Professional Services organization assists our clients with
    their implementations, thus helping our clients quickly and
    economically launch their
    e-commerce
    and service projects.
    Full-lifecycle Solutions.  We work with our
    clients from the earliest stages of their projects. The
    full-lifecycle approach encompasses everything from working with
    our clients end users and technical staff to define
    project requirements to solution design, implementation,
    usability testing, staging and deployment.
    Custom Solutions.  We can also manage specific
    areas of our clients projects, such as designing a
    solution to meet a clients requirements, implementing
    scenarios or integrating our solutions with a third-party
    application.
    Structured Enablement.  In this model, we give
    our clients the guidance they need while maximizing the skills
    of the clients own personnel. Depending on a clients
    project goals and the expertise of its team, appropriate ATG
    personnel (such as architects or engineers) work onsite as
    advisors to aid the clients personnel in areas such as
    reviewing completed work or advising on a particular project
    area.  Education Services.
  Markets
    Research
    and Development
   6




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e-commerce
  Sales and
    Marketing
    ATG e-commerce e-commerce
      Strategic
    Alliances
    Competition
    
    in-house development efforts by potential clients or partners;
    e-commerce
    application vendors, such as Escalate Retail and IBM;
    e-commerce
    business process outsourcers, such as Digital River and GSI
    Commerce;
    providers of hosted managed service offerings, such as
    Accenture, EDS and IBM;
    providers of hosted on-demand subscription services, such as
    Demandware, Digital River, MarketLive and Venda;
    vendors of marketing and customer-service applications,
    including natural language, self-service and traditional
    customer relationship management application vendors; and
    commerce optimization vendors, such as Avail Intelligence,
    Baynote and LivePerson. 7




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e-commerce e-commerce
  Proprietary
    Rights and Licensing
      Employees
    Internet
    Address and SEC Reports
  Form 10-K, Form 10-Q Form 8-K 1-800-SEC-0330. http://www.sec.gov
  www.atg.com
 8




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Form 10-K.
  Item 1A.
    Risk
    Factors  Form 10-K
  We
    expect our revenues and operating results to continue to
    fluctuate for the foreseeable future. If our quarterly or annual
    results are lower than the expectations of securities analysts,
    then the price of our common stock is likely to
    fall.
    
    the timing of revenue recognition of our products and services,
    which is affected by the mix of product license revenue and
    services provided; due to the growth of our service offerings
    and evolution of our sales terms with our customers, an
    increasing portion of our revenue is being recognized ratably
    over a period of time rather than at the time of invoice and we
    expect this trend to continue in the near term;
    the timing of customer orders, especially larger transactions,
    and product implementations;
    Our ability to cultivate and maintain strategic alliances;
    fluctuating economic conditions, particularly as they affect our
    customers willingness to implement new
    e-commerce
    solutions and their ability to pay for our products and services;
    delays in introducing new products and services;
    the size of price discounting and concessions;
    changes in the mix of revenues derived from products and
    services;
    timing of hiring and utilization of personnel;
    cost overruns related to fixed-price services projects;
    the mix of domestic and international sales;
    variation in our actual costs from our cost estimates related to
    long term hosting contracts;
    increased expenses, whether related to sales and marketing,
    product development or administration; and
    costs related to possible acquisitions of technologies or
    businesses.    We may
    not be able to sustain or increase our revenue or attain
    profitability on a quarterly or annual basis.
   9




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Our
    lengthy sales cycle makes it difficult to predict our quarterly
    results and causes variability in our operating
    results.
    If the
    market for
    e-commerce
    does not continue to grow, then demand for our products and
    services may decrease.
  e-commerce.
  A
    slowdown in the economy could negatively impact our revenue and
    earnings.
    If we
    fail to adapt to rapid changes in the market for online business
    applications, then our products and services could become
    obsolete.
    e-commerce E-commerce
 10




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We
    face intense competition in the market for online commerce
    applications and services, and we expect competition to
    intensify in the future. If we fail to remain competitive, then
    our revenues may decline, which could adversely affect our
    future operating results and our ability to grow our
    business.
    
    Potential clients or partners may choose to develop
    e-commerce
    applications in-house, rather than paying for our products or
    services.
    Some of our current and potential competitors have greater
    financial, marketing and technical resources than we do,
    allowing them to leverage a larger installed customer base and
    distribution network, adopt more aggressive pricing policies and
    offer more attractive sales terms, adapt more quickly to new
    technologies and changes in customer requirements, and devote
    greater resources to the promotion and sale of their products
    and services than we can.
    Our suite of service products competes against various vendor
    software tools designed to address a specific element or
    elements of the complete set of eService processes, including
    e-mail
    management, support, knowledge management, and web-based
    customer self-service and assisted service.
    Current and potential competitors have established or may
    establish cooperative relationships among themselves or with
    third parties to enhance their products and expand their
    markets. Accordingly, new competitors or alliances among
    competitors may emerge and rapidly acquire significant market
    share.
    Some of current and potential competitors, especially our larger
    competitors like IBM that offer broad suites of computer and
    software applications may offer free or low-cost
    e-commerce
    applications and functionality bundled with their own computer
    and software products. Potential customers may not see the need
    to buy our products and services separately when they can use
    the bundled applications and functionality in our
    competitors product suites for little or no additional
    cost.  If the
    market for our OnDemand service offerings does not develop or
    develops more slowly than we expect, then our business could be
    negatively affected.
    If our
    clients experience interruptions, delays or failures in our
    hosted services, then we could incur significant costs and lose
    revenue opportunities.
  e-commerce
  We
    depend heavily on key employees in a competitive labor
    market.
   11




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If we
    fail to anticipate and address the risks associated with
    CleverSets business, then our business could be
    harmed.
    We
    could incur substantial costs defending against a claim of
    infringement or protecting our intellectual property from
    infringement.
      
    cease selling or using products or services that incorporate the
    challenged intellectual property;
    obtain a license, which may not be available on reasonable
    terms, to sell or use the relevant technology; or
    redesign those products or services to avoid infringement.     12




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If we
    fail to maintain our existing customer base, then our ability to
    generate revenues will be harmed.
  e-commerce e-commerce e-commerce e-commerce e-commerce
  If we
    fail to address the challenges associated with our international
    operations, then revenues from our products and services may
    decline, and the costs of providing our products or services may
    increase.
    
    changes in regulatory requirements, exchange rates, tariffs and
    other barriers;
    longer payment cycles and problems in collecting accounts
    receivable in Western Europe and Asia;
    difficulties in managing systems integrators and technology
    partners;
    difficulties in staffing and managing foreign subsidiary
    operations;
    differing technology standards;
    difficulties and delays in translating products and product
    documentation into foreign languages for countries in which
    English is not the primary language;
    reduced protection for intellectual property rights in some of
    the countries in which we operate or plan to operate;
    difficulties related to entering into legal contracts under
    local laws and in foreign languages;
    fluctuations in the exchange rates between foreign and United
    States currency;
    potentially adverse tax consequences; and
    political and economic instability.  We may
    need financing in the future, and any additional financing may
    result in restrictions on our operations or substantial dilution
    to our stockholders.
   13




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If
    systems integrators or value added resellers reduce their
    support and implementation of our products, then our revenues
    may fail to meet expectations and our operating results would
    suffer.
    If our
    software products contain serious errors or defects, then we may
    lose revenues and market acceptance and may incur costs to
    defend or settle product liability claims.
    e-commerce,
  Government
    or industry regulations could directly restrict our business or
    indirectly affect our business by limiting the growth of
    e-commerce.
  e-commerce e-commerce e-commerce
 14




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The
    Internet has generated privacy concerns that could result in
    legislation or market perceptions that could result in reduced
    sales of our products and harm our business.
      Anti-takeover
    provisions in our charter documents and Delaware law could
    prevent or delay a change in control of our
    company.
    
    authorizing the issuance of blank check preferred
    stock;
    providing for a classified board of directors with staggered,
    three-year terms;
    providing that directors may only be removed for cause by a
    two-thirds vote of stockholders;
    limiting the persons who may call special meetings of
    stockholders and prohibiting stockholder action by written
    consent;
    establishing advance notice requirements for nominations for
    election to the board of directors or for proposing matters that
    can be acted on by stockholders at stockholder meetings; and
    authorizing anti-takeover provisions.    Continued
    compliance with regulatory and accounting requirements will be
    challenging and will require significant
    resources.
   15




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Item 1B.
    Unresolved
    Staff Comments  Form 10-K
  Item 2.
    Properties    Item 3.
    Legal
    Proceedings  Rule 10b-5
   16




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##### Table of Contents



e-commerce e-commerce
    Item 4.
    Submission
    of Matters to a Vote of Security Holders   PART II  Item 5.
    Market
    for the Registrants Common Equity, Related Stockholder
    Matters and Issuer Purchases of Equity Securities   High


LowFiscal 2006First quarter

$
3.49


$
1.83Second quarter


3.81



2.12Third quarter


3.10



2.32Fourth quarter


2.66



1.91Fiscal 2007First quarter

$
2.67


$
2.04Second quarter


2.88



2.19Third quarter


3.33



2.69Fourth quarter


4.75



3.10    17




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##### Table of Contents



Value of Investment($)12/31/2002


12/31/2003


12/31/2004


12/31/2005


12/29/2006


12/31/2007Art Technology Group Inc.

$
100.00


$
123.39


$
120.97


$
158.06


$
187.90


$
348.39Internet Software & Svcs

$
100.00


$
200.13


$
252.24


$
218.28


$
207.19


$
221.50NASDAQ Market Index

$
100.00


$
150.36


$
163.00


$
166.58


$
183.68


$
201.91  18




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##### Table of Contents



Stock
    Repurchase Program
    Rule 10b5-1
    (c)

(d)Total number of

Approximate dollar(a)

(b)

shares purchased

value of shares that mayTotal number of

Average price

as part of publicly

yet be purchased underPeriod

shares purchased

paid per share

announced plan

the plans or programs(In thousands)November 2007


171,300


$
4.15



171,300


$
17,098   Item 6.
    Selected
    Consolidated Financial Data  Form 10-K. Form 10-K Form 10-K
   19




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##### Table of Contents



Consolidated
    Statement of Operations Data:
  Year Ended December 31,2007


2006


2005


2004


2003(In thousands, except per share data)Revenue:Product licenses

$
30,529


$
32,784


$
29,821


$
23,345


$
26,793Recurring services


76,672



51,113



44,258



29,359



31,266Professional and education services


29,859



19,335



16,567



16,515



14,047Total revenue


137,060



103,232



90,646



69,219



72,106Cost of Revenue:Product licenses


2,197



1,751



1,816



2,206



2,118Recurring services


24,119



11,239



6,575



3,884



4,689Professional and education services


29,223



19,560



16,680



15,995



15,041Total cost of revenue


55,539



32,550



25,071



22,085



21,848Gross Profit


81,521



70,682



65,575



47,134



50,258Operating Expenses:Research and development


24,963



21,517



18,481



16,209



17,928Sales and marketing


44,397



30,909



29,396



29,602



31,400General and administrative


18,211



12,952



11,231



7,742



9,265Restructuring charge (benefit)


(59
)


(62
)


885



3,570



(10,346
)Total operating expenses


87,512



65,316



59,993



57,123



48,247Income (loss) from operations


(5,991
)


5,366



5,582



(9,989
)


2,011Interest and other income, net


2,237



1,712



219



395



176Income (loss) before provision (benefit) for income taxes


(3,754
)


7,078



5,801



(9,594
)


2,187Provision (benefit) for income taxes


433



(2,617
)


32



(50
)


(255
)Net income (loss)

$
(4,187
)

$
9,695


$
5,769


$
(9,544
)

$
2,442Basic net income (loss) per share

$
(0.03
)

$
0.08


$
0.05


$
(0.12
)

$
0.03Diluted net income (loss) per share

$
(0.03
)

$
0.08


$
0.05


$
(0.12
)

$
0.03Basic weighted average common shares outstanding


127,528



115,280



109,446



79,252



71,798Diluted weighted average common shares outstanding


127,528



120,096



111,345



79,252



73,678   Consolidated
    Balance Sheet Data:
  December 31,2007


2006


2005


2004


2003(In thousands)Cash, cash equivalents and short-term marketable securities

$
50,879


$
31,223


$
33,569


$
26,507


$
41,584Long-term marketable securities


1,062











4,001



Total assets


177,719



149,981



92,765



97,803



67,360Total deferred revenue


46,354



24,209



21,113



25,355



14,915Long-term obligations, less current maturities










63



112



Total stockholders equity

$
107,097


$
105,074


$
50,160


$
42,185


$
20,937  20




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
  Form 10-K. Form 10-K
  e-commerce e-commerce e-commerce e-commerce
  Shift to
    increasing ratably recognized revenue
  e-commerce
  e-commerce e-commerce e-commerce
    Key
    measures that we use to evaluate our performance:
   21




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##### Table of Contents




    We use net income and gross margins on our recurring services
    revenue and professional services and education services
    revenue, to measure our success at meeting cash and non-cash
    cost and expense targets in relation to revenue earned.
    We use product license bookings, a non-GAAP financial measure,
    as an important measure of growth in demand for our ATG
    e-commerce
    platform and the success of our sales and marketing efforts. We
    define product license bookings as product license revenue as
    reported on our statement of operations plus the contract value
    of licenses executed in the current period less revenue that was
    recognized from licenses executed in prior periods. We believe
    that this measure provides us with an indication of the amount
    of new software license business that our direct sales team has
    added in the period. Product license revenue associated with a
    particular transaction may be deferred for reasons other than
    the presence of a managed application hosting or eStara
    e-commerce
    optimization solutions arrangement, such as the presence of
    credit risk or other contractual terms that, under GAAP, require
    us to defer the recognition of revenue. The deferred revenue for
    such a transaction may be recognized in a single future period
    when the conditions that originally required deferral have been
    resolved, rather than ratably. We include all additions to
    deferred product license revenue in our calculation of product
    license bookings.
    We use cash flow from operations as an indicator of the success
    of the business. Because a significant portion of our revenue is
    deferred, in the near term our net income may be significantly
    different from the cash that we generate from operations. Cash
    flow from operations is typically higher in the quarters
    following our seasonally stronger product license bookings
    quarters, which have  historically been the fourth and second
    quarters.
    We use recurring services revenue, as reported on our statement
    of operations, to evaluate the success of our strategy to
    deliver site-independent online services and the growth of our
    ratable revenue sources. We expect that recurring services
    revenue will continue to increase as a percentage of total
    revenue in future periods. Recurring services revenue includes
    eStara
    e-commerce
    optimization services solutions, application hosting services
    and support and maintenance related to ATG
    e-commerce
    platform sales.
    We use days sales outstanding (DSO), calculated by
    dividing accounts receivable in the period by revenue and
    multiplying the result by the number of days in the period. We
    also use a modified DSO that adjusts our revenue by the change
    in deferred revenue during the period to provide us with a more
    accurate picture of the strength of our accounts receivables and
    related collection efforts. The percentage of accounts
    receivable that are less than 60 days old is an important
    factor that our management uses to understand the strength of
    our accounts receivable portfolio. This measure is important
    because a disproportionate percentage of our product license
    bookings often occurs late in the quarter, which has the effect
    of increasing our DSO and modified DSO.  Trends in
    On-Line Sales and our Business
    Trend in on-line sales. e-commerce e-commerce e-commerce
  E-commerce
    replatforming. e-commerce
 22




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##### Table of Contents



e-commerce e-commerce e-commerce e-commerce e-commerce
  Emergence of the on demand model of Software as a
    Service.
  Rapidly evolving and increasingly complex customer
    requirements. e-commerce e-commerce
  International expansion.
  Competitive trend.
  Recent
    Events
  e-commerce e-commerce
  Critical
    Accounting Policies and Estimates
     23




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##### Table of Contents



Definitions
      Revenue
    Recognition
  e-commerce Form 10-K
  Persuasive evidence of an arrangement
  Delivery has occurred or services rendered e-commerce
  Price is fixed or determinable
    Collection is probable
 24




---



##### Table of Contents



e-commerce
  No. 00-21, EITF 00-21,
      e-commerce set-up e-commerce
  Allowances
    for Accounts Receivable
   25




---



##### Table of Contents



Research
    and Development Costs
  Accounting for Research and Development
    Costs, Accounting for the
    Costs of Computer Software to be Sold, Leased, or Otherwise
    Marketed,
  e-commerce Position 98-1, Accounting for Computer Software Developed or Obtained for
    Internal Use (SOP 98-1).
  e-commerce
  Impairment
    or Disposal of Long Lived Assets, including Intangible
    Assets
    Goodwill
  Goodwill and Other
    Intangible Assets
 26




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##### Table of Contents



Accounting
    for Income Taxes
  Accounting for Income Taxes
  Accounting for
    Uncertainty in Income Taxes
  Stock-Based
    Compensation Expense
   27




---



##### Table of Contents



Results
    of Operations
    Year Ended December 31,2007


2006


2005Revenue:Product licenses


22
%


32
%


33
%Recurring services


56
%


50
%


49
%Professional and education services


22
%


18
%


18
%Total revenue


100
%


100
%


100
%Cost of Revenue:Product licenses


2
%


2
%


2
%Recurring services


18
%


11
%


7
%Professional and education services


21
%


19
%


19
%Total cost of revenue


41
%


32
%


28
%Gross Profit


59
%


68
%


72
%Operating Expenses:Research and development


18
%


21
%


20
%Sales and marketing


33
%


30
%


33
%General and administrative


13
%


12
%


12
%Restructuring charge (benefit)


0
%


0
%


1
%Total operating expenses


64
%


63
%


66
%Income (loss) from operations


(5
)%


5
%


6
%Interest and other income, net


2
%


2
%


0
%Income (loss) before provision (benefit) for income taxes


(3
)%


7
%


6
%Provision (benefit) for income taxes


0
%


(2
)%


0
%Net income (loss)


(3
)%


9
%


6
%     Year Ended December 31,2007


2006


2005Cost of product license revenue


7
%


5
%


6
%Gross margin on product license revenue


93
%


95
%


94
%Cost of recurring services revenue


31
%


22
%


15
%Gross margin on recurring services revenue


69
%


78
%


85
%Cost of professional and education services revenue


98
%


101
%


101
%Gross margin on professional and education services revenue


2
%


(1
)%


(1
)%  28




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##### Table of Contents



Years
    ended December 31, 2007, 2006 and 2005
  Revenues
  Years Ended December 31,2007


2006


2005(In thousands)Total revenue

$
137,060


$
103,232


$
90,646   e-commerce
          Product
    License Revenue
  Years Ended December 31,2007


2006


2005Product license revenue

$
30,529


$
32,784


$
29,821As a percent of total revenue


22
%


32
%


33
%   e-commerce
  e-commerce e-commerce
  e-commerce
   29




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##### Table of Contents



Product
    license bookings
    Years Ended December 31,2007


2006


2005(In thousands)Product license revenue

$
30,529


$
32,784


$
29,821Increase in product license deferred revenue


14,166



505



Product license deferred revenue recognized


(1,283
)


(477
)


Product license bookings

$
43,412


$
32,812


$
29,821     Recurring
    services revenue
  Years Ended December 31,2007


2006


2005Support and maintenance

$
41,923


$
39,303


$
38,942eStara
    e-commerce
    optimization services


25,980



4,690



On demand


8,769



7,120



5,316Total recurring services revenue

$
76,672


$
51,113


$
44,258As a percent of total revenue


56
%


50
%


49
%     
    Support and maintenance revenue increased 7% to
    $41.9 million in 2007 from $39.3 million in 2006. The
    increase is due to growth in our installed base of ATG
    e-commerce
    software attributable to the increase in product license
    bookings partially offset by approximately $1.1 million of
    revenue that was deferred due to arrangements that were sold in
    conjunction with application hosting services or eStara
    e-commerce
    optimization services.
    eStara
    e-commerce
    optimization services revenue increased to $26.0 million in
    2007 from $4.7 million in 2006. Revenues in 2007 included
    the full years results of eStara, which we acquired in
    October 2006, and represented 34% of total recurring service
    revenue for 2007 compared with 9% in 2006.
    On demand revenue, which represents revenue from arrangements in
    which we sold our ATG
    e-commerce
    software as a service on a hosted basis, increased 23% to
    $8.8 million for 2007 from $7.1 million for 2006.    
    Support and maintenance revenue increased 1%, to
    $39.3 million, in 2006 from $38.9 million in 2005. The
    increase is due to growth in our installed base of ATG
    e-commerce
    software.
    eStara
    e-commerce
    optimization services revenue increased to $4.7 million in
    2006 from a base of zero in 2006 as a result of our acquisition
    of eStara in October 2006, and represented 9% of total recurring
    revenue in 2006.
    On demand revenue increased 42% to $7.1 million in 2006
    from $5.3 million in 2005 due to an increase of customers
    using our managed application hosting services. 30




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##### Table of Contents



Professional
    and educational services revenue
  Years Ended December 31,2007


2006


2005Professional services

$
27,236


$
17,634


$
15,046Education


2,623



1,701



1,521Total professional & education services revenue

$
29,859


$
19,335


$
16,567As a percent of total revenue


22
%


18
%


18
%     
    Professional services revenue consists primarily of revenue from
    consulting and implementation services, which typically are
    performed in the quarters closely following the execution of a
    product license transaction. Professional services revenue
    increased 55% to $27.2 million in 2007 from
    $17.6 million in 2006, due to an increase in implementation
    activity associated with growth in our product license bookings
    in 2007, partially offset by the deferral of revenue for
    services related to managed application hosting and
    e-commerce
    optimization arrangements that will be recognized ratably once
    the services commence.
    Education revenue, which consists primarily of training of
    customer personnel, consultants and strategic partners on the
    use of our products and services, increased 54% to
    $2.6 million in 2007 from $1.7 million in 2006. The
    increase is a result of an increased focus on developing our
    partner and consultant practices.    
    Professional services revenues increased 17% to
    $17.6 million in 2006 from $15.0 million in 2005. The
    increase was a result of growth and product license bookings
    during 2006.
    Education revenue increased 12% to $1.7 million in 2006
    from $1.5 million in 2005.    Cost of
    Product License Revenues
  Years Ended December 31,2007


2006


2005Cost of product license revenue

$
2,197


$
1,751


$
1,816As a percent of license revenue


7
%


5
%


6
%Gross margin on product license revenue

$
28,332


$
31,033


$
28,005As a percent of license revenue


93
%


95
%


94
%    31




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##### Table of Contents



Cost of
    Recurring Services Revenue
  Years Ended December 31,2007


2006


2005Cost of recurring services revenue

$
24,119


$
11,239


$
6,575As a percent of recurring services revenue


31
%


22
%


15
%Gross margin on recurring services revenue

$
52,553


$
39,874


$
37,683As a percent of recurring services revenue


69
%


78
%


85
%   set-up set-up
  e-commerce
      Cost of
    Professional and Education Services Revenues
  Years Ended December 31,2007


2006


2005Cost of professional and education services revenue

$
29,223


$
19,560


$
16,680As a percent of professional and education services revenue


98
%


101
%


101
%Gross margin on professional and education services revenue

$
636


$
(225
)

$
(113
)As a percent of professional and education services revenue


2
%


(1
)%


(1
)%    32




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##### Table of Contents



Research
    and Development Expenses
  Years Ended December 31,2007


2006


2005Research & development expenses

$
24,963


$
21,517


$
18,481As a percent of total revenue


18
%


21
%


20
%           Sales and
    Marketing Expenses
  Years Ended December 31,2007


2006


2005Sales and marketing expenses

$
44,397


$
30,909


$
29,396As a percent of total revenue


33
%


30
%


33
%        33




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##### Table of Contents



General
    and Administrative Expenses
  Years Ended December 31,2007


2006


2005General and administrative expenses

$
18,211


$
12,952


$
11,231As a percent of total revenue


13
%


12
%


12
%                 Stock-Based
    Compensation Expense
  Share-Based Payment,
    
    2007 operating loss before taxes and net loss were higher by
    $4.2 million and basic and diluted loss per share were
    higher by $0.03, respectively; 34




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##### Table of Contents




    2006 operating profit before taxes and net income were lower by
    $3.6 million and basic and diluted earnings per share were
    lower by $0.04 and $0.03, respectively;      Restructuring
  Form 10-K.
  Interest
    and Other Income, Net
      Provision
    (Benefit) for Income Taxes
       35




---



##### Table of Contents



Accounting for Uncertainty in Income
    Taxes,
  eStara
    Acquisition
  five-day
    Liquidity
    and Capital Resources
      
    Although we incurred a net loss of $4.2 million, it
    included non-cash expenses for depreciation and amortization of
    $7.9 million, and stock-based compensation expense of
    $5.8 million.
    Deferred revenue increased $22.1 million during the year.
    Most of the invoices related to this deferred revenue were
    collected in 2007 and therefore increased our cash flow from
    operations. Under applicable revenue recognition rules, a
    portion of this amount was not recognized as revenue in 2007 as
    discussed earlier, thereby lowering our net income.
    Accounts receivable increased $5.6 million, or 17.0% in
    2007. The increase in accounts receivable is due to a 33%, or
    $33.8 million, increase in revenue and a $12.9 million
    increase in product license deferred revenue partially offset by
    collections of outstanding accounts receivable balances.
    Accrued expenses increased $4.1 million in 2007 due to
    higher operating expenses in 2007. We will be required to pay
    cash in future periods for these expenses that were recorded in
    2007.
    We deferred $3.1 million of costs related to the
    implementation of customer websites during 2007. Deferring these
    costs has the effect of a cash outflow in 2007 that will be
    recorded as expense in future periods.     36




---



##### Table of Contents



Accounts
    Receivable and Days Sales Outstanding
    Quarter Ended December 31,2007


2006(Dollar amounts in thousands)Days sales outstanding


93



97Revenue

$
39,326


$
32,207Accounts receivable, net

$
40,443


$
34,554Modified days sales outstanding


82



89Percent of accounts receivable less than 60 days


88
%


86
%     Credit
    Facility
       37




---



##### Table of Contents



Contractual
    Obligations
    Less than








More thanContractual Obligations

Total


1 year


1-3 years


3-5 years


5 yearsOperating Leases

$
12,427


$
4,668


$
4,811


$
2,119


$
829Tax obligations


1,968



1,481











487$
14,395


$
6,149


$
4,811


$
2,119


$
1,316   Recent
    Accounting Pronouncements
  Fair Value Measurements (FSP) 157-b, FSP 157-b FSP 157-b
  The Fair Value Option for Financial Assets and Financial
    Liabilities  Including an Amendment of
    SFAS 115
  Business Combinations, Accounting for
    Costs Associated with Exit or Disposal Activities
  Share-Based Payment Share Based Payment.
 38




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  held-to-maturity
   39




---



##### Table of Contents



Item 8.
    Consolidated
    Financial Statements and Supplementary Data  Report of
    Independent Registered Public Accounting Firm
  The Board of
    Directors and Stockholders
         Share-Based
    Payment Accounting for Uncertainty in Income Taxes, an interpretation
    of FASB Statement No. 109.
    Ernst &
    Young LLP
    40




---



##### Table of Contents



ART
    TECHNOLOGY GROUP, INC.
  CONSOLIDATED
    BALANCE SHEETS
 (In
    thousands, except share data)
  December 31,2007


2006ASSETSCurrent Assets:Cash and cash equivalents

$
34,419


$
17,911Marketable securities


16,460



13,312Accounts receivable, net of reserves of $958 ($447 in 2006)


40,443



34,554Deferred costs, current


790



Prepaid expenses and other current assets


2,741



2,501Total current assets


94,853



68,278Property and equipment, net


7,208



5,326Deferred costs, less current portion


2,337



Marketable securities


1,062



Other assets


1,475



1,036Intangible assets, net


11,109



16,013Goodwill


59,675



59,328$
177,719


$
149,981LIABILITIES AND STOCKHOLDERS EQUITYCurrent Liabilities:Accounts payable

$
3,619


$
2,607Accrued expenses


19,082



15,791Deferred revenue, current portion


35,577



23,708Accrued restructuring, current portion


855



1,213Capital lease obligations






56Total current liabilities


59,133



43,375Accrued restructuring, less current portion


225



1,031Deferred revenue, less current portion


10,777



501Other liabilities


487



Commitments and contingencies (Note 7 and 11)Stockholders equity:Preferred stock, $0.01 par value; authorized -
    10,000,000 shares; issued and outstanding  no
    shares






Common stock, $0.01 par value; authorized 
    200,000,000 shares; issued and outstanding 
    129,293,221 shares and 127,055,373 shares at
    December 31, 2007 and 2006, respectively


1,293



1,270Additional paid-in capital


305,151



296,291Accumulated deficit


(195,745
)


(191,558
)Treasury stock, at cost (986,960 shares at
    December 31, 2007)


(2,902
)


Accumulated other comprehensive loss


(700
)


(929
)Total stockholders equity


107,097



105,074$
177,719


$
149,981    41




---



##### Table of Contents



ART
    TECHNOLOGY GROUP, INC.
  CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except share and per share data)
  Year Ended December 31,2007


2006


2005Revenue:Product licenses

$
30,529


$
32,784


$
29,821Recurring services


76,672



51,113



44,258Professional and education services


29,859



19,335



16,567Total revenue


137,060



103,232



90,646Cost of Revenue:Product licenses


2,197



1,751



1,816Recurring services


24,119



11,239



6,575Professional and education services


29,223



19,560



16,680Total cost of revenue


55,539



32,550



25,071Gross Profit


81,521



70,682



65,575Operating Expenses:Research and development


24,963



21,517



18,481Sales and marketing


44,397



30,909



29,396General and administrative


18,211



12,952



11,231Restructuring charge (benefit)


(59
)


(62
)


885Total operating expenses


87,512



65,316



59,993Income (loss) from operations


(5,991
)


5,366



5,582Interest and other income, net


2,237



1,712



219Income (loss) before provision (benefit) for income taxes


(3,754
)


7,078



5,801Provision (benefit) for income taxes


433



(2,617
)


32Net income (loss)

$
(4,187
)

$
9,695


$
5,769Basic net income (loss) per share

$
(0.03
)

$
0.08


$
0.05Diluted net income (loss) per share

$
(0.03
)

$
0.08


$
0.05Basic weighted average common shares outstanding


127,528



115,280



109,446Diluted weighted average common shares outstanding


127,528



120,096



111,345    42




---



##### Table of Contents



ART
    TECHNOLOGY GROUP, INC.
  CONSOLIDATED
    STATEMENTS OF STOCKHOLDERS EQUITY
 AND COMPREHENSIVE INCOME (LOSS)
 (In thousands, except share data)
  AccumulatedCommon Stock


Additional








Other


Total


ComprehensiveNumber of


Par


Paid-in


Accumulated


Treasury


Comprehensive


Stockholders


IncomeShares


Value


Capital


Deficit


Stock


Loss


Equity


(Loss)Balance, December 31, 2004


108,141,966


$
1,081


$
249,465


$
(207,022
)

$



$
(1,339
)

$
42,185



Exercise of stock options


1,751,942



18



1,342















1,360



Issuance of common stock in connection with employee stock
    purchase plan


743,698



7



647















654



Comprehensive income:Net income














5,769











5,769


$
5,769Foreign currency translation adjustment






















192



192



192Comprehensive income





























$
5,961Balance, December 31, 2005


110,637,606



1,106



251,454



(201,253
)






(1,147
)


50,160



Exercise of stock options


1,474,897



15



1,535















1,550



Issuance of common stock in connection with employee stock
    purchase plan


327,643



3



658















661



Issuance of common stock and valuation of options related to
    eStara acquisition


14,523,386



145



38,894















39,039



Vesting of restricted stock related to the eStara acquisition


45,284







120















120



Vesting of restricted stock issued under the non-employee
    director plan


46,557



1



55















56



Stock based compensation expense related to employee stock awards










3,575















3,575



Comprehensive income:Net income














9,695











9,695


$
9,695Foreign currency translation adjustment






















218



218



218Comprehensive income





























$
9,913Balance, December 31, 2006


127,055,373



1,270



296,291



(191,558
)






(929
)


105,074



Exercise of stock options


1,622,028



16



2,031















2,047



Issuance of common stock in connection with employee stock
    purchase plan


410,720



4



897















901



Vesting of restricted stock related to the eStara acquisition


198,646



2



528















530



Vesting of restricted stock issued under the non-employee
    director plan


6,454



1



231















232



Repurchase of common stock


(986,960
)














(2,902
)






(2,902
)


Stock based compensation expense related to employee stock awards










5,173















5,173



Comprehensive loss:Net loss














(4,187
)










(4,187
)

$
(4,187
)Foreign currency translation adjustment






















229



229



229Comprehensive loss





























$
(3,958
)Balance, December 31, 2007


128,306,261


$
1,293


$
305,151


$
(195,745
)

$
(2,902
)

$
(700
)

$
107,097    43




---



##### Table of Contents



ART
    TECHNOLOGY GROUP, INC.
  CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
  Years Ended December 31,2007


2006


2005Cash Flows from Operating Activities:Net income (loss)

$
(4,187
)


9,695


$
5,769Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation and amortization


7,862



5,141



4,180Stock-based compensation expense


5,843



3,751



Non-cash impairment charges










1,167Net changes in operating assets and liabilities:Accounts receivable, net


(5,584
)


(9,424
)


2,940Prepaid expense and other current assets


(657
)


(1,183
)


434Deferred costs


(3,127
)






Deferred rent






562



664Accounts payable


1,012



(629
)


(1,428
)Accrued expenses and other liabilities


4,118



(169
)


310Deferred revenue


22,145



2,417



(4,067
)Accrued restructuring


(1,164
)


(2,536
)


(6,061
)Net cash provided by operating activities


26,261



7,625



3,908Cash Flows from Investing Activities:Purchases of marketable securities


(21,779
)


(18,904
)


(14,115
)Maturities of marketable securities


17,569



15,101



13,804Purchases of property and equipment


(4,840
)


(4,459
)


(1,924
)Payment of acquisition costs


(829
)


(7,153
)


(1,010
)(Increase) decrease in other assets


(22
)


(155
)


313Net cash used in investing activities


(9,901
)


(15,570
)


(2,932
)Cash Flows from Financing Activities:Principal payment on notes payable






(198
)


(413
)Proceeds from the exercise of stock options


2,047



1,537



1,360Proceeds from employee stock purchase plan


901



661



654Repurchase of common stock


(2,902
)






Payments on capital leases


(56
)


(63
)


(55
)Net cash (used in) provided by financing activities


(10
)


1,937



1,546Effect of foreign exchange rate changes on cash and cash
    equivalents


158



(141
)


228Net increase (decrease) in cash and cash equivalents


16,508



(6,149
)


2,750Cash and cash equivalents, beginning of period


17,911



24,060



21,310Cash and cash equivalents, end of period

$
34,419


$
17,911


$
24,060Supplemental Disclosure of Cash Flow information:Cash paid for interest expense

$



$
11


$
18Cash paid for income taxes

$



$



$
39Supplemental Disclosure of Noncash Investing and Financing
    Activities:Issuance of stock and options related to acquisitions

$



$
39,039


$
  44




---



##### Table of Contents



(1)
    Organization,
    Business and Summary of Significant Accounting
    Policies  e-commerce e-commerce
  (a)
    Principles
    of Consolidation    (b)
    Use of
    Estimates    (c)
    Revenue
    Recognition  e-commerce e-Commerce 97-2, Software Revenue Recognition
    (SOP 97-2) Revenue Recognition
    (SAB 104) No. 00-21, Revenue Arrangements with Multiple Deliverables
    (EITF 00-21),
    1. Sales
    of Perpetual Software Licenses
  SOP 97-2 , SOP 98-9, Modifications of
    SOP 97-2,
    Software Revenue Recognition, With Respect to Certain
    Transactions. SOP 97-2 SOP 98-9,
 45




---



##### Table of Contents



SOP 97-2.
    SOP 98-9. e-commerce e-commerce
  2. Sales
    of Application Hosting Services:
  No. 00-3, Application of AICPA Statement of Position
    97-2 to
    Arrangements that include the Right to Use Software Stored on
    Another Entitys Hardware, EITF 00-21.
  EITF 00-3, SOP 97-2, EITF 00-21 EITF 00-21, set-up
 46




---



##### Table of Contents



set-up set-up
  3. Sales
    of eStara
    e-Commerce
    Optimization Services Solutions
  e-commerce e-commerce e-commerce e-commerce e-commerce
  e-commerce e-commerce
  (d)
    Accounts
    Receivable and Allowances for Accounts Receivable    Revenue Recognition When Right of Return Exists,
    Beginning of





Deductions/


Balance at EndPeriod


Additions


Write-Offs


of Period(In thousands)Year Ended December 31, 2005

$
680


$
677


$
(579
)

$
778Year Ended December 31, 2006

$
778


$
323


$
(654
)

$
447Year Ended December 31, 2007

$
447


$
1,670


$
(1,159
)

$
958  47




---



##### Table of Contents



(e)
    Cost
    of Product License Revenues    (f)
    Cost
    of Recurring Services Revenues    (g)
    Cost
    of Professional and Educational Services Revenues    (h)
    Net
    Income (Loss) Per Share  Share-Based
    Payment in-the-money
    2007


2006


2005(In thousands, except per share amounts)Net income (loss)

$
(4,187
)

$
9,695


$
5,769Weighted average common shares outstanding used in computing
    basic net income per share


127,528



115,280



109,446Dilutive employee common stock equivalents






4,816



1,899Total weighted average common stock and common stock equivalent
    shares outstanding used in computing diluted net income per
    share


127,528



120,096



111,345Basic net income (loss) per share

$
(0.03
)

$
0.08


$
0.05Diluted net income (loss) per share

$
(0.03
)

$
0.08


$
0.05Anti-dilutive common stock equivalents


16,506



5,237



7,443   (i)
    Cash,
    Cash Equivalents and Marketable Securities  Accounting for
    Certain Investments in Debt and Equity Securities.
 48




---



##### Table of Contents



held-to-maturity.
    December 31,2007


2006(In thousands)Cash and cash equivalents:Cash

$
21,678


$
16,750Money market accounts


4,453



262Commercial paper


7,288



899Certificates of deposit


1,000



Total cash and cash equivalents

$
34,419


$
17,911Marketable securities:Maturities within 1 year:U.S. Treasury and U.S. Government Agency securities

$



$
996Certificates of deposit


902



1,775Commercial paper


9,794



4,792Corporate debt securities


5,764



5,749Maturities within 1 to 3 years:Corporate debt securities


1,062



Total marketable securities

$
17,522


$
13,312   (j)
    Property
    and Equipment    December 31,Asset Classification

Estimated Useful Life

2007


2006(In thousands)Computer equipment

3 years

$
8,729


$
5,839Leasehold improvements

Lesser of useful life or life of lease


2,443



2,309Furniture and fixtures

5 years


536



1,512Computer software

3 years


2,128



4,87513,836



14,535Less  accumulated depreciation and amortization




(6,628
)


(9,209
)$
7,208


$
5,326    49




---



##### Table of Contents



Accounting for the
    Impairment or Disposal of Long-Lived Assets
  (k)
    Research
    and Development Expenses for Software Products  Accounting for Research
    and Development Costs, Accounting for the Costs of Computer Software to be Sold,
    Leased, or Otherwise Marketed,
  Accounting for Computer Software Developed or Obtained
    for Internal Use
    (l)
    Income
    Taxes  Accounting for Income Taxes.
 50




---



##### Table of Contents



(m)
    Stock-Based
    Compensation  Share-Based Payment Accounting for Stock Issued to Employees Statement of Cash
    Flows
  (n)
    Comprehensive
    Income (Loss)  Reporting Comprehensive Income
  (o)
    Fair
    Value of Financial Instruments    (p)
    Concentrations
    of Credit Risk        (q)
    Goodwill  Goodwill and Other Intangible Assets
 51




---



##### Table of Contents



As of, and ForThe Year EndedDecember 31,2007


2006(In thousands)Balance at beginning of year

$
59,328


$
27,347Acquisition of eStara






32,071eStara earn-out payment


621



Collection of accounts receivable previously reserved


(274
)


Reversal of accruals related to Primus acquisition






(90
)$
59,675


$
59,328     (r)
    Intangible
    Assets        December 31, 2007


December 31, 2006Gross Carrying


Accumulated


Net Book


Gross Carrying


Accumulated


Net BookAmount


Amortization


Value


Amount


Amortization


Value(In thousands)Customer relationships

$
11,500


$
(6,196
)

$
5,304


$
11,500


$
(3,492
)

$
8,008Purchased technology


8,900



(4,145
)


4,755



8,900



(2,336
)


6,564Trademarks


1,400



(350
)


1,050



1,400



(70
)


1,330Non-compete agreements


400



(400
)






400



(289
)


111Total intangible assets

$
22,200


$
(11,091
)

$
11,109


$
22,200


$
(6,187
)

$
16,013    52




---



##### Table of Contents



Total(In thousands)2008

$
4,0132009


3,3812010


2,7092011


1,006Total

$
11,109   (s)
    Foreign
    Currency Translation  Foreign Currency Translation
  (t)
    Recent
    Accounting Pronouncements  Fair Value Measurements
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities  Including an Amendment of
    SFAS 115
  Business Combinations
 53




---



##### Table of Contents



Accounting for Costs Associated with Exit or
    Disposal Activities,
  Share-Based Payment. Share Based
    Payment.
  (2)
    Disclosures
    About Segments of an Enterprise  Disclosures About Segments of an
    Enterprise and Related Information
      Year Ended December 31,2007


2006


2005United States


68
%


75
%


76
%Europe, Middle East, Africa (excluding UK)


16
%


9
%


9
%United Kingdom (UK)


14
%


14
%


14
%Other


2
%


2
%


1
%100
%


100
%


100
%  54




---



##### Table of Contents



(3)
    Credit
    Facility and Notes Payable  Credit
    Facility
            (4)
    Income
    Taxes  Income
    Taxes
    Years Ended December 31,2007


2006


2005(In thousands)Domestic

$
(7,280
)

$
3,176


$
5,777Foreign


3,526



3,902



24Total

$
(3,754
)

$
7,078


$
5,801  55




---



##### Table of Contents



Years Ended December 31,2007


2006


2005(In thousands)FederalCurrent

$
9


$



$
Deferred










StateCurrent






12



Deferred










ForeignCurrent


424



(2,629
)


32Deferred










$
433


$
(2,617
)

$
32     Years Ended December 31,2007


2006


2005Federal tax at statutory rate


(35.0
)%


35.0
%


35.0
%State taxes, net of federal benefit


(4.7
)


0.1



0.9Stock-based compensation


2.8



18.7



Meals and entertainment


3.4



2.1



2.5Reversal of previously accrued taxes






(36.8
)


Research and development


(13.6
)


(34.6
)


Other


1.3



6.8



Provision before valuation allowance


(45.8
)


(8.7
)


38.4Increase (use) of fully reserved net operating losses


57.3



(28.0
)


(37.8
)11.5
%


(36.7
)%


0.6
%  56




---



##### Table of Contents



December 31,2007


2006(in thousands)Deferred tax assets:Restructuring

$
381


$
1,025Depreciation and amortization


708



1,348Reserves and accruals


3,903



72Capitalized expenses


16,781



20,450US income tax credits


8,164



7,643Net operating losses


87,717



93,218Total gross deferred tax assets


117,654



123,756Valuation allowance


(113,245
)


(117,797
)Total deferred tax assets


4,409



5,959Deferred tax liabilities:Intangible assets


(4,409
)


(5,959
)Net deferred tax assets

$



$
          57




---



##### Table of Contents



Accounting for
    Uncertainty in Income Taxes-an Interpretation of FASB Statement
    No. 109
        Balance at January 1, 2007

$
4,599Increases for tax positions taken during a prior period


313Decreases for tax positions taken during the current period


(618
)Decreases relating to settlements


Decreases resulting from the expiration of the statute of
    limitations


Balance at December 31, 2007

$
4,294        58




---



##### Table of Contents



(5)
    Stock-Based
    Compensation and Stockholders Equity  Equity
    Compensation Plans
    1996
    Stock Option Plan
      1999
    Outside Director Stock Option Plan
        Primus
    Stock Option Plans
   59




---



##### Table of Contents



1999
    Employee Stock Purchase Plan
    Grant-Date
    Fair Value
    Years Ended December 31,Stock Options

2007


2006


2005Options granted (in thousands)


1,478



4,540



3,839Weighted-average exercise price

$
2.86


$
2.64


$
1.22Weighted average grant date fair value

$
2.25


$
2.28


$
0.83Assumptions:Expected volatility


95.3
%


113.2
%


93.5
%Expected term (in years)


6.25



6.25



4.11Risk-free interest rate


4.33
%


4.68
%


3.71
%Expected dividend yield


0
%


0
%


0
%          60




---



##### Table of Contents



Stock-Based
    Compensation Expense
      
    2007 operating loss before taxes and net loss were higher by
    $4.2 million and basic and diluted loss per share were
    higher by $0.03, respectively;
    2006 operating profit before taxes and net income were lower by
    $3.6 million and basic and diluted earnings per share were
    lower by $0.04 and $0.03, respectively;      Year EndingDecember 31,2005(In thousands)Net income as reported

$
5,769Add: Stock-based compensation expense included in reported net
    income


Deduct: Total stock-based compensation expense determined under
    fair value method for all awards


(2,553
)Pro forma net income

$
3,216Basic and diluted net income per share:As reported

$
0.05Pro forma basic and diluted net income per share:

$
0.03   Stock-Based
    Compensation Activity
    Weighted AverageWeighted Average


RemainingNumber


Exercise Price


Contractual Term


Aggregateof Options


Per Share


in Years


Intrinsic Value(In thousands, except weighted average exercise price andweighted average remaining contractual term in years)Outstanding, December 31, 2006


15,229


$
2.55Granted


1,487



2.87Exercised


(1,622
)


1.27Cancelled


(947
)


4.16Outstanding, December 31, 2007


14,147


$
2.62



6.8


$
34,185Exercisable, December 31, 2007


9,223


$
2.77



6.1


$
24,347Options vested or expected to vest
    at December 31, 2007


13,748


$
2.64



6.5


$
33,374  61




---



##### Table of Contents



(1)
    
    In addition to the vested options, the Company expects a portion
    of the unvested options to vest at some point in the future.
    Options expected to vest are calculated by applying an estimated
    forfeiture rate to the unvested options.      WeightedRestricted


Average GrantShares


Date Fair Valueand RSUs


Per Share(In thousands, exceptper share amounts)Non-Vested shares outstanding at December 31, 2006


354


$
2.52Awards granted


2,436


$
2.55Restrictions lapsed


(209
)

$
2.52Awards forfeited


(222
)

$
2.37Non-Vested shares outstanding at December 31, 2007


2,359


$
2.57         Adoption
    of Shareholders Rights Plan
   62




---



##### Table of Contents



(6)
    Acquisitions  Acquisition
    of eStara, Inc.
  e-commerce five-day
     63




---



##### Table of Contents



Cash

$
2,699Accounts receivable


3,671Other current assets


188Property, plant and equipment


167Goodwill


32,071Intangible assets:Customer relationships (estimated useful life of 4 years)


7,300Developed product technology (estimated useful life of
    5 years)


5,300Trademarks (estimated life of 5 years)


1,400Total intangible assets


14,000Other long-term assets


37Accounts payable


(517
)Deferred revenue


(679
)Accrued and other expenses


(1,821
)Total purchase price

$
49,816     Year EndedDecember 31,2006(Unaudited)Revenue

$
113,935Net income

$
7,111Net income per share  basic

$
0.06Net income per share  assuming dilution

$
0.05   Acquisition
    of CleverSet, Inc.
  e-commerce e-commerce
  (7)
    Commitments
    and Contingencies  Leases
   64




---



##### Table of Contents



2008

$
4,6682009


2,7172010


2,0942011


1,9142012


205Thereafter


829Total future minimum lease payments

$
12,427       Indemnifications
        (8)
    Employee
    Benefit Plan   65




---



##### Table of Contents



(9)
    Accrued
    Expenses    2007


2006(In thousands)Compensation and benefits

$
9,348


$
6,609Income taxes


1,887



1,560Professional Fees


3,475



1,985Other


4,372



5,637$
19,082


$
15,791   (10)
    Restructuring  Accounting for Costs Associated with
    Exit or Disposal Activities Employers Accounting for Settlements and Curtailments
    of Defined Benefit Pension Plans and for Termination Benefits Restructuring and Impairment Charges. No. 94-3, Liability Recognition for Certain Employee Termination
    Benefits and Other Costs to Exit an Activity (Including Certain
    Costs Incurred in a Restructuring)
   66




---



##### Table of Contents



Restructuring Charge (Benefit)2007


2006


2005


2004


2003


2002


2001


Total(In thousands)Facility-rated costs and impairments

$



$



$
1,817


$
1,488


$
1,464


$
14,634


$
59,418


$
78,821Employee severance and benefit costs














2,461



1,236



3,553



7,938



15,188Asset impairments


























4,205



4,205Exchangeable share settlement


























1,263



1,263Marketing costs


























851



851Legal and accounting


























405



405Restructuring charge










1,817



3,949



2,700



18,187



74,080



100,733Changes in estimates reducing other accruals


(200
)


























(200
)Adjustments to 2001 action, net


61



545



(792
)


(60
)


(8,338
)


688



1,500



(6,396
)Adjustments to 2002 action, net










43



(242
)


(5,118
)










(5,317
)Adjustments to 2003 action, net


71



(607
)


74



(77
)


410











(129
)Adjustments to 2004 action, net










(257
)


















(257
)Adjustments to 2005 action, net


9



























9Total adjustments to prior actions, net


(59
)


(62
)


(932
)


(379
)


(13,046
)


688



1,500



(12,290
)Restructuring charge (benefit)

$
(59
)

$
(62
)

$
885


$
3,570


$
(10,346
)

$
18,875


$
75,580


$
88,443   2007
    Adjustments
    2006
    Adjustments
  sub-lease sub-lease sub-lease
  sub-tenant sub-lease sub-tenant,
    2005
    Adjustments
   67




---



##### Table of Contents



sub-lease
  Form 10-K.
    Restructuring Accrual2005


2004


2003


2002


2001


Total(In thousands)Balance December 31, 2004

$



$
2,319


$
1,373


$
1,155


$
6,311


$
11,158Restructuring charges for the year ended
    December 31, 2005

$
1,817


















$
1,817Changes in estimates resulting in additional charges






200



98



91







389Changes in estimates reducing accruals






(457
)


(24
)


(48
)


(792
)


(1,321
)Write-offs


(1,167
)


















(1,167
)Facility related payments


(264
)


(317
)


(428
)


(548
)


(2,676
)


(4,233
)Employee related payments






(1,546
)














(1,546
)Balance December 31, 2005

$
386


$
199


$
1,019


$
650


$
2,843


$
5,097Changes in estimates reducing accruals









$
(607
)





$
(147
)

$
(754
)Facility related payments


(123
)


(143
)


(223
)


(333
)


(1,596
)


(2,418
)Foreign Currency exchange














(317
)






(317
)Employee related payments






(56
)














(56
)Changes in estimates resulting in additional accruals/charges


















692



692Balance December 31, 2006

$
263


$



$
189


$



$
1,792


$
2,244Changes in estimate reducing accrualsFacility related payments

$
(272
)





$
(131
)





$
(906
)

$
(1,309
)Foreign Currency exchange










4











4Employee related paymentsChanges in estimates resulting in additional accruals/charges


9







71







61



141Balance December 31, 2007

$



$



$
133


$



$
947


$
1,080   Abandoned
    Facilities Obligations
   68




---



##### Table of Contents



sub-lease sub-lease
  Lease Locations

2008


2009


Total(In thousands)Waltham, MA

$
1,384


$
346


$
1,730Reading, UK


537



89



626Facility obligations, gross


1,921



435



2,356Contracted sublet income


(1,055
)


(192
)


(1,247
)Net cash obligations

$
866


$
243


$
1,109   (11)
    Litigation  Rule 10b-5
    e-commerce e-commerce
 69




---



##### Table of Contents



(12) Quarterly
    Results of Operations (Unaudited)
    Year Ended December 31, 2007March 31,


June 30,


September 30,


December 31,2007


2007


2007


2007(In thousands, except per share amounts)Total revenues

$
29,232


$
32,616


$
35,886


$
39,326Gross profit


17,951



19,517



21,577



22,476Net income (loss)


(1,461
)


(2,748
)


(760
)


782Basic and diluted net income (loss) per share

$
(0.01
)

$
(0.02
)

$
(0.01
)

$
0.01   Year Ended December 31, 2006March 31,


June 30,


September 30,


December 31,2006


2006


2006


2006(In thousands, except per share amounts)Total revenues

$
23,956


$
25,229


$
21,840


$
32,207Gross profit


16,793



17,808



14,173



21,908Net income (loss)


2,641



2,275



(285
)


5,064Basic and diluted net income (loss) per share

$
0.02


$
0.02


$
(0.00
)

$
0.04  70




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  1.
    Managements
    Report on Disclosure Controls and Procedures  Rules 13a-15(e) 15d-15(e)). Rule 13a-15(e)
  2.
    Internal
    Control over Financial Reporting  (a)
    Managements
    Annual Report on Internal Control Over Financial
    Reporting           71




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm
  The Board of
    Directors and Stockholders
               Ernst &
    Young LLP
    72




---



##### Table of Contents



4.
    Changes
    in internal control over financial reporting.  Form 10-K
  
    Hiring of key leadership accounting personnel to focus on our
    technical accounting issues and management of the monthly close
    and SEC reporting processes; and
    Improvement of our documentation and training related to
    policies, procedures and controls related to our significant
    accounts and processes;
    Steps to reduce the complexity of our consolidation processes;
    and
    Enhancement of our policies and procedures for accounting review
    of our:  
    Month-end close;
    Account reconciliation processes;
    Journal entries; and
    Write-offs, restructuring-related and purchase
    accounting-related entries, and impairment reviews.    Item 9B.
    Other
    information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance    http://www.atg.com/About
  Form 8-K Form 8-K
  Item 11.
    Executive
    Compensation   73




---



##### Table of Contents



Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   74




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules  (a) (1) Financial
    Statements
    
    Report of Independent Registered Public Accounting Firm
    Consolidated Balance Sheets as of December 31, 2007 and 2006
    Consolidated Statements of Operations for the years ended
    December 31, 2007, 2006 and 2005
    Consolidated Statements of Stockholders Equity and
    Comprehensive Income (Loss) for the years ended
    December 31, 2007, 2006 and 2005
    Consolidated Statements of Cash Flows for the years ended
    December 31, 2007, 2006 and 2005
    Notes to Consolidated Financial Statements  (a) (2) Financial
    Statement Schedule
    (a)
    (3) Exhibits   75




---



##### Table of Contents



SIGNATURES       By:
    /s/  ROBERT
    D. BURKE   Chief Executive Officer and President
    Name

Title/s/  ROBERT
    D. BURKERobert
    D. Burke

Chief Executive Officer and President(Principal Executive Officer)/s/  JULIE
    M.B. BRADLEYJulie
    M.B. Bradley

Senior Vice President and Chief Financial Officer(Principal Financial and Accounting Officer)/s/  MICHAEL
    A. BROCHUMichael
    A. Brochu

Director/s/  DAVID
    B. ELSBREEDavid
    B. Elsbree

Director/s/  JOHN
    R. HELDJohn
    R. Held

Director/s/  ILENE
    H. LANGIlene
    H. Lang

Director/s/  MARY
    E. MAKELAMary
    E. Makela

Director/s/  DANIEL
    C. REGISDaniel
    C. Regis

Chairman of the Board/s/  PHYLLIS
    S. SWERSKYPhyllis
    S. Swersky

Director  76




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##### Table of Contents



EXHIBIT INDEX
  Filed withThis

Incorporated by ReferenceExhibit



Form





ExhibitNo.

Description

10-K

Form

Filing Date

No.2
.1

Agreement and Plan of Merger dated as of January 19, 2008
    among ATG, Einstein Acquisition Corp., eShopperTools.com, Inc.,
    and the stockholder representative and principal stockholders of
    eShopperTools.com, Inc., named therein



8-K

January 25, 2008


10.12
.2

Agreement and Plan of Merger dated as of September 18, 2006
    among ATG, eStara, Inc., Arlington Acquisition Corp., Storrow
    Acquisition Corp., and the stockholder representative and
    principal stockholders of eStara named therein



8-K

September 22, 2006


10.12
.3

Amendment No. 1 to Agreement and Plan of Merger dated as of
    October 2, 2006 among ATG, eStara, Inc. and the stockholder
    representative named therein



8-K

October 6, 2006


2.23
.1

Amended and Restated Certificate of Incorporation



S-8

June 12, 2003


4.13
.2

Amended and Restated By-Laws



S-3

July 6, 2001


4.24
.1

Rights Agreement dated September 26, 2001 with EquiServe
    Trust Company, N.A.
    (SEC file
    no. 000-26679)



8-K

October 2, 2001


4.110
.1*

Amended and Restated 1996 Stock Option Plan (including forms of
    agreements)



10-Q

August 7, 2007


10.110
.2*

Amended and Restated 1999 Outside Director Stock Option Plan
    (including forms of agreements)



10-Q

August 7, 2007


10.210
.3*

1999 Employee Stock Purchase Plan



DEF14A
    (proxy
    statement)

April 10, 2006


Annex A10
.4

Primus 1999 Non-Officer Stock Option Plan



10-K

March 16, 2005


10.410
.5

Primus 1999 Stock Incentive Compensation Plan, as amended



8-K

April 25, 2007


99.310
.6*

General
    Change-in-Control
    Policy for Employees



10-Q

November 9, 2004


10.2110
.7*

Amended and Restated Employment Agreement dated November 8,
    2004 with Robert Burke



10-Q

November 9, 2004


10.2210
.8*

Offer letter with Julie M.B. Bradley dated July 6, 2005



10-Q

November 8, 2005


10.110
.9*

Offer letter with John Federman dated September 15, 2006

X10
.10*

Offer Letter with Andrew Reynolds dated July 23, 2007

X10
.11*

Resignation Agreement between John Federman and Company, dated
    October 9, 2007

X

10
.12*

2007 Executive Management Compensation Plan, as amended,
    July 23, 2007



10-Q

November 5, 2007


10.210
.13*

Amended and Restated Non-Employee Director Compensation Plan, as
    amended



10-Q

August 7, 2007


10.410
.14

Lease agreement dated May 6, 2006 with RREEF America REIT
    II Corp. PPP



10-Q

May 10, 2006


10.33 77




---



##### Table of Contents



Filed withThis

Incorporated by ReferenceExhibit



Form





ExhibitNo.

Description

10-K

Form

Filing Date

No.10
.15

Lease dated October 6, 1999 with Pine Street
    Investors I, LLC



10-K

March 28, 2003


10.510
.16

First Amendment to Lease dated December 30, 1999 with Pine
    Street Investors I, LLC



10-K

March 28, 2003


10.610
.17

Second Amendment to Lease dated August 20, 2000 with Pine
    Street Investors I, LLC



10-K

March 28, 2003


10.710
.18

Third Amendment to Lease dated December 22, 2000 with Pine
    Street Investors I, LLC



10-K

March 28, 2003


10.810
.19

Fourth Amendment to Lease dated July 15, 2001 with Pine
    Street Investors I, LLC



10-K

March 15, 2004


10.1010
.20

Fifth Amendment to Lease dated March 31, 2003 with Pine
    Street Investors I, LLC



10-K

March 15, 2004


10.1110
.21

Amended and Restated Loan and Security Agreement dated
    June 13, 2002 with Silicon Valley Bank



10-Q

August 14, 2002


10.110
.22

First Loan Modification Agreement dated September 30, 2002
    with Silicon Valley Bank



10-Q

November 14, 2002


10.110
.23

Amendment Agreement dated October 4, 2002 with Silicon
    Valley Bank



10-Q

November 14, 2002


10.210
.24

Second Loan Modification Agreement dated December 20, 2002
    with Silicon Valley Bank



10-K

March 28, 2003


10.2110
.25

Fourth Loan Modification Agreement dated November 26, 2003
    with Silicon Valley Bank



10-K

March 15, 2004


10.2510
.26

Fifth Loan Modification Agreement dated June 2004 with Silicon
    Valley Bank



10-Q

August 9, 2004


10.2610
.27

Letter Agreement re: Loan Arrangement with Silicon Valley Bank
    dated June 16, 2004



10-Q

August 9, 2004


10.2510
.28

Sixth Loan Modification Agreement dated November 24, 2004
    with Silicon Valley Bank



10-K

March 16, 2005


10.2810
.29

Seventh Loan Modification Agreement dated December 21, 2004
    with Silicon Valley Bank



10-K

March 16, 2005


10.2910
.30

Eighth Loan Modification Agreement dated December 30, 2005
    with Silicon Valley Bank



10-K

March 16, 2006


10.3110
.31

Ninth Loan Modification Agreement dated February 10, 2006
    with Silicon Valley Bank



10-Q

May 10, 2006


10.3210
.32

Tenth Loan Modification Agreement dated October 4, 2006
    with Silicon Valley Bank



8-K

October 5, 2006


10.110
.33

Eleventh Loan Modification Agreement dated May 7, 2007 with
    Silicon Valley Bank



10-Q

August 7, 2007


10.510
.34

Twelfth Loan Modification Agreement dated September 5, 2007
    with Silicon Valley Bank



10-Q

November 5, 2007


10.110
.35

Securities Account Control Agreement dated December 20,
    2002 with Silicon Valley Bank



10-K

March 28, 2003


10.2021
.1

Subsidiaries

X23
.1

Consent of Ernst & Young LLP

X 78




---



##### Table of Contents



Filed withThis

Incorporated by ReferenceExhibit



Form





ExhibitNo.

Description

10-K

Form

Filing Date

No.31
.1

Certification of Principal Executive Officer Pursuant to
    Exchange Act Rules
    13a-14 and
    15d-14, as
    Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002

X31
.2

Certification of Principal Financial and Accounting Officer
    Pursuant to Exchange Act Rules
    13a-14 and
    15d-14, as
    Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002

X32
.1

Certification of Principal Executive Officer Pursuant to
    18 U.S.C. Section 1350, as Adopted Pursuant to
    Section 906 of the Sarbanes-Oxley Act of 2002

X32
.2

Certification of the Principal Financial and Accounting Officer
    Pursuant to 18 U.S.C. Section 1350, as Adopted
    Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

X      79