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

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2008ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number
    001-33707
      CONSTANT CONTACT,
    INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

04-3285398(State or other jurisdiction of
    
    incorporation or organization)

(I.R.S. Employer
    Identification No.)Reservoir Place, 1601 Trapelo Road, Suite 329

02451Waltham, Massachusetts

(Zip code)(Address of principal executive
    offices)   (781) 472-8100
    (Registrants telephone number, including area code)
    Securities registered pursuant to Section 12(b) of the
    Act:
 Title of Class

Name of Exchange on Which RegisteredCommon Stock, $.01 par value

NASDAQ Global Market   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
  Large accelerated
    filer o

Accelerated
    filer þ

Non-accelerated
    filer o
    (Do not check if a smaller reporting company)

Smaller reporting
    company o   Rule 12b-2 o þ
      Form 10-K.




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##### 





CONSTANT
    CONTACT, INC.
  INDEX
   
 PageNumberPART IITEM 1.


BUSINESS


2ITEM 1A.


RISK FACTORS


14ITEM 1B.


UNRESOLVED STAFF COMMENTS


28ITEM 2.


PROPERTIES


28ITEM 3.


LEGAL PROCEEDINGS


29ITEM 4.


SUBMISSION OF MATTERS TO A VOTE OF SECURITY
    HOLDERS


29PART IIITEM 5.


MARKET FOR REGISTRANTS COMMON EQUITY,
    RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY
    SECURITIES


29ITEM 6.


SELECTED FINANCIAL DATA


31ITEM 7.


MANAGEMENTS DISCUSSION AND ANALYSIS OF
    FINANCIAL CONDITION AND RESULTS OF OPERATIONS


32ITEM 7A.


QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT
    MARKET RISK


43ITEM 8.


FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA


44ITEM 9.


CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON
    ACCOUNTING AND FINANCIAL DISCLOSURE


67ITEM 9A.


CONTROLS AND PROCEDURES


67ITEM 9B.


OTHER INFORMATION


68PART IIIITEM 10.


DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE
    GOVERNANCE


68ITEM 11.


EXECUTIVE COMPENSATION


68ITEM 12.


SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
    AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS


68ITEM 13.


CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS,
    AND DIRECTOR INDEPENDENCE


68ITEM 14.


PRINCIPAL ACCOUNTANT FEES AND SERVICES


68PART IVITEM 15.


EXHIBITS AND FINANCIAL STATEMENT
    SCHEDULES


69SIGNATURES


70Ex-10.28 2009 Executive Cash Incentive Bonus PlanEx-10.32 Letter Agreement, dated December 9, 2008, between the Company and Nancie FreitasEx-21.1 Subsidiaries of the CompanyEx-23.1 Consent of PricewaterhouseCoopers LLPEx-31.1 Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002Ex-31.2 Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002Ex-32 Certification of Chief Executive Officer and Chief Financial Officer pursuant to Section 906 of the Sarbanes-Oxley Act of 2002




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Forward-Looking
    Statements
  Form 10-K Form 10-K Form 10-K,
  Form 10-K




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PART I  ITEM 1.
    BUSINESS  Overview
        pay-per-click word-of-mouth
 2




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pay-per-click
    (781) 472-8100. www.constantcontact.com. Form 10-K. www.sec.gov
  Industry
    Background
  Benefits
    of Email Marketing
    
    Targeted.  Email marketing enables
    organizations to tailor messages to specific audiences and
    enables recipients to respond through links to websites.
    Timely.  The cycle from concept through design
    and execution for email marketing is much shorter than direct
    mail because there is no need to print and mail. Reducing cycle
    time allows organizations to rapidly respond to market
    conditions and opportunities.
    Efficient.  Email marketing combines low cost
    with measurable responses leading to an attractive return on
    investment.  Constant
    Contact Market Opportunity
    4-digit
 3




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
    Unfamiliar with Email Marketing.  Many small
    organizations are not familiar with the benefits of email
    marketing and do not understand how to effectively build a
    permission-based contact list, develop an effective email
    marketing campaign and measure its effectiveness.
    Lack of Technical Expertise.  Small
    organizations often do not have the technical expertise to
    implement email marketing software or to design and execute
    effective email marketing campaigns.
    Limited Budgets.  Small organizations typically
    have small marketing budgets. They generally cannot afford to
    hire in-house staff or engage an outside marketing agency to
    develop, execute and evaluate an email marketing campaign,
    particularly during times of economic distress.    
    General Email Applications.  General email
    applications and services such as Microsoft
    Outlook®,

    Google
    Gmail®,

    America
    Online®

    and Microsoft
    Hotmail®

    are generally designed for
    one-to-one
    emails. They do not easily incorporate the formatting, graphics,
    and links necessary to produce professional-looking email
    marketing campaigns. They also limit the number of recipients
    per email and do not have the reporting capabilities to allow
    users to evaluate the effectiveness of their email marketing
    campaigns. Finally, they do not provide regulatory compliance
    tools to assist the sender in complying with anti-spam
    requirements.
    Enterprise Service Providers.  Enterprise
    service providers, such as Epsilon Data Management LLC (a
    subsidiary of Alliance Data Systems Corporation), ExactTarget,
    Inc., Responsys Inc. and Silverpop Systems Inc. focus on large
    organizations with sizeable marketing budgets. These providers
    offer sophisticated, Internet-based marketing services and tools
    with professional and customized execution and reporting at a
    price and scale that is generally beyond the scope of most small
    organizations.    Our
    Solution
    
    Easy.  We enable customers to easily create
    great looking email marketing campaigns without prior expertise
    in marketing, graphic design or Hyper Text Markup Language, or
    HTML. Our product includes over 375 customizable templates
    intelligently organized to streamline creation of a
    professional-looking message. We also provide customers with
    tools that make it easy for them to import, build and manage
    contact lists and to monitor delivery and response. We further
    enhance our product with free customer support and daily
    webinars covering topics ranging from a general product tour to
    email marketing best practices.
    Fast.  Because our product is accessed through
    the web, customers only need access to a computer and the
    Internet to begin using it to create and send their first email
    campaign. A customer can typically create and send their first
    campaign in less than one hour. Once a customer has loaded their
    contact list, created and sent their first campaign, our product
    becomes even faster to use as this information is stored and can
    be easily accessed for future use.  
    Affordable.  We offer our email marketing
    product on a subscription basis, eliminating the up-front
    license fee associated with traditional software. Instead, we
    encourage potential customers to try our product without charge
    for a 60-day
    period. After the free trial, customers can use our product for
    a subscription fee of as low as $15 per month with the amount of
    the fee increasing based on the number of unique contacts or
    email addresses in a customers contact list. We provide
    discounted pricing for prepayments, non-profits and multiple
    product purchases. For the year ended December 31, 2008,
    the average monthly amount that we charged a customer for our
    email marketing solution alone was approximately $33.00. 4




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
    Effective.  Our product provides our customers
    with an effective way to reach their customers, clients and
    members. According to data measured by ReturnPath, Inc.,
    approximately 98% of our customers emails were delivered
    past any spam filters or controls to their target email inboxes
    in the United States during 2008. We have made significant
    investments in systems and processes to reduce the number of our
    customers emails that are blocked as possible spam. In
    addition, to help ensure that customers emails are
    delivered, we have developed relationships with leading Internet
    Service Providers, or ISPs.
    Measurable.  Our email marketing campaign
    reports provide customers with information and data regarding
    each campaign. In addition to receiving aggregate data on email
    receipt, open rates and click-through rates per campaign, our
    customers can identify on an individual basis which contacts
    received and opened an email and which links in the email they
    clicked on. We also provide comparable metrics for our overall
    customer base. This feedback permits customers to alter the
    content or timing of their campaigns to capitalize on aspects of
    prior campaigns that were positively received by their
    constituents.  Business
    Strengths
    
    Focus on Small Organizations.  We have
    maintained a consistent and exclusive focus on small
    organizations, which has enabled us to design a full customer
    experience tuned to their unique needs. Through the website
    experience, product usability, affordable price point and
    personal touch of our communications consultants and customer
    support representatives, we work to ensure that small
    organizations feel that we are committed to their success.
    Efficient Customer Acquisition Model.  We
    believe that we have developed an efficient customer acquisition
    model that generates an attractive return on our sales and
    marketing expenditures. We utilize a variety of marketing
    channels to acquire new customers including online advertising,
    partner relationships, radio advertising, online and in-person
    seminars and brand awareness. In 2008, our cost of email
    marketing customer acquisition, which we define as our total
    annual sales and marketing expense divided by the gross number
    of email marketing customers added during the year, was
    approximately $304 per email marketing customer. For 2008, our
    average monthly total revenue per email marketing customer,
    including all sources of revenue, was $35.01, implying payback
    on a revenue basis in less than one year.
    High Degree of Recurring Revenue.  We benefit
    from a high level of customer loyalty. From January 2005 through
    December 2008, at least 97.4% of customers in a given month have
    continued to subscribe to our email marketing product in the
    following month. We believe this represents a high level of
    customer retention, particularly given the transient nature of
    many small organizations. These customers provide us with a
    significant base of recurring revenue and generate new customer
    referrals.
    Consistent Commitment to Customer Service.  We
    seek to provide our customers with a high level of customer
    support in order to encourage trials and ongoing usage of our
    product. We conduct online webinars and in-person events to
    educate potential customers about the benefits of email
    marketing. In addition, our communications consultants seek to
    contact all new U.S. and Canadian based trial customers to
    help them launch an initial campaign and address any questions
    or concerns. In 2008, we won the
    Stevie®

    Award for Best Customer Service Team for The 2008
    American Business Awards. As a result, we believe we have a
    highly satisfied customer base.
    Software-as-a-Service Delivery.  We provide our
    product on an on-demand basis, meaning that our customers can
    access and use our product through a standard web browser. This
    enables our customers to rapidly begin using our product with
    few up-front costs and limited technical expertise. It also
    enables us to serve additional customers with little incremental
    expense and to deploy new applications and upgrades quickly and
    efficiently to our existing customers. 5




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Our
    Products and Services
  Email
    Marketing
    
    Campaign Creation Wizard.  This comprehensive,
    easy-to-use interface enables our customers to create and edit
    email campaigns. Through intuitive controls, customers can
    readily change colors, fonts, borders and backgrounds and insert
    images and logos to help ensure that their emails appear
    polished and professional. The wizard operates on a
    what-you-see-is-what-you-get basis whereby a
    customer can move paragraphs and blocks of content within the
    draft email quickly and view the message from the perspective of
    intended recipients.
    Professionally Developed Templates.  These
    pre-designed email message forms help customers quickly create
    attractive and professional campaigns. Over 375 templates
    provide ideas about the kinds of emails customers can send,
    including newsletters, event invitations, business letters,
    promotions and announcements, and demonstrate, through the use
    of color and format, the creativity and professionalism of a
    potential campaign. Our advanced editing functionality enables
    customers to easily modify the templates. We also provide
    templates designed to appeal to specific vertical markets. For
    example, we offer a restaurant template that includes a
    pre-formatted menu section and a retail template designed to
    promote mens apparel.
    Contact List Management.  These tools help
    customers build and manage their email contact lists. Our
    contact list building tools include file and spreadsheet import
    functionality as well as software plug-ins to import contact
    lists maintained in Microsofts
    Outlook®

    and Outlook
    Express®

    and Intuits
    QuickBooks®.

    We also provide HTML programming code for a Join My
    Mailing List box that can be included on the
    customers web site and used to gather new contacts. Our
    list management tools enable a customer to target or segment
    contacts for all or specific campaigns and monitor email
    addresses to which previous campaigns could not be delivered. In
    addition to their constituents names and email addresses,
    several additional customizable fields are available for the
    purposes of personalizing email messages. Unsubscribe requests
    are automatically processed to help ensure ongoing compliance
    with government regulations and email marketing best practices.
    Email Tracking and Reporting.  These features
    enable our customers to review and analyze the overall
    effectiveness of a campaign by tracking and reporting aggregate
    information including how many emails were delivered, how many
    were opened, and which links were clicked on. These features
    also enable our customers to identify on an individual basis
    which contacts received an email, opened an email and clicked on
    particular links within the message.
    Email Delivery Management.  These tools are
    incorporated throughout our product and are designed to maintain
    our high deliverability rates. Some of these tools are readily
    apparent to our customers, such as in-depth delivery tracking.
    Others are delivered through back-office processes, such as a
    spam content check and address validation. To further improve
    the percentage of emails delivered, we work closely with ISPs on
    spam prevention issues. We also include processes and
    verifications that greatly increase compliance with anti-spam
    standards.
    Premium Image Hosting.  We enable customers to
    store up to five images for free, view and edit these images and
    resize them as necessary for use in their email campaigns. For
    customers who elect to purchase our premium image hosting
    option, we offer them access to our stock image gallery with
    thousands of images to choose from and allow them to store up to
    approximately 1,200 personal images (25 megabytes).
    The premium image hosting option costs an additional $5.00 per
    month. By adding images to an email message, a customer can make
    the campaign more compelling and visually appealing.
    Email Archive.  We offer our customers the
    ability to create a hosted version of current and past email
    communications on our system and make them readily available to
    their constituents via a link on a 6




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customers website. The service, which is available for an
    additional $5.00 per month, extends the life of up to 100 email
    communications and provides our customers an ability to showcase
    to online visitors the extent and breadth of their communication
    efforts.  
    Security and Privacy.  We protect our
    customers data at a higher level than we believe many of
    our customers do themselves. We do not use our customers
    confidential information, including their contact lists, except
    to provide our product, nor do we share, sell or rent this
    information. In addition, we require that our customers adopt a
    privacy policy to assist them in complying with government
    regulations and email marketing best practices.  Survey
    easy-to-understand ® follow-up
  Customer
    Support
        Professional
    Services
   7




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Pricing
  60-day 60-day
    Number of Unique Email Addresses

Monthly PricingUp to 500

$
15.00501-2,500

$
30.002,501-5,000

$
50.005,001-10,000

$
75.0010,001-25,000

$
150.00       Customers
  business-to-business business-to-consumer business-to-business business-to-consumer
   8




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Sales and
    Marketing
    Customer
    Acquisition Sources
  Online Advertising. pay-per-click pay-per-click
  Channel Partners.
  Radio Advertising.
  Print Advertising. Entrepreneur
  Word-of-Mouth
    Referrals.
  Footer Click-Throughs.
 9




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Sales
    Efforts
  Communications Consultants.
  Local Evangelism.
  Distance Learning.
  Other
    Marketing Initiatives
  Press Relations and Thought Leadership. Hints & Tips
  Website Marketing. visitor-to-trial trial-to-paying
  Vertical Marketing.
  Community.
    Technology
    and Operations
    around-the-clock
 10




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Research
    and Development
    Competition
    
    product functionality, performance and reliability;
    integrated solutions;
    customer support and education;
    email deliverability rates;
    product scalability;
    ease of use; and
    cost.  ® tm
     11




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Government
    Regulation
        
    prohibiting false or misleading email header information;
    prohibiting the use of deceptive subject lines;
    ensuring that recipients may, for at least 30 days after an
    email is sent, opt out of receiving future commercial email
    messages from the sender, with the opt-out effective within
    10 days of the request;
    requiring that commercial email be identified as a solicitation
    or advertisement unless the recipient affirmatively permitted
    the message; and
    requiring that the sender include a valid postal address in the
    email message.    and/or
   12




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and/or
    
    new customers signing up for our services must agree that they
    will send email through our service only to persons who have
    given their permission;
    when an email contact list is uploaded, the customer must
    certify that it has permission to email each of the addressees;
    when an individual indicates that they want to be added to a
    mailing list, they may receive a confirmation email and may be
    required to confirm their intent to be added to the contact
    list, through a process called double opt-in;
    we electronically inspect all of our customers email
    contact lists to check for spam traps, dictionary attack
    patterns and lists that fail to meet our permission
    standards; and
    for customers with large email address lists, we conduct list
    review interviews to verify that the list is properly acquired
    and permission-based and that the proposed messages meet our
    content standards. Initial campaigns using such lists are
    conducted in stages, so that we can terminate the campaign early
    if the use of the list generates an unusually high number of
    complaints.  Intellectual
    Property
     13




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®
  Employees
    Facilities
    ITEM 1A.
    RISK
    FACTORS  Our business is subject to numerous risks. We caution you
    that the following important factors, among others, could cause
    our actual results to differ materially from those expressed in
    forward-looking statements made by us or on our behalf in
    filings with the SEC, press releases, communications with
    investors and oral statements. Any or all of our forward-looking
    statements in this Annual Report on
    Form 10-K
    and in any other public statements we make may turn out to be
    wrong. They can be affected by inaccurate assumptions we might
    make or by known or unknown risks and uncertainties. Many
    factors mentioned in the discussion below will be important in
    determining future results. Consequently, no forward-looking
    statement can be guaranteed. Actual future results may vary
    materially from those anticipated in forward-looking statements.
    We undertake no obligation to update any forward-looking
    statements, whether as a result of new information, future
    events or otherwise. You are advised, however, to consult any
    further disclosure we make in our reports filed with the SEC.
  RISKS
    RELATED TO OUR BUSINESS AND INDUSTRY
  If we
    are unable to attract new customers and retain existing
    customers on a cost-effective basis, our business and results of
    operations will be affected adversely.
   14




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Current
    economic conditions may negatively affect the small business
    sector, which may cause our customers to terminate existing
    accounts with us or cause potential customers to fail to
    purchase our products, resulting in a decrease in our revenue
    and impairing our ability to operate profitably.
    Our
    business is substantially dependent on the market for email
    marketing services for small organizations.
    U.S.
    federal legislation entitled Controlling the Assault of
    Non-Solicited Pornography and Marketing Act of 2003 imposes
    certain obligations on the senders of commercial emails, which
    could minimize the effectiveness of our email marketing product,
    and establishes financial penalties for non-compliance, which
    could increase the costs of our business.
  CAN-SPAM
 15




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Evolving
    regulations concerning data privacy may restrict our
    customers ability to solicit, collect, process and use
    data necessary to conduct email marketing campaigns or to send
    surveys and analyze the results or may increase their costs,
    which could harm our business.
    In the
    event we are unable to minimize the loss of our existing
    customers or to grow our customer base by adding new customers,
    our operating results will be adversely affected.
    If the
    security of our customers confidential information stored
    in our systems is breached or otherwise subjected to
    unauthorized access, our reputation may be severely harmed, we
    may be exposed to liability and we may lose the ability to offer
    our customers a credit card payment option.
   16




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As
    Internet commerce develops, federal, state and foreign
    governments may adopt new laws to regulate Internet commerce,
    which may negatively affect our business.
    As we
    attempt to expand our customer base through our marketing
    efforts, our new customers may use our products differently than
    our existing customers and, accordingly, our business model may
    not be as efficient at attracting and retaining new
    customers.
    The
    market in which we participate is competitive and, if we do not
    compete effectively, our operating results could be
    harmed.
    ® tm
 17




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If the
    delivery of our customers emails is limited or blocked,
    the fees we may be able to charge for our email marketing
    product may not be accepted by the market and customers may
    cancel their accounts.
      If we
    fail to promote and maintain our brand in a cost-effective
    manner, we may lose market share and our revenue may
    decrease.
   18




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We
    depend on search engines to attract a significant percentage of
    our customers, and if those search engines change their listings
    or our relationship with them deteriorates or terminates, we may
    be unable to attract new customers, which would adversely affect
    our business and results of operations.
    The
    success of our business depends on the continued growth and
    acceptance of email as a communications tool, and the related
    expansion and reliability of the Internet infrastructure. If
    consumers do not continue to use email, demand for our email
    marketing products may decline.
    Various
    private spam blacklists have in the past interfered with, and
    may in the future interfere with, the effectiveness of our
    products and our ability to conduct business.
     19




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Any
    efforts we may make in the future to promote our services to
    market segments other than small organizations or to expand our
    product offerings beyond email marketing may not
    succeed.
    Our
    customers use of our products to transmit negative
    messages or website links to harmful applications could damage
    our reputation, and we may face liability for unauthorized,
    inaccurate or fraudulent information distributed via our
    products.
        If we
    fail to enhance our existing products or develop new products,
    our products may become obsolete or less competitive and we
    could lose customers.
    Our
    relationships with our channel partners may be terminated or may
    not continue to be beneficial in generating new email marketing
    customers, which could adversely affect our ability to increase
    our customer base.
   20




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Competition
    for employees in our industry is intense, and we may not be able
    to attract and retain the highly skilled employees whom we need
    to support our business.
      Our
    anticipated growth could strain our personnel resources and
    infrastructure, and if we are unable to implement appropriate
    controls and procedures to manage our anticipated growth, we may
    not be able to successfully implement our business
    plan.
      If we
    fail to retain our key personnel, we may not be able to achieve
    our anticipated level of growth and our business could
    suffer.
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Any
    significant disruption in service on our website or in our
    computer systems, or in our customer support services, could
    reduce the attractiveness of our products and result in a loss
    of customers.
      We
    rely on third-party computer hardware and software that may be
    difficult to replace or that could cause errors or failures of
    our service.
    If we
    are unable to protect the confidentiality of our unpatented
    proprietary information, processes and know-how and our trade
    secrets, the value of our technology and products could be
    adversely affected.
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Our
    use of open source software could impose limitations on our
    ability to commercialize our products.
      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 require us to obtain
    expensive licenses, and our business may be adversely
    affected.
    
    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;
    in the case of open source software-related claims, require us
    to release our software code under the terms of an open source
    license; or
    require us to redesign our software and services to avoid
    infringement.   23




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Providing
    our products to customers outside the United States exposes us
    to risks inherent in international business.
    
    localization of our products, including translation into foreign
    languages and associated expenses;
    laws and business practices favoring local competitors;
    compliance with multiple, conflicting and changing governmental
    laws and regulations, including tax, email marketing, privacy
    and data protection laws and regulations;
    foreign currency fluctuations;
    different pricing environments;
    difficulties in staffing and maintaining foreign
    operations; and
    regional economic and political conditions.  We
    have incurred net losses in the past and expect to incur net
    losses in the future.
    We are
    incurring significant increased costs as a result of operating
    as a public company, and our management has been, and will
    continue to be, required to devote substantial time to
    compliance initiatives.
     24




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Our
    ability to use net operating loss carryforwards in the United
    States may be limited.
    Our
    quarterly results may fluctuate and if we fail to meet the
    expectations of analysts or investors, our stock price could
    decline substantially.
    
    our ability to retain existing customers, attract new customers
    and satisfy our customers requirements;
    general economic conditions;
    changes in our pricing policies;
    our ability to expand our business;
    the effectiveness of our personnel;
    new product and service introductions;
    technical difficulties or interruptions in our services;
    the timing of additional investments in our hardware and
    software systems;
    regulatory compliance costs;
    costs associated with future acquisitions of technologies and
    businesses; and
    extraordinary expenses such as litigation or other
    dispute-related settlement payments.  quarter-to-quarter
  We may
    need additional capital in the future, which may not be
    available to us on favorable terms, or at all, and may dilute
    your ownership of our common stock.
    
    fund our operations;
    respond to competitive pressures;
    take advantage of strategic opportunities, including more rapid
    expansion of our business or the acquisition of complementary
    products, technologies or businesses; and
    develop new products or enhancements to existing products. 25




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We may
    engage in future acquisitions that could disrupt our business,
    dilute stockholder value and harm our business, operating
    results or financial condition.
    
    an inability to locate a suitable acquisition candidate or
    technology or acquire a desirable candidate or technology on
    favorable terms;
    difficulties in integrating personnel and operations from the
    acquired business or acquired technology with our existing
    technology and products and in retaining and motivating key
    personnel from the business;
    disruptions in our ongoing operations and the diversion of our
    managements attention from their
    day-to-day
    responsibilities associated with operating our business;
    increases in our expenses that adversely impact our business,
    operating results and financial condition;
    potential write-offs of acquired assets and increased
    amortization expense related to identifiable assets
    acquired; and
    potentially dilutive issuances of equity securities or the
    incurrence of debt.    RISKS
    RELATED TO THE OWNERSHIP OF OUR COMMON STOCK
  The
    market price of our common stock has been and may continue to be
    volatile.
    
    fluctuations in our quarterly financial results or the quarterly
    financial results of companies perceived to be similar to us;
    changes in estimates of our financial results or recommendations
    by securities analysts;
    changes in general economic, industry and market conditions;
    failure of any of our products to achieve or maintain market
    acceptance;
    changes in market valuations of similar companies;
    success of competitive products;
    changes in our capital structure, such as future issuances of
    securities or the incurrence of additional debt; 26




---



##### Table of Contents




    announcements by us or our competitors of significant products,
    contracts, acquisitions or strategic alliances;
    regulatory developments in the United States, foreign countries
    or both;
    litigation involving our company, our general industry or both;
    additions or departures of key personnel; and
    investors general perception of us.    If
    securities or industry analysts do not continue to publish
    research or publish inaccurate or unfavorable research about our
    business, our stock price and trading volume could
    decline.
    A
    significant portion of our total outstanding shares may be sold
    into the public market in the future, which could cause the
    market price of our common stock to drop significantly, even if
    our business is doing well.
      Anti-takeover
    provisions in our charter documents and Delaware law could
    discourage, delay or prevent a change of control of our company
    and may affect the trading price of our common
    stock.
    
    authorize the issuance of blank check preferred
    stock that could be issued by our board of directors to thwart a
    takeover attempt;
    establish a classified board of directors, as a result of which
    the successors to the directors whose terms have expired will be
    elected to serve from the time of election and qualification
    until the third annual meeting following their election;
    require that directors only be removed from office for cause and
    only upon a supermajority stockholder vote; 27




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##### Table of Contents




    provide that vacancies on our board of directors, including
    newly created directorships, may be filled only by a majority
    vote of directors then in office;
    limit who may call special meetings of stockholders;
    prohibit stockholder action by written consent, requiring all
    actions to be taken at a meeting of the stockholders; and
    require supermajority stockholder voting to effect certain
    amendments to our restated certificate of incorporation and
    second amended and restated bylaws.  We do
    not currently intend to pay dividends on our common stock and,
    consequently, the ability to achieve a return on an investment
    in our common stock will depend on appreciation in the price of
    our common stock.
    ITEM 1B.
    UNRESOLVED
    STAFF COMMENTS    ITEM 2.
    PROPERTIES          Commitments and Contingencies.
 28




---



##### Table of Contents



ITEM 3.
    LEGAL
    PROCEEDINGS    ITEM 4.
    SUBMISSION
    OF MATTERS TO A VOTE OF SECURITY HOLDERS   PART II  ITEM 5.
    MARKET
    FOR REGISTRANTS COMMON EQUITY, RELATED STOCKHOLDER MATTERS
    AND ISSUER PURCHASES OF EQUITY SECURITIES  Certain
    Information Regarding the Trading of Our Common Stock
    High


Low2007:Fourth Quarter (from October 3, 2007)

$
30.76


$
15.452008:First Quarter

$
25.24


$
14.13Second Quarter

$
20.19


$
14.09Third Quarter

$
21.24


$
16.25Fourth Quarter

$
17.95


$
10.312009:First Quarter (through March 10, 2009)

$
17.25


$
12.37   Holders
    of Our Common Stock
    Dividends;
    Equity Repurchases
    Recent
    Sales of Unregistered Securities; Use of Proceeds from
    Registered Securities
    Form S-1 No. 333-144381),
 29




---



##### Table of Contents



Securities
    Authorized for Issuance Under Equity Compensation
    Plans
   30




---



##### Table of Contents



ITEM 6.
    SELECTED
    FINANCIAL DATA  Form 10-K. Form 10-K. Form 10-K.
  Year Ended December 31,2008


2007


2006


2005


2004(In thousands, except per share and customer data)Statements of Operations Data:Revenue

$
87,268


$
50,495


$
27,552


$
14,658


$
8,071Cost of revenue(1)


24,251



13,031



7,801



3,747



2,211Gross profit


63,017



37,464



19,751



10,911



5,860Operating expenses:(1)Research and development


15,123



10,341



6,172



3,355



2,140Sales and marketing


42,851



27,376



18,592



7,460



3,385General and administrative


9,508



5,445



2,623



1,326



856Total operating expenses


67,482



43,162



27,387



12,141



6,381Loss from operations


(4,465
)


(5,698
)


(7,636
)


(1,230
)


(521
)Interest and other income (expense), net


2,409



(2,556
)


(203
)


(24
)


(34
)Net loss


(2,056
)


(8,254
)


(7,839
)


(1,254
)


(555
)Accretion of redeemable convertible preferred stock






(816
)


(3,788
)


(5,743
)


(3,701
)Net loss attributable to common stockholders

$
(2,056
)

$
(9,070
)

$
(11,627
)

$
(6,997
)

$
(4,256
)Net loss attributable to common stockholders per share:Basic and diluted

$
(0.07
)

$
(0.97
)

$
(3.38
)

$
(2.49
)

$
(4.37
)Weighted average shares outstanding used in computing per share
    amounts:Basic and diluted


27,879



9,366



3,438



2,813



974Other Operating Data:End of period number of email marketing customers(2)


253,421



164,669



89,323



47,730



25,229    (1)
    
    Amounts include stock-based compensation expense, as follows:  Year Ended December 31,2008


2007


2006


2005


2004(In thousands)Cost of revenue

$
354


$
81


$
25


$



$
Research and development


737



170



27







Sales and marketing


648



133



19







6General and administrative


1,117



261



12



17



17$
2,856


$
645


$
83


$
17


$
23    (2)
    
    We define our end of period number of email marketing customers
    as email marketing customers that we billed directly during the
    last month of the period. 31




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##### Table of Contents



As of December 31,2008


2007


2006


2005


2004(In thousands)Balance Sheet Data:Cash, cash equivalents and short-term
    marketable securities

$
107,175


$
101,535


$
12,790


$
2,784


$
2,115Total assets


127,142



111,845



18,481



5,545



3,222Deferred revenue


15,052



10,354



5,476



2,827



1,270Redeemable convertible preferred stock warrant










628







Notes payable and capital lease obligation










702



1,326



844Redeemable convertible preferred stock










35,322



16,657



10,914Total stockholders equity (deficit)


99,990



94,354



(28,629
)


(17,237
)


(10,287
)   ITEM 7.
    MANAGEMENTS
    DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
    OPERATIONS  You should read the following discussion and analysis of our
    financial condition and results of operations together with our
    consolidated financial statements and the related notes and
    other financial information included elsewhere in this Annual
    Report on
    Form 10-K.
    Some of the information contained in this discussion and
    analysis or set forth elsewhere in this Annual Report on
    Form 10-K
    including information with respect to our plans and strategy for
    our business and related financing, includes forward-looking
    statements that involve risks and uncertainties. You should
    review the Risk Factors section of this Annual
    Report on
    Form 10-K
    for a discussion of important factors that could cause actual
    results to differ materially from the results described in or
    implied by the forward-looking statements contained in the
    following discussion and analysis.
  Overview
     32




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##### Table of Contents



Sources
    of Revenue
      Cost of
    Revenue and Operating Expenses
    Cost of Revenue.
   33




---



##### Table of Contents



Research and Development.
  Sales and Marketing. pay-per-click
  General and Administrative.
  Critical
    Accounting Policies
  Form 10-K
  Revenue Recognition. Revenue Recognition in Financial
    Statements No. 00-03, Application of AICPA Statement of Position
    97-2 to
    Arrangements that Include the Right to Use Software Stored on
    Another Entitys Hardware
 34




---



##### Table of Contents



No. 00-21, Accounting for Revenue Arrangements with Multiple
    Deliverables
  Income Taxes.
  Software and Website Development Costs. No. 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use No. 00-02, Accounting for Web Site Development Costs,
  Redeemable Convertible Preferred Stock
    Warrant. Accounting for Certain
    Financial Instruments with Characteristics of Both Liabilities
    and Equity
  Stock-Based Compensation. Share-Based Payment Accounting for Stock-Based
    Compensation Accounting for Stock Issued to Employees
   35




---



##### Table of Contents



Year Ended December 31,2008


2007


2006Weighted average risk-free interest rate


2.24
%


4.23
%


4.82
%Expected term (in years)


6.1



6.1



6.1Weighted average expected volatility


54.37
%


62.1
%


64.9
%Expected dividends


0
%


0
%


0
%   Share-Based Payment
 36




---



##### Table of Contents



Results
    of Operations
    Year EndedDecember 31,2008


2007


2006Revenue


100
%


100
%


100
%Cost of revenue


28



26



28Gross profit


72



74



72Operating expenses:Research and development


17



20



22Sales and marketing


49



54



67General and administrative


11



11



10Total operating expenses


77



85



99Loss from operations


(5
)


(11
)


(27
)Interest and other income (expense), net


3



(5
)


(1
)Net loss


(2
)%


(16
)%


(28
)%   Comparison
    of Years Ended December 31, 2008 and 2007
  Revenue.
  Cost of Revenue.
  Research and Development Expenses.
 37




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##### Table of Contents



Sales and Marketing Expenses.
  General and Administrative Expenses.
  Interest and Other Income (Expense),
    Net.
  Comparison
    of Years Ended December 31, 2007 and 2006
  Revenue.
  Cost of Revenue.
  Research and Development Expenses.
 38




---



##### Table of Contents



Sales and Marketing Expenses.
  General and Administrative Expenses.
  Interest and Other Income (Expense),
    Net.
  Liquidity
    and Capital Resources
       39




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##### Table of Contents




    during 2008, deferred revenue increased $4.7 million from
    $10.4 million to $15.1 million;
    during 2007, deferred revenue increased $4.9 million from
    $5.5 million to $10.4 million; and
    during 2006, deferred revenue increased $2.7 million from
    $2.8 million to $5.5 million.      
    during 2008, accrued expenses increased $2.6 million from
    $2.9 million to $5.5 million primarily due to
    increased employee related costs as a result of personnel
    additions and approximately $250,000 related to the acquisition
    of property and equipment included in accrued expenses at
    December 31, 2008;
    during 2007, accrued expenses increased $522,000 from
    $2.4 million to $2.9 million; and
    during 2006, accrued expenses increased $1.9 million from
    $494,000 to $2.4 million primarily due to increased
    marketing efforts during the year, increased employee related
    costs as a result of personnel additions and increased expense
    levels partially offset by the receipt of invoices and timing of
    payments. This increase also included $500,000 related to the
    acquisition of property and equipment that was included in
    accrued expenses at December 31, 2006.    
    during 2008, accounts payable increased $928,000 from
    $3.9 million to $4.8 million;
    during 2007, accounts payable increased $1.3 from
    $2.6 million to $3.9 million; and
    during 2006, accounts payable increased $1.1 million from
    $1.5 million to $2.6 million.      
    change in fair value of warrant of $3.9 million and
    $588,000 for the years ended December 31, 2007 and 2006,
    respectively;
    depreciation and amortization expense of $5.6 million,
    $2.6 million and $1.5 million for the years ended
    December 31, 2008, 2007 and 2006, respectively; and
    stock-based compensation expense of $2.9 million, $645,000
    and $83,000 for the years ended December 31, 2008, 2007 and
    2006, respectively. 40




---



##### Table of Contents



41




---



##### Table of Contents



Off-Balance
    Sheet Arrangements
    New
    Accounting Pronouncements
  No. 157-2, Effective Date of FASB Statement
    No. 157
  No. 08-3, Accounting by Lessees for Maintenance Deposits under Lease
    Agreements. EITF 08-3 EITF 08-3 EITF 08-3
  Contractual
    Obligations
   42




---



##### Table of Contents



Less than








More thanTotal


1 Year


1-3 Years


3-5 Years


5 Years(In thousands)Operating lease obligations

$
12,737


$
2,773


$
3,413


$
1,736


$
4,815Hosting commitments(1)


8,266



2,629



3,202



2,435



Vendor commitments


11,469



11,469











Total

$
32,472


$
16,871


$
6,615


$
4,171


$
4,815     (1)
    
    In February 2009, we issued a new commitment to one of our
    hosting vendors for space for two years, commencing
    March 1, 2009. This commitment supercedes our prior monthly
    commitment set to expire in 2009. As a result, future minimum
    payments under these agreements will increase by $530,000,
    $1.7 million and $279,000 in 2009, 2010 and 2011,
    respectively.  ITEM 7A.
    QUANTITATIVE
    AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK  Foreign Currency Exchange Risk.
  Interest Rate Sensitivity.
 43




---



##### 



ITEM 8.
    FINANCIAL
    STATEMENTS AND SUPPLEMENTARY DATA  Constant
    Contact, Inc.
  Index to
    Consolidated Financial Statements
   
 Page(s)Report of Independent Registered Public
    Accounting Firm


45Consolidated Balance Sheets


46Consolidated Statements of Operations


47Consolidated Statements of Changes in Redeemable
    Convertible Preferred Stock and Stockholders Equity
    (Deficit) and Comprehensive Loss


48Consolidated Statements of Cash Flows


49Notes to Consolidated Financial Statements


50   44




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm     Internal Control  Integrated
    Framework
        /s/  PricewaterhouseCoopers
    LLP
    45




---



##### Table of Contents



Constant
    Contact, Inc.
  Consolidated
    Balance Sheets
  December 31,2008


2007(In thousands, except share and per share data)ASSETSCurrent assetsCash and cash equivalents

$
73,243


$
97,051Short-term marketable securities


33,932



4,484Accounts receivable, net of allowance for doubtful accounts of
    $17 and $11, at December 31, 2008 and 2007, respectively


40



62Prepaid expenses and other current assets


3,670



1,701Total current assets


110,885



103,298Property and equipment, net


15,799



7,986Restricted cash


308



308Other assets


150



253Total assets

$
127,142


$
111,845LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
4,786


$
3,858Accrued expenses


5,461



2,928Deferred revenue


15,052



10,354Total current liabilities


25,299



17,140Long-term accrued rent


1,853



351Total liabilities


27,152



17,491Commitments and contingencies (Note 10)Stockholders equityPreferred stock; $0.01 par value; 5,000,000 shares
    authorized; no shares issued or outstanding at December 31,
    2008 and 2007






Common stock; $0.01 par value; 100,000,000 shares
    authorized at December 31, 2008 and 2007; 28,170,812 and
    27,617,014 shares issued and outstanding at
    December 31, 2008 and 2007, respectively


282



276Additional paid-in capital


144,414



136,832Accumulated other comprehensive income


106



2Accumulated deficit


(44,812
)


(42,756
)Total stockholders equity


99,990



94,354Total liabilities and stockholders equity

$
127,142


$
111,845    46




---



##### Table of Contents



Constant
    Contact, Inc.
  Consolidated
    Statements of Operations
  Years Ended December 31,2008


2007


2006(In thousands, except per share data)Revenue

$
87,268


$
50,495


$
27,552Cost of revenue


24,251



13,031



7,801Gross profit


63,017



37,464



19,751Operating expensesResearch and development


15,123



10,341



6,172Sales and marketing


42,851



27,376



18,592General and administrative


9,508



5,445



2,623Total operating expenses


67,482



43,162



27,387Loss from operations


(4,465
)


(5,698
)


(7,636
)Interest income


2,409



1,543



479Interest expense






(188
)


(94
)Other expense, net






(3,911
)


(588
)Net loss


(2,056
)


(8,254
)


(7,839
)Accretion of redeemable convertible preferred stock






(816
)


(3,788
)Net loss attributable to common stockholders

$
(2,056
)

$
(9,070
)

$
(11,627
)Net loss attributable to common stockholders per share: basic
    and diluted

$
(0.07
)

$
(0.97
)

$
(3.38
)Weighted average shares outstanding used in computing per share
    amounts: basic and diluted


27,879



9,366



3,438    47




---



##### Table of Contents



Constant
    Contact, Inc.
  Consolidated
    Statements of Changes in Redeemable Convertible Preferred Stock
    and Stockholders Equity (Deficit) and Comprehensive
    Loss
  Series A


Series B


Series CRedeemable


Redeemable


Redeemable


Total Redeemable












Accumulated





TotalConvertible


Convertible


Convertible


Convertible









Additional


Other





StockholdersPreferred Stock


Preferred Stock


Preferred Stock


Preferred Stock



Common Stock


Paid-in


Comprehensive


Accumulated


Equity


ComprehensiveShares


Amount


Shares


Amount


Shares


Amount


Shares


Amount



Shares


Amount


Capital


Income


Deficit


(Deficit)


Loss(In thousands, except share data)Balance at December 31, 2005


1,026,680


$
10,835



9,641,666


$
5,822






$




10,668,346


$
16,657




3,464,829


$
35


$
9,391


$



$
(26,663
)

$
(17,237
)Issuance of common stock in connection with stock option
    exercises



































192,076



2



8











10Issuance of common stock in connection with warrant exercises



































132,039



1



181











182Stock-based compensation expense











































83











83Reclassification of redeemable convertible preferred stock
    warrant to liability











































(40
)










(40
)Issuance of Series C redeemable convertible preferred
    stock, net of issuance costs of $123


















2,521,432



14,877



2,521,432



14,877Accretion of Series A, B and C redeemable convertible
    preferred stock to redemption value






3,214







554







20







3,788












(3,788
)










(3,788
)Net loss



















































(7,839
)


(7,839
)

$
(7,839
)Total comprehensive loss


























































$
(7,839
)Balance at December 31, 2006


1,026,680



14,049



9,641,666



6,376



2,521,432



14,897



13,189,778



35,322




3,788,944



38



5,835







(34,502
)


(28,629
)Issuance of common stock in connection with stock option
    exercises



































199,824



2



69











71Issuance of common stock in connection with warrant exercises



































125,704



1



155











156Issuance of common stock in connection with initial public
    offering, net of issuance costs of $1,804



































6,199,845



62



90,374











90,436Stock-based compensation expense











































645











645Accretion of Series A, B and C redeemable convertible
    preferred stock to redemption value






718







74







24







816












(816
)










(816
)Issuance of redeemable convertible preferred stock in connection
    with warrant exercise










120,000



4,605











120,000



4,605
























Conversion of redeemable convertible preferred stock to common
    stock upon close of initial public offering


(1,026,680
)


(14,767
)


(9,761,666
)


(11,055
)


(2,521,432
)


(14,921
)


(13,309,778
)


(40,743
)



17,302,697



173



40,570











40,743Unrealized gain on available-for-sale securities















































2







2


$
2Net loss



















































(8,254
)


(8,254
)


(8,254
)Total comprehensive loss


























































$
(8,252
)Balance at December 31, 2007



































27,617,014



276



136,832



2



(42,756
)


94,354Issuance of common stock in connection with stock option
    exercises



































201,300



2



234











236Issuance of common stock in connection with employee stock
    purchase plan



































38,033



1



496











497Issuance of common stock in connection with secondary public
    offering, net of issuance costs of $756



































314,465



3



3,996











3,999Stock-based compensation expense











































2,856











2,856Unrealized gain on available-for-sale securities















































104







104


$
104Net loss



















































(2,056
)


(2,056
)


(2,056
)Total comprehensive loss


























































$
(1,952
)Balance at December 31, 2008





$







$







$







$





28,170,812


$
282


$
144,414


$
106


$
(44,812
)

$
99,990    48




---



##### Table of Contents



Constant
    Contact, Inc.
  Consolidated
    Statements of Cash Flows
  Years Ended December 31,2008


2007


2006(In thousands)Cash flows from operating activitiesNet loss

$
(2,056
)

$
(8,254
)

$
(7,839
)Adjustments to reconcile net loss to net cash provided by (used
    in) operating activitiesDepreciation and amortization


5,558



2,631



1,536Accretion of discount on investments


(46
)


(151
)


(10
)Stock-based compensation expense


2,856



645



83Changes in fair value of redeemable convertible preferred stock
    warrant






3,918



588Provision for bad debts


6



8



5Gain on sale of equipment






(6
)


Changes in operating assets and liabilitiesAccounts receivable


16



(29
)


1Prepaid expenses and other current assets


(1,969
)


(1,290
)


(255
)Other assets


103



(237
)


(16
)Accounts payable


928



1,282



1,098Accrued expenses


2,283



522



1,412Deferred revenue


4,698



4,878



2,649Long-term accrued rent


1,502



351



Net cash provided by (used in) operating activities


13,879



4,268



(748
)Cash flows from investing activitiesPurchases of short-term marketable securities


(33,798
)


(9,327
)


(3,994
)Proceeds from maturities of short-term marketable securities


4,500



9,000



Net increase in restricted cash






(42
)


Proceeds from sale of equipment






12Acquisition of property and equipment, including costs
    capitalized for development of internal use software


(13,121
)


(5,666
)


(3,701
)Net cash used in investing activities


(42,419
)


(6,023
)


(7,695
)Cash flows from financing activitiesProceeds from notes payable






2,788



Repayments of notes payable






(3,490
)


(614
)Repayments of capital lease obligations










(10
)Proceeds from issuance of Series C redeemable convertible
    preferred stock, net of issuance costs of $123










14,877Proceeds from issuance of common stock pursuant to exercise of
    stock options and warrants


236



227



192Proceeds from issuance of preferred stock pursuant to exercise
    of a warrant






59



Proceeds from issuance of common stock pursuant to employee
    stock purchase plan


497







Proceeds from issuance of common stock in connection with
    initial public offering, net of issuance costs of $1,804






90,436



Proceeds from issuance of common stock in connection with
    secondary public offering, net of issuance costs of $756


3,999







Net cash provided by financing activities


4,732



90,020



14,445Net (decrease) increase in cash and cash equivalents


(23,808
)


88,265



6,002Cash and cash equivalents, beginning of year


97,051



8,786



2,784Cash and cash equivalents, end of year

$
73,243


$
97,051


$
8,786Supplemental disclosure of cash flow informationCash paid for interest

$



$
194


$
97Supplemental disclosure of noncash investing and financing
    activities:Acquisition of property and equipment included in accrued
    expenses

$
250


$



$
500Conversion of redeemable convertible preferred stock to common
    stock






40,743



    49




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##### Table of Contents



Constant
    Contact, Inc.
  Notes
    to Consolidated Financial Statements
 (in
    thousands, except share and per share amounts)
  1.
    Nature of
    the Business    2.
    Summary
    of Significant Accounting Policies  Basis
    of Presentation
    Use of
    Estimates
    Cash
    and Cash Equivalents
    Marketable
    Securities
  Accounting for Certain Investments in Debt and Equity
    Securities
   50




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
  Accounts
    Receivable
    Concentration
    of Credit Risk and Significant Customers
      Property
    and Equipment
      Computer equipment

3 yearsSoftware

3 yearsFurniture and fixtures

5 yearsLeasehold improvements

Shorter of life of lease or
    estimated useful life   Long-Lived
    Assets
  Accounting for the
    Impairment or Disposal of Long-Lived Assets
  Revenue
    Recognition
  Revenue Recognition
    in Financial Statements No. 00-03, Application of AICPA Statement of Position
    97-2 to
    Arrangements that include the Right to Use Software Stored on
    Another Entitys
 51




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
  Hardware
  No. 00-21, Accounting for Revenue Arrangements with Multiple
    Deliverables,
  Deferred
    Revenue
    Software
    and WebSite Development Costs
  No. 98-1, Accounting for the Costs of Computer Software Developed or
    Obtained for Internal Use No. 00-02, Accounting for Web Site Development Costs
  Redeemable
    Convertible Preferred Stock Warrant
  150-5, Issuers Accounting under FASB Statement No. 150
    for Freestanding Warrants and Other Similar Instruments on
    Shares that are Redeemable (FSP 150-5) FSP 150-5 Accounting for
    Certain Financial Instruments with Characteristics of both
    Liabilities and Equity
  Comprehensive
    Loss
   52




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    Fair
    Value of Financial Instruments
  Fair Value Measurements
  
    Level 1  Quoted prices in active markets for
    identical assets or liabilities.
    Level 2  Inputs other than Level 1 that are
    observable, either directly or indirectly, such as quoted prices
    for similar assets or liabilities; quoted prices in markets that
    are not active; or other inputs that are observable or can be
    corroborated by observable market data for substantially the
    full term of the assets or liabilities.
    Level 3  Unobservable inputs that are supported
    by little or no market activity and that are significant to the
    fair value of the assets or liabilities    Fair
    Value Option for Financial Assets and Financial
    Liabilities
  The Fair Value Option for Financial
    Assets and Financial Liabilities Including an Amendment of FASB
    Statement No. 115
  Segment
    Data
    Net
    Loss Attributable to Common Stockholders Per Share
   53




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    December 31,2008


2007


2006Options to purchase common stock


3,021,171



2,200,622



1,702,007Warrants to purchase common or redeemable convertible preferred
    stock


520



520



282,223Restricted shares


48,008



96,006



144,008Redeemable convertible preferred stock










17,146,675Total options, warrants, restricted shares and redeemable
    convertible preferred stock exercisable or convertible into
    common stock


3,069,699



2,297,148



19,274,913   Advertising
    Expense
    Accounting
    for Stock-Based Compensation
  Share-Based Payment , Accounting for Stock-Based
    Compensation , Accounting for Stock Issued to
    Employees ,
  Income
    Taxes
    Accounting for Uncertainty
    in Income Taxes, an Interpretation of FASB Statement
    No. 109
 54




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    Reclassification
    Recent
    Accounting Pronouncements
  No. 157-2, Effective Date of FASB Statement
    No. 157
  No. 08-3, Accounting by Lessees for Maintenance Deposits under Lease
    Agreements (EITF 08-3). EITF 08-3 EITF 08-3 EITF 08-3
  3.
    Property
    and Equipment    December 31,2008


2007Computer equipment

$
15,172


$
8,100Software


6,886



3,821Furniture and fixtures


2,022



1,308Leasehold improvements


3,384



929Total property and equipment


27,464



14,158Less: Accumulated depreciation and amortization


11,665



6,172Property and equipment, net

$
15,799


$
7,986      55




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##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
  4.
    Notes
    Payable      5.
    Redeemable
    Convertible Preferred Stock and Stockholders Equity
    (Deficit)  Public
    Offerings
      Common
    Stock
      Redeemable
    Convertible Preferred Stock
   56




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
        Dividends
    Redemption
    Warrants
    FSP 150-5.
 57




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    6.
    Stock-Based
    Awards        Stock
    Options
     58




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
      Share Based Payment
  Year Ended


Year Ended


Year EndedDecember 31,


December 31,


December 31,2008


2007


2006Weighted average risk-free interest rate


2.24
%


4.23
%


4.82
%Expected term (in years)


6.1



6.1



6.1Weighted average expected volatility


54.37
%


62.1
%


64.9
%Expected dividends


0
%


0
%


0
%  59




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    WeightedAverageWeighted


RemainingAverage


Contractual


AggregateNumber of


Exercise


Term


IntrinsicOptions


Price


(In Years)


ValueBalance at December 31, 2005


1,217,766


$
0.79Granted


749,277



2.35Exercised


(192,076
)


0.05Forfeited


(72,960
)


0.47Balance at December 31, 2006


1,702,007



1.57Granted


860,296



13.36Exercised


(199,824
)


0.35Forfeited


(161,857
)


1.15Balance at December 31, 2007


2,200,622



6.32Granted


1,109,900



15.44Exercised


(201,300
)


1.17Forfeited


(88,051
)


10.00Balance at December 31, 2008


3,021,171


$
9.91



8.28


$
16,301Vested and expected to vest at December 31, 2008


2,887,524


$
9.81



8.24


$
15,794Exercisable at December 31, 2008


1,090,248


$
4.26



6.86


$
11,063             Years EndedDecember 31,2008


2007


2006Cost of revenue

$
354


$
81


$
25Research and development


737



170



27Sales and marketing


648



133



19General and administrative


1,117



261



12$
2,856


$
645


$
83  60




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    Stock
    Purchase Plan
    Restricted
    Stock
    7.
    Income
    Taxes    Years EndedDecember 31,2008


2007


2006Statutory rate


34
%


34
%


34
%Increase in valuation allowance


(27
)


(44
)


(40
)State taxes, net of federal benefit


19



6



6Impact of permanent differences


(22
)






(1
)Expiration of state net operating losses


(3
)


(5
)


(5
)Tax credits


17



8



7Impact of change in effective state tax rates


(18
)






Other






1



(1
)0
%


0
%


0
%  61




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
    December 31,2008


2007Deferred tax assetsCurrent:Accrued expenses

$
304


$
307Total current


304



307Noncurrent:Net operating loss carryforwards


12,583



14,002Depreciation and capitalized research and development


385



Research and development credit carryforwards


2,392



1,689Stock options


895



288Total noncurrent


16,255



15,979Total gross deferred tax assets


16,559



16,286Deferred tax asset valuation allowance


(16,559
)


(16,036
)Deferred tax assets






250Deferred tax liabilities-non-currentDepreciation and capitalized research and development






(250
)Total deferred tax liabilities  non-current






(250
)Net deferred tax assets

$



$
          62




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
        8.
    Accrued
    Expenses  December 31,2008


2007Payroll and payroll related

$
2,211


$
1,114Licensed software and maintenance


981



638Marketing programs


569



344Other accrued expenses


1,700



832$
5,461


$
2,928   9.
    401(k)
    Savings Plan    10.
    Commitments
    and Contingencies  Operating
    Leases
   63




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
            2009

$
2,7732010


2,5702011


8432012


8592013 and thereafter


5,692Total

$
12,737   Hosting
    Services
    2009

$
2,6292010


1,5812011


1,6212012


1,6612013


774Total

$
8,266    64




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
  Vendor
    Commitments
    Letters
    of Credit and Restricted Cash
    Indemnification
    Obligations
    11.
    Related
    Party     65




---



##### Table of Contents



Constant
    Contact, Inc.
  Notes to
    Consolidated Financial
    Statements  (Continued)
 (in thousands, except share and per share amounts)
  12.
    Quarterly
    Information (Unaudited)  Three Months EndedDec. 31,


Sept. 30,


June 30,


March 31,


Dec. 31,


Sept. 30,


June 30,


March 31,2008


2008


2008


2008


2007


2007


2007


2007Statements of Operations Data:Revenue

$
25,471


$
22,859


$
20,771


$
18,167


$
15,867


$
13,517


$
11,398


$
9,713Gross Profit


18,206



16,305



15,122



13,384



12,096



10,094



8,292



6,982Loss from operations


(1,716
)


(1,013
)


(1,098
)


(638
)


(54
)


(781
)


(2,473
)


(2,390
)Net (loss)/income


(1,606
)


(399
)


(389
)


338



(1,069
)


(1,691
)


(2,813
)


(2,681
)Net (loss)/income attributable to common stockholders


(1,606
)


(399
)


(389
)


338



(1,096
)


(1,962
)


(3,078
)


(2,934
)Basic net (loss)/income attributable to common stockholders per
    share:

$
(0.06
)

$
(0.01
)

$
(0.01
)

$
0.01


$
(0.04
)

$
(0.51
)

$
(0.81
)

$
(0.79
)Diluted net (loss)/income attributable to common stockholders
    per share:

$
(0.06
)

$
(0.01
)

$
(0.01
)

$
0.01


$
(0.04
)

$
(0.51
)

$
(0.81
)

$
(0.79
)  66




---



##### Table of Contents



ITEM 9.
    CHANGES
    IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND
    FINANCIAL DISCLOSURE    ITEM 9A.
    CONTROLS
    AND PROCEDURES  Disclosure
    Controls and Procedures
  Rules 13a-15(e) 15d-15(e)
  Managements
    Annual Report on Internal Control Over Financial
    Reporting
  Rules 13a-15(f) 15d-15(f)
  
    Pertain to the maintenance of records that in reasonable detail
    accurately and fairly reflect the transactions and dispositions
    of our assets;
    Provide reasonable assurance that transactions are recorded as
    necessary to permit preparation of financial statements in
    accordance with generally accepted accounting principles, and
    that our receipts and expenditures are being made only in
    accordance with authorizations of our management and
    directors; and
    Provide reasonable assurance regarding prevention or timely
    detection of unauthorized acquisition, use or disposition of our
    assets that could have a material effect on our financial
    statements.    Internal
    Control  Integrated Framework
 67




---



##### Table of Contents



Form 10-K.
  Changes
    in Internal Control Over Financial Reporting
  Rules 13a-15(f) 15d-15(f)
  ITEM 9B.
    OTHER
    INFORMATION   PART III  ITEM 10.
    DIRECTORS,
    EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE    www.constantcontact.com
  ITEM 11.
    EXECUTIVE
    COMPENSATION    ITEM 12.
    SECURITY
    OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND
    RELATED STOCKHOLDER MATTERS    ITEM 13.
    CERTAIN
    RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR
    INDEPENDENCE    ITEM 14.
    PRINCIPAL
    ACCOUNTANT FEES AND SERVICES   68




---



##### Table of Contents



PART IV  ITEM 15.
    EXHIBITS AND
    FINANCIAL STATEMENT SCHEDULES  Financial Statements
  Form 10-K.
  Exhibits
  Form 10-K
  Financial Statement Schedules
   69




---



##### Table of Contents



SIGNATURES      By:
    /s/  Gail
    F. Goodman   President and Chief Executive Officer
      Signature

Title

Date/s/  Gail
    F. GoodmanGail
    F. Goodman

Chairman, President and Chief Executive Officer (Principal
    Executive Officer)

March 12, 2009/s/  Thomas
    AndersonThomas
    Anderson

Director

March 11, 2009/s/  Robert
    P. BadavasRobert
    P. Badavas

Director

March 12, 2009/s/  John
    CampbellJohn
    Campbell

Director

March 11, 2009/s/  Michael
    T. FitzgeraldMichael
    T. Fitzgerald

Director

March 12, 2009/s/  Patrick
    GallagherPatrick
    Gallagher

Director

March 9, 2009/s/  William
    S. KaiserWilliam
    S. Kaiser

Director

March 11, 2009/s/  Steven
    R. WassermanSteven
    R. Wasserman

Vice President and Chief Financial Officer
    (Principal Financial and Accounting Officer)

March 12, 2009  70




---



##### Table of Contents



EXHIBIT INDEX
  ExhibitNumber

Description3
.1(1)

Restated Certificate of Incorporation of the Company.3
.2(1)

Second Amended and Restated Bylaws of the Company.4
.1(1)

Specimen Certificate evidencing shares of common stock.10
.1(1)#

1999 Stock Option/Stock Issuance Plan, as amended.10
.2(1)#

Form of Non-Qualified Stock Option Agreement with Executive
    Officers under the 1999 Stock Option/Stock Issuance Plan.10
.3(1)#

Form of Non-Qualified Stock Option Agreement under the 1999
    Stock Option/Stock Issuance Plan.10
.4(1) #

Restricted Stock Agreement, dated December 12, 2005,
    between the Company and Steven R. Wasserman.10
.5(1)#

2007 Stock Incentive Plan.10
.6(1)#

Forms of Incentive Stock Option Agreement, under the 2007 Stock
    Incentive Plan.10
.7(1)#

Forms of Non-Qualified Stock Option Agreement, under the 2007
    Stock Incentive Plan.10
.8(1)#

2007 Employee Stock Purchase Plan.10
.9(1)#

Letter Agreement, dated April 14, 1999, between the Company
    and Gail F. Goodman.10
.10(1)#

Letter Agreement, dated December 1, 2005, between the
    Company and Steven R. Wasserman.10
.11(1)#

2007 Executive Team Bonus Plan.10
.12(1)#

Form of Director and Officer Indemnification Agreement.10
.13(1)

Amended and Restated Investors Rights Agreement, dated as
    of August 9, 2001, among the Company and the investors
    listed therein.10
.14(1)

Amended and Restated Preferred Investors Rights Agreement,
    dated as of May 12, 2006, among the Company and the parties
    listed therein.10
.15(1)

Lease Agreement, dated as of July 9, 2002, as amended,
    between the Company and Boston Properties Limited Partnership.10
.16(2)

Fourth Amendment to Lease, dated as of November 26, 2007,
    between the Company and Boston Properties Limited Partnership.10
.17(1)

Form of Indemnification Agreement between the Company and
    certain entities that sold stock in the Companys initial
    public offering.10
.18(3)#

2008 Executive Incentive Plan.10
.19(3)

Master Services Agreement dated July 19, 2007 by and
    between the Company and Sentinel Properties-Bedford, LLC, as
    amended.10
.20(4)

Fifth Amendment to Lease, dated as of April 14, 2008,
    between the Company and Boston Properties Limited Partnership.10
.21(5)

Lease, dated as of May 30, 2008, between the Company and
    Centerra Office Tech I, LLC.10
.22(5)

Lease, dated as of May 30, 2008, between the Company and
    McWhinney 409CC, LLC.10
.23(6)#

Amendment to 2007 Employee Stock Purchase Plan.10
.24(7)

First Amendment to Lease, dated as of October 8, 2008,
    between the Company and McWhinney 409CC, LLC.10
.25(8)#

Letter Agreement dated December 9, 2008 between the Company
    and Gail F. Goodman.10
.26(8)#

Letter Agreement dated December 9, 2008 between the Company
    and Steven R. Wasserman.10
.27(1)

Loan and Security Agreement, dated February 27, 2003, as
    amended, between the Company and Silicon Valley Bank.10
.28*#

2009 Executive Cash Incentive Bonus Plan.10
.29(9)#

Letter Agreement, dated March 7, 2007, between the Company
    and Robert P. Nault.10
.30(8)#

Letter Agreement, dated December 9, 2008, between the
    Company and Robert P. Nault.10
.31(8)#

Letter Agreement, dated December 9, 2008, between the
    Company and Ellen Brezniak.10
.32*#

Letter Agreement, dated December 9, 2008, between the
    Company and Nancie Freitas, amending a Letter Agreement, dated
    November 17, 2005 between the Company and Nancie Freitas.21
.1*

Subsidiaries of the Company.23
.1*

Consent of PricewaterhouseCoopers LLP. 71




---



##### Table of Contents



ExhibitNumber

Description31
.1*

Certification of Chief Executive Officer pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002.31
.2*

Certification of Chief Financial Officer pursuant to Section 302
    of the Sarbanes-Oxley Act of 2002.32
*

Certification of Chief Executive Officer and Chief Financial
    Officer pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002.     *
    
    Filed herewith.#
    
    Management contract or compensatory plan required to be filed as
    an exhibit pursuant to Item 15(b) of this Annual Report on
    Form 10-K.(1)
    
    Incorporated by reference to the Companys Registration
    Statement on
    Form S-1,
    as amended (Registration Number 333-144381) filed with the
    Securities and Exchange Commission.(2)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    November 28, 2007.(3)
    
    Incorporated by reference to the Companys Annual Report on
    Form 10-K
    for the year ended December 31, 2007 filed with the
    Securities and Exchange Commission on March 14, 2008.(4)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    April 18, 2008.(5)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    June 4, 2008.(6)
    
    Incorporated by reference to the Companys Quarterly Report
    on
    Form 10-Q
    for the quarter ended June 30, 2008 filed with the
    Securities and Exchange Commission on August 13, 2008.(7)
    
    Incorporated by reference to the Companys Quarterly Report
    on
    Form 10-Q
    for the quarter ended September 30, 2008 filed with the
    Securities and Exchange Commission on November 7, 2008.(8)
    
    Incorporated by reference to the Companys Current Report
    on
    Form 8-K
    filed with the Securities and Exchange Commission on
    December 10, 2008.(9)
    
    Incorporated by reference to the Companys Registration
    Statement on
    Form S-1,
    as amended (Registration Number
    333-149918)
    filed with the Securities and Exchange Commission. 72