##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
 Form 10-K
  þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the Fiscal Year Ended
    June 30,
    2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934   Commission file number:
    001-34628
 QuinStreet, Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

77-0512121(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   1051 East Hillsdale Blvd., Suite 800
 Foster City, California 94404
 (Address of principal executive
    offices, including zip code)
 (650) 587-7700
 (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, par value $0.001 per share

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act: None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. o
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer o
    Non-accelerated
    filer þ
    Smaller
    reporting
    company o   Rule 12b-2 o þ
   over-the-counter
    Documents
    Incorporated by Reference:
  Form 10-K




---



##### 





QUINSTREET,
    INC.
  FOR THE
    FISCAL YEAR ENDED JUNE 30, 2010
  TABLE OF
    CONTENTS
   
 PagePART I.Item 1.


Business


3Item 1A.


Risk Factors


13Item 1B.


Unresolved Staff Comments


31Item 2.


Properties


31Item 3.


Legal Proceedings


31Item 4.


(Removed and Reserved)


31PART II.Item 5.


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


32Item 6.


Selected Consolidated Financial Data


35Item 7.


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


38Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


54Item 8.


Financial Statements and Supplementary Data


55Item 9.


Changes In and Disagreements with Accountants on
    Accounting and Financial Disclosure


91Item 9A.


Controls and Procedures


91Item 9B.


Other Information


91PART III.Item 10.


Directors, Executive Officers and Corporate
    Governance


91Item 11.


Executive Compensation


92Item 12.


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


92Item 13.


Certain Relationships and Related Transactions,
    and Director Independence


92Item 14.


Principal Accounting Fees and Services


92PART IV.Item 15.


Exhibits, Financial Statement Schedules


93Signatures


96EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1   1




---



##### Table of Contents



PART I  SPECIAL
    NOTE REGARDING FORWARD-LOOKING STATEMENTS
    
    our immature industry and relatively new business model;
    our ability to manage our growth effectively;
    our dependence on Internet search companies to attract Internet
    visitors;
    our ability to successfully manage any recent or future
    acquisitions;
    our dependence on a small number of large clients and our
    dependence on a small number of verticals for a majority of our
    revenue;
    our ability to attract and retain qualified employees and key
    personnel;
    changes in government regulation affecting our business or our
    clients businesses;
    our ability to accurately forecast our operating results and
    appropriately plan our expenses;
    our ability to compete in our industry;
    our ability to enhance and maintain our client and vendor
    relationships;
    our ability to develop new services and enhancements and
    features to meet new demands from our clients;
    our ability to raise additional capital in the future, if needed;
    general economic conditions in our domestic and potential future
    international markets; and
    our ability to protect our intellectual property rights.     2




---



##### Table of Contents



Item 1.
    Business  Our
    Company
  business-to-business,
    pay-per-click,
  Market
    Opportunity
   3




---



##### Table of Contents



Change
    in marketing strategy and approach
    From
    qualitative, impression-driven marketing to analytic,
    data-driven marketing
    From
    account management-based client relationships to results-based
    client relationships
    From
    marketing messages pushed on audiences to marketing messages
    pulled by self-directed audiences
    From
    marketing spending focused on large media buys to marketing
    spending optimized for fragmented media
    Increasing
    complexity of online marketing
   4




---



##### Table of Contents



Our
    Business Model
    
    We own or access targeted media.
    We run advertisements or other forms of marketing messages and
    programs in that media to create visitor responses or clicks
    through to client offerings.
    We match these responses or clicks to client offerings or brands
    that meet visitor interests or needs, converting visitors into
    qualified leads or clicks.
    We optimize client matches and media yield such that we achieve
    desired results for clients and a sound financial outcome for us.    Media
    and Internet visitor mix
    
    websites owned and operated by us, with content and offerings
    that are relevant to our clients target customers;  
    visitors acquired from PPC advertisements purchased on major
    search engines and sent to our websites;
    revenue sharing agreements with third-party websites with whom
    we have a relationship and whose content is relevant to our
    clients target customers;
    email lists owned by third parties and warranted to us by their
    owners to comply with the CAN-SPAM Act;
    email lists owned by us, and generated on an opt-in basis from
    Internet visitors to our websites; and
    display ads run through online advertising networks or directly
    with major websites or portals.  Conversion
    optimization
   5




---



##### Table of Contents



point-of-sale
  Offerings
    and client coverage
    Our
    Competitive Advantages
  Vertical
    focus and expertise
    Measurable
    marketing experience and expertise
    Targeted
    media
  business-to-business
 6




---



##### Table of Contents



Proprietary
    technology
    
    an ad server for tracking the placement and performance of
    content, creative messaging, and offerings on our websites and
    on those of publishers with whom we work;
    database-driven applications for dynamically matching content,
    offers or brands to Internet visitors expressed needs or
    interests;
    a platform for measuring and managing the performance of tens of
    thousands of PPC search engine advertising campaigns;
    dashboards or reporting tools for displaying operating and
    financial metrics for thousands of ongoing marketing campaigns;
    and,
    a compliance tool capable of cataloging and filtering content
    from the thousands of websites on which our marketing programs
    appear to ensure adherence to client branding guidelines and to
    regulatory requirements.    Client
    relationships
    
    our close, often direct, relationships with most of our large
    clients;
    our ability to deliver measurable and attractive return on
    investment, or ROI, on clients marketing spending;
    our ownership of, or exclusive access to large amounts of,
    targeted media inventory and associated Internet visitors in the
    client verticals on which we focus; and,
    our ability to consistently and reliably deliver large
    quantities of qualified leads or clicks.    Client-driven
    online marketing approach
   7




---



##### Table of Contents



Acquisition
    strategy and success
    
    Our ability to monetize Internet media, coupled with client
    demand for our services, provides us with a particular advantage
    in acquiring targeted online media properties in the client
    verticals on which we focus.
    Our capabilities in online media can allow us to generate a
    greater volume of leads or clicks, and therefore create more
    value, than other owners of marketing services companies that
    have aggregated client budgets or relationships.
    We can often apply technologies across our business volume to
    create more value than previous owners of the technology.  Scale
    Our
    Strategy
    
    Focus on generating sustainable revenues by providing
    measurable value to our clients.
    Build QuinStreet and our industry sustainably by behaving
    ethically in all we do and by providing quality content and
    website experiences to Internet visitors.
    Remain vertically focused, choosing to grow through depth,
    expertise and coverage in our current client verticals; enter
    new client verticals selectively over time, organically and
    through acquisitions.
    Build a world class organization, with
    best-in-class
    capabilities for delivering measurable marketing results to
    clients and high yields or returns on media costs.
    Develop and evolve the best technologies and platform for
    managing vertical marketing and media on the Internet; focus on
    technologies that enhance media yield, improve client results
    and achieve scale efficiencies.
    Build, buy and partner with vertical content websites that
    provide the most relevant and highest quality visitor
    experiences in the client and media verticals we serve.
    Be a client-driven organization; develop a broad set of media
    sources and capabilities to reliably meet client needs. 8




---



##### Table of Contents



Our
    Culture
    Performance.
  High Standards.
  Teamwork.
  Customer Empathy.
  Prioritization.
  Urgency.
  Progress.
  Innovation and Flexibility.
  Recognition.
  Fun.
  Clients
    Sales and
    Marketing
     9




---



##### Table of Contents



Technology
    and Infrastructure
      Intellectual
    Property
      Our
    Competitors
    Advertising
    and direct marketing services agencies
   10




---



##### Table of Contents



Online
    marketing and media companies
    Government
    Regulation
  debt-to-income
  Employees
    Available
    Information
  Form 10-K, Form 10-Q, Form 8-K Form 10-K, Form 10-Q, Form 8-K,
 11




---



##### Table of Contents



1-800-SEC-0330. (http://www.sec.gov)
  Executive
    Officers of the Registrant
    Name

Age

PositionDouglas Valenti


50


Chief Executive Officer and ChairmanBronwyn Syiek


46


President and Chief Operating OfficerKenneth Hahn


43


Chief Financial OfficerTom Cheli


39


Executive Vice PresidentScott Mackley


37


Executive Vice PresidentNina Bhanap


37


Chief Technology OfficerDaniel Caul


44


General CounselTimothy Stevens


43


Senior Vice President   Douglas Valenti
  Bronwyn Syiek
  Kenneth Hahn
  Tom Cheli
 12




---



##### Table of Contents



Scott Mackley
  Nina Bhanap
  Daniel Caul
  Timothy Stevens
  Item 1A.
    Risk
    Factors  Investing in our common stock involves a high degree of risk.
    You should carefully consider the risks described below and the
    other information in this report on
    Form 10-K.
    If any of such risks actually occur, our business, operating
    results or financial condition could be adversely affected. In
    those cases, the trading price of our common stock could decline
    and you may lose all or part of your investment.
  Risks
    Related to Our Business and Industry
  We
    operate in an immature industry and have a relatively new
    business model, which makes it difficult to evaluate our
    business and prospects.
    
    maintain and expand client relationships;
    sustain and increase the number of visitors to our websites; 13




---



##### Table of Contents




    sustain and grow relationships with third-party website
    publishers and other sources of web visitors;
    manage our expanding operations and implement and improve our
    operational, financial and management controls;
    raise capital at attractive costs, or at all;
    acquire and integrate websites and other businesses;
    successfully expand our footprint in our existing client
    verticals and enter new client verticals;
    respond effectively to competition and potential negative
    effects of competition on profit margins;
    attract and retain qualified management, employees and
    independent service providers;
    successfully introduce new processes and technologies and
    upgrade our existing technologies and services;
    protect our proprietary technology and intellectual property
    rights; and
    respond to government regulations relating to the Internet,
    marketing in our client verticals, personal data protection,
    email, software technologies and other aspects of our business.    We
    depend upon Internet search companies to attract a significant
    portion of the visitors to our websites, and any change in the
    search companies search algorithms or perception of us or
    our industry could result in our websites being listed less
    prominently in either paid or algorithmic search result
    listings, in which case the number of visitors to our websites
    and our revenue could decline.
     14




---



##### Table of Contents



A
    substantial portion of our revenue is generated from a limited
    number of clients and, if we lose a major client, our revenue
    will decrease and our business and prospects would be adversely
    impacted.
    There
    is significant activity and uncertainty in the regulatory and
    legislative environment for the for-profit education sector.
    These regulatory or legislative changes could negatively affect
    our clients businesses, marketing practices and budgets
    and could impact demand, pricing or form of our services, any or
    all of which could have a material adverse impact on our
    financial results.
      debt-to-income
   15




---



##### Table of Contents



We are
    dependent on two market verticals for a majority of our revenue.
    Negative changes in the economic condition or regulatory
    environment in one or both of these verticals could cause our
    revenue to decline and our business and growth could
    suffer.
    Our
    future growth depends in part on our ability to identify and
    complete acquisitions.
    Any
    acquisitions that we complete will involve a number of risks. If
    we are unable to address and resolve these risks successfully,
    such acquisitions could harm our business, results of operations
    and financial condition.
    
    diversion of management time and potential business disruptions;
    difficulties integrating and supporting acquired products or
    technologies;
    expenses, distractions and potential claims resulting from
    acquisitions, whether or not they are completed;
    retaining and integrating employees from any businesses we may
    acquire;
    issuance of dilutive equity securities, incurrence of debt or
    reduction in cash balances;
    integrating various accounting, management, information, human
    resource and other systems to permit effective management;
    incurring possible impairment charges, contingent liabilities,
    amortization expense or write-offs of goodwill;
    unexpected capital expenditure requirements;
    insufficient revenue to offset increased expenses associated
    with acquisitions;
    underperformance problems associated with acquisitions; and
    becoming involved in acquisition-related litigation.   16




---



##### Table of Contents



If we
    are unable to retain the members of our management team or
    attract and retain qualified management team members in the
    future, our business and growth could suffer.
    We
    need to hire and retain additional qualified personnel to grow
    and manage our business. If we are unable to attract and retain
    qualified personnel, our business and growth could be seriously
    harmed.
    We
    depend on third-party website publishers for a significant
    portion of our visitors, and any decline in the supply of media
    available through these websites or increase in the price of
    this media could cause our revenue to decline or our cost to
    reach visitors to increase.
   17




---



##### Table of Contents



If we
    do not effectively manage our growth, our operating performance
    will suffer and we may lose clients.
    
    successfully scale our technology to accommodate a larger
    business and integrate acquisitions;
    maintain our standing with key vendors, including Internet
    search companies and third-party website publishers;
    maintain our client service standards; and
    develop and improve our operational, financial and management
    controls and maintain adequate reporting systems and procedures.    We
    have incurred a significant amount of debt, which may limit our
    ability to fund general corporate requirements and obtain
    additional financing, limit our flexibility in responding to
    business opportunities and competitive developments and increase
    our vulnerability to adverse economic and industry
    conditions.
    
    we may not have sufficient liquidity to respond to business
    opportunities, competitive developments and adverse economic
    conditions;
    we may not have sufficient liquidity to fund all of these costs
    if our revenue declines or costs increase; and
    we may not have sufficient funds to repay the principal balance
    of our debt when due.    The
    severe economic downturn in the United States poses additional
    risks to our business, financial condition and results of
    operations.
   18




---



##### Table of Contents



Poor
    perception of our business or industry as a result of the
    actions of third parties could harm our reputation and adversely
    affect our business, financial condition and results of
    operations.
    Our
    operating results have fluctuated in the past and may do so in
    the future, which makes our results of operations difficult to
    predict and could cause our operating results to fall short of
    analysts and investors expectations.
    
    changes in demand and pricing for our services;
    changes in our pricing policies, the pricing policies of our
    competitors, or the pricing of Internet advertising or media;
    the addition of new clients or the loss of existing clients;
    changes in our clients advertising agencies or the
    marketing strategies our clients or their advertising agencies
    employ;
    changes in the regulatory environment for us or our clients;
    changes in the economic prospects of our clients or the economy
    generally, which could alter current or prospective
    clients spending priorities, or could increase the time or
    costs required to complete sales with clients;
    changes in the availability of Internet advertising or the cost
    to reach Internet visitors;
    changes in the placement of our websites on search engines;
    the introduction of new product or service offerings by our
    competitors; and
    costs related to acquisitions of businesses or technologies. 19




---



##### Table of Contents



Our
    quarterly revenue and operating results may fluctuate
    significantly from quarter to quarter due to seasonal
    fluctuations in advertising spending.
  business-to-business
  We may
    need additional capital in the future to meet our financial
    obligations and to pursue our business objectives. Additional
    capital may not be available or may not be available on
    favorable terms and our business and financial condition could
    therefore be adversely affected.
    If we
    fail to compete effectively against other online marketing and
    media companies and other competitors, we could lose clients and
    our revenue may decline.
      
    online marketing or media services providers such as Monster
    Worldwide in the education client vertical and BankRate in the
    financial services client vertical;
    offline and online advertising agencies;
    major Internet portals and search engine companies with
    advertising networks such as Google, Yahoo!, MSN, and AOL;
    other online marketing service providers, including online
    affiliate advertising networks and industry-specific portals or
    lead generation companies;
    website publishers with their own sales forces that sell their
    online marketing services directly to clients;
    in-house marketing groups at current or potential clients;
    offline direct marketing agencies; and
    television, radio and print companies. 20




---



##### Table of Contents



If the
    market for online marketing services fails to continue to
    develop, our future growth may be limited and our revenue may
    decrease.
    Third-party
    website publishers can engage in unauthorized or unlawful acts
    that could subject us to significant liability or cause us to
    lose clients.
    Because
    many of our client contracts can be cancelled by the client with
    little prior notice or penalty, the cancellation of one or more
    contracts could result in an immediate decline in our
    revenue.
   21




---



##### Table of Contents



Unauthorized
    access to or accidental disclosure of consumer
    personally-identifiable information that we collect may cause us
    to incur significant expenses and may negatively affect our
    credibility and business.
    If we
    do not adequately protect our intellectual property rights, our
    competitive position and business may suffer.
        Confidentiality
    agreements with employees, consultants and others may not
    adequately prevent disclosure of trade secrets and other
    proprietary information.
   22




---



##### Table of Contents



Third
    parties may sue us for intellectual property infringement which,
    if successful, could require us to pay significant damages or
    curtail our offerings.
      Our
    proprietary technologies may include design or performance
    defects and may not achieve their intended results, either of
    which could impair our future revenue growth.
    If we fail to keep pace with rapidly-changing technologies
    and industry standards, we could lose clients or advertising
    inventory and our results of operations may suffer.
   23




---



##### Table of Contents



Changes
    in government regulation and industry standards applicable to
    the Internet and our business could decrease demand for our
    technologies and services or increase our costs.
        income-to-debt
 24




---



##### Table of Contents



Increased
    taxation of companies engaged in Internet commerce may adversely
    affect the commercial use of our marketing services and our
    financial results.
    Limitations
    on our ability to collect and use data derived from user
    activities could significantly diminish the value of our
    services and cause us to lose clients and revenue.
    As a
    creator and a distributor of Internet content, we face potential
    liability and expenses for legal claims based on the nature and
    content of the materials that we create or distribute. If we are
    required to pay damages or expenses in connection with these
    legal claims, our operating results and business may be
    harmed.
   25




---



##### Table of Contents



Wireless
    devices and mobile phones are increasingly being used to access
    the Internet, and our online marketing services may not be as
    effective when accessed through these devices, which could cause
    harm to our business.
    We may
    not succeed in expanding our businesses outside the United
    States, which may limit our future growth.
    
    the adaptation of technologies and services to foreign
    clients preferences and customs;
    application of foreign laws and regulations to us, including
    marketing and privacy regulations;
    changes in foreign political and economic conditions;
    tariffs and other trade barriers, fluctuations in currency
    exchange rates and potentially adverse tax consequences;
    language barriers or cultural differences;
    reduced or limited protection for intellectual property rights
    in foreign jurisdictions;
    difficulties and costs in staffing, managing or overseeing
    foreign operations; and
    education of potential clients who may not be familiar with
    online marketing.    We
    rely on Internet bandwidth and data center providers and other
    third parties for key aspects of the process of providing
    services to our clients, and any failure or interruption in the
    services and products provided by these third parties could harm
    our business.
   26




---



##### Table of Contents



back-up back-up back-up
  Interruption
    or failure of our information technology and communications
    systems could impair our ability to effectively deliver our
    services, which could cause us to lose clients and harm our
    operating results.
  and/or
      Any
    constraints on the capacity of our technology infrastructure
    could delay the effectiveness of our operations or result in
    system failures, which would result in the loss of clients and
    harm our business and results of operations.
    We
    could lose clients if we fail to detect click-through or other
    fraud on advertisements in a manner that is acceptable to our
    clients.
   27




---



##### Table of Contents



We
    incur significant costs as a result of operating as a public
    company, which may adversely affect our operating results and
    financial condition.
      If we
    fail to maintain proper and effective internal controls, our
    ability to produce accurate financial statements on a timely
    basis could be impaired, which would adversely affect our
    ability to operate our business.
   28




---



##### Table of Contents



Risks
    Related to the Ownership of Our Common Stock
  Our
    stock price may be volatile, and you may not be able to resell
    shares of our common stock at or above the price you
    paid.
  Form 10-K
  
    changes in earnings estimates or recommendations by securities
    analysts;
    changes in governmental regulations;
    announcements by us or our competitors of new services,
    significant contracts, commercial relationships, acquisitions or
    capital commitments;
    changes in the search engine rankings of our sites or our
    ability to access PPC advertising;
    developments with respect to intellectual property rights;
    our ability to develop and market new and enhanced products on a
    timely basis;
    our commencement of, or involvement in, litigation;
    negative publicity about us, our industry, our clients or our
    clients industries; and
    a slowdown in our industry or the general economy.    If
    securities or industry analysts do not publish research or
    reports about our business, or if they issue an adverse or
    misleading opinion regarding our stock, our stock price and
    trading volume could decline.
    Our
    directors, executive officers and principal stockholders and
    their respective affiliates have substantial control over us and
    could delay or prevent a change in corporate
    control.
    
    delaying, deferring or preventing a change in corporate control;
    impeding a merger, consolidation, takeover or other business
    combination involving us; or 29




---



##### Table of Contents




    discouraging a potential acquirer from making a tender offer or
    otherwise attempting to obtain control of us.  Future
    sales of shares by existing stockholders could cause our stock
    price to decline.
    We
    have broad discretion to determine how to use the funds raised
    in our initial public offering and may use them in ways that may
    not enhance our operating results or the price of our common
    stock.
    Provisions
    in our charter documents under Delaware law and in contractual
    obligations, could discourage a takeover that stockholders may
    consider favorable and may lead to entrenchment of
    management.
    
    a classified board of directors with three-year staggered terms,
    which may delay the ability of stockholders to change the
    membership of a majority of our board of directors;
    no cumulative voting in the election of directors, which limits
    the ability of minority stockholders to elect director
    candidates;
    the exclusive right of our board of directors to elect a
    director to fill a vacancy created by the expansion of the board
    of directors or the resignation, death or removal of a director,
    which prevents stockholders from being able to fill vacancies on
    our board of directors;
    the ability of our board of directors to determine to issue
    shares of preferred stock and to determine the price and other
    terms of those shares, including preferences and voting rights,
    without stockholder approval, which could be used to
    significantly dilute the ownership of a hostile acquirer;
    a prohibition on stockholder action by written consent, which
    forces stockholder action to be taken at an annual or special
    meeting of our stockholders;
    the requirement that a special meeting of stockholders may be
    called only by the chairman of the board of directors, the chief
    executive officer or the board of directors, which may delay the
    ability of our stockholders to force consideration of a proposal
    or to take action, including the removal of directors; and
    advance notice procedures that stockholders must comply with in
    order to nominate candidates to our board of directors or to
    propose matters to be acted upon at a stockholders
    meeting, which may discourage or deter a potential acquiror from
    conducting a solicitation of proxies to elect the
    acquirors own slate of directors or otherwise attempting
    to obtain control of us.   30




---



##### Table of Contents



We do
    not currently intend to pay dividends on our common stock and,
    consequently, your ability to achieve a return on your
    investment will depend on appreciation in the price of our
    common stock.
    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties        Item 3.
    Legal
    Proceedings      Item 4.
    (Removed
    and Reserved) 31




---



##### Table of Contents



PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities    High

LowThird quarter ended March 31, 2010 (beginning February 11,
    2010)

$
17.74


$
12.77Fourth quarter ended June 30, 2010

$
18.25


$
11.37       Form 10-K.
 32




---



##### Table of Contents



Performance
    Graph
      COMPARISON
    OF CUMULATIVE TOTAL RETURN* Among
    QuinStreet, Inc., the NASDAQ Composite Index
    and the RDG Internet Composite Index
  
  2/11/10
  2/11/10

2/28/10

3/31/10

4/30/10

5/31/10

6/30/10QuinStreet, Inc.


100.00



97.33



113.40



112.60



92.60



76.73NASDAQ Composite


100.00



102.87



110.26



113.22



103.96



97.21RDG Internet Composite


100.00



101.84



110.32



112.73



103.18



95.57   Recent
    Sales of Unregistered Securities
    Use of
    Proceeds
  Form S-1 No. 333-163228)
 33




---



##### Table of Contents



34




---



##### Table of Contents



Item 6.
    Selected
    Consolidated Financial Data      Fiscal Year Ended June 30,2010


2009


2008


2007


2006(In thousands, except per share data)Consolidated Statements of Operations Data:Net revenue

$
334,835


$
260,527


$
192,030


$
167,370


$
142,408Cost of revenue(1)


240,730



181,593



130,869



108,945



85,820Gross profit


94,105



78,934



61,161



58,425



56,588Operating expenses:(1)Product development


19,726



14,887



14,051



14,094



17,265Sales and marketing


16,698



16,154



12,409



8,487



7,166General and administrative


18,464



13,172



13,371



11,440



6,835Total operating expenses


54,888



44,213



39,831



34,021



31,266Operating income


39,217



34,721



21,330



24,404



25,322Interest income


97



245



1,482



1,905



1,341Interest expense


(3,977
)


(3,544
)


(1,214
)


(732
)


(427
)Other income (expense), net


1,523



(239
)


145



(139
)


(874
)Interest and other income (expense), net


(2,357
)


(3,538
)


413



1,034



40Income before income taxes


36,860



31,183



21,743



25,438



25,362Provision for taxes


(16,276
)


(13,909
)


(8,876
)


(9,828
)


(9,773
)Income from continuing operations


20,584



17,274



12,867



15,610



15,589Cumulative effect of change in accounting principle


















(1,820
)Net income

$
20,584


$
17,274


$
12,867


$
15,610


$
13,769Less: 8% non-cumulative dividends on convertible preferred stock


(2,018
)


(3,276
)


(3,276
)


(3,276
)


(3,276
)Less: Undistributed earnings allocated to convertible preferred
    stock


(5,784
)


(8,599
)


(5,925
)


(7,690
)


(6,591
)Net income attributable to common stockholders  Basic

$
12,782


$
5,399


$
3,666


$
4,644


$
3,902Undistributed earnings re-allocated to common stock


419



399



360



522



525 35




---



##### Table of Contents



Fiscal Year Ended June 30,2010


2009


2008


2007


2006(In thousands, except per share data)Net income attributable to common stockholders 
    Diluted

$
13,201


$
5,798


$
4,026


$
5,166


$
4,427Net income per share attributable to common stockholdersBasic

$
0.50


$
0.41


$
0.28


$
0.36


$
0.31Diluted

$
0.46


$
0.39


$
0.26


$
0.34


$
0.29Weighted average shares used in computing net income per share
    attributable to common stockholdersBasic


25,616



13,294



13,104



12,789



12,411Diluted


28,429



14,971



15,325



15,263



15,295     (1)
    
    Cost of revenue and operating expenses include stock-based
    compensation expense as follows:  Cost of revenue

$
3,111


$
1,916


$
1,112


$
416


$
66Product development


2,176



669



443



75



(7
)Sales and marketing


3,463



1,761



581



226



10General and administrative


4,621



1,827



1,086



1,354



20     June 30,2010

2009

2008

2007

2006(In thousands)Consolidated Balance Sheets Data:Cash and cash equivalents

$
155,770


$
25,182


$
24,953


$
26,765


$
30,593Working capital


155,164



16,426



17,022



42,769



36,294Total assets


434,630



212,878



179,746



118,536



101,203Total liabilities


144,608



96,289



86,032



37,831



39,567Total debt


93,608



57,240



51,654



10,250



9,216Total stockholders equity


290,022



73,186



50,311



37,312



18,350   Fiscal Year Ended June 30,2010

2009

2008

2007

2006(In thousands)Consolidated Statements of Cash Flows Data:Net cash provided by operating activities

$
38,509


$
32,570


$
24,751


$
25,197


$
21,659Depreciation and amortization


18,791



15,978



11,727



9,637



7,208Capital expenditures


2,710



1,347



2,177



2,030



1,104   Fiscal Year Ended June 30,2010

2009

2008

2007

2006(In thousands)Other Financial Data:Adjusted EBITDA(1)

$
71,379


$
56,872


$
36,279


$
36,112


$
32,619  36




---



##### Table of Contents



(1)
    
    We define Adjusted EBITDA as net income less provision for
    taxes, depreciation expense, amortization expense, stock-based
    compensation expense, interest and other income (expense), net.
    Please see the Adjusted EBITDA section below for
    more information.    Fiscal Year Ended June 30,2010


2009


2008


2007


2006(In thousands)Net income

$
20,584


$
17,274


$
12,867


$
15,610


$
13,769Interest and other (income) expense, net


2,357



3,538



(413
)


(1,034
)


(40
)Provision for taxes


16,276



13,909



8,876



9,828



9,773Depreciation and amortization


18,791



15,978



11,727



9,637



7,208Stock-based compensation expense


13,371



6,173



3,222



2,071



89Cumulative effect of change in accounting principle


















1,820Adjusted EBITDA

$
71,379


$
56,872


$
36,279


$
36,112


$
32,619  37




---



##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  You should read the following discussion of our financial
    condition and results of operations in conjunction with the
    consolidated financial statements and the notes thereto included
    elsewhere in this report. The following discussion contains
    forward-looking statements that reflect our plans, estimates and
    beliefs. Our actual results could differ materially from those
    discussed in the forward-looking statements. Factors that could
    cause or contribute to these differences include those discussed
    below and elsewhere in this report, particularly in the sections
    titled Special Note Regarding Forward-Looking
    Statements and Risk Factors.
  Management
    Overview
      
    We own or access targeted media;
    We run advertisements or other forms of marketing messages and
    programs in that media to create visitor responses or clicks
    through to client offerings;
    We match these responses or clicks to client offerings or brands
    that meet visitor interests or needs, converting visitors into
    qualified leads or clicks; and
    We optimize client matches and media yield such that we achieve
    desired results for clients and a sound financial outcome for us.      business-to-business,
       38




---



##### Table of Contents



Trends
    Affecting our Business
  Seasonality
    Acquisitions
  Acquisitions
    in Fiscal Year 2010
      Acquisitions
    in Fiscal Year 2009
    Acquisitions
    in Fiscal Year 2008
   39




---



##### Table of Contents



Client
    Verticals
    Development
    and Acquisition of Vertical Media
    Basis of
    Presentation
  General
    Net
    Revenue
  DMS.
  DSS.
  Cost
    of Revenue
  pay-per-click, cost-per-lead, cost-per-click, cost-per-thousand-impressions,
 40




---



##### Table of Contents



Operating
    Expenses
    Product Development.
  Sales and Marketing.
  General and Administrative.
  Interest
    and Other Income (Expense), Net
      Income
    Tax Expense
  non-U.S. activities
   41




---



##### Table of Contents



Results
    of Operations
    Fiscal Year Ended June 30,2010


2009


2008(In thousands)Net revenue

$
334,835



100.0
%

$
260,527



100.0
%

$
192,030



100.0
%Cost of revenue(1)


240,730



71.9



181,593



69.7



130,869



68.2Gross profit


94,105



28.1



78,934



30.3



61,161



31.8Operating expenses:(1)Product development


19,726



5.9



14,887



5.7



14,051



7.3Sales and marketing


16,698



5.0



16,154



6.2



12,409



6.5General and administrative


18,464



5.5



13,172



5.1



13,371



7.0Operating income


39,217



11.7



34,721



13.3



21,330



11.1Interest income


97



0.0



245



0.1



1,482



0.8Interest expense


(3,977
)


(1.2
)


(3,544
)


(1.4
)


(1,214
)


(0.6
)Other income (expense), net


1,523



0.5



(239
)


(0.1
)


145



0.1Income before income taxes


36,860



11.0



31,183



12.0



21,743



11.3Provision for taxes


(16,276
)


(4.9
)


(13,909
)


(5.3
)


(8,876
)


(4.6
)Net income

$
20,584



6.1
%

$
17,274



6.6
%

$
12,867



6.7
%     (1)
    
    Cost of revenue and operating expenses include stock-based
    compensation expense as follows:  Cost of revenue

$
3,111



0.9
%

$
1,916



0.7
%

$
1,112



0.6
%Product development


2,176



0.6



669



0.3



443



0.2Sales and marketing


3,463



1.0



1,761



0.7



581



0.3General and administrative


4,621



1.4



1,827



0.7



1,086



0.6   Net
    Revenue
  Fiscal Year Ended June 30,


2010 - 2009


2009 - 20082010


2009


2008


% Change


% Change(In thousands)Net revenue

$
334,835


$
260,527


$
192,030



29
%


36
%Cost of revenue


240,730



181,593



130,869



33
%


39
%Gross profit

$
94,105


$
78,934


$
61,161



19
%


29
%    42




---



##### Table of Contents



Cost
    of Revenue
      Operating
    Expenses
  Fiscal Year Ended June 30,


2010 - 2009


2009 - 20082010


2009


2008


% Change


% Change(In thousands)Product development

$
19,726


$
14,887


$
14,051



33
%


6
%Sales and marketing


16,698



16,154



12,409



3
%


30
%General and administrative


18,464



13,172



13,371



40
%


(1
)%Operating expenses

$
54,888


$
44,213


$
39,831



24
%


11
%   Product
    Development Expenses
   43




---



##### Table of Contents



Sales and
    Marketing Expenses
      General
    and Administrative Expenses
     44




---



##### Table of Contents



Interest
    and Other Income (Expense), Net
  Fiscal Year Ended June 30,


2010 - 2009


2009 - 20082010


2009


2008


% Change


% Change(In thousands)Interest income

$
97


$
245


$
1,482



(60
)%


(83
)%Interest expense


(3,977
)


(3,544
)


(1,214
)


12
%


192
%Other income (expense), net


1,523



(239
)


145



(737
)%


(265
)%Interest and other income (expense), net

$
(2,357
)

$
(3,538
)

$
413



(33
)%


(957
)%       Provision
    for Taxes
  Fiscal Year Ended June 30,2010

2009

2008(In thousands)Provision for taxes

$
16,276


$
13,909


$
8,876Effective tax rate


44.2
%


44.6
%


40.8
%   ASC 740-10
   45




---



##### Table of Contents



Selected
    Quarterly Financial Data
    Three Months EndedSept 30,


Dec 31,


Mar 31,


June 30,


Sept 30,


Dec 31,


Mar 31,


June 30,2008


2008


2009


2009


2009


2009


2010


2010(In thousands)Net revenue

$
63,678


$
59,235


$
69,813


$
67,801


$
78,552


$
76,963


$
90,773


$
88,547Costs of revenue


45,281



42,969



46,780



46,563



55,047



56,557



66,268



62,858Gross profit


18,397



16,266



23,033



21,238



23,505



20,406



24,505



25,689Operating expenses:Product development


3,757



3,723



3,512



3,895



4,470



4,739



5,325



5,192Sales and marketing


4,259



4,164



3,594



4,137



3,625



3,990



4,575



4,508General and administrative


3,736



3,171



2,865



3,400



3,441



6,203



4,467



4,353Operating income


6,645



5,208



13,062



9,806



11,969



5,474



10,138



11,636Interest income


90



87



44



24



9



8



16



64Interest expense


(763
)


(1,107
)


(879
)


(795
)


(748
)


(881
)


(1,302
)


(1,046
)Other income (expense), net


51



(291
)


(16
)


17



120



165



(64
)


1,302Income before income taxes


6,023



3,897



12,211



9,052



11,350



4,766



8,788



11,956Provision for taxes


(2,719
)


(1,547
)


(5,818
)


(3,825
)


(4,837
)


(2,356
)


(3,538
)


(5,545
)Net income

$
3,304


$
2,350


$
6,393


$
5,227


$
6,513


$
2,410


$
5,250


$
6,411Net income per share(1)Basic

$
0.07


$
0.04


$
0.16


$
0.13


$
0.16


$
0.05


$
0.12


$
0.14Diluted

$
0.07


$
0.04


$
0.15


$
0.12


$
0.16


$
0.04


$
0.11


$
0.13Other Financial Data:Adjusted EBITDA

$
12,157


$
10,957


$
18,571


$
15,187


$
18,150


$
14,989


$
18,339


$
19,901     (1)
    
    Net income per share for the four quarters of each fiscal year
    may not sum to the total for the fiscal year because of the
    different number of shares outstanding during each period.  Adjusted
    EBITDA
  Our use of Adjusted EBITDA.
   46




---



##### Table of Contents




    Adjusted EBITDA does not reflect our cash expenditures for
    capital equipment or other contractual commitments;
    although depreciation and amortization are non-cash charges, the
    assets being depreciated and amortized may have to be replaced
    in the future, and Adjusted EBITDA does not reflect cash capital
    expenditure requirements for such replacements;
    Adjusted EBITDA does not reflect changes in, or cash
    requirements for, our working capital needs;
    Adjusted EBITDA does not consider the potentially dilutive
    impact of issuing stock-based compensation to our management
    team and employees;
    Adjusted EBITDA does not reflect the significant interest
    expense or the cash requirements necessary to service interest
    or principal payments on our indebtedness;
    Adjusted EBITDA does not reflect certain tax payments that may
    represent a reduction in cash available to us; and
    other companies, including companies in our industry, may
    calculate Adjusted EBITDA measures differently, which reduces
    their usefulness as a comparative measure.      Three Months EndedSept 30,


Dec 31,


Mar 31,


June 30,


Sept 30,


Dec 31,


Mar 31,


June 30,2008


2008


2009


2009


2009


2009


2010


2010(In thousands)Net income

$
3,304


$
2,350


$
6,393


$
5,227


$
6,513


$
2,410


$
5,250


$
6,411Interest and other (income) expense, net


622



1,311



851



754



619



708



1,350



(320
)Provision for taxes


2,719



1,547



5,818



3,825



4,837



2,356



3,538



5,545Depreciation and amortization


4,114



4,237



4,035



3,592



3,952



4,651



5,075



5,113Stock-based compensation expense


1,398



1,512



1,474



1,789



2,229



4,864



3,126



3,152Adjusted EBITDA

$
12,157


$
10,957


$
18,571


$
15,187


$
18,150


$
14,989


$
18,339


$
19,901   Adjusted EBITDA quarterly trends.
 47




---



##### Table of Contents



Liquidity
    and Capital Resources
      Fiscal Year Ended June 30,2010

2009

2008(In thousands)Cash flows from operating activities

$
38,509


$
32,570


$
24,751Cash flows from investing activities


(72,233
)


(27,326
)


(49,248
)Cash flows from financing activities


164,324



(5,012
)


22,756   Net
    Cash Provided by Operating Activities
       48




---



##### Table of Contents



Net
    Cash Used in Investing Activities
          Net
    Cash Provided by or Used in Financing Activities
        Off-Balance
    Sheet Arrangements
   49




---



##### Table of Contents



Contractual
    Obligations
      Payments Due by PeriodTotal


Less Than 1 Year


1 to 3 Years


3 to 5 Years


More Than 5 Years(In thousands)Credit facility

$
75,904


$
3,963


$
19,688


$
52,253


$
Notes payable


19,544



12,278



5,143



2,123



Operating lease obligations


17,641



1,442



3,219



4,711



8,269$
113,089


$
17,683


$
28,050


$
59,087


$
8,269       New
    Credit Facility
           50




---



##### Table of Contents



New
    Lease
  12-month
    Critical
    Accounting Policies and Estimates
          Revenue
    Recognition
         51




---



##### Table of Contents



(i) set-up Set-up
    Stock-Based
    Compensation
      Goodwill
        Long-Lived
    Assets
   52




---



##### Table of Contents



Income
    Taxes
      Recent
    Accounting Pronouncements
      
    provide updated guidance on whether multiple deliverables exist,
    how the deliverables in an arrangement should be separated, and
    how the consideration should be allocated;
    require an entity to allocate revenue in an arrangement using
    estimated selling price (ESP) of deliverables if a
    vendor does not have vendor-specific objective evidence
    (VSOE) of selling price or third-party evidence
    (TPE) of selling price;
    and eliminate the use of the residual method and require an
    entity to allocate revenue using the relative selling price
    method. 53




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk    Foreign
    Currency Exchange Risk
    Interest
    Rate Risk
     54




---



##### 



Item 8.
    Financial
    Statements and Supplementary Data  QUINSTREET,
    INC.
  INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of PricewaterhouseCoopers LLP, Independent
    Registered Public Accounting Firm


56Consolidated Balance Sheets


57Consolidated Statements of Operations


58Consolidated Statements of Convertible Preferred
    Stock, Stockholders Equity and Comprehensive Income


59Consolidated Statements of Cash Flows


60Notes to Consolidated Financial Statements


61   55




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM         
    56




---



##### Table of Contents



QUINSTREET,
    INC.CONSOLIDATED BALANCE SHEETS
 (In thousands, except share and per share data)
  June 30,2010


2009ASSETSCurrent assetsCash and cash equivalents

$
155,770


$
25,182Accounts receivable, net


51,466



33,283Deferred tax assets


8,528



5,543Prepaid expenses and other assets


3,123



1,228Total current assets


218,887



65,236Property and equipment, net


5,419



4,741Goodwill


158,582



106,744Other intangible assets, net


47,156



33,990Deferred tax assets, noncurrent


3,972



1,525Other assets, noncurrent


614



642Total assets

$
434,630


$
212,878LIABILITIES, CONVERTIBLE PREFERRED STOCK AND
    STOCKHOLDERS EQUITYCurrent liabilitiesAccounts payable

$
16,776


$
13,408Accrued liabilities


30,144



21,794Deferred revenue


1,241



718Debt


15,562



12,890Total current liabilities


63,723



48,810Deferred revenue, noncurrent


305



820Debt, noncurrent


78,046



44,350Other liabilities, noncurrent


2,534



2,309Total liabilities


144,608



96,289Commitments and contingencies (See Note 10)Convertible preferred stock: $0.001 par value; 5,000,000
    and 30,000,000 shares authorized; 0 and
    21,176,533 shares issued and outstanding at June 30,
    2010 and 2009, respectively; liquidation value of $0 and $69,564
    at June 30, 2010 and 2009, respectively






43,403Stockholders equityCommon stock: $0.001 par value; 100,000,000 and
    45,000,000 shares authorized; 47,247,147 and
    15,413,000 shares issued, and 45,069,695 and 13,315,348
    shares outstanding at June 30, 2010 and 2009, respectively


47



15Additional paid-in capital


217,581



20,634Treasury stock, at cost (2,177,452 and 2,097,652 shares at
    June 30, 2010 and 2009, respectively)


(7,779
)


(7,064
)Accumulated other comprehensive income


9



21Retained earnings


80,164



59,580Total stockholders equity


290,022



73,186Total liabilities, convertible preferred stock and
    stockholders equity

$
434,630


$
212,878    57




---



##### Table of Contents



QUINSTREET,
    INC.CONSOLIDATED STATEMENTS OF OPERATIONS
 (In thousands, except per share data)
  Fiscal Year Ended June 30,2010


2009


2008Net revenue

$
334,835


$
260,527


$
192,030Cost of revenue(1)


240,730



181,593



130,869Gross profit


94,105



78,934



61,161Operating expenses:(1)Product development


19,726



14,887



14,051Sales and marketing


16,698



16,154



12,409General and administrative


18,464



13,172



13,371Operating income


39,217



34,721



21,330Interest income


97



245



1,482Interest expense


(3,977
)


(3,544
)


(1,214
)Other income (expense), net


1,523



(239
)


145Income before income taxes


36,860



31,183



21,743Provision for taxes


(16,276
)


(13,909
)


(8,876
)Net income

$
20,584


$
17,274


$
12,867Net income attributable to common stockholdersBasic

$
12,782


$
5,399


$
3,666Diluted

$
13,201


$
5,798


$
4,026Net income per share attributable to common stockholdersBasic

$
0.50


$
0.41


$
0.28Diluted

$
0.46


$
0.39


$
0.26Weighted average shares used in computing net income per share
    attributable to common stockholdersBasic


25,616



13,294



13,104Diluted


28,429



14,971



15,325     (1)
    
    Cost of revenue and operating expenses include stock-based
    compensation expense as follows:  Cost of revenue

$
3,111


$
1,916


$
1,112Product development


2,176



669



443Sales and marketing


3,463



1,761



581General and administrative


4,621



1,827



1,086    58




---



##### Table of Contents



QUINSTREET,
    INC.CONSOLIDATED STATEMENTS OF CONVERTIBLE PREFERRED
    STOCK, STOCKHOLDERS EQUITY AND COMPREHENSIVE
    INCOME
 (In thousands, except share data)
  AccumulatedConvertible















Additional


Other





TotalPreferred Stock



Common Stock


Treasury Stock


Paid-in


Comprehensive


Retained


Shareholders


ComprehensiveShares


Amount



Shares


Amount


Shares


Amount


Capital


Income


Earnings


Equity


IncomeBalance at June 30, 2007


21,176,533


$
43,403




14,350,087


$
14



(1,375,647
)

$
(121
)

$
6,180


$
95


$
31,144


$
37,312Issuance of common stock upon exercise of stock options











893,197



1











2,574











2,575Stock-based compensation



























3,222











3,222Excess tax benefits from stock-based compensation



























1,707











1,707Repurchase of common shares



















(558,730
)


(5,606
)














(5,606
)Cumulative effect of adoption of accounting for uncertain tax
    positions



































(1,705
)


(1,705
)Comprehensive income:Net income



































12,867



12,867



12,867Unrealized gain on investments































10







10



10Currency translation adjustments































(71
)






(71
)


(71
)Comprehensive income










































$
12,806Balance at June 30, 2008


21,176,533


$
43,403




15,243,284


$
15



(1,934,377
)

$
(5,727
)

$
13,683


$
34


$
42,306


$
50,311Issuance of common stock upon exercise of stock options











169,716















304











304Stock-based compensation



























6,173











6,173Excess tax benefits from stock-based compensation



























474











474Repurchase of common stock



















(163,275
)


(1,337
)














(1,337
)Comprehensive income:Net income



































17,274



17,274



17,274Unrealized gain on investments































(10
)






(10
)


(10
)Currency translation adjustments































(3
)






(3
)


(3
)Comprehensive income










































$
17,261Balance at June 30, 2009


21,176,533


$
43,403




15,413,000


$
15



(2,097,652
)

$
(7,064
)

$
20,634


$
21


$
59,580


$
73,186Issuance of common stock upon exercise of stock options











657,614



1











1,639











1,640Issuance of common stock in connection with initial public
    offering, net of issuance costs of $13,215











10,000,000



10











136,775











136,785Conversion of preferred stock to common stock in connection with
    initial public offering


(21,176,533
)


(43,403
)



21,176,533



21











43,382











43,403Stock-based compensation



























13,371











13,371Excess tax benefits from stock-based compensation



























1,780











1,780Repurchase of common stock



















(79,800
)


(715
)














(715
)Comprehensive income:Net income



































20,584



20,584



20,584Currency translation adjustments































(12
)






(12
)


(12
)Comprehensive income










































$
20,572Balance at June 30, 2010





$





47,247,147


$
47



(2,177,452
)

$
(7,779
)

$
217,581


$
9


$
80,164


$
290,022    59




---



##### Table of Contents



QUINSTREET,
    INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
  Fiscal Year Ended June 30,2010


2009


2008Cash flows from operating activitiesNet income

$
20,584


$
17,274


$
12,867Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization


18,791



15,978



11,727Provision for sales returns and doubtful accounts receivable


(751
)


1,473



1,146Stock-based compensation


13,371



6,173



3,222Excess tax benefits from stock-based compensation


(1,859
)


(474
)


(1,707
)(Gain) loss, net on early extinguishment of debt


(1,179
)






Other non-cash adjustments, net


(443
)


563



369Changes in assets and liabilities, net of effects of
    acquisitions:Accounts receivable


(14,403
)


(9,042
)


(921
)Prepaid expenses and other assets


29



485



(228
)Other assets, noncurrent


11



(710
)


(555
)Deferred taxes


(6,771
)


(4,081
)


(3,772
)Accounts payable


3,363



3,359



(4,977
)Accrued liabilities


7,900



2,491



8,020Deferred revenue


(112
)


(720
)


(954
)Other liabilities, noncurrent


(22
)


(199
)


514Net cash provided by operating activities


38,509



32,570



24,751Cash flows from investing activitiesRestricted cash


14



711



(23
)Proceeds from sales of property and equipment


53







44Capital expenditures


(2,710
)


(1,347
)


(2,177
)Business acquisitions, net of notes payable and cash acquired


(68,176
)


(27,932
)


(63,244
)Internal software development costs


(1,414
)


(1,060
)


(1,378
)Purchases of marketable securities










(11,642
)Proceeds from sales and maturities of marketable securities






2,302



29,172Net cash used in investing activities


(72,233
)


(27,326
)


(49,248
)Cash flows from financing activitiesNet proceeds from issuance of common stock


136,790







Proceeds from exercise of common stock options


1,640



304



2,575Proceeds from bank debt


43,300



8,607



29,000Principal payments on bank debt


(3,100
)


(3,500
)


Principal payments on acquisition-related notes payable


(15,450
)


(9,560
)


(4,920
)Excess tax benefits from stock-based compensation


1,859



474



1,707Repurchases of common stock


(715
)


(1,337
)


(5,606
)Net cash provided by (used in) financing activities


164,324



(5,012
)


22,756Effect of exchange rate changes on cash and cash equivalents


(12
)


(3
)


(71
)Net increase (decrease) in cash and cash equivalents


130,588



229



(1,812
)Cash and cash equivalents at beginning of period


25,182



24,953



26,765Cash and cash equivalents at end of period

$
155,770


$
25,182


$
24,953Supplemental disclosure of cash flow informationCash paid for interest


3,860



2,269



1,193Cash paid for taxes


22,109



20,354



8,473Supplemental disclosure of noncash investing and financing
    activitiesConversion of preferred stock to common stock


43,403







Notes payable issued in connection with business acquisitions


14,501



8,151



16,910    60




---



##### Table of Contents



QUINSTREET,
    INC.



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS

(In
    thousands, except share and per share data) 1.
    The
    Company    Initial
    Public Offering
  two-for-one
      2.
    Summary
    of Significant Accounting Policies  Basis
    of Consolidation
    Use of
    Estimates
    Revenue
    Recognition
   61




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
        (i) set-up Set-up
    Concentrations
    of Credit Risk
        Fiscal Year Ended June 30,2010


2009


2008Client A


*



19
%


23
%Client B


*



*



12
%Client C


*



*



11
%     *
    
    indicates less than 10% of total net revenue for the period.   62




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
  Fair
    Value of Financial Instruments
    Cash
    and Cash Equivalents
    Restricted
    Cash
    Property
    and Equipment
    Computer equipment

3 yearsSoftware

3 yearsFurniture and fixtures

3 to 5 yearsLeasehold improvements

the shorter of the lease term or the estimated useful lives of
    the improvements   Internal
    Software Development Costs
  product-by-product
  Goodwill
   63




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
      Long-Lived
    Assets
    Advertising
    Costs
    Income
    Taxes
     64




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
  Foreign
    Currency Translation
    Comprehensive
    Income
  available-for-sale.
  Loss
    Contingencies
      Stock-Based
    Compensation
   65




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
        401(k)
    Savings Plan
    Recent
    Accounting Pronouncements
      
    provide updated guidance on whether multiple deliverables exist,
    how the deliverables in an arrangement should be separated, and
    how the consideration should be allocated;
    require an entity to allocate revenue in an arrangement using
    estimated selling price (ESP) of deliverables if a
    vendor does not have vendor-specific objective evidence
    (VSOE) of selling price or third-party evidence
    (TPE) of selling price;
    and eliminate the use of the residual method and require an
    entity to allocate revenue using the relative selling price
    method.     66




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
      3.
    Net
    Income Attributable to Common Stockholders and Net Income per
    Share     67




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
    Fiscal Year Ended June 30,2010


2009


2008Numerator:Basic:Net income

$
20,584


$
17,274


$
12,8678% non-cumulative dividends on convertible preferred stock


(2,018
)


(3,276
)


(3,276
)Undistributed earnings allocated to convertible preferred stock


(5,784
)


(8,599
)


(5,925
)Net income attributable to common stockholders  basic

$
12,782


$
5,399


$
3,666Diluted:Net income attributable to common stockholders  basic

$
12,782


$
5,399


$
3,666Undistributed earnings re-allocated to common stock


419



399



360Net income attributable to common stockholders 
    diluted

$
13,201


$
5,798


$
4,026Denominator:Basic:Weighted average shares of common stock used in computing basic
    net income per share


25,616



13,294



13,104Diluted:Weighted average shares of common stock used in computing basic
    net income per share


25,616



13,294



13,104Add weighted average effect of dilutive securities:Stock options


2,813



1,677



2,221Weighted average shares of common stock used in computing
    diluted net income per share


28,429



14,971



15,325Net income per common share:Basic

$
0.50


$
0.41


$
0.28Diluted

$
0.46


$
0.39


$
0.26Securities excluded from weighted average shares used in
    computing diluted net income per share because the effect would
    have been anti-dilutive:(1)


2,918



4,740



2,286     (1)
    
    These weighted shares relate to anti-dilutive stock options as
    calculated using the treasury stock method and could be dilutive
    in the future.  4.
    Investments
    and Fair Value Measurements  Investments
   68




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
  Fair
    Value Measurements
              Quoted Prices inActive Marketsfor Identical AssetsTotal


(Level 1)Assets:Money market funds

$
133,128


$
133,128Balance at June 30, 2010

$
133,128


$
133,128Assets:Money market funds

$
8,054


$
8,054Balance at June 30, 2009

$
8,054


$
8,054   5.  Balance
    Sheet Components
  Accounts
    Receivable, Net
    June 30,2010


2009Accounts receivable

$
54,224


$
36,792Less: Allowance for doubtful accounts


(324
)


(506
)Less: Allowance for sales returns


(2,434
)


(3,003
)$
51,466


$
33,283  69




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
  Property
    and Equipment, Net
    June 30,2010


2009Computer equipment

$
11,506


$
10,295Software


5,946



4,955Furniture and fixtures


1,976



1,992Leasehold improvements


917



694Internal software development costs


14,870



13,45635,215



31,392Less: Accumulated depreciation and amortization


(29,796
)


(26,651
)$
5,419


$
4,741     Accrued
    liabilities
    June 30,2010


2009Accrued media costs

$
15,760


$
12,920Accrued compensation and related expenses


11,872



6,457Accrued taxes payable


642



430Accrued professional service and other business expenses


1,870



1,987Total accrued liabilities

$
30,144


$
21,794   6.
    Acquisitions  Acquisitions
    in Fiscal Year 2010
  Acquisition
    of Internet.com
   70




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
  business-to-business
  AmountCash

$
15,943Fair value of debt (net of $46 of imputed interest)


1,654$
17,597     Estimated


EstimatedFair Value


Useful LifeTangible assets acquired

$
3,136Liabilities assumed


(503
)Advertiser relationships


1,300


5 - 7 yearsWebsite/trade/domain names


2,500


5 yearsContent


2,400


4 yearsNoncompete agreements


200


2 yearsGoodwill


8,564


Indefinite$
17,597   Acquisition
    of Insure.com
    AmountCash

$
15,000Fair value of debt (net of $24 of imputed interest )


976$
15,976    71




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
    Estimated


EstimatedFair Value


Useful LifeAdvertiser relationships

$
900


3 yearsWebsite/trade/domain names


1,250


8 yearsContent


3,900


8 yearsGoodwill


9,926


Indefinite$
15,976   Acquisition
    of Payler Corp. D/B/A HSH Associates Financial Publishers
    (HSH)
    AmountCash

$
6,000Fair value of debt (net of $241 of imputed interest)


3,759$
9,759     Estimated


EstimatedFair Value


Useful LifeTangible assets acquired

$
50Liabilities assumed


(1,695
)Advertiser relationships


1,100


3 yearsWebsite/trade/domain names


800


6 yearsContent


1,400


6 yearsGoodwill


8,104


Indefinite$
9,759   Other
    Acquisitions in Fiscal Year 2010
   72




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
    AmountCash

$
29,882Fair value of debt (net of $531 of imputed interest)


8,112$
37,994     Estimated


EstimatedFair Value


Useful LifeTangible assets acquired

$
45Content


8,384


1-6 yearsCustomer/publisher relationships


1,150


1-7 yearsWebsite/trade/domain names


2,748


5 yearsNoncompete agreements


224


2-3 yearsAcquired technology


199


3 yearsGoodwill


25,244


Indefinite$
37,994   Acquisitions
    in Fiscal Year 2009
  Acquisition
    of U.S. Citizens for Fair Credit Card Terms, Inc.
    (CardRatings)
    AmountCash

$
10,372Fair value of debt (net of $722 of imputed interest)


4,278Acquisition-related costs


20$
14,670    73




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
    Estimated


EstimatedFair Value


Useful LifeTangible assets acquired

$
834Liabilities assumed


(206
)Advertiser relationships


2,325


7 yearsWebsite/trade/domain names


776


5 yearsNoncompete agreements


124


3 yearsContent


140


2 yearsGoodwill


10,677


Indefinite$
14,670   Other
    Acquisitions in Fiscal Year 2009
    AmountCash

$
14,606Fair value of debt (net of $395 of imputed interest)


3,873Acquisition-related costs


134$
18,613     Estimated


EstimatedFair Value


Useful LifeLiabilities assumed

$
(22
)Content


2,538


1-6 yearsCustomer/publisher relationships


1,952


1-7 yearsWebsite/trade/domain names


2,418


5 yearsNoncompete agreements


236


2-3 yearsAcquired technology


392


3 yearsGoodwill


11,099


Indefinite$
18,613  74




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
  Acquisitions
    in Fiscal Year 2008
  Acquisition
    of Cyberspace Communications Corporation
    (SureHits)
  change-in-control
  AmountCash

$
26,519Fair value of
    change-in-control
    provisions (net of $72 of imputed interest)


1,841Acquisition-related costs


212$
28,572     Estimated


EstimatedFair Value


Useful LifeTangible assets acquired

$
4,006Liabilities assumed


(2,998
)Advertiser relationships


7,692


3-5 yearsAcquired technology


2,482


3 yearsPublisher relationships


391


2 yearsTrade name


199


5 yearsNoncompete agreements


176


3 yearsGoodwill


16,624


Indefinite$
28,572     Acquisition
    of ReliableRemodeler.com, Inc.
    (ReliableRemodeler)
   75




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
    AmountCash

$
17,500Fair value of debt (net of $1,277 of imputed interest)


6,723Acquisition-related costs


54$
24,277     Estimated


EstimatedFair Value


Useful LifeTangible assets acquired

$
859Liabilities assumed


(987
)Deferred tax liabilities


(3,849
)Customer relationships


7,476


5 yearsAcquired technology


1,124


5 yearsTrade name and domain name


814


5 yearsContent


183


4 yearsGoodwill


18,657


Indefinite$
24,277   Acquisition
    of Vendorseek L.L.C. (Vendorseek)
  business-to-business
  AmountCash

$
10,665Fair value of debt (net of $346 of imputed interest)


3,404Acquisition-related costs


128$
14,197    76




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
    Estimated


EstimatedFair Value


Useful LifeTangible assets acquired

$
413Liabilities assumed


(221
)Customer relationships


156


2 yearsPublisher relationships


899


5 yearsAcquired technology


639


3 yearsTrade name and domain name


252


5 yearsNoncompete agreements


88


3 yearsGoodwill


11,971


Indefinite$
14,197   Other
    Acquisitions in Fiscal Year 2008
    AmountCash

$
9,471Fair value of debt (net of $412 of imputed interest)


4,942Acquisition-related costs


84$
14,497     Estimated


EstimatedFair Value


Useful LifeContent

$
3,281


2-5 yearsCustomer/advertiser/publisher relationships


918


2-5 yearsDomain names


1,364


5 yearsNoncompete agreements


269


2-3.5 yearsGoodwill


8,665


Indefinite$
14,497  77




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
  Pro
    Forma Financial Information (unaudited)
    Fiscal Year EndedJune 30,2010


2009Net revenue

$
342,824


$
281,785Net income


19,506



12,580Basic net income per share

$
0.45


$
0.27Diluted net income per share

$
0.42


$
0.26   7.
    Intangibles
    Assets, Net and Goodwill    June 30, 2010


June 30, 2009Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Amount


Amount


Amortization


AmountCustomer/publisher/advertiser relationships

$
26,532


$
(11,798
)

$
14,734


$
22,982


$
(6,299
)

$
16,683Content


34,388



(16,064
)


18,324



18,145



(10,546
)


7,599Website/trade/domain names


16,485



(5,171
)


11,314



9,187



(2,988
)


6,199Acquired technology and others


11,398



(8,614
)


2,784



10,034



(6,525
)


3,509$
88,803


$
(41,647
)

$
47,156


$
60,348


$
(26,358
)

$
33,990       Year Ending June 30,2011

$
15,6162012


12,5192013


8,9912014


4,8362015


2,917Thereafter


2,277$
47,156  78




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
    DMS


DSS


TotalBalance at June 30, 2008

$
79,237


$
1,231


$
80,468Additions


26,276







26,276Balance at June 30, 2009


105,513



1,231



106,744Additions


51,838







51,838Balance at June 30, 2010

$
157,351


$
1,231


$
158,582     8.
    Income
    Taxes    Fiscal Year Ended June 30,2010


2009


2008US

$
35,987


$
30,806


$
20,299Foreign


873



377



1,444$
36,860


$
31,183


$
21,743     Fiscal Year Ended June 30,2010


2009


2008CurrentFederal

$
17,555


$
14,018


$
9,856State


5,827



3,808



2,437Foreign


(88
)


164



35523,294



17,990



12,648DeferredFederal

$
(6,005
)

$
(4,109
)

$
(3,074
)State


(981
)


94



(698
)Foreign


(32
)


(66
)


(7,018
)


(4,081
)


(3,772
)$
16,276


$
13,909


$
8,876  79




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
    Fiscal Year Ended June 30,2010


2009


2008Federal tax rate


35.0
%


35.0
%


35.0
%States taxes, net of federal benefit


8.1
%


8.2
%


5.1
%Stock-based compensation expense


4.4
%


2.8
%


1.7
%Other


(3.3
)%


(1.4
)%


(1.0
)%Effective income tax rate


44.2
%


44.6
%


40.8
%     Fiscal Year Ended June 30,2010


2009Current:Net operating loss

$
129


$
143Deferred revenue


190



178Reserves and accruals


4,780



3,155Stock options


1,545



685Other


1,884



1,382Total current deferred tax assets

$
8,528


$
5,543Non currentIntangible assets

$
(462
)

$
(460
)Net operating loss


169



156Fixed assets


(211
)


(74
)Stock options


4,634



2,055Foreign


11



4Total noncurrent deferred tax assets


4,141



1,681Valuation allowance


(169
)


(156
)Noncurrent deferred tax assets, net

$
3,972


$
1,525Total deferred tax assets, net

$
12,500


$
7,068      80




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
        Fiscal Year2010


2009


2008Balance at the beginning of the year

$
2,617


$
2,248


$
2,383Gross increases  current period tax positions


219



868



193Gross decreases  current period tax positions






(293
)


(328
)Reductions as a result of lapsed statute of limitations


(99
)


(206
)


Gross decreases  settlements with tax authorities


(723
)






Balance at the end of the year

$
2,014


$
2,617


$
2,248       non-U.S.,
 81




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
  9.
    Debt  Promissory
    Notes
    Credit
    Facility
               82




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
      Debt
    Maturities
    Notes


CreditFiscal Year Ending June 30,

Payable


Facility2011

$
12,278


$
3,9632012


3,059



7,0002013


2,084



12,6882014


1,623



52,2532015 and thereafter


500



19,544



75,904Less: Imputed interest and unamortized discounts


(565
)


(1,275
)Less: Current portion


(11,959
)


(3,603
)Noncurrent portion of debt

$
7,020


$
71,026   Letters
    of Credit
        10.
    Commitments
    and Contingencies  Leases
   83




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
    OperatingFiscal Year Ending June 30,

Leases2011

$
1,4422012


1,1462013


2,0732014


2,3322015


2,379Thereafter


8,269$
17,641     12-month
      Guarantor
    Arrangements
     84




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
      Litigation
  party-in-interest. non-transferable,
      11.
    Stock
    Benefit Plans  Stock-Based
    Compensation
    Stock
    Incentive Plan
   85




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
    36-month
          Valuation
    Assumptions
   86




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
      Fiscal Year Ended June 30,2010

2009

2008Expected term (in years)


4.6



4.6



4.6Weighted-average volatility


67
%


62
%


52
%Expected dividend yield


0.0
%


0.0
%


0.0
%Risk-free interest rate


2.4
%


2.8
%


3.1
%Grant date fair value

$
9.42


$
5.28


$
4.76   Stock
    Option Award Activity
    WeightedWeighted


AverageAverage


Remaining


AggregateExercise


Contractual Life


IntrinsicShares


Price


(in Years)


ValueOutstanding at June 30, 2009


9,151,423


$
7.87Options granted


3,797,950



13.30Options exercised


(657,614
)


2.49Options forfeited


(347,487
)


11.40Options expired


(148,210
)


9.41Outstanding at June 30, 2010


11,796,062


$
9.79



5.26


$
31,527Vested and
    expected-to-vest
    at June 30, 2010(1)


10,832,457


$
9.61



5.22


$
30,209Vested and exercisable at June 30, 2010


6,586,248


$
7.99



4.81


$
24,285     (1)
    
    The expected-to-vest options are the result of applying the
    pre-vesting forfeiture assumption to total outstanding options.    Fiscal Year Ended June 30,2010

2009

2008Intrinsic value

$
8,001


$
1,365


$
6,606Cash received


1,640



304



2,575Tax benefit


2,129



544



1,734    87




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
  12.
    Stockholders
    Equity  Initial
    Public Offering of Common Stock
    Stock
    Repurchases
    Preferred
    Stock
    one-for-one
  13.
    Related
    Party Transactions      brother-in-law
  14.
    Segment
    Information   88




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
          Fiscal Year Ended June 30,2010


2009


2008Net revenue by segment:DMS

$
333,090


$
257,420


$
188,429DSS


1,745



3,107



3,601Total net revenue


334,835



260,527



192,030Segment operating income before depreciation, amortization, and
    stock-based compensation expense:DMS


70,423



55,251



34,740DSS


956



1,621



1,539Total segment operating income before depreciation,
    amortization, and stock-based compensation expense


71,379



56,872



36,279Depreciation and amortization


(18,791
)


(15,978
)


(11,727
)Stock-based compensation expense


(13,371
)


(6,173
)


(3,222
)Total operating income

$
39,217


$
34,721


$
21,330     Fiscal Year Ended June 30,2010


2009


2008Net revenue:United States

$
334,131


$
259,965


$
191,245International


704



562



785Total net revenue

$
334,835


$
260,527


$
192,030   June 30,2010


2009Long-lived assets:United States

$
5,193


$
4,485International


226



256Total long-lived assets

$
5,419


$
4,741  89




---



##### Table of Contents



QUINSTREET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
 (In
    thousands, except share and per share data)
  15.
    Subsequent
    Events  Acquisition
    of Insurance.com
      Litigation
   90




---



##### Table of Contents



Item 9.
    Changes
    In and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  Rules 13a-15(e) 15d-15(e)
  Changes
    in Internal Control over Financial Reporting
  Rule 13a-15(d) 15d-15(d)
  Exemption
    from Managements Report on Internal Control Over Financial
    Reporting for Fiscal Year ended June 30, 2010
    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance  Regulation S-K
  Code of
    Ethics
  http://investor.quinstreet.com.
   91




---



##### Table of Contents



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   92




---



##### Table of Contents



PART IV  Item 15.
    Exhibits,
    Financial Statement Schedules  Form 10-K:
    PageReport of Independent Registered Public
    Accounting Firm


56Consolidated Balance Sheets


57Consolidated Statements of Operations


58Consolidated Statements of Convertible Preferred
    Stock, Stockholders Equity and Comprehensive Income


59Consolidated Statements of Cash Flows


60Notes to Consolidated Financial Statements


61       Schedule II:
    Valuation and Qualifying Accounts
    Charged toBalance at the

Expenses/

Write-offs

Balance atBeginning of

Against the

Net of

the End ofthe Year

Revenue

Receivables

the YearFiscal year 2008

$
1,094


$
1,217


$
(150
)

$
2,161Fiscal year 2009

$
2,161


$
1,463


$
(115
)

$
3,509Fiscal year 2010

$
3,509


$
263


$
(1,014
)

$
2,758         ExhibitNo.

Description of Exhibit3.1(6)

Amended and Restated Certificate of Incorporation3.2(7)

Amended and Restated Bylaws4.1(3)

Form of QuinStreet, Inc.s Common Stock Certificate.4.2(1)

Second Amended and Restated Investor Rights Agreement, by and
    between QuinStreet, Inc., Douglas Valenti and the investors
    listed on Schedule 1 thereto, dated May 28, 2003.10.1(1)+

QuinStreet, Inc. 2008 Equity Incentive Plan.10.2(1)+

Forms of Option Agreement and Option Grant Notice under 2008
    Equity Incentive Plan (for
    non-executive
    officer employees).10.3(1)+

Forms of Option Agreement and Option Grant Notice under 2008
    Equity Incentive Plan (for executive officers).10.4(1)+

Forms of Option Agreement and Option Grant Notice under 2008
    Equity Incentive Plan (for
    non-employee
    directors).10.5(2)+

QuinStreet, Inc. 2010 Equity Incentive Plan. 93




---



##### Table of Contents



ExhibitNo.

Description of Exhibit10.6(2)+

Forms of Option Agreement and Option Grant Notice under 2010
    Equity Incentive Plan (for
    non-executive
    officer employees).10.7(2)+

Forms of Option Agreement and Option Grant Notice under 2010
    Equity Incentive Plan (for executive officers).10.8(2)+

QuinStreet, Inc. 2010 Non-Employee Directors Stock Award
    Plan.10.9(2)+

Form of Option Agreement and Option Grant Notice for Initial
    Grants under the 2010
    Non-Employee
    Directors Stock Award Plan.10.10(2)+

Form of Option Agreement and Option Grant Notice for Annual
    Grants under the 2010
    Non-Employee
    Directors Stock Award Plan.10.11(3)+

Form of 2010 Incremental Bonus Plan.10.12(3)+

Annual Incentive Plan.10.13(3)

Amended and Restated Revolving Credit and Term Loan Agreement,
    by and among QuinStreet, Inc., the lenders thereto and Comerica
    Bank as Administrative Agent, dated as of January 14, 2010.10.14(3)

Security Agreement, by and among QuinStreet, Inc., certain
    subsidiaries of QuinStreet, Inc. and Comerica Bank as
    Administrative Agent, dated as of September 29, 2008.10.15(3)#

QuinStreet Merchant Agreement, dated as of October 3, 2001, by
    and between QuinStreet, Inc. and DeVry, Inc.10.16(3)#

Letter Agreement, dated as of December 2, 2003, by and between
    QuinStreet, Inc. and DeVry, Inc10.17(3)#

Letter Agreement by and between QuinStreet, Inc. and DeVry, Inc.10.18(3)#

Letter Agreement, dated as of October 5, 2007, by and between
    QuinStreet, Inc. and DeVry, Inc.10.19(4)+

Form of Indemnification Agreement made by and between
    QuinStreet, Inc. and each of its directors and executive
    officers.10.20(4)

Office Lease Agreement, dated as of June 2, 2003, by and between
    QuinStreet, Inc. and
    CA-Parkside
    Towers Limited Partnership, as amended.10.21(5)

Office Lease Metro Center, dated as of February 24, 2010,
    between the registrant and CA-Metro Center Limited Partnership.21.1*

List of subsidiaries.23.1*

Consent of Independent Registered Public Accounting Firm24.1*

Power of Attorney (incorporated by reference to the signature
    page of this Annual Report on
    Form 10-K)31.1*

Certification of the Chief Executive Officer of QuinStreet, Inc.
    pursuant to Rule 13a-14 under the Securities Exchange Act of
    1934.31.2*

Certification of the Chief Financial Officer of QuinStreet, Inc.
    pursuant to Rule 13a-14 under the Securities Exchange Act of
    1934.32.1*

Certification of the Chief Executive Officer and Chief Financial
    Officer of QuinStreet, Inc. pursuant to 18 U.S.C. Section
    1350 as Adopted Pursuant to Section 906 of the Sarbanes-Oxley
    Act of 2002.     *
    
    Filed Herewith.+
    
    Indicates management contract or compensatory plan.#
    
    Confidential treatment has been granted for certain information
    contained in this document. Such information has been omitted
    and filed separately with the Securities and Exchange Commission.(1)
    
    Incorporated by reference to the same numbered exhibit to
    QuinStreet, Inc.s Registration Statement on
    Form S-1
    (SEC File
    No. 333-163228)
    filed on November 19, 2009.(2)
    
    Incorporated by reference to the same numbered exhibit to
    QuinStreet, Inc.s Amendment No. 1 to Registration
    Statement on
    Form S-1
    (SEC File
    No. 333-163228)
    filed on December 22, 2009.(3)
    
    Incorporated by reference to the same numbered exhibit to
    QuinStreet, Inc.s Amendment No. 2 to Registration
    Statement on
    Form S-1
    (SEC File
    No. 333-163228)
    filed on January 14, 2010. 94




---



##### Table of Contents



(4)
    
    Incorporated by reference to the same numbered exhibit to
    QuinStreet, Inc.s Amendment No. 3 to Registration
    Statement on
    Form S-1
    (SEC File
    No. 333-163228)
    filed on January 26, 2010.(5)
    
    Incorporated by reference to Exhibit 10.1 to QuinStreet,
    Inc.s quarterly report on
    Form 10-Q
    (SEC File No.
    001-34628)
    filed on May 12, 2010.(6)
    
    Incorporated by reference to Exhibit 3.2 to QuinStreet,
    Inc.s Amendment No. 1 to Registration Statement on Form
    S-1 (SEC File No. 333-163228) filed on December 22, 2009.(7)
    
    Incorporated by reference to Exhibit 3.4 to QuinStreet,
    Inc.s Amendment No. 1 to Registration Statement on Form
    S-1 (SEC File No. 333-163228) filed on December 22, 2009. 95




---



##### Table of Contents



SIGNATURES      By:
    /s/  Douglas
    Valenti     KNOW ALL PERSONS BY THESE PRESENTS Form 10-K
    Signature

Title

Date/s/  Douglas
    ValentiDouglas
    Valenti

Chairman and Chief Executive Officer
    (Principal Executive Officer)

September 13, 2010/s/  Kenneth
    HahnKenneth
    Hahn

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

September 13, 2010/s/  William
    BradleyWilliam
    Bradley

Director

September 13, 2010/s/  John
    G. McDonaldJohn
    G. McDonald

Director

September 13, 2010/s/  Gregory
    SandsGregory
    Sands

Director

September 13, 2010/s/  James
    SimonsJames
    Simons

Director

September 13, 2010/s/  Glenn
    SolomonGlenn
    Solomon

Director

September 13, 2010/s/  Dana
    StalderDana
    Stalder

Director

September 13, 2010  96