UNITED
        STATES SECURITIES AND EXCHANGE
        COMMISSION
 Washington, DC
        20549
 FORM
        10-Q
 (Mark
        One)
 þ
              
              **QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
                SECURITIES EXCHANGE ACT OF 1934**
 **For
        the Quarter ended March 31,
        2007**
 OR
 o
              
              **TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
                THE
                SECURITIES EXCHANGE ACT OF 1934**
 0-28252(Commission
        File Number)
 BROADVISION,
        INC.
 
  **Delaware**
              
              **94-3184303**(State
                  or other jurisdiction of
              
              (I.R.S.
                  Employerincorporation
                  or organization)
              
              Identification
                  Number)**1600
                  Seaport Blvd., 5th Floor, North
                  Bldg.**
              
              **94063****Redwood
                  City, California**(Address
                  of principal executive offices)
              
              (Zip
                  code)
 (650) 331-1000
   þ o
  o o þ
  o þ













BROADVISION,
        INC. AND SUBSIDIARIESFORM 10-QQuarter Ended March 31,
        2007
 TABLE
        OF CONTENTS
 **PART
                  I.**
              
              **FINANCIAL
                INFORMATION**Item 1.
              
              Financial
                StatementsCondensed
                Consolidated Balance Sheets at March 31, 2007
                (unaudited) and December 31, 2006Condensed
                Consolidated
                Statements of Operations and Comprehensive (Loss) Income for the
                three
                months ended March 31, 2007 and 2006 (unaudited)Condensed
                Consolidated
                Statements of Cash Flows for the three months ended March 31, 2007
                and
                2006 (unaudited)Notes
                to Condensed
                Consolidated Financial Statements (unaudited)Item 2.
              
              Management's
                Discussion and Analysis of Financial Condition and Results of
                OperationsItem 3.
              
              Quantitative
                and
                Qualitative Disclosures About Market RiskItem 4.
              
              Controls
                and
                Procedures**PART
                  II.**
              
              **OTHER
                INFORMATION**Item 1.
              
              Legal
                ProceedingsItem 1A.
              
              Risk
                FactorsItem 2.
              
              Unregistered
                Sales of Equity Securities and Use of ProceedsItem 3.
              
              Defaults
                Upon
                Senior SecuritiesItem 4.
              
              Submission
                of
                Matters to a Vote of Security HoldersItem 5.
              
              Other
                InformationItem 6.
              
              Exhibits
 **SIGNATURES**
 EXHIBIT
                31.1EXHIBIT
                32.1








**~i~**
 ***Table
          Of Contents***


**PART
        I. FINANCIAL INFORMATION**
  **Item 1.
        Financial Statements**
  **BROADVISION,
        INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED BALANCE SHEETS**
 **(In
        thousands, except par value amounts)**
 **March
                    31,**
                
                **December
                    31,****2007**
                
                **2006****(unaudited)**
                
                ***ASSETS**Current
                    assets:Cash
                    and cash equivalents
                
                $
                41,017
                
                $
                37,003Accounts
                    receivable, less allowance for doubtful accounts of $744 as of
                    March 31, 2007 and $1,141 as of December 31,
                    2006
                
                
                10,552
                
                
                10,106Prepaids
                    and other
                
                
                1,149
                
                
                1,108Restricted
                    cash, current portion
                
                
                796
                
                
                997Total
                    current assets
                
                
                53,514
                
                
                49,214Property
                    and equipment, net
                
                
                1,104
                
                
                1,144Restricted
                    cash, net of current portion
                
                
                1,000
                
                
                1,000Goodwill
                
                
                25,066
                
                
                25,066Other
                    assets
                
                
                496
                
                
                518Total
                    assets
                
                $
                81,180
                
                $
                76,942**LIABILITIES
                    AND STOCKHOLDERS' EQUITY**Current
                    liabilities:Accounts
                    payable
                
                $
                1,373
                
                $
                1,249Accrued
                    expenses
                
                
                8,888
                
                
                10,538Warrant
                    liability
                
                
                8,953
                
                
                1,610Unearned
                    revenue
                
                
                6,403
                
                
                6,278Deferred
                    maintenance
                
                
                10,851
                
                
                10,584Total
                    current liabilities
                
                
                36,468
                
                
                30,259Other
                    non-current liabilities
                
                
                3,028
                
                
                3,429Total
                    liabilities
                
                
                39,496
                
                
                33,688Commitments
                    and contingenciesStockholders'
                    equity:Convertible
                    preferred stock, $0.0001 par value; 1,000 shares authorized as
                    of March
                    31,2007 and 10,000 shares authorized as of December 31, 2006;
                    none issued
                    and outstanding
                
                
                -
                
                
                -Common
                    stock, $0.0001 par value; 280,000 shares authorized and 107,376
                    shares
                    issued and outstanding as of March 31,2007; 2,000,000 shares
                    authorized
                    and 106,523 shares issued and outstanding as of December 31,
                    2006
                
                
                10
                
                
                10Additional
                    paid-in capital
                
                
                1,253,697
                
                
                1,253,135Accumulated
                    other comprehensive income
                
                
                142
                
                
                168Accumulated
                    deficit
                
                
                (1,212,165
                )
                
                (1,210,059
                )Total
                    stockholders' equity
                
                
                41,684
                
                
                43,254Total
                    liabilities and stockholders' equity
                
                $
                81,180
                
                $
                76,942*
                  Derived from audited consolidated financial statements filed in
                  the
                  Company's 2006 Annual Report on Form 10-K.
  *See
        Accompanying Notes to Condensed Consolidated Financial
        Statements*
  **~1~**
 ***Table
            Of Contents***
 **BROADVISION,
        INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF
        OPERATIONS**
 **AND
        COMPREHENSIVE (LOSS) INCOME**
 **(In
        thousands, except per share amounts)**
 **(Unaudited)**
 **Three
                  Months Ended March 31,****2007**
              
              **2006****Revenues:**Software
                  licenses
              
              $
              5,733
              
              $
              2,882Services
              
              
              7,012
              
              
              9,742Total
                  revenues
              
              
              12,745
              
              
              12,624**Cost
                  of revenues:**Cost
                  of software licenses
              
              
              12
              
              
              62Cost
                  of services
              
              
              2,393
              
              
              4,058Total
                  cost of revenues
              
              
              2,405
              
              
              4,120Gross
                  profit
              
              
              10,340
              
              
              8,504**Operating
                  expenses:**Research
                  and development
              
              
              2,655
              
              
              2,631Sales
                  and marketing
              
              
              2,069
              
              
              2,381General
                  and administrative
              
              
              1,067
              
              
              1,738Restructuring
                  charge
              
              
              278
              
              
              490Total
                  operating expenses
              
              
              6,069
              
              
              7,240Operating
                  income
              
              
              4,271
              
              
              1,264Interest
                  income, net
              
              
              355
              
              
              107Loss
                  on revaluation of warrants
              
              
              (7,343
              )
              
              (370
              )Other
                  income, net
              
              
              277
              
              
              36(Loss)
                  income before provision for income taxes
              
              
              (2,440
              )
              
              1,037Provision
                  for income taxes
              
              
              (56
              )
              
              (156
              )Net
                  (loss) income
              
              $
              (2,496
              )
              $
              881Basic
                  (loss) income per share
              
              $
              (0.02
              )
              $
              0.02Diluted
                  (loss) income per share
              
              $
              (0.02
              )
              $
              0.02**Shares
                  used in computing:**Weighted
                  average shares-basic
              
              
              106,667
              
              
              42,958Weighted
                  average shares-diluted
              
              
              106,667
              
              
              43,068**Comprehensive
                  (loss) income:**Net
                  (loss) income
              
              $
              (2,496
              )
              $
              881Other
                  comprehensive (loss) gain, net of tax:Foreign
                  currency translation adjustment
              
              
              (26
              )
              
              16Total
                  comprehensive (loss) income
              
              $
              (2,522
              )
              $
              897
  *See
        Accompanying Notes to Condensed Consolidated Financial
        Statements*
  **~2~**
 ***Table
            Of Contents***
 **BROADVISION,
        INC. AND SUBSIDIARIES**
 **CONDENSED
        CONSOLIDATED STATEMENTS OF CASH
        FLOWS**
 **(In
        thousands)**
 **(Unaudited)**
 **Three
                  Months Ended March 31,****2007**
              
              **2006****Cash
                  flows from operating activities:**Net
                  (loss) income
              
              $
              (2,496
              )
              $
              881Adjustments
                  to reconcile net income (loss) to net cash provided by operating
                  activities:Depreciation
                  and amortization
              
              
              532
              
              
              268(Reversal
                  of) provision for receivable reserves
              
              
              (397
              )
              
              41Stock
                  based compensation
              
              
              300
              
              
              168Loss
                  on sale of fixed assets
              
              
              3
              
              
              -Loss
                  on revaluation of warrants
              
              
              7,343
              
              
              370Changes
                  in operating assets and liabilities:Accounts
                  receivable
              
              
              (50
              )
              
              (469
              )Prepaids
                  and other
              
              
              (35
              )
              
              (29
              )Other
                  non-current assets
              
              
              17
              
              
              109Accounts
                  payable and accrued expenses
              
              
              (1,104
              )
              
              (974
              )Restructuring
                  accrual
              
              
              (125
              )
              
              (314
              )Unearned
                  revenue and deferred maintenance
              
              
              392
              
              
              5,406Other
                  noncurrent liabilities
              
              
              (544
              )
              
              455Net
                  cash provided by operating activities
              
              
              3,836
              
              
              5,912**Cash
                  flows from investing activities:**Purchases
                  of property and equipment
              
              
              (495
              )
              
              (21
              )Transfer
                  from restricted cash
              
              
              201
              
              
              -Net
                  cash used for investing activities
              
              
              (294
              )
              
              (21
              )**Cash
                  flows from financing activities:**Repayments
                  of bank line of credit, term debt, and convertible notes
              
              
              -
              
              
              (112
              )Proceeds
                  from issuance of common stock, net
              
              
              498
              
              
              -Net
                  cash provided by (used for) financing activities
              
              
              498
              
              
              (112
              )Effect
                  of exchange rates on cash and cash equivalents
              
              
              (26
              )
              
              16Net
                  increase in cash and cash equivalents
              
              
              4,014
              
              
              5,795Cash
                  and cash equivalents at beginning of period
              
              
              37,003
              
              
              4,849Cash
                  and cash equivalents at end of period
              
              $
              41,017
              
              $
              10,644**Supplemental
                  information of noncash financing and investing
                  activities:**Exchange
                  of convertible debt to common stock
              
              $
              -
              
              $
              20,535Reclassification
                  of tax liability to accumulated deficit
              
              $
              388
              
              $
              -Conversion
                  of accrued interest to equity
              
              $
              -
              
              $
              196
  *See
        Accompanying Notes to Condensed Consolidated Financial
        Statements*
 
 **~3~**
 ***Table
            Of Contents***
 **BROADVISION,
        INC. AND SUBSIDIARIES**
 **NOTES
        TO CONDENSED CONSOLIDATED FINANCIAL
        STATEMENTS**
  **(Unaudited)**
  **Note
        1. Organization and Summary of Significant Accounting
        Policies**
  ***Nature
        of Business***
 
 BroadVision, Inc.
        (collectively with its subsidiaries, "BroadVision" or the "Company") was
        incorporated in the state of Delaware on May 13, 1993 and has been a
        publicly traded corporation since 1996. BroadVision develops, markets, and
        supports enterprise portal applications that enable companies to unify their
        e-business infrastructure and conduct both interactions and transactions
        with
        employees, partners, and customers through a personalized self-service model
        that increases revenues, reduces costs, and improves productivity.
  ***Basis
        of Presentation***
 
 The
        condensed consolidated financial results and related information as of and
        for
        the three months ended March 31, 2007 and 2006 are unaudited. The Condensed
        Consolidated Balance Sheet at December 31, 2006 has been derived from the
        audited consolidated financial statements as of that date but does not
        necessarily reflect all of the informational disclosures previously reported
        in
        accordance with U.S. generally accepted accounting principles. The unaudited
        condensed consolidated financial statements should be reviewed in conjunction
        with the audited consolidated financial statements and related notes contained
        in the Company's 2006 Annual Report on Form 10-K.
 
 The
        accompanying unaudited condensed consolidated financial statements have been
        prepared in accordance with U.S. generally accepted accounting principles
        for
        interim financial information and with the instructions in Form 10-Q and
        Article
        10 of Regulation S-X. Accordingly, they do not include all of the information
        and footnotes required by U.S. generally accepted accounting principles for
        annual financial statements. In the opinion of management, all adjustments
        (consisting of normal recurring accruals) considered necessary for a fair
        presentation of interim financial information have been included. Operating
        results for the three months ended March 31, 2007 are not necessarily indicative
        of the results that may be expected for the remainder of the fiscal year
        ending
        December 31, 2007 or any future interim period. The condensed consolidated
        financial statements include the accounts of the Company and its wholly owned
        subsidiaries. All significant intercompany accounts and transactions have
        been
        eliminated.
 
 Based
        on
        the Company's internal forecasts and projections, the Company believes that
        its
        cash resources at March 31, 2007 will be sufficient to fund its operations
        through at least March 31, 2008 At March 31, 2007, the Company's current
        assets
        exceeded its current liabilities by approximately $17.1 million. If the
        Company's existing cash resources are not sufficient to meet its obligations,
        it
        will seek to raise additional capital through public or private equity financing
        or from other sources. If adequate funds are not available or are not available
        on acceptable terms as needed, the Company may be unable to pay its debts
        as
        these become due, develop its products, take advantage of future opportunities
        or respond to competitive pressures or unanticipated requirements.
 
 ***Use
        of Estimates***
 
 The
        preparation of condensed consolidated financial statements in conformity
        with
        U.S. generally accepted accounting principles requires management to make
        certain assumptions and estimates that affect reported amounts of assets
        and
        liabilities as of the date of the financial statements and the reported amounts
        of revenues and expenses during the reporting period. On an ongoing basis,
        the
        Company evaluates its estimates, including those related to the collectibility
        of accounts receivables, the value assigned to and the estimated useful lives
        of
        long-lived assets, the realization of goodwill and deferred tax assets, and
        the
        valuation of stock-based compensation, the reasonableness of the restructuring
        reserves, the determination of contingent liabilities and the valuation of
        debt
        and equity securities. The Company bases its estimates on historical experience
        and on various other assumptions that are believed to be reasonable under
        the
        circumstances, the results of which form the basis for making judgments about
        the carrying values of assets and liabilities. Actual results could differ
        from
        estimates.
 
 **~4~**
 ***Table
            Of Contents***
 ***Revenue
        Recognition***
 
 *Overview*
 
 The
        Company's revenue consists of fees for licenses of its software products,
        maintenance, consulting services and customer training. The Company generally
        charges fees for licenses of its software products either based on the number
        of
        persons registered to use the product or based on the number of CPUs on which
        the product is installed. Licenses for software whereby fees charged are
        based
        upon the number of persons registered to use the product include licenses
        for
        development use and licenses for use in deployment of the customer's website.
        Licenses for software whereby fees charged are on a per-CPU basis differentiate
        between development and deployment usage. The Company's revenue recognition
        policies comply with the provisions of Statement of Position ("SOP")
        No. 97-2, *Software
        Revenue Recognition* ("SOP
        97-2"), as amended; SOP No. 98-9, *Software
        Revenue Recognition, With Respect to Certain Transactions* ("SOP
        98-9") and Staff Accounting Bulletin ("SAB") 104, *Revenue
        Recognition* ("SAB
        104") *.* The
        Company applies the separation criteria in Emerging Issues Task Force ("EITF
        00-21"), "Revenue Arrangements with Multiple Deliverables" ("EITF 00-21")
        to
        determine whether its arrangements with multiple deliverables should be treated
        as separate units of accounting. EITF 00-21 indicates that revenue recognized
        for any multiple-element contract is to be allocated to each element of the
        arrangement based on the relative fair value of each element. The determination
        of the fair value of each element is based on the Company's analysis of
        objective evidence from comparable sales of the individual element.
 
 *Software
        License Revenue*
 
 The
        Company licenses its products through the Company's direct sales force and
        indirectly through resellers and Application Service Providers ("ASP"). In
        general, software license revenues are recognized when a non-cancelable license
        agreement has been signed and the customer acknowledges an unconditional
        obligation to pay, the software product has been delivered, there are no
        uncertainties surrounding product acceptance, the fees are fixed and
        determinable and collection is reasonably assured. Delivery is considered
        to
        have occurred when title and risk of loss have been transferred to the customer,
        which generally occurs when media containing the licensed programs is provided
        to a common carrier. In case of electronic delivery, delivery occurs when
        the
        customer is given access to the licensed programs. For products that cannot
        be
        used without a licensing key, the delivery requirement is met when the licensing
        key is made available to the customer. If collectibility is not reasonably
        assured, revenue is recognized when the fee is collected. Subscription-based
        license revenues are recognized ratably over the subscription period. The
        Company enters into reseller arrangements that typically provide for sublicense
        fees payable to the Company based upon a percentage of list price. The Company
        does not grant resellers the right of return.
 
 The
        Company recognizes revenue using the residual method pursuant to the
        requirements of SOP No. 97-2, as amended by SOP No. 98-9. Revenues recognized
        from multiple-element software arrangements are allocated to each element
        of the
        arrangement based on the fair values of the elements, such as licenses for
        software products, maintenance, consulting services or customer training.
        The
        determination of fair value is based on vendor-specific objective evidence,
        which is specific to us. The Company limits its assessment of objective evidence
        for each element to either the price charged when the same element is sold
        separately or the price established by management having the relevant authority
        to do so, for an element not yet sold separately. If evidence of fair value
        of
        all undelivered elements exists but evidence does not exist for one or more
        delivered elements, then revenue is recognized using the residual method.
        Under
        the residual method, the fair value of the undelivered elements is deferred
        and
        the remaining portion of the arrangement fee is recognized as revenue.
 
 The
        Company records unearned revenue for software license agreements when cash
        has
        been received from the customer and the agreement does not qualify for revenue
        recognition under the Company's revenue recognition policy. The Company records
        accounts receivable for software license agreements when the agreement qualifies
        for revenue recognition but cash or other consideration has not been received
        from the customer.
 
 **~5~**
 ***Table
            Of Contents***
 *Services
        Revenue*
 
 Consulting
        services revenues and customer training revenues are recognized as such services
        are performed.
 
 Maintenance
        revenues, which include revenues bundled with software license agreements
        that
        entitle the customers to technical support and future unspecified enhancements
        to the Company's products, are deferred and recognized ratably over the related
        agreement period, generally twelve months.
 
 The
        Company's consulting services, which consist of consulting, maintenance and
        training, are delivered through the BroadVision Global Services ("BVGS")
        organization. Services that the Company provides are not essential to the
        functionality of the software. The Company records reimbursement from the
        Company's customers for out-of-pocket expenses as an increase to services
        revenues.
 
 ***Employee
        Stock Benefit Plans***
 
 *2006
        Equity Incentive Plan:* At
        the
        Company's 2006 annual meeting on August 8, 2006, the stockholders of the
        Company
        approved the adoption of the Company's 2006 Equity Incentive Plan (the "Equity
        Plan"), under which 3,500,000 shares of common stock are reserved for issuance.
        The Company's 1996 Equity Incentive Plan (the Prior Equity Plan) was terminated
        and replaced by the Equity Plan. Under the Equity Plan, the Board of Directors
        may grant incentive or nonqualified stock options at prices not less than
        100%
        of the fair market value of the Company's common stock, as determined by
        the
        Board of Directors, at the date of grant. The vesting of individual options
        may
        vary but in each case at least 25% of the total number of shares subject
        to
        options will become exercisable per year. These options generally expire
        ten
        years after the grant date. When an employee option is exercised prior to
        vesting, any unvested shares so purchased are subject to repurchase by the
        Company at the original purchase price of the stock upon termination of
        employment. The Company's right to repurchase lapses at a minimum rate of
        20%
        per year over five years from the date the option was granted or, for new
        employees, the date of hire. Such right is exercisable only within 90 days
        following termination of employment. For the three months ended March 31,
        2007
        and 2006, no shares were repurchased, respectively. Under the Equity Plan,
        the
        Company may grant options from the plans not approved by security holders.
        Those
        plans are the "2000 Non-Officer Plan" and "Non-plan" grants.
 
 *2000
        Non-Officer Plan and Non-plan Grants:* In
        February 2000, the Company adopted its 2000 Non-Officer Plan under which
        6,000,000 shares of common stock were reserved for issuance to selected
        employees, consultants, and its affiliates who are not Officers or Directors.
        Under the 2000 Non-Officer Plan, the Company may grant non-statutory stock
        options at prices not less than 85% of the fair market value of the Company's
        common stock at the date of grant. Options granted under the 2000 Non-Officer
        Plan generally vest over two years and are exercisable for not more than
        ten
        years.
 
 *Employee
        Stock Purchase Plan:* The
        Company also has a compensatory Employee Stock Purchase Plan (the "Purchase
        Plan") that enables employees to purchase, through payroll deductions, shares
        of
        the Company's common stock at a discount from the market price of the stock
        at
        the time of purchase. The Board of Directors has authorized sequential one-year
        offerings beginning on July 1 of each year and extending until June 30 of
        the
        following year.
 
 As
        of
        March 31, 2007, the Company had 615,789 shares
        available for issuance under the Purchase Plan. The Purchase Plan permits
        eligible employees to purchase common stock with a value equivalent to a
        percentage of the employee's earnings, not to exceed the lesser of 15% of
        the
        employee's earnings or $25,000, at a price equal to the lesser of 85% of
        the
        fair market value of the common stock on the date of the offering or the
        date of
        purchase. Under APB No. 25, *Accounting
        for*  *Stock
        Issued to Employees* ,
        the
        Company was not required to recognize stock-based compensation expense for
        the
        cost of shares issued under the Purchase Plan. Upon adoption of SFAS No.
        123
        (revised 2004), *Share-Based
        Payment* ("SFAS
        123R") (effective January 1, 2006), the Company began recording stock-based
        compensation expense related to the Purchase Plan.
 
 **~6~**
 ***Table
            Of Contents***
 ***Stock-Based
        Compensation***
 
 Effective
        January 1, 2006, the Company adopted the fair value recognition provisions
        of
        SFAS 123R, using the modified-prospective transition method. Under the fair
        value recognition provisions of SFAS 123R, share-based compensation cost
        is
        estimated at the grant date based on the fair value of the award and is
        recognized as expense, net of estimated pre-vesting forfeitures, ratably
        over
        the vesting period of the award. In addition, the adoption of SFAS 123R requires
        additional accounting related to the income tax effects and disclosure regarding
        the cash flow effects resulting from share-based payment arrangements. In
        January 2005, the SEC issued SAB No. 107, *Share-Based
        Payment* ,
        which
        provides supplemental implementation guidance for SFAS 123R. Calculating
        share-based compensation expense requires the input of highly subjective
        assumptions, including the expected term of the share-based awards, stock
        price
        volatility, dividend yield, risk free interest rates, and pre-vesting
        forfeitures. The assumptions used in calculating the fair value of stock-based
        awards represent the Company's best estimates, but these estimates involve
        inherent uncertainties and the application of management judgment. As a result,
        if factors change and the Company uses different assumptions, its share-based
        compensation expense could be materially different in the future. In addition,
        the Company is required to estimate the expected pre-vesting forfeiture rate
        and
        only recognize expense for those shares expected to vest. If the Company's
        actual forfeiture rate is materially different from its estimate, the Company's
        share-based compensation expense could be significantly different from what
        the
        Company has recorded in the current period.
 
 Stock-based
        compensation is classified in the Condensed Consolidated Statements of
        Operations in the same expense line items as cash compensation. The following
        table sets forth the total stock-based compensation expense recognized in
        the
        Company's Condensed Consolidated Statements of Operations for the three months
        ended March 31, 2007 and 2006.
  **Three
                  Months Ended March 31,****2007**
              
              **2006**Cost
                  of services
              
              $
              53,822
              
              $
              24,270Research
                  and development
              
              
              122,236
              
              
              73,830Sales
                  and marketing
              
              
              67,932
              
              
              38,370General
                  and administrative
              
              
              55,856
              
              
              31,530$
              299,846
              
              $
              168,000
  On
        November 10, 2005, the Financial Accounting Standard Board ("FASB") issued
        FASB Staff Position No. FAS 123(R)-3 *"Transition
        Election Related to Accounting for Tax Effects of Share-Based Payment
        Awards* "
        (FSP
        123(R)-3). The Company adopted the alternative transition method provided
        in the
        FASB Staff Position for calculating the tax effects of stock-based compensation
        pursuant to SFAS 123R in the fourth quarter of fiscal 2006. The alternative
        transition method includes simplified methods to establish the beginning
        balance
        of the additional paid-in capital pool (APIC pool) related to the tax effects
        of
        employee stock-based compensation, and to determine the subsequent impact
        on the
        APIC pool and Consolidated Statements of Cash Flows of the tax effects of
        employee stock-based compensation awards that are outstanding upon adoption
        of
        SFAS 123R. The adoption did not have a material impact on the Company's results
        of operations and financial condition.
  The
        fair
        value of each option award is estimated on the date of grant using the
        Black-Scholes option valuation model based on the assumptions noted in the
        following table. The expected term of options represents the period that
        the
        Company's stock-based awards are expected to be outstanding based on the
        simplified method provided in SAB 107. The risk-free interest rate for periods
        related to the expected life of the options is based on the U.S. Treasury
        yield
        curve in effect at the time of grant.  The expected volatility is based on
        historical volatilities of the Company's stock over the expected life of
        the
        option.  The expected dividend yield is zero, as the Company does not
        anticipate paying dividends in the near future. For the three-month periods
        ended March 31, 2007 and 2006, the Company used forfeiture rates of 9% and
        11%,
        respectively, based on an analysis of historical data. The following assumptions
        were used to determine stock-based compensation during the three months ended
        March 31, 2007 and 2006:
 **Three
                  Months Ended March 31,****2007**
              
              
              **2006**Expected
                  life (in years)
              
              6.00
              
              
              
              6.00Risk-free
                  interest rate
              
              4.77
              %
              
              
              4.81
              %Expected
                  volatility
              
              101.00
              %
              
              
              83.40
              %Expected
                  dividend
              
              -
              %
              
              
              -
              %Forfeiture
                  rate
              
              9.00
              %
              
              
              11.00
              %
  **~7~**
 ***Table
            Of Contents***
 As
        of
        March 31, 2007, the Company had reserved 9,906,098 common shares for future
        issuance upon the exercise of outstanding stock options and
        warrants.
 
 The
        Company's Chairman and Chief Executive Officer ("CEO") has options to purchase
        1,704,444 shares of common stock at an average exercise price of $38.60 per
        share. The table below is a summary of options granted to him through March
        31,
        2007:
  **Date**
              
              **Options**
              
              **Options**
              
              
              
              **Vesting
                  Period****Granted**
              
              **Granted**
              
              **Price**
              
              **Vested**
              
              **(months)**6/23/1999
              
              
              500,000
              
              $
              60.00
              
              
              500,000
              
              
              605/25/2001
              
              
              500,000
              
              
              66.51
              
              
              500,000
              
              
              4811/27/2001
              
              
              4,444
              
              
              35.01
              
              
              4,444
              
              
              242/19/2002
              
              
              55,555
              
              
              18.63
              
              
              55,555
              
              
              4810/30/2002
              
              
              644,445
              
              
              2.16
              
              
              644,445
              
              
              48Totals
              
              
              1,704,444
              
              
              
              
              
              1,704,444
  Activity
        in the Company's Equity Plan for the three months ended March 31, 2007, is
        as
        follows:
 **Three
                  Months Ended,****March
                  31, 2007****Weighted
                  -****Weighted
                  -**
              
              **Average**
              
              **Aggregate****Options**
              
              **Average**
              
              **Remaining**
              
              **Intrinsic****Shares**
              
              **Exercise**
              
              **Contractual**
              
              **Value****('000)**
              
              **Price**
              
              **Term**
              
              **('000)**Outstanding
                  at December 31, 2006
              
              
              6,239
              
              $
              13.48
              
              
              -
              
              $
              -Granted
              
              
              259
              
              
              1.21
              
              
              -
              
              
              -Exercised
              
              
              (364
              )
              
              0.58
              
              
              -
              
              
              639Forfeited
              
              
              (19
              )
              
              1.07
              
              
              -
              
              
              -Expired
              
              
              (29
              )
              
              15.07
              
              
              -
              
              
              -Outstanding
                  at March 31, 2007
              
              
              6,086
              
              $
              13.76
              
              
              7.12
              
              $
              7,545Vested
                  and expected to vest at March 31, 2007
              
              
              5,958
              
              $
              14.03
              
              
              7.07
              
              $
              7,297Exercisable
                  at March 31, 2007
              
              
              3,960
              
              $
              20.78
              
              
              6.04
              
              $
              3,244
 
 The
        Company grants options outside of the Company's Equity Plan (2000 Non-Officer
        Plan and Non-plan Grants). The terms of these options are generally identical
        to
        those granted under the Company's Equity Plan. A summary of options outside
        of
        the Equity Plan for the three months ended March 31, 2007, is presented
        below:
  **Three
                  Months Ended,****March
                  31, 2007****Weighted
                  -****Weighted
                  -**
              
              **Average**
              
              **Aggregate****Options**
              
              **Average**
              
              **Remaining**
              
              **Intrinsic****Shares**
              
              **Exercise**
              
              **Contractual**
              
              **Value****('000)**
              
              **Price**
              
              **Term**
              
              **('000)**Outstanding
                  at December 31, 2006
              
              
              765
              
              $
              9.70
              
              
              -
              
              $
              -Granted
              
              
              -
              
              
              -
              
              
              -
              
              
              -Exercised
              
              
              (90
              )
              
              1.19
              
              
              -
              
              
              149Forfeited
              
              
              (14
              )
              
              6.33
              
              
              -
              
              
              -Expired
              
              
              -
              
              
              -
              
              
              -
              
              
              -Outstanding
                  at March 31, 2007
              
              
              661
              
              $
              10.93
              
              
              7.05
              
              $
              962Vested
                  and expected to vest at March 31, 2007
              
              
              651
              
              $
              17.36
              
              
              7.02
              
              $
              409Exercisable
                  at March 31, 2007
              
              
              409
              
              $
              11.09
              
              
              5.79
              
              $
              940
 **~8~**
 ***Table
            Of Contents***
 The
        aggregate intrinsic value is calculated as the difference between the exercise
        price of the underlying awards and the quoted price of our common stock for
        the
        options that were in the money at March 31, 2007. As of March 31, 2007, the
        total compensation cost related to the nonvested stock options, net of estimated
        forfeitures, is approximately $654,000 for the remainder of year 2007, $288,000
        for year 2008, $80,000 for year 2009, and $3,000 for year 2010.
  ***Earnings
        Per Share Information***
  Basic
        income (loss) per share is computed using the weighted-average number of
        shares
        of common stock outstanding less shares subject to repurchase. Diluted income
        (loss) per share is computed using the weighted-average number of shares
        of
        common stock outstanding and, when dilutive, common equivalent shares from
        outstanding stock options and warrants using the treasury stock method,
        potential common shares from the conversion of convertible debt using the
        as-if
        converted method, and shares subject to repurchase, if any. There were 3.6
        million and 9.2 million potential common shares excluded from the determination
        of diluted net income per share for the three months ended March 31, 2007
        and
        2006, respectively, as the effect of each share was anti-dilutive because
        the per-share strike price of the options under which these shares may be
        issued
        is higher than current market price. The following table sets forth the basic
        and diluted (loss) income per share computational data for the periods presented
        (in thousands, except per share amounts):
 **Three
                  Months Ended March 31,****2007**
              
              **2006**Net
                  (loss) income
              
              
              (2,496
              )
              
              881Weighted-average
                  common shares outstanding used to compute basic (loss) income per
                  share
              
              
              106,667
              
              
              42,958Weighted-average
                  common equivalent shares from outstanding common stock options
                  and
                  warrants
              
              
              -
              
              
              110Total
                  weighted-average common and common equivalent shares outstanding
                  used to
                  compute diluted loss per share
              
              
              106,667
              
              
              43,068Basic
                  (loss) income per share
              
              $
              (0.02
              )
              $
              0.02Diluted
                  (loss) income per share
              
              $
              (0.02
              )
              $
              0.02
  ***Legal
        Proceedings***
  The
        Company is subject from time to time to various legal actions and other claims
        arising in the ordinary course of business. The Company is not presently
        a party
        to any material legal proceedings. ******
  ***Foreign
        Currency Transactions***
  During
        fiscal 2004, the Company changed the functional currencies of all foreign
        subsidiaries from the U.S. dollar to the local currency of the respective
        countries. Assets and liabilities of these subsidiaries are translated into
        U.S.
        dollars at the balance sheet date. Income and expense items are translated
        at
        average exchange rates for the period. Foreign exchange gains and losses
        resulting from the remeasurement of foreign currency assets and liabilities
        are
        included as other income (expense) in the Condensed Consolidated Statements
        of
        Operations. For the three-month periods ended March 31, 2007, and 2006,
        translation (loss) gain was ($26,000), and $16,000 ,
        respectively. These amounts are included in the accumulated other comprehensive
        (loss) income account in the Condensed Consolidated Balance Sheets.
  **~9~**
 ***Table
            Of Contents***
 ***Valuation
        of Long-Lived Assets***
  The
        Company adopted SFAS No. 142, *Goodwill
        and Other Intangible Assets* ("SFAS
        142"), on January 1, 2002. Pursuant to SFAS 142, the Company is
        required to test its goodwill for impairment upon adoption and annually or
        more
        often if events or changes in circumstances indicate that the asset might
        be
        impaired. SFAS No. 142 provides for a two-step approach to determining
        whether and by how much goodwill has been impaired. The first step requires
        a
        comparison of the fair value of the Company to its net book value. If the
        fair
        value is greater, then no impairment is deemed to have occurred. If the fair
        value is less, then the second step must be completed to determine the amount,
        if any, of actual impairment. There were no impairment charges recognized
        by the
        Company for the three-month periods ended March 31, 2007 and 2006,
        respectively.
  ***Reclassification***
  Certain
        reclassifications have been made to prior period balances to conform to current
        period financial statement presentation.
  ***Comprehensive
        (Loss) Income***
  Comprehensive
        (loss) income includes net (loss) income and other comprehensive (loss) income,
        which primarily consists of cumulative translation adjustments. Total
        comprehensive (loss) income is presented in the accompanying Condensed
        Consolidated Statements of Operations. Total accumulated other comprehensive
        (loss) income is displayed as a separate component of stockholder's equity
        in
        the accompanying Condensed Consolidated Balance Sheets. The accumulated balances
        for each classification of comprehensive (loss) income consist of the following,
        net of taxes (in thousands):
 **Accumulated
                    Other****Comprehensive  **Income****Balance,
                  December 31, 2006
                
                $
                168Foreign
                    currency translation loss
                
                
                (26
                )Balance,
                    March 31, 2007
                
                $
                142
 ***Adoption
          of new accounting pronouncements***
  Effective
          January 1, 2007, the Company adopted Financial Accounting Standards Board
          ("FASB") Staff Position No. EITF 00-19-2, *Accounting
          for Registration Payment Arrangements* ("FSP").
          This FSP addresses how to account for registration payment arrangements
          and
          clarifies that a financial instrument subject to a registration payment
          arrangement should be accounted for in accordance with other generally
          accepted
          accounting principles ("GAAP") without regard to the contingent obligation
          to
          transfer consideration pursuant to the registration payment arrangement.
          This
          accounting pronouncement further clarifies that a liability for liquidated
          damages resulting from registration payment obligations should be recorded
          in
          accordance with SFAS No. 5, *Accounting
          for Contingencies* ("SFAS
          No. 5") ,
          when
          the payment of liquidated damages becomes probable and can be reasonably
          estimated. The Company does not believe that it has any SFAS No. 5 contingencies
          as of March 31, 2007 relating to its registration payment arrangements,
          nor does
          the Company believe that there is a material impact on its condensed
          consolidated financial statements as a result of implementing this
          FSP.
  ***Recent
        Accounting Pronouncements***
  In
        February 2007, the FASB issued Statement No. 159, *The
        Fair Value Option for Financial Assets and Financial
        Liabilities* ("SFAS
        No. 159"). SFAS No. 159 permits the measurement of many financial instruments
        and certain other items at fair value. Entities may choose to measure eligible
        items at fair value at specified election dates, reporting unrealized gains
        and
        losses on such items at each subsequent reporting period. The objective of
        SFAS
        No. 159 is to provide entities with the opportunity to mitigate volatility
        in
        reported earnings caused by measuring related assets and liabilities differently
        without having to apply complex hedge accounting provisions. It is intended
        to
        expand the use of fair value measurement. SFAS No. 159 is effective for fiscal
        years beginning after November 15, 2007. The Company is currently evaluating
        what effect, if any, the adoption of SFAS No. 159 will have on the Company's
        consolidated results of operations and financial position.
  In
        September 2006, the FASB issued SFAS No. 157, *Fair
        Value Measurements* ("SFAS
        No. 157") *.* SFAS No. 157 establishes a framework for measuring the fair value of
        assets and liabilities. This framework is intended to provide increased
        consistency in how fair value determinations are made under various existing
        accounting standards which permit, or in some cases require, estimates of
        fair
        market value. SFAS No. 157 is effective for fiscal years beginning
        after November 15, 2007, and interim periods within those fiscal years.
        Earlier application is encouraged, provided that the reporting entity has
        not
        yet issued financial statements for that fiscal year, including any financial
        statements for an interim period within that fiscal year. The Company is
        currently evaluating what effect, if any, the adoption of SFAS No. 157 will
        have
        on the Company's consolidated results of operations and financial position.
  **~10~**
 ***Table
            Of Contents***
 **Note
        2. Selected Balance Sheet Detail**
  Property
        and equipment consisted of the following (in thousands):
  **March
                  31,**
              
              **December
                  31,****2007**
              
              **2006****(unaudited)**Furniture
                  and fixtures
              
              $
              731
              
              $
              795Computers
                  and software
              
              
              13,278
              
              
              14,547Leasehold
                  improvements
              
              
              5,223
              
              
              5,00719,232
              
              
              20,349Less
                  accumulated depreciation and amortization
              
              
              (18,128
              )
              
              (19,205
              )$
              1,104
              
              $
              1,144
  Accrued
        expenses consisted of the following (in thousands):
 **March
                  31,**
              
              **December
                  31,****2007**
              
              **2006****(unaudited)**Employee
                  benefits
              
              $
              1,085
              
              $
              961Commissions
                  and bonuses
              
              
              860
              
              
              885Sales
                  and other taxes
              
              
              1,171
              
              
              2,000Income
                  tax and tax contingency reserves (Note 7)
              
              
              759
              
              
              1,378Restructuring
                  (Note 6)
              
              
              1,162
              
              
              1,272Customer
                  advances
              
              
              378
              
              
              654Other
              
              
              3,473
              
              
              3,388Total
                  accrued expenses
              
              $
              8,888
              
              $
              10,538
  **Note
        3. Bank Borrowings, Convertible Notes and Other Non-Current
        Liabilities**
  Bank
        borrowings consist of various credit facilities with a commercial
        lender:
  •
The
        Company maintained a revolving line of credit in the form of a loan and security
        agreement with a commercial lender, which expired in February 2006. As of
        March
        31, 2007, the Company did not have any amounts outstanding under this credit
        facility.
  •
The
        Company has entered into term debt in the form of notes payable with the
        same
        lender. The term debt requires monthly payments of approximately $38,000
        plus
        interest through October 2006, and monthly payments of approximately $2,000
        for
        the five months ending March 2007. A portion of the term debt was utilized
        for
        an equipment line of credit. The note bears annual interest equal to the
        Prime
        Rate plus one and one-quarter percentage points (1.25%) and principal and
        interest are due in monthly payments through maturity based on the terms
        of the
        facilities. As of March 31, 2006, the entire balance of $277,000 was classified
        as currently due. The Company paid off the entire balance in the third quarter
        of 2006.
  **~11~**
 ***Table
            Of Contents***
 *Convertible
        Notes*
  In
        November 2004, the Company issued $16.0 million of notes that were convertible,
        at the holders' option, into common stock at a conversion price of $2.76
        per
        share, subject to adjustment in certain defined circumstances, including
        dilutive equity issuances (the "Notes"). The Notes bore interest at a rate
        of
        six percent per annum. In October 2005, the Company inadvertently did not
        make
        timely payment of the third quarter interest payment due under the Notes.
        Lack
        of timely payment became an event of default. As a result, the event of default
        permitted each noteholder to require the Company to redeem 120% of all or
        any
        portion of the amounts outstanding under the applicable Note. During the
        quarter
        ended December 31, 2005, the Company recorded additional principal of $2.6
        million, which represented the 20% increase in the redeemable debt
        premium.
 
 In
        November 2005, the Notes were purchased by an unaffiliated investor, and
        subsequently on November 18, 2005, the Notes were purchased by an entity
        controlled by Dr. Pehong Chen, the Company's Chairman and Chief Executive
        Officer. On December 20, 2005, in order to relieve BroadVision from the
        liquidity challenges presented by the Notes, Dr. Chen and the Company entered
        into a Debt Conversion Agreement whereby Dr. Chen agreed to cancel all amounts
        owed under the Notes in exchange for 34,500,000 shares of BroadVision common
        stock, which were issued in March 2006 as discussed below, at an effective
        price
        per share of $0.45, representing a 25% discount to the December 20, 2005
        closing
        price of BroadVision common stock of $0.60 per share. Because of the significant
        difference between the $0.45 per share exchange price and the $2.76 per share
        conversion price included in the Notes, the Company accounted for this
        transaction as a deemed extinguishment and reissuance of the Notes. A loss
        of
        $7.0 million was recorded in December 2005 under APB No. 26, *Extinguishment
        of Debt* ,
        equal
        to fair value of the reissued Notes (which was determined to be the fair
        value
        of the underlying common shares into which the Notes were to be exchanged)
        less
        the carrying value of the extinguished Notes. As a result, the Notes were
        carried at December 31, 2005 at fair value of the Common Stock on December
        20,
        2005 of $20.5 million, less equivalent shares representing interest of
        $165,000.
  In
        March 2006, the notes were cancelled and the related shares were issued.
        As a
        result of this share issuance, the percentage of the Company's outstanding
        shares of common stock held by Dr. Chen increased to approximately 59%. The
        issuance of shares was recorded in Stockholders' equity (deficit) at the
        amount
        then outstanding of $20.5 million.
  The
        Company made a determination that the convertible notes entered into in 2004
        included certain embedded derivatives (conversion feature and additional
        investment rights) that should be valued under the provisions of SFAS 133, *Accounting
        for Derivative Instruments and Hedging Activities* ("SFAS
        133"). The additional investment rights expired during the quarter ended
        September 30, 2005. Accordingly, the conversion feature and additional
        investment rights have been revalued each applicable reporting period under
        SFAS
        133, with the resulting gains and losses recorded in the accompanying
        Consolidated Statements of Operations. Further, in conjunction with the December
        20, 2005 Debt Conversion Agreement, the conversion feature was no longer
        considered to be a derivative, as the conversion rate was fixed at $0.45
        per
        share. Additional investment rights of $132,000 were included in the fair
        value
        of the Notes upon modification on December 20, 2005.
  In
          conjunction with the issuance of the Notes in November 2004 to the institutional
          investors in the original private placement, the Company issued warrants
          to
          purchase 1,739,130 shares of common stock at an exercise price of $3.58
          per
          share. These warrants were adjusted twice during 2006 pursuant to an
          anti-dilution provision of the warrants (see discussion below). As a result,
          the
          warrants became exercisable for 4,206,811 shares of the Company's common
          stock
          at an exercise price of $1.48 per share. The warrants were exercisable
          beginning
          in May 2005 and have a five-year life. None of the warrants have been exercised
          as of March 31, 2007. The warrants have been accounted for as a derivative
          under
          SFAS 133, as the warrants allow for the potential settlement in cash. As
          such,
          the warrants have been revalued each reporting period under SFAS 133, with
          the
          resulting gains and losses recorded in the accompanying Consolidated Statements
          of Operations.
 **~12~**
 ***Table
            Of Contents***
 As
        of
        March 31, 2007, the following warrants to purchase the Company's common stock
        were outstanding:
  **Underlying**
              
              **Exercise****Description**
              
              **Shares**
              
              **Price
                  per Share**Issued
                  to landlord in real estate buyout transaction in
                  August 2004
              
              
              700,000
              
              $
              5.00Issued
                  to convertible notes investors in November 2004
              
              
              4,206,811
              
              
              1.48Other
                  issued in connection with revenue transactions in 2000
              
              
              620
              
              
              435.98Total
                  warrants
              
              
              4,907,431
  *Warrants
        issued to landlord in real estate buyout transaction in August
        2004*
  The
        warrants issued to the Company's landlord in connection with the August 2004
        real estate buyout transaction have a term of five years and became exercisable
        beginning in August 2005. The warrants have not been exercised as of March
        31,
        2007.
 In
            accordance with EITF 00-19 *Accounting
            for Derivative Financial Instruments Indexed to, and Potentially Settled
            in, a
            Company's Own Stock* ("EITF
            00-19") , ** the
            warrants issued to the landlord have been included in the Company's condensed
            consolidated financial statements as a short-term liability and were
            originally
            valued at fair value on the date of issuance. The warrants are revalued
            each
            period until and unless the warrants are exercised. For the three months
            ended
            March 31, 2007 and 2006, the Company recorded gains (losses) related
            to the
            revaluation of warrants to landlord of approximately $(683,000) and $14,000,
            respectively. These gains (losses)
            are included in loss on revaluation of warrants in the accompanying Condensed
            Consolidated Statements of Operations. If the warrants are exercised
            prior to
            their termination, their carrying value will be transferred to
            equity.
 *Warrants
        issued to convertible note investors in November 2004*
  The
          warrants issued to the original Note purchasers in November 2004, which
          were
          initially exercisable to purchase 1,739,130 shares at an exercise price
          of $3.58
          per share, were adjusted twice during 2006. Pursuant to an anti-dilution
          provision of the warrants and as triggered by (i) the conversion of the
          Notes
          into shares of the Company's common stock and (ii) the rights offering,
          the
          exercise price of the warrants and the number of shares underlying the
          warrants
          were adjusted in March 2006 and November 2006, respectively. The Company
          recorded a charge of $574,000 and $282,000 in its consolidated financial
          statements for the quarters ended December 31, 2006 and March 31, 2006,
          respectively, to reflect these adjustments. All other terms of the warrants
          remained unchanged. As of March 31, 2007, the warrants are exercisable
          for
          4,206,811 shares of the Company's common stock at an exercise price of
          $1.48 per
          share. The warrants were first exercisable on May 10, 2005 and may be
          exercised on or prior to May 10, 2010. Any warrants not exercised prior to
          such time will expire. No warrants had been exercised as of March 31,
          2007.
  In
          accordance with EITF 00-19, ** the
          warrants issued to the original Note purchasers have been included in the
          Company's consolidated financial statements as a short-term liability and
          were
          originally valued at fair value on the date of issuance. The warrants are
          revalued each period until and unless the warrants are exercised. For the
          three
          months ended March 31, 2007 and 2006, the Company recorded losses related
          to the
          revaluation of warrants to the Note holders of approximately $6,660,000
          and
          $384,000, respectively. These losses are included in loss on revaluation
          of
          warrants in the accompanying Condensed Consolidated Statements of Operations.
          If
          the warrants are exercised prior to their termination, their carrying value
          will
          be transferred to equity.
  Effective
            January 1, 2007, we adopted Financial Accounting Standards Board (FASB)
            Staff
            Position EITF 00-19-2, *Accounting
            for Registration Payment Arrangements* ("FSP").
            This FSP addresses how to account for registration payment arrangements
            and
            clarifies that a financial instrument subject to a registration payment
            arrangement should be accounted for in accordance with other generally
            accepted
            accounting principles ("GAAP") without regard to the contingent obligation
            to
            transfer consideration pursuant to the registration payment arrangement.
            This
            accounting pronouncement further clarifies that a liability for liquidated
            damages resulting from registration statement obligations should be recorded
            in
            accordance with SFAS No. 5, *Accounting
            for Contingencies* ,
            when
            the payment of liquidated damages becomes probable and can be reasonably
            estimated.
 **~13~**
 ***Table
              Of Contents***
 Pursuant
          to the terms of the registration rights agreement entered into with the
          warrant
          holders in connection with the Note financing, if all of the shares underlying
          the warrants cannot be sold (other than during certain grace periods as
          set
          forth in the registration rights agreement) pursuant to the registration
          statement, then, as partial relief for the damages to any holder of shares
          underlying the warrants, by reason of any such reduction of such holders'
          ability to sell the underlying shares the Company shall pay an amount in
          cash
          equal to one percent (1%) of the amount such holder paid to the Company
          in
          consideration for the Notes and warrants, per month (such payments accruing
          beginning on the first day in which such shares can not be sold) until
          such
          shares can again be sold pursuant to the registration statement. The Company's
          potential payment obligation under this provision of the registration rights
          agreement is uncapped. In the event the Company fails to make any such
          payments
          in a timely manner, such payments shall bear interest at the rate of 1.0%
          per
          month (prorated for partial months) until paid in full.
  The
            Company has made no such payments to date, and believes the likelihood
            of being
            required to make any such cash payment under the registration payment
            arrangement described above to not be probable; therefore, the Company
            has
            determined that it does not need to recognize a liability for such contingent
            obligations in accordance with the provisions of the FSP.
 Losses
        on
        the revaluation of warrants were recorded as follows (in
        thousands):
  **Three
                  Months Ended March 31,****2007**
              
              **2006**Warrants
                  related to the Notes
              
              $
              (6,660
              )
              $
              (384
              )Warrants
                  related to real estate buyout
              
              
              (683
              )
              
              14Losses
                  on revaluation of warrants
              
              $
              (7,343
              )
              $
              (370
              )
  *Other
        Non-Current Liabilities*
  Other
        non-current liabilities consist of the following:
  **March
                  31,**
              
              **December
                  31,****2007**
              
              **2006****(in
                  thousands)**Restructuring
                  (Note 6)
              
              $
              1,274
              
              $
              1,290Deferred
                  maintenance and unearned revenue
              
              
              1,158
              
              
              1,739Other
              
              
              596
              
              
              400Total
                  other non-current liabilities
              
              $
              3,028
              
              $
              3,429
  **Note
        4. Commitments and Contingencies**
  *Warranties
        and Indemnification*
  The
        Company provides a warranty to its customers that its software will perform
        substantially in accordance with documentation, typically for a period of
        90
        days following receipt of the software. Historically, costs related to these
        warranties have been immaterial. Accordingly, the Company has not recorded
        any
        warranty liabilities as of March 31, 2007 and 2006.
 
 The
        Company's software license agreements typically provide for indemnification
        of
        customers for intellectual property infringement claims caused by use of
        a
        current release of the Company's software consistent with the terms of the
        Agreement. The term of these indemnification clauses is generally perpetual.
        The
        potential future payments the Company could be required to make under these
        indemnification clauses is generally limited to the amount the customer paid
        for
        the software. Historically, costs related to these indemnifications provisions
        have been immaterial. The Company also maintains liability insurance that
        limits
        the Company's exposure. As a result, the Company believes the potential
        liability of these indemnification clauses is minimal. Accordingly, the Company
        has not recorded any liabilities for these agreements as of March 31, 2007
        and
        2006.
  **~14~**
 ***Table
            Of Contents***
 The
        Company has agreements whereby it indemnifies its officers and directors
        for
        certain events or occurrences while the officer is, or was, serving in such
        capacity. The term of the indemnification period is for so long as such officer
        or director is subject to an indemnifiable event by reason of the fact that
        such
        person was serving in such capacity. The maximum potential amount of future
        payments the Company could be required to make under these indemnification
        agreements may be unlimited; however, the Company has a director and officer
        insurance policy that limits its exposure and enables the Company to recover
        a
        portion of any future amounts paid. As a result of the Company's insurance
        policy coverage, the Company believes the estimated fair value of these
        indemnification agreements is insignificant. Accordingly, the Company has
        no
        liabilities recorded for these agreements as of either March 31, 2007 or
        2006. The Company assesses the need for an indemnification reserve on a
        quarterly basis and there can be no guarantee that an indemnification reserve
        will not become necessary in the future.
  *Leases*
  The
        Company leases its headquarters facility and its other facilities under
        noncancelable operating lease agreements expiring in or prior to the year
        2012.
        Under the terms of the agreements, the Company is required to pay property
        taxes, insurance and normal maintenance costs.
 
 A
        summary
        of total future minimum lease payments under noncancelable operating lease
        agreements is as follows (in millions):
  **Operating****Years
                  Ending December 31,**
              
              **Leases**2007
              
              $
              2.42008
              
              
              1.92009
              
              
              1.72010
              
              
              1.32011
                  and thereafter
              
              
              1.6Total
                  minimum lease payments
              
              $
              8.9
 
 These
        future minimum lease payments are net of approximately $4.4 million of
        sublease income to be received under sublease agreements. As of March 31,
        2007,
        the Company has accrued $2.0 million of estimated future facilities costs
        as a
        restructuring accrual.
  *Standby
        Letter of Credit Commitments*
  As
        of March 31, 2007, the Company had $1.8 million of outstanding
        commitments in the form of standby letters of credit, primarily in favor
        of the
        Company's various landlords to secure obligations under the Company's facility
        leases.
  **Note
        5. Geographic, Segment and Significant Customer
        Information**
  The
        Company operates in one segment, electronic business commerce solutions.
        The
        Company's reportable segment includes the Company's facilities in North and
        South America (Americas), Europe and Asia Pacific and the Middle East
        (/Pacific). The Company's chief operating decision maker is considered to
        be the
        CEO. The CEO reviews financial information presented on a consolidated basis
        accompanied by disaggregated information about revenues by geographic region
        and
        by product for purposes of making operating decisions and assessing financial
        performance. The disaggregated revenue information reviewed by the CEO is
        as
        follows (in thousands):
  **Three
                  Months Ended****March
                  31,****2007**
              
              **2006**Software
                  licenses
              
              $
              5,733
              
              $
              2,882Consulting
                  services
              
              
              1,287
              
              
              3,842Maintenance
              
              
              5,725
              
              
              5,900Total
                  revenues
              
              $
              12,745
              
              $
              12,624
 
 **~15~**
 ***Table
            Of Contents***
 The
        Company sells its products and provides services worldwide through a direct
        sales force and through a channel of independent distributors, value-added
        resellers ("VARs") and ASPs. In addition, the sales of the Company's products
        are promoted through independent professional consulting organizations known
        as
        systems integrators. The Company provides services worldwide through its
        BroadVision Global Services Organization and indirectly through distributors,
        VARs, ASPs, and systems integrators. The Company currently operates in three
        primary geographical territories, Americas, Europe and Asia/Pacific.
 
 Disaggregated
        financial information regarding the Company's geographic revenues and long-lived
        assets is as follows (in thousands):
  **Three
                  months ended****March
                  31,****2007**
              
              **2006**Revenues:Americas
              
              $
              6,910
              
              $
              10,019Europe
              
              
              4,010
              
              
              1,271Asia/Pacific
              
              
              1,825
              
              
              1,334Total
                  revenues
              
              $
              12,745
              
              $
              12,624  **March
                  31,**
              
              **December
                  31,****2007**
              
              **2006**Long-Lived
                  Assets:Americas
              
              $
              25,998
              
              $
              26,025Europe
              
              
              104
              
              
              104Asia/Pacific
              
              
              68
              
              
              81Total
                  long-lived assets
              
              $
              26,170
              
              $
              26,210
  During
        the three months ended March 31, 2007 and 2006, no single customer
        accounted for more than 10% of the Company's revenues.
  **Note
        6. Restructuring Charges**
  Through
        March 31, 2007, the Company approved restructuring plans to, among other
        things,
        reduce its workforce and consolidate its facilities. Restructuring and asset
        impairment charges were taken to align its cost structure with changing market
        conditions and to create a more efficient organization. The Company's
        restructuring charges are comprised primarily of (i) severance and benefits
        termination costs related to the reduction of its workforce; (ii) lease
        termination costs and/or costs associated with permanently vacating its
        facilities; (iii) other incremental costs incurred as a direct result of
        the restructuring plan; and (iv) impairment costs related to certain
        long-lived assets abandoned. The Company accounts for each of these costs
        in
        accordance with SAB 100, *Restructuring
        and Impairment Charges,* and
        as
        follows:
  **~16~**
 ***Table
            Of Contents***
 ** *Severance
        and Termination Costs.* **
  • For
        exit
        or disposal activities initiated on or prior to December 31, 2002, the
        Company accounts for costs in accordance with EITF 94-3, *Liability
        Recognition for Certain Employee Termination Benefits and Other Costs to
        Exit an
        Activity (Including Certain Costs Incurred in a Restructuring)* ("EITF
        94-3").  Accordingly, the Company records the liability related to these
        termination costs when the following conditions have been met:
        (i) management with the appropriate level of authority approves a
        termination plan that commits us to such plan and establishes the benefits
        the
        employees will receive upon termination; (ii) the benefit arrangement is
        communicated to the employees in sufficient detail to enable the employees
        to
        determine the termination benefits; (iii) the plan specifically identifies
        the number of employees to be terminated, their locations and their job
        classifications; and (iv) the period of time to implement the plan does not
        indicate changes to the plan are likely.
 
 • For
        exit
        or disposal activities initiated after December 31, 2002, the Company
        accounts for costs in accordance with SFAS 146, *Accounting
        for Costs Associated with Exit or Disposal Activities* ("SFAS
        146").  SFAS 146 requires that a liability for a cost associated with an
        exit or disposal activity be recognized and measured initially at fair value
        only when the liability is incurred.
  ** *Excess
        Facilities Costs.* **
  •  For
        exit
        or disposal activities initiated on or prior to December 31, 2002, the
        Company accounts for lease termination and/or abandonment costs in accordance
        with EITF 88-10, *Costs
        Associated with Lease Modification or Termination* .
        Accordingly, the Company recorded the costs associated with lease termination
        and/or abandonment when the leased property had no substantive future use
        or
        benefit.
 
 • For
        exit
        or disposal activities initiated after December 31, 2002, the Company
        accounts for lease termination and/or abandonment costs in accordance with
        SFAS
        146, which requires that a liability for such costs be recognized and measured
        initially at fair value on the cease use date of the facility.
 
 Severance
        and termination costs and excess facilities costs the Company records under
        these provisions are not associated with nor do these benefit continuing
        activities.
  As
        of March 31, 2007, the total restructuring accrual of $2.4 million consisted
        of
        the following (in millions):
 **Current**
              
              **Non-Current**
              
              **Total**Severance
                  and termination
              
              $
              0.4
              
              $
              -
              
              $
              0.4Excess
                  facilities
              
              
              0.8
              
              
              1.2
              
              
              2.0Total
              
              $
              1.2
              
              $
              1.2
              
              $
              2.4
  The
        Company estimates that the $0.4 million severance and termination accrual
        will
        be nearly paid in full by December 31, 2007. We expect to pay the excess
        facilities amounts related to restructured or abandoned leased space as follows
        (in millions):
  **Total
                  future****minimum****Years
                  ending December 31,**
              
              **payments**2007
              
              $
              0.72008
              
              
              0.52009
              
              
              0.42010
              
              
              0.22011
                  and thereafter
              
              
              0.2Total
                  minimum facilities payments
              
              $
              2.0
  **~17~**
 ***Table
            Of Contents***
 The
        following table summarizes the activity related to the restructuring plans
        initiated subsequent to December 31, 2002, and accounted for in accordance
        with SFAS 146 (in thousands):
  **Amounts****Accrued**
              
              **charged
                  to****restructuring**
              
              **restructuring**
              
              
              
              **Accrued****costs**
              
              **costs**
              
              **Amounts
                  paid**
              
              **restructuring****beginning**
              
              **and
                  other**
              
              **or
                  written off**
              
              **costs,
                  ending****Three
                  Months Ended March 31, 2007**Lease
                  cancellations and commitments
              
              $
              77
              
              $
              110
              
              $
              (69
              )
              $
              118Termination
                  payments to employees and related costs
              
              
              -
              
              
              -
              
              
              -
              
              
              -$
              77
              
              $
              110
              
              $
              (69
              )
              $
              118**Three
                  Months Ended March 31, 2006**Lease
                  cancellations and commitments
              
              $
              4,188
              
              $
              108
              
              $
              -
              
              $
              4,296Termination
                  payments to employees and related costs
              
              
              105
              
              
              374
              
              
              (376
              )
              
              103$
              4,293
              
              $
              482
              
              $
              (376
              )
              $
              4,399
  The
        following table summarizes the activity related to the restructuring plans
        initiated on or prior to December 31, 2002, and accounted for in accordance
        with EITF 94-3 (in thousands):
 **Amounts****Accrued**
              
              **charged
                  to****restructuring**
              
              **restructuring**
              
              
              
              **Accrued****costs,**
              
              **costs**
              
              **Amounts
                  paid**
              
              **restructuring****beginning**
              
              **and
                  other**
              
              **or
                  written off**
              
              **costs,
                  ending****Three
                  Months Ended March 31, 2007**Lease
                  cancellations and commitments
              
              $
              2,138
              
              $
              164
              
              $
              (336
              )
              $
              1,966Termination
                  payments to employees and related costs
              
              
              347
              
              
              5
              
              
              -
              
              
              352$
              2,485
              
              $
              169
              
              $
              (336
              )
              $
              2,318**Three
                  Months Ended March 31, 2006**Lease
                  cancellations and commitments
              
              $
              2,651
              
              $
              8
              
              $
              (436
              )
              $
              2,223Termination
                  payments to employees and related costs
              
              
              311
              
              
              -
              
              
              8
              
              
              319$
              2,962
              
              $
              8
              
              $
              (428
              )
              $
              2,542
  The
        Company has based its excess facilities accrual, in part, upon estimates
        of
        future sublease income. The Company has used the following factors, among
        others, in making such estimates: opinions of independent real estate experts,
        current market conditions and rental rates, an assessment of the time period
        over which reasonable estimates could be made, the status of negotiations
        with
        potential subtenants, and the location of the respective facilities. The
        Company
        has recorded the low-end of a range of assumptions modeled for restructuring
        charges, in accordance with SFAS 5, *Accounting
        for Contingencies* ("SFAS
        5"). Adjustments to the facilities accrual will be required if actual sublease
        income differs from amounts currently expected. The Company will review the
        status of restructuring activities on a quarterly basis and, if appropriate,
        record changes to our restructuring obligations in current operations based
        on
        management's most current estimates.
  **~18~**
 ***Table
            Of Contents***
 **Note
        7. Accounting for Uncertainty in Income Taxes**
  Effective
          January 1, 2007, the Company adopted FASB Interpretation No.48, " *Accounting
          for Uncertainty in Income Taxes - an interpretation of FASB Statement
          No. 109.* "
          ("FIN
          48"). FIN 48 prescribes a recognition threshold and measurement attribute
          for
          the financial statement recognition and measurement of uncertain tax positions
          taken or expected to be taken in a company's income tax return, and also
          provides guidance on derecognition, classification, interest and penalties,
          accounting in interim periods, disclosure, and transition. FIN 48 utilizes
          a
          two-step approach for evaluating uncertain tax positions accounted for
          in
          accordance with SFAS No. 109, " *Accounting
          for Income Taxes* "("SFAS
          No. 109"). Step one, *Recognition* ,
          requires a company to determine if the weight of available evidence indicates
          that a tax position is more likely than not to be sustained upon audit,
          including resolution of related appeals or litigation processes, if any.
          Step
          two, *Measurement* ,
          is
          based on the largest amount of benefit, which is more likely than not to
          be
          realized on ultimate settlement. The cumulative effect of adopting FIN
          48 on
          January 1, 2007 is recognized as a change in accounting principle, recorded
          as
          an adjustment to the opening balance of retained earnings on the adoption
          date.
 
 The
          Company recognized a decrease in liability in the amount of $388,000 for
          unrecognized tax benefits related to tax positions taken in prior periods.
          Additionally, the Company reclassified $160,000 from current taxes payable
          to
          long-term taxes payable as FIN 48 specifies that tax positions for which
          the
          timing of the ultimate resolution is uncertain should be recognized as
          long-term
          liabilities.
 
 Upon
          adoption of FIN 48, the Company's policy to include interest and penalties
          related to unrecognized tax benefits within the Company's provision for
          (benefit
          from) income taxes did not change.
 
 The
          Company's total amount of unrecognized tax benefits as of January 1, 2007
          (adoption date) and March 31, 2007 was $548,000 and $160,000, respectively.
          Total amount of unrecognized tax benefits that, if recognized, would affect
          the
          Company's effective tax rate was $548,000 and $160,000 as of January 1,
          2007 and
          March 31, 2007, respectively.
 
 The
          tax
          years 1993 to 2006 remain open in several jurisdictions, none of which
          have
          individual significance.
 **Item 2.
        Management's Discussion and Analysis of Financial
        Condition and Results of Operations**
  ** *This
        report on Form 10-Q contains forward-looking statements within the meaning
        of
        Section 27A of the Securities Act of 1933, as amended, and within the meaning
        of
        Section 21E of the Securities Exchange Act of 1934, as amended, which are
        subject to the "safe harbor" created by those sections. These forward-looking
        statements are generally identified by words such as "expect," "anticipate,"
        "intend," "believe," "hope," "assume," "estimate," "plan," "will" and other
        similar words and expressions. These forward-looking statements involve risks
        and uncertainties that could cause our actual results to differ materially
        from
        those expressed or implied in the forward-looking statements as a result
        of
        certain factors, including those described herein and in the Company's most
        recently filed Annual Report on Form 10-K and other documents filed with
        the
        SEC. We undertake no obligation to publicly release any revisions to the
        forward-looking statements or to reflect events and circumstances after the
        date
        of this document.*
  **Overview**
 
 Since
        1993, BroadVision has been a pioneer and consistent innovator of e-business
        solutions. We deliver a combination of technologies and services into the
        global
        market that enable customers of all sizes to power mission-critical web
        initiatives that ultimately deliver high-value to their bottom line. Our
        offering consists of a robust framework for personalization and self-service,
        modular applications and agile toolsets that customers use to create e-commerce
        and portal solutions. We have more than 500 customers - including Audible.com,
        Baker Hughes, Cardinal Health, Citibank, Hilti, Japan Airlines, Renault,
        Sears,
        Sony, Standard Chartered Bank, Vodafone, U.S. Air Force, Yomiuri Shinbun
        and
        Xerox.
  **~19~**
 ***Table
            Of Contents***
 Our
        objective is to further our position as a global supplier of web-based,
        self-service applications. This will require us to continue to build new
        functionality into our applications that offer our customers a compelling
        value
        proposition to license our products rather than design and build custom
        solutions.
  We
        generate revenue from fees for licenses of our software products, and related
        maintenance, consulting services and customer training. We generally charge
        fees
        for licenses of our software products either based on the number of persons
        registered to use the product or based on the number of CPUs utilized by
        the
        machine on which the product is installed. Payment terms are generally 30
        days
        from the date the products are delivered, the maintenance contract is booked
        or
        the consulting services are provided.
  From
        2001
        to 2005, we incurred significant losses and negative cash flows from operations.
        In fiscal years 2004 and 2005, we incurred significant cash usage related
        to the
        termination of excess real estate obligations, certain reductions in workforce
        and the execution and subsequent termination of an acquisition agreement.
        Although we generated net income in year 2006 and believe that our future
        cash
        flows will benefit from these events, our ability to generate profits or
        positive cash flows in future periods remains uncertain.
  We
        strive
        to anticipate changes in the demand for our services and aggressively manage
        our
        labor force appropriately. As part of our budgeting process, cross-functional
        management participates in the planning, reviewing and managing of our business
        plans. This process is intended to allow us to adjust our cost structures
        to
        changing market needs, competitive landscapes and economic factors. Our emphasis
        on cost control helps us manage our margins even if revenues generated fall
        short of our expectations.
  As
        of
        March 31, 2007, we are more than halfway through implementing a 24-month
        turnaround plan. To date under this plan we have implemented cost-cutting
        measures and we have taken steps to stabilize our customer base. In the
        remaining quarters of 2007, our focus under this plan will be on delivering
        new
        products and technologies and generating demand among existing and potential
        new
        customers.
 
 In
        February 2006, we announced a subscription rights offering to existing
        stockholders to sell a total of 178 million shares, or 5.9 shares for each
        share
        of BroadVision common stock held as of the record date of December 20, 2005,
        at
        an effective price per share of $0.45. The primary purpose of the rights
        offering was to allow the holders of BroadVision common stock on the record
        date
        an opportunity to further invest in BroadVision in order to maintain their
        proportionate interest in BroadVision common stock, at the same price per share
        as the per share price afforded to Dr. Chen in connection with his acquisition
        of shares of common stock in exchange for the cancellation of the Notes.
        The
        rights offering expired on November 28, 2006. Eligible participants exercised
        rights to purchase 36.4 million shares, resulting in $15.8 million in net
        proceeds. Dr. Chen's ownership was approximately 39% as a result of closing
        the
        rights offering in the fourth quarter of 2006.
 
 In
        order
        to complete the issuance of shares to Dr. Chen without violating applicable
        listing standards, we voluntarily delisted our common stock from the NASDAQ
        National Market effective prior to the opening of trading on March 8, 2006.
        We
        had previously received a notice from NASDAQ stating that we were not in
        compliance with the minimum bid price rules applicable to stocks traded on
        NASDAQ, and that we had until March 6, 2006 to regain compliance. Quotations
        for
        BroadVision common stock are currently available through the "Pink Sheets"
        (www.pinksheets.com) under the trading symbol "BVSN", and we anticipate that
        such quotations will continue to be available.
 
 In
        June
        2006, William Meyer resigned as our Chief Financial Officer, a position Mr.
        Meyer had held since April 2003. Dr. Chen is currently serving as Chief
        Financial Officer on an interim basis until a permanent replacement is hired.
 **Explanatory
          Note**
 The
          amount reported on our Condensed Consolidated Statement of Operations on
          Form
          10-Q under the caption “Loss on revaluation of warrants” ($7,343,000) differs by
          approximately $683,000 from the corresponding amount previously reported
          on our
          press release issued on April 25, 2007 (“Press Release”).  Subsequent to
          the issuance of our Press Release, we determined that the warrants issued
          to the
          landlord in a real estate buyout transaction in August 2004 (see Note 3
          of Notes
          to Condensed Consolidated Financial Statements) did not fall within the
          scope of
          FASB Staff Position No. EITF 00-19-2 *Accounting
          for Registration Payment Arrangements* as
          previously believed and therefore under EITF 00-19 *Accounting
          for Derivative Financial Instruments Indexed to, and Potentially Settled
          in, a
          Company's Own Stock,* we
          recorded a loss of $683,000 as a change in the fair value of the warrants
          as of
          March 31, 2007.
 **~20~**
 ***Table
            Of Contents***
 **Critical
        Accounting Policies, Estimates and Judgments**
 
 This
        management's discussion and analysis of our financial condition and results
        of
        operations is based upon our condensed consolidated financial statements,
        which
        have been prepared in accordance with U.S. generally accepted accounting
        principles. In preparing these financial statements, we are required to make
        estimates and judgments that affect the reported amounts of assets, liabilities,
        revenues and expenses, and related disclosures of contingent assets and
        liabilities. On an ongoing basis, we evaluate our estimates, including those
        related to the collectibility of accounts receivables, the value assigned
        to and
        the estimated useful lives of long-lived assets, the realization of goodwill
        and
        deferred tax assets, and the valuation of stock-based compensation, the
        reasonableness of the restructuring reserves, the determination of contingent
        liabilities and the valuation of debt and equity securities. We
        base
        our estimates on historical experience and on various other assumptions that
        we
        believe are reasonable, the results of which form the basis for making judgments
        about the carrying values of assets and liabilities that are not readily
        apparent from other sources. Actual results may differ from these estimates
        using different assumptions or conditions. We believe the following critical
        accounting policies reflect the more significant judgments and estimates
        used in
        the preparation of our consolidated financial statements.
  During
        the previous years through December 31, 2005, we faced various liquidity
        challenges. During the year ended December 31, 2006, the following significant
        events occurred: approximately $20.5 million in convertible debt was exchanged
        for 34.5 million shares of common stock; we generated cash flow from operations
        of approximately $16 million; and we closed our rights offering and raised
        net
        proceeds of approximately $15.8 million. At March 31, 2007, our current assets
        exceeded our current liabilities by approximately $17.1 million. Our management
        believes that our cash resources at March 31, 2007 will be sufficient to
        fund operations through at least March 31 , 2008. If our existing cash resources
        are not sufficient to meet our obligations, we will seek to raise additional
        capital through public or private equity financing or from other sources.
        If
        adequate funds are not available or are not available on acceptable terms
        as
        needed, we may be unable to pay our debts as they become due, develop our
        products, take advantage of future opportunities or respond to competitive
        pressures or unanticipated requirements.
  *Revenue
        Recognition*
  *Overview*
 
 Our
        revenue consists of fees for licenses of our software products, maintenance,
        consulting services and customer training. We generally charge fees for licenses
        of our software products either based on the number of persons registered
        to use
        the product or based on the number of CPUs on which the product is installed.
        Licenses for software whereby fees charged are based upon the number of persons
        registered to use the product include licenses for development use and licenses
        for use in deployment of the customer's website. Licenses for software whereby
        fees charged are on a per-CPU basis differentiate between development and
        deployment usage. Our revenue recognition policies comply with the provisions
        of
        Statement of Position ("SOP") No. 97-2, *Software
        Revenue Recognition* ("SOP
        97-2"), as amended; SOP No. 98-9, *Software
        Revenue Recognition, With Respect to Certain Transactions* ("SOP
        98-9") and Staff Accounting Bulletin ("SAB") 104, *Revenue
        Recognition* ("SAB
        104") *.*
 
 We
        apply
        the separation criteria in Emerging Issues Task Force ("EITF") 00-21, "Revenue
        Arrangements with Multiple Deliverables" ("EITF 00-21") to determine whether
        our
        arrangements with multiple deliverables should be treated as separate units
        of
        accounting. EITF 00-21 indicates that revenue recognized for any
        multiple-element contract is to be allocated to each element of the arrangement
        based on the relative fair value of each element. The determination of the
        fair
        value of each element is based on our analysis of objective evidence from
        comparable sales of the individual element .
 
 *Software
        License Revenue*
 
 We
        license our products through our direct sales force and indirectly through
        resellers and Application Service Providers ("ASP"). In general, software
        license revenues are recognized when a non-cancelable license agreement has
        been
        signed and the customer acknowledges an unconditional obligation to pay,
        the
        software product has been delivered, there are no uncertainties surrounding
        product acceptance, the fees are fixed and determinable and collection is
        reasonably assured. Delivery is considered to have occurred when title and
        risk
        of loss have been transferred to the customer, which generally occurs when
        media
        containing the licensed programs is provided to a common carrier. In case
        of
        electronic delivery, delivery occurs when the customer is given access to
        the
        licensed programs. For products that cannot be used without a licensing key,
        the
        delivery requirement is met when the licensing key is made available to the
        customer. If collectibility is not reasonably assured, revenue is recognized
        when the fee is collected. Subscription-based license revenues are recognized
        ratably over the subscription period. We enter into reseller arrangements
        that
        typically provide for sublicense fees payable to us based upon a percentage
        of
        list price. We do not grant resellers the right of return.
 
 **~21~**
 ***Table
            Of Contents***
 We
        recognize revenue using the residual method pursuant to the requirements
        of SOP
        No. 97-2, as amended by SOP No. 98-9. Revenues recognized from multiple-element
        software arrangements are allocated to each element of the arrangement based
        on
        the fair values of the elements, such as licenses for software products,
        maintenance, consulting services or customer training. The determination
        of fair
        value is based on vendor-specific objective evidence, which is specific to
        us.
        We limit our assessment of objective evidence for each element to either
        the
        price charged when the same element is sold separately or the price established
        by management having the relevant authority to do so, for an element not
        yet
        sold separately. If evidence of fair value of all undelivered elements exists
        but evidence does not exist for one or more delivered elements, then revenue
        is
        recognized using the residual method. Under the residual method, the fair
        value
        of the undelivered elements is deferred and the remaining portion of the
        arrangement fee is recognized as revenue.
 
 We
        record
        unearned revenue for software license agreements when cash has been received
        from the customer and the agreement does not qualify for revenue recognition
        under our revenue recognition policy. We record accounts receivable for software
        license agreements when the agreement qualifies for revenue recognition but
        cash
        or other consideration has not been received from the customer.
 
 *Services
        Revenue*
 
 Consulting
        services revenues and customer training revenues are recognized as such services
        are performed.
  *Receivable
        Reserves*
  Occasionally,
        our customers experience financial difficulty after we record the sale but
        before payment has been received. We maintain receivable reserves for estimated
        losses resulting from the inability of our customers to make required payments.
        Our normal payment terms are generally 30 to 90 days from invoice date. If
        the financial condition of our customers were to deteriorate, resulting in
        an
        impairment of their ability to make payments, additional reserves may be
        required. Losses from customer receivables in the three months ended March
        31,
        2007 and, 2006, have not been significant. If all efforts to collect a
        receivable fail, and the receivable is considered uncollectible, we would
        write
        off against the receivable reserve.
  *Impairment
        Assessment*
 
 We
        adopted SFAS 142 on January 1, 2002. Pursuant to SFAS 142, we are
        required to test goodwill for impairment upon adoption and annually or more
        often if events or changes in circumstances indicate that the asset might
        be
        impaired. SFAS No. 142 provides for a two-step approach to determining
        whether and by how much goodwill has been impaired. Since we have only one
        reporting unit for purposes of applying SFAS No. 142, the first step
        requires a comparison of the fair value of BroadVision to our net book value.
        If
        the fair value is greater, then no impairment is deemed to have occurred.
        If the
        fair value is less, then the second step must be completed to determine the
        amount, if any, of actual impairment. Our last impairment test was as of
        December 31, 2006. There were no events or circumstances from that date through
        March 31, 2007 indicating that a further assessment was necessary. As of
        March
        31, 2007, our market capitalization was significantly higher than our book
        value.
 
 *Income
        Taxes and Deferred Tax Assets*
  Income
          taxes are computed using an asset and liability approach in accordance
          with SFAS
          No. 109, *Accounting
          for Income Taxes* ,
          which
          requires the recognition of taxes payable or refundable for the current
          year and
          deferred tax assets and liabilities for the future tax consequences of
          events
          that have been recognized in our consolidated financial statements or tax
          returns. The measurement of current and deferred tax assets and liabilities
          is
          based on provisions of the enacted tax law; the effects of future changes
          in tax
          laws or rates are not anticipated. The measurement of deferred tax assets
          is
          reduced, if necessary, by the amount of any tax benefits that, based on
          available evidence, is not expected to be realized.
  **~22~**
 ***Table
              Of Contents***
 We
          analyze our deferred tax assets with regard to potential realization. We
          have
          established a valuation allowance on our deferred tax assets to the extent
          that
          management has determined that it is more likely than not that some portion
          or
          all of the deferred tax asset will not be realized based upon the uncertainty
          of
          their realization. We have considered estimated future taxable income and
          ongoing prudent and feasible tax planning strategies in assessing the amount
          of
          the valuation allowance.
 
 We
          recognized a decrease in liability in the amount of $388,000 for unrecognized
          tax benefits related to tax positions taken in prior periods.
          Additionally, we reclassified $160,000 from current taxes payable to
          long-term taxes payable as FIN 48 specifies that tax positions for which
          the
          timing of the ultimate resolution is uncertain should be recognized as
          long-term
          liabilities.
 
 Upon
          adoption of FIN 48, our policy to include interest and penalties related
          to
          unrecognized tax benefits within our provision for (benefit from) income
          taxes
          did not change.
 
 Our
          total
          amount of unrecognized tax benefits as of January 1, 2007 (adoption date)
          and
          March 31, 2007 was $548,000 and $160,000, respectively. Total amount of
          unrecognized tax benefits that, if recognized, would affect our effective
          tax
          rate was $548,000 and $160,000 as of January 1, 2007 and March 31, 2007,
          respectively.
 
 The
          tax
          years 1993 to 2006 remain open in several jurisdictions, none of which
          have
          individual significance.
  *Accounting
        for Stock-Based Compensation*
 
 On
        January 1, 2006, we adopted SFAS 123R using the modified prospective method
        as
        permitted under SFAS 123R. Under the modified-prospective-transition method,
        results for the prior periods have not been restated.
 
 In
        anticipation of the reporting requirements under SFAS 123R, our Board of
        Directors on November 29, 2005 unanimously approved accelerating the
        vesting of out-of-the-money, unvested stock options held by current employees,
        including executive officers, and Board members. The acceleration applied
        only
        to those options with an exercise price of $1.13 per share or higher. The
        closing market price of BroadVision common stock on November 28, 2005, the
        last full trading day before the date of the acceleration, was $0.72 per
        share.
        The following table summarizes the options for which vesting was
        accelerated:
 
 **Aggregate****Number
                  of****Common
                  Shares****Issuable
                  Under**
              
              
              **Weighted
                  Average****Accelerated
                  Stock**
              
              
              **Exercise
                  Price****Options**
              
              
              **per
                  Share**Non-Employee
                  Directors
              
              
              122,181
              
              
              $
              2.98Named
                  Executive Officers
              
              
              391,886
              
              
              
              2.87Directors
                  and Named Executive Officers
              
              
              514,067
              
              
              
              2.89All
                  Other Employees
              
              
              610,707
              
              
              
              2.97Total
              
              
              1,124,774
              
              
              
              2.94
  The
        decision to accelerate vesting of these options was made to avoid recognizing
        compensation cost in our statements of operations as required under the
        provisions of SFAS 123R, which was effective as of January 1, 2006.
 
 In
        accordance with SFAS 123R, we started to recognize compensation expense related
        to stock options granted to employees based on: (a) compensation cost for
        all
        share-based payments granted prior to, but not yet vested as of January 1,
        2006,
        based on the grant date fair value estimated in accordance with SFAS 123,
        adjusted for an estimated future forfeiture rate, and (b) compensation cost
        for
        all share-based payments granted subsequent to January 1, 2006, based on
        the
        grant-date fair value estimated in accordance with the provisions of SFAS
        123R.
 
 **~23~**
 ***Table
            Of Contents***
 Our
        assessment of the estimated fair value of the stock options granted is affected
        by our stock price as well as assumptions regarding a number of complex and
        subjective variables. We utilize the Black-Scholes model to estimate the
        fair
        value of stock options granted. Generally, our calculation of the fair value
        for
        options granted under SFAS 123R is similar to the calculation of fair value
        under SFAS 123 with the exception of the treatment of forfeitures. The fair
        value of restricted stock units granted is based on the grate date price
        of our
        common stock.
 
 The
        Black-Scholes option valuation model was developed for use in estimating
        the
        fair value of traded options that have no vesting restrictions and are fully
        transferable. This model also requires the input of highly subjective
        assumptions including:
  •
The
        expected volatility of our common stock price, which we determine based on
        historical volatility of our common stock over the expected term of the
        option;
  •
        Expected dividends, which are nil, as we do not currently anticipate issuing
        dividends;
  •
        Expected life of the stock option, which is estimated based on the historical
        stock option exercise behavior of our employees; and
  •
        Expected forfeitures of stock options, which is estimated based on the
        historical turnover of our employees. Prior to adoption of FAS 123R, we
        recognized forfeitures under FAS 123 as they occurred.


In
        the
        future, we may elect to use different assumptions under the Black-Scholes
        valuation model or a different valuation model, which could result in a
        significantly different impact on our net income or loss.
  *Restructuring
        Charges*
  Through
        March 31, 2007, we have approved restructuring plans to, among other things,
        reduce our workforce and consolidate facilities. Restructuring and asset
        impairment charges were taken to align our cost structure with changing market
        conditions and to create a more efficient organization. Our restructuring
        charges are comprised primarily of: (i) severance and benefits termination
        costs related to the reduction of our workforce; (ii) lease termination
        costs and/or costs associated with permanently vacating our facilities;
        (iii) other incremental costs incurred as a direct result of the
        restructuring plan; and (iv) impairment costs related to certain long-lived
        assets abandoned. We account for each of these costs in accordance with SAB
        100,
*Restructuring and Impairment charges*, as follows: **
  ** *Severance
        and Termination Costs.* **
  • For
        exit
        or disposal activities initiated on or prior to December 31, 2002, we
        account for costs in accordance with EITF 94-3.  Accordingly, we record the
        liability related to these termination costs when the following conditions
        have
        been met: (i) management with the appropriate level of authority approves a
        termination plan that commits us to such plan and establishes the benefits
        the
        employees will receive upon termination; (ii) the benefit arrangement is
        communicated to the employees in sufficient detail to enable the employees
        to
        determine the termination benefits; (iii) the plan specifically identifies
        the number of employees to be terminated, their locations and their job
        classifications; and (iv) the period of time to implement the plan does not
        indicate changes to the plan are likely.
 
 • For
        exit
        or disposal activities initiated after December 31, 2002, we account for
        costs in accordance with SFAS 146.  SFAS 146 requires that a liability for
        a cost associated with an exit or disposal activity be recognized and measured
        initially at fair value only when the liability is incurred.
  **~24~**
 ***Table
            Of Contents***
 ** *Excess
        Facilities Costs.* **
  •  For
        exit
        or disposal activities initiated on or prior to December 31, 2002, we
        account for lease termination and/or abandonment costs in accordance with
        EITF
        88-10, *Costs
        Associated with Lease Modification or Termination* .
        Accordingly, we recorded the costs associated with lease termination and/or
        abandonment when the leased property had no substantive future use or benefit
        to
        us.
 
 • For
        exit
        or disposal activities initiated after December 31, 2002, we account for
        lease termination and/or abandonment costs in accordance with SFAS 146, which
        requires that a liability for such costs be recognized and measured initially
        at
        fair value on the cease use date of the facility.
 
 Severance
        and termination costs and excess facilities costs we record under these
        provisions are not associated with nor do these benefit continuing activities.
 
 Inherent
        in the estimation of the costs related to our restructuring efforts are
        assessments related to the most likely expected outcome of the significant
        actions to accomplish the restructuring. In determining the charges related
        to
        the restructurings to date, the majority of estimates made by management
        have
        related to charges for excess facilities. In determining the charges for
        excess
        facilities, we were required to estimate future sublease income, future net
        operating expenses of the facilities, and brokerage commissions, among other
        expenses. The most significant of these estimates have related to the timing
        and
        extent of future sublease income in which to reduce our lease obligations.
        We
        based our estimates of sublease income, in part, on the opinions of independent
        real estate experts, current market conditions and rental rates, an assessment
        of the time period over which reasonable estimates could be made, the status
        of
        negotiations with potential subtenants, and the location of the respective
        facility, among other factors. We have recorded the low-end of a range of
        assumptions modeled for restructuring charges, in accordance with SFAS 5. 
Adjustments to the facilities accrual will be required if actual lease exit
        costs or sublease income differ from amounts currently expected. We will
        review
        the status of restructuring activities on a quarterly basis and, if appropriate,
        record changes to our restructuring obligations in current operations based
        on
        management's most current estimates.
  *Cash
        and Cash Equivalents, and Restricted Cash* ******
 
 We
        consider all debt and equity securities with remaining maturities of three
        months or less at the date of purchase to be cash equivalents. Short-term
        cash
        investments consist of debt and equity securities that have a remaining maturity
        of less than one year as of the date of the balance sheet. Cash and cash
        equivalents that serve as collateral for financial instruments such as letters
        of credit are classified as restricted cash. Restricted cash in which the
        underlying instrument has a term of greater than twelve months from the balance
        sheet date are classified as non-current.
 
 Management
        determines the appropriate classification of cash investments at the time
        of
        purchase and evaluates such designation as of each balance sheet date. All
        cash
        investments to date have been classified as available-for-sale and carried
        at
        fair value with related unrealized gains or losses reported as other
        comprehensive income (loss), net of tax. Total realized gains during the
        three
        months ended March 31, 2007 was $2,000 .
        We did
        not have any gain (loss) for any investment for the three months ended March
        31,
        2006. Our cash and cash equivalents, and restricted cash consisted of the
        following as of March 31, 2007 and December 31, 2006 (in thousands):
 
 **March
                  31, 2007**
              ****
              ****
              **December
                  31, 2006****Fair
                  value**
              
              
              **Fair
                  value**Cash
                  and certificates of deposits
              
              $
              19,591
              
              
              $
              15,830Money
                  market
              
              
              21,426
              
              
              
              21,173Total
                  cash and equivalents
              
              $
              41,017
              
              
              $
              37,003
  **~25~**
 ***Table
            Of Contents***
 *Research
        and Development and Software Development Costs*
 
 Under
        the
        criteria set forth in SFAS No. 86, *Accounting
        for the Cost of Computer Software to be Sold, Leased or Otherwise
        Marketed* ,
        development costs incurred in the research and development of new software
        products are expensed as incurred until technological feasibility in the
        form of
        a working model has been established at which time such costs are capitalized
        and recorded at the lower of unamortized cost or net realizable value. The
        costs
        incurred subsequent to the establishment of a working model but prior to
        general
        release of the product have not been significant. To date, we have not
        capitalized any costs related to the development of software for external
        use.
 
 *Concentrations
        of Credit Risk*
 
 Financial
        instruments that potentially subject us to concentrations of credit risk
        consist
        primarily of cash and cash equivalents and accounts receivable. We place
        our
        cash and cash equivalents with high-quality institutions. Our management
        performs ongoing credit evaluations of our customers and requires certain
        of
        these customers to provide security deposits or letters of credit.
 
 Cash
        deposits in foreign countries of approximately $9.8 million are subject to
        local
        banking laws and may bear higher or lower risk than cash deposited in the
        United
        States. As part of our cash and investment management processes, we perform
        periodic evaluations of the credit standing of the financial institutions
        we use
        and we have not sustained any credit losses from instruments held at these
        financial institutions. From time to time, our financial instruments maintained
        in our foreign subsidiaries may be subject to political risks or instability
        that may arise in foreign countries where we operate.
 
 At
        March
        31, 2007 and 2006, no customer accounted for 10% or more of our accounts
        receivable balance. For the three month ended March 31, 2007, and 2006, no
        customer accounted for 10% or more of our total revenues.
 
 *Fair
        Value of Financial Instruments*
 
 Our
        financial instruments consist of cash equivalents, accounts receivable, accounts
        payable and debt. We do not have any derivative financial instruments. We
        believe the reported carrying amounts of our financial instruments
        approximates fair value, based upon the short maturity of cash equivalents,
        accounts receivable and payable, and based on the current rates available
        to it
        on similar debt issues.
  *Foreign
        Currency Transactions*
 
 During
        fiscal 2004, we changed the functional currencies of all foreign
        subsidiaries from the U.S. dollar to the local currency of the respective
        countries. Assets and liabilities of these subsidiaries are translated into
        U.S.
        dollars at the balance sheet date. Income and expense items are translated
        at
        average exchange rates for the period. Foreign exchange gains and losses
        resulting from the remeasurement of foreign currency assets and liabilities
        are
        included as other income (expense) in the Condensed Consolidated Statements
        of
        Operations. For the three-month periods ended March 31, 2007, and 2006,
        translation (loss) gain was ($26,000), and $16,000 ,
        respectively. These amounts are included in the accumulated other comprehensive
        (loss) income account in the Condensed Consolidated Balance Sheets.
  *Legal
        Proceedings* **
 
 We
        are
        subject from time to time to various legal actions and other claims arising
        in
        the ordinary course of business. We are not presently a party to any
        material legal proceedings.
 *Adoption
            of new accounting pronouncements*
  Effective
          January 1, 2007, we adopted Financial Accounting Standards Board ("FASB")
          Staff Position No. EITF 00-19-2, *Accounting
          for Registration Payment Arrangements* ("FSP").
          This FSP addresses how to account for registration payment arrangements
          and
          clarifies that a financial instrument subject to a registration payment
          arrangement should be accounted for in accordance with other generally
          accepted
          accounting principles ("GAAP") without regard to the contingent obligation
          to
          transfer consideration pursuant to the registration payment arrangement.
          This
          accounting pronouncement further clarifies that a liability for liquidated
          damages resulting from registration payment obligations should be recorded
          in
          accordance with SFAS No. 5, *Accounting
          for Contingencies* ("SFAS
          No. 5") ,
          when
          the payment of liquidated damages becomes probable and can be reasonably
          estimated. We do not believe that we have any SFAS No. 5 contingencies
          as of March 31, 2007 relating to our registration payment arrangements,
          nor do
          we believe that there is a material impact on our condensed consolidated
          financial statements as a result of implementing this FSP.
 **~26~**
 ***Table
            Of Contents***
 *Recent
          Accounting Pronouncements*
 In
        February 2007, the FASB issued Statement No. 159, *The
        Fair Value Option for Financial Assets and Financial
        Liabilities* ("SFAS
        159"). SFAS 159 permits the measurement of many financial instruments and
        certain other items at fair value. Entities may choose to measure eligible
        items
        at fair value at specified election dates, reporting unrealized gains and
        losses
        on such items at each subsequent reporting period. The objective of SFAS
        159 is
        to provide entities with the opportunity to mitigate volatility in reported
        earnings caused by measuring related assets and liabilities differently without
        having to apply complex hedge accounting provisions. It is intended to expand
        the use of fair value measurement. SFAS 159 is effective for fiscal years
        beginning after November 15, 2007. We are currently evaluating what effect,
        if
        any, the adoption of SFAS 159 will have on our consolidated results of
        operations and financial position.
  In
        September 2006, the FASB issued SFAS No. 157, *Fair
        Value Measurements* ("SFAS
        157") *.* SFAS 157 establishes a framework for measuring the fair value of assets and
        liabilities. This framework is intended to provide increased consistency
        in how
        fair value determinations are made under various existing accounting standards
        which permit, or in some cases require, estimates of fair market value.
        SFAS 157 is effective for fiscal years beginning after November 15,
        2007, and interim periods within those fiscal years. Earlier application
        is
        encouraged, provided that the reporting entity has not yet issued financial
        statements for that fiscal year, including any financial statements for an
        interim period within that fiscal year. We are currently evaluating what
        effect,
        if any, the adoption of SFAS 157 will have on our consolidated results of
        operations and financial position.
  ***Results
        of Operations***
  *Revenues*
  ** *Total
        revenues* increased
        1% during the three months ended March 31, 2007 to $12.7 million as
        compared to $12.6 million for the three months ended March 31, 2006. A
        summary of our revenues by geographic region is as follows (dollars in
        thousands, unaudited):
 
 **Software****Licenses**
              
              %
              
              
              **Services**
              
              %
              
              
              **Total**
              
              %Three
                  Months Ended:March 31,
                  2007Americas
              
              $
              3,110
              
              
              
              54
              %
              
              $
              3,800
              
              
              
              54
              %
              
              $
              6,910
              
              
              
              54
              %Europe
              
              
              1,855
              
              
              
              32
              
              
              
              2,155
              
              
              
              31
              
              
              
              4,010
              
              
              
              31Asia
                  Pacific
              
              
              768
              
              
              
              14
              
              
              
              1,057
              
              
              
              15
              
              
              
              1,825
              
              
              
              15Total
              
              $
              5,733
              
              
              
              100
              %
              
              $
              7,012
              
              
              
              100
              %
              
              $
              12,745
              
              
              
              100
              %March 31,
                  2006Americas
              
              $
              2,265
              
              
              
              79
              %
              
              $
              7,754
              
              
              
              80
              %
              
              $
              10,019
              
              
              
              79
              %Europe
              
              
              346
              
              
              
              12
              
              
              
              925
              
              
              
              9
              
              
              
              1,271
              
              
              
              10Asia
                  Pacific
              
              
              271
              
              
              
              9
              
              
              
              1,063
              
              
              
              11
              
              
              
              1,334
              
              
              
              11Total
              
              $
              2,882
              
              
              
              100
              %
              
              $
              9,742
              
              
              
              100
              %
              
              $
              12,624
              
              
              
              100
              %
  
 We
        operate in a competitive industry. There have been declines in both the
        technology industry and in general economic conditions since the beginning
        of
        2001. These declines may continue. Financial comparisons discussed herein
        may
        not be indicative of future performance.
  ** *Software
        license revenues* increased
        99% during the three months ended March 31, 2007 to $5.7 million as
        compared to $2.9 million for the three months ended March 31, 2006.
        The increase was mainly due to increased license sales to existing
        customers.
  ** *Services
        revenues* consisting
        of consulting revenues, customer training revenues and maintenance revenues
        decreased 28% during the three months ended March 31, 2007 to
        $7.0 million as compared to $9.7 million for the three months ended
        March 31, 2006. The decrease in service revenues was attributable to both
        lower maintenance and consulting revenues. Maintenance revenues decreased
        3% for
        the three months ended March 31, 2007 to $5.7 million as compared to
        $5.9 million for the three months ended March 31, 2006. Maintenance
        revenue decreased because certain customers chose to not fully renew maintenance
        contracts due to normal attrition. Consulting revenues decreased 66% for
        the
        three months ended March 31, 2007 to $1.3 million as compared to
        $3.8 million for the three months ended March 31, 2006. The decline in
        consulting revenues can be attributable to a lagging effect caused by declining
        license revenues in prior quarters.
  **~27~**
 ***Table
            Of Contents***
 *Cost
        of Revenues*
  Cost
        of software license revenues includes the costs of product media, duplication,
        packaging and other manufacturing costs, as well as royalties payable to
        third
        parties for software that is either embedded in, or bundled and licensed
        with,
        our products. Cost of services consists primarily of employee-related costs,
        third-party consultant fees incurred on consulting projects, post-contract
        customer support and instructional training services. A summary of our cost
        of
        revenues is as follows (dollars in thousands, unaudited):
  **Three
                  Months Ended March 31,****2007**
              
              %
              
              
              **2006**
              
              %Cost
                  of software licenses
              $
              12
              
              
              
              0
              %
              
              $
              62
              
              
              
              1
              %Cost
                  of services
              
              2,393
              
              
              
              19
              
              
              
              4,058
              
              
              
              32Total
                  cost of revenues
              $
              2,405
              
              
              
              19
              %
              
              $
              4,120
              
              
              
              33
              %
   ** *Cost
        of software licenses* decreased
        80% during
        the three months ended March 31, 2007 to $12,000 as compared to $62,000 for
        the three months ended March 31, 2006. This decrease is primarily a result
        of decreased proportion of license revenues generated from royalty-bearing
        products.
  ** *Cost
        of services* decreased
        41% during the three months ended March 31, 2007 to $2.4 million as
        compared to $4.1 million for the three months ended March 31, 2006.
        This decrease was the result of the reduction in consulting headcount, the
        consolidation of our facilities, and less services revenue.
  *Gross
        margin* increased
        to 81% during the three months ended March 31, 2007 from 67% for the three
        months ended March 31, 2006. The increase is a result of our restructuring
        and cost control plans.
  Operating
        expenses consist of the following:
  •  *Research
        and development expenses* consist
        primarily of salaries, employee-related benefit costs and consulting fees
        incurred in association with the development of our products. Costs incurred
        for
        the research and development of new software products are expensed as incurred
        until such time that technological feasibility, in the form of a working
        model,
        is established at which time such costs are capitalized and recorded at the
        lower of unamortized cost or net realizable value. The costs incurred subsequent
        to the establishment of a working model but prior to general release of the
        product have not been significant to date, and we have not capitalized any
        costs
        related to the development of software for external use.
 
 • *Sales
        and marketing expenses* consist
        primarily of salaries, employee-related benefit costs, commissions and other
        incentive compensation, travel and entertainment and marketing program-related
        expenditures such as collateral materials, trade shows, public relations,
        advertising, and creative services.
 
 • *General
        and administrative expenses* consist
        primarily of salaries, employee-related benefit costs, provisions and credits
        related to uncollectible accounts receivable and professional service fees.
 
 •  *Restructuring
        charges* represent
        costs incurred to restructure company operations. These charges, including
        charges for excess facilities, severance and certain non-cash items, were
        recorded under the provisions of EITF 94-3 and SFAS 146.
 
 **~28~**
 ***Table
            Of Contents***
 A
        summary of operating expenses is set forth in the following table. The
        percentage of expenses is calculated based on total revenues (dollars in
        thousands, unaudited):
  **Three
                  months ended****March
                  31,****2007**
              
              **%(1)**
              
              
              **2006**
              
              **%(1)**Research
                  and development
              
              $
              2,655
              
              
              21
              %
              
              $
              2,631
              
              
              21
              %Sales
                  and marketing
              
              
              2,069
              
              
              16
              
              
              
              2,381
              
              
              19General
                  and administrative
              
              
              1,067
              
              
              8
              
              
              
              1,738
              
              
              13Restructuring
                  charges
              
              
              278
              
              
              2
              
              
              
              490
              
              
              4Total
                  operating expenses
              
              $
              6,069
              
              
              47
              %
              
              $
              7,240
              
              
              57
              %
 (1)
              Expressed
                  as a percent of total revenues for the period
                  indicated
  ** *Research
        and development expenses* increased
        1% during the three months ended March 31, 2007 to $2.7 million as
        compared to $2.6 million for the three months ended March 31, 2006.
  ** *Sales
        and marketing expenses* decreased
        14% during the three months ended March 31, 2007 to $2.1 million as
        compared to $2.4 million for the three months ended March 31, 2006.
        This decrease was primarily due to decreased salary expense as a result of
        reductions in the work force, decreased variable compensation due to lower
        revenues, and decreased facility, travel and marketing program costs as a
        result
        of various cost-cutting actions.
  ** *General
        and administrative expenses* decreased
        39% during the three months ended March 31, 2007 to $1.1 million as
        compared to $1.7 million for the three months ended March 31, 2006.
        The decrease was primarily attributable to layoffs, natural attrition and
        function consolidations.
  *Interest
        income, net* was
        of
        $355,000  for
        the
        three months ended March 31, 2007 as compared to $107,000 for the three
        months ended March 31, 2006. The increase was due to increased cash
        balances due to positive cash from operating activities and the closing of
        the
        rights offering.
  ** *Loss
        on revaluation of warrants* was
        $7,343,000 for the three months ended March 31, 2007 as compared to
        $370,000 for the three months ended March 31, 2006. The increase was
        primarily due to the appreciation in our stock price, which also increased
        the
        valuation of warrants during the first quarter of 2007.
  ** *Other
        income, net,* was
        $277,000 for the three months ended March 31, 2007 as compared to $36,000
        for the three months ended March 31, 2006. The increase was primarily due
        to the translation gain during the first quarter of year 2007.
  ** Provision
        forincome
        taxes ,
        was a
        provision of $56,000 for the three months ended March 31, 2007 as compared
        to a
        provision of $156,000 for the three months ended March 31, 2006. The
        expenses related to Alternative Minimum Taxes (AMT) calculated at both
        Federal and state levels after application of net operating loss
        (NOL) carryforwards.
  ***Liquidity
        and Capital Resources***
  **Background
        and Overview**
  During
        the previous years through December 31, 2005, we faced various liquidity
        challenges. During the year ended December 31, 2006, the following significant
        events occurred: approximately $20.5 million in convertible debt was exchanged
        for 34.5 million shares of common stock; we generated cash flow from operations
        of approximately $16.0 million; and we closed our rights offering and raised
        net
        proceeds of approximately $15.8 million. At March 31, 2007, our current assets
        exceeded our current liabilities by approximately $17.1 million. Our management
        believes that cash resources at March 31, 2007 will be sufficient to fund
        operations through at least March 31, 2008 . If our existing cash resources
        are
        not sufficient to meet our obligations, we will seek to raise additional
        capital
        through public or private equity financing or from other sources. If adequate
        funds are not available or are not available on acceptable terms as needed,
        we
        may be unable to pay our debts as they become due, develop our products,
        take
        advantage of future opportunities or respond to competitive pressures or
        unanticipated requirements.
 
 **~29~**
 ***Table
            Of Contents***
 Our
        consolidated balance sheet strengthened considerably throughout the year
        2006,
        and well into March 2007. As of March 31, 2007, we had $41.0 million of cash
        and
        cash equivalents, with no long-term debt borrowings. This compares with a
        cash
        position of $37.0 million at December 31, 2006. The increase was due primarily
        to $3.8 million cash generated from our operations.
 
 Revenues
        for the first quarter of 2007 were $12.7 million, as compared to revenues
        of
        $12.6 million for the first quarter of 2006. License revenue for the first
        quarter of 2007 was $5.7 million versus $4.0 million for the fourth quarter
        of
        2006 and $2.9 million in the first quarter of 2006. The majority of our license
        revenue for the first quarter of 2007 was generated from our core Commerce
        and
        Portal solutions from customers including Finnair, Prime Polymer, Standard
        Bank
        of Argentina, Vodafone Omnitel, and several other brand name global customers.
        License revenues increased in all regions as compared to the first quarter
        of
        2006: revenues from customers in Americas increased by $0.9 million, revenues
        from customers in Europe increased by $1.5 million and revenues from customers
        in Asia Pacific increased by $0.4 million. The most significant change was
        the
        year-over-year decline in consulting revenues due to decreased demand. This
        decline was more than offset by corresponding cost savings in both direct
        headcount and contractor expenses. As a result, consulting services generated
        better operating margins than many prior higher-revenue quarters.
 
 We
        continued to focus on expense control in the first quarter of 2007, with
        the
        goal of achieving strong operating results and profit margins. Operating
        expenses for the first quarter of 2007 were $6.1 million, as compared to
        $7.2
        million for the first quarter of 2006. For the three months ended of March
        31,
        2007 and 2006, we took a charge of $7.3 million and $0.3 million, respectively,
        on the revaluation of warrants and change in value of derivatives. As a result,
        for the three months ended March 31, 2007 net loss was $2.5 million, or $0.02
        per share. This compares to net income of $0.9 million, or $0.02 per diluted
        share for the three months ended March 31, 2006.
  The
        following table
        represents our liquidity at March 31, 2007 and December 31, 2006 (dollars
        in
        thousands):
 
 **March
                  31,**
              
              **December
                  31,****2007**
              
              **2006****(unaudited)**Cash
                  and cash equivalents
              
              $
              41,017
              
              $
              37,003Restricted
                  cash, current portion
              
              $
              796
              
              $
              997Restricted
                  cash, net of current portion
              
              $
              1,000
              
              $
              1,000Working
                  capital
              
              $
              17,046
              
              $
              18,955Working
                  capital ratio
              
              
              1.47
              
              
              1.63
  *Cash
        Provided By Operating Activities*
  Cash
        provided by operating activities was $3.8 million for the three months ended
        March 31, 2007. Net cash provided by operating activities in this period
        consisted primarily of $4.5 million in operating profit (excluding restructuring
        charges) generated from sales margin improvement and company-wide cost reduction
        efforts, offset by payment of $0.9 million of accounts payable and accrued
        expenses.
  Cash
        provided by operating activities was $5.9 million for the three months ended
        March 31, 2006, consisting primarily of $5.4 million of unearned revenue
        and
        deferred maintenance revenue received in the quarter as a result of our receipt
        of customer payments prior to having performed all material obligations under
        the applicable agreement. In addition, we received payment of $5.0 million
        from
        one customer. Other significant adjustments to reconcile net loss to cash
        provided by operating activities included net increases in accounts receivable
        and decreases in accounts payable aggregating approximately $1.4 million.
  **~30~**
 ***Table
            Of Contents***
 *Cash
        Used For Investing Activities*
  Cash
        used
        for investing activities was $294,000 for the three months ended March 31,
        2007.
        This figure reflects the release of $201,000 restricted cash and offset
        by $495,000 in leasehold improvement for our new headquarter facility. Cash
        used in investing activities was $21,000 for the three months ended
        March 31, 2006 primarily consisted of the purchase of property and
        equipment. Our capital expenditures consisted of purchases of operating
        resources to manage our operations and consisted primarily of leaseholds
        improvement for our new headquarters.
  *Cash
        Provided By (Used For) Financing Activities*
  Cash
        provided by financing activities was $498,000 for the three months ended
        March
        31, 2007, primarily consisting of cash received in connection with the issuance
        of common stock. Cash used in financing activities was $112,000 for the three
        months ended March 31, 2006, mainly as a result paying down bank term debt.
  *Leases
        and Other Contractual Obligations*
  We
        lease
        our headquarters facility and our other facilities under non-cancelable
        operating lease agreements expiring through the year 2012. Under the terms
        of
        the agreements, we are required to pay lease costs, property taxes, insurance
        and normal maintenance costs.
  A
        summary
        of total future minimum lease payments as of March 31, 2007, under
        noncancelable operating lease agreements, is as follows (in millions):
 
 **Operating****Years
                  Ending December 31,**
              
              **Leases**2007
              
              $
              2.42008
              
              
              1.92009
              
              
              1.72010
              
              
              1.32011
                  and thereafter
              
              
              1.6Total
                  minimum lease payments
              
              $
              8.9
  Restricted
        cash represents collateral for letters of credit, all of which are due to
        mature
        within one year.
  **Item 3.
        Quantitative and Qualitative Disclosures About
        Market Risk**
  Our
        exposure to market risk for changes in interest rates relates primarily to
        our
        investment portfolio. We had no derivative financial instruments as of
        March 31, 2007 and 2006. We place our investments in instruments that meet
        high credit quality standards and the amount of credit exposure to any one
        issue, issuer and type of instrument is limited.
  **~31~**
 ***Table
            Of Contents***
 **ITEM
          4. Controls and Procedures**
  We
            maintain disclosure controls and procedures that are designed to ensure
            that
            information required to be disclosed in our Exchange Act reports is recorded,
            processed, summarized and reported within the time periods specified
            in the
            SEC’s rules and forms and that such information is accumulated and communicated
            to our management, including the individual who serves as our Chief Executive
            Officer and interim Chief Financial Officer, as appropriate, to allow
            for timely
            decisions regarding required disclosure. In designing and evaluating
            the
            disclosure controls and procedures, management recognizes that any controls
            and
            procedures, no matter how well designed and operated, can provide only
            reasonable assurance of achieving the desired control objectives, and
            management
            is required to apply its judgment in evaluating the cost-benefit relationship
            of
            possible controls and procedures. Our disclosure controls and procedures
            were
            designed to provide reasonable assurance that the controls and procedures
            would
            meet their objectives.
  As
            required by Rules 15(e) and 15d-15(e) under the Exchange Act, we carried
            out an
            evaluation, under the supervision and with the participation of our management,
            including the individual who serves as both our Chief Executive Officer
            and our
            interim Chief Financial Officer, of the effectiveness of the design and
            operation of our disclosure controls and procedures as of the end of
            the period
            covered by this report. Based on the foregoing, our Chief Executive Officer
            and
            interim Chief Financial Officer concluded that our disclosure controls
            and
            procedures were not effective at the reasonable assurance level. This
            conclusion
            was based on the identification of one previously reported material weakness
            in
            internal control over financial reporting as of December 31, 2006, which
            we are
            unable to conclude had been remediated as of March 31, 2007.
 ***Changes
        in Internal Control over Financial Reporting***
  There
          has
          been no change in our internal control over financial reporting during
          the
          quarter ended March 31, 2007 that has materially affected, or is reasonably
          likely to materially affect, our internal control over financial
          reporting.
 **~32~**
 ***Table
            Of Contents***
 ***Limitations
        on the Effectiveness of Controls***
  Our
          management, including our Chief Executive Officer and interim Chief Financial
          Officer, does not expect that our disclosure controls and procedures or
          our
          internal controls will prevent all error and fraud. A control system, no
          matter
          how well conceived and operated, can provide only reasonable, not absolute,
          assurance that the objectives of the control system are met. Further, the
          design
          of a control system must reflect the fact that there are resource constraints,
          and the benefits of controls must be considered relative to their costs.
          Because
          of the inherent limitations in all control systems, no evaluation of controls
          can provide absolute assurance that all control issues and instances of
          fraud,
          if any, within the company have been detected. These inherent limitations
          include the realities that judgments in decision-making can be faulty,
          and that
          breakdowns can occur because of simple error or mistake. Additionally,
          controls
          can be circumvented by the individual acts of some persons, by collusion
          of two
          or more people, or by management override of the controls. The design of
          any
          system of controls also is based in part upon certain assumptions about
          the
          likelihood of future events, and there can be no assurance that any design
          will
          succeed in achieving its stated goals under all potential future conditions;
          over time, controls may become inadequate because of changes in conditions,
          or
          the degree of compliance with the policies or procedures may deteriorate.
          Because of the inherent limitations in a cost-effective control system,
          misstatements due to error or fraud may occur and not be detected. Our
          disclosure controls and procedures are designed to provide reasonable assurance
          of achieving their objectives, and we are in the process of remediating
          the
          material weakness that existed at December 31, 2006 and March 31,
          2007.
  **PART
        II. OTHER INFORMATION**
  **Item 1.
        Legal Proceedings**
  We
        are subject from time to time to various legal actions and other claims arising
        in the ordinary course of business. We are not presently a party to any material
        legal proceedings.
  **Item 1A.
        Risk Factors**
  *The
        risks and uncertainties described below are not the only ones facing us.
        Additional risks and uncertainties not presently known to us or that we
        currently deem immaterial also may impair our business operations. If any
        of the
        following risks actually occur, our business could be harmed. In that event,
        the
        trading price of our common stock could decline.*
 
 ***We
        have a history of losses and our future profitability on a quarterly or annual
        basis is uncertain, which could have a harmful effect on our business and
        the
        value of BroadVision common stock.***
  While
        we
        generated positive operating income and cash flow in the twelve months ended
        March 31, 2007, we have incurred substantial cumulative net operating losses
        and
        negative cash flows from operations since 2000. We also generated GAAP loss
        in
        the first quarter of 2007. As of March 31, 2007, we had an accumulated deficit
        of approximately $1.2 billion.
  Given
        our
        planned operating and capital expenditures, for the foreseeable future we
        expect
        our results of operations to fluctuate, and during this period we may incur
        losses and/or negative cash flows. If our revenue does not increase or if
        we
        fail to maintain our expenses at an amount less than our projected revenue,
        we
        will not be able to achieve or sustain operating profitability on a consistent
        basis. We are continuing our efforts to reduce and control our expense
        structure. We believe strict cost containment and expense reductions are
        essential to achieving positive cash flow and profitability. A number of
        factors
        could preclude us from successfully bringing costs and expenses in line with
        our
        revenues, including unplanned uses of cash, the inability to accurately forecast
        business activities and further deterioration of our revenues. If we are
        not
        able to effectively reduce our costs and achieve an expense structure
        commensurate with our business activities and revenues, we may have inadequate
        levels of cash for operations or for capital requirements, which could
        significantly harm our ability to operate our business.
  Our
        failure to operate profitably or control negative cash flows on a quarterly
        or
        annual basis could harm our business and the value of BroadVision common
        stock.
        If the negative cash flow continues, our liquidity and ability to operate
        our
        business would be severely and adversely impacted. Additionally, our ability
        to
        raise financial capital may be hindered due to our operational losses and
        negative cash flows, reducing our operating flexibility.
 
 **~33~**
 ***Table
            Of Contents***
 ***Because
        our quarterly operating results are volatile and difficult to predict, our
        quarterly operating results in one or future periods are likely to fluctuate
        significantly, which could cause our stock price to decline if we fail to
        meet
        the expectations of securities analysts or investors.***
  Our
        quarterly operating results have varied significantly in the past and are
        likely
        to continue to vary significantly in the future. For example, in the quarters
        ended March 31, 2005, June 30, 2005, September 30, 2005, December
        31, 2005, and March 31, 2006, our revenues declined 22%, 23%, 18%, 1%, and
        13%
        respectively, as compared to the previous quarters. In the quarters ended
        June
        30, 2006, and September 30, 2006, our revenue increased 1%, and 7% respectively,
        as compared to the previous quarters. In the quarters ended December 31,
        2006
        and March 31, 2007, our revenue declined 4%, and 2% respectively, as compared
        to
        the previous quarters. If our revenues, operating results, earnings or future
        projections are below the levels expected by securities analysts or investors,
        our stock price is likely to decline.
 
 We
        expect
        to continue to experience significant fluctuations in our results of operations
        due to a variety of factors, some of which are outside of our control,
        including:
  • 
          introduction
          of products and services and enhancements by us and our competitors;
  • 
          competitive
          factors that affect our pricing;
 • 
            market
            acceptance of new products;
 • 
              the
              mix of products sold by us;
 • 
                changes
                in our pricing policies or our competitors;
  • changes
                in our sales incentive plans;
  • the
        budgeting cycles of our customers;
  • customer
        order deferrals in anticipation of new products or enhancements by our
        competitors or us or because of macro-economic conditions;
  • 
        nonrenewal
        of our maintenance agreements, which generally automatically renew for one-year
        terms unless earlier terminated by either party upon 90-days notice;
  • 
        product
        life cycles;
  • 
        changes
        in strategy;
  • 
        seasonal
        trends;
  • the
        mix
        of distribution channels through which our products are sold;
  • 
        the
        mix of international and domestic sales;
  • 
        the
        rate at which new sales people become productive;
  • 
        changes
        in the level of operating expenses to support projected growth;
  • 
        increase
        in the amount of third party products and services that we use in our products
        or resell with royalties attached;
  • 
        fluctuations
        in the recorded value of outstanding common stock warrants that will be based
        upon changes to the underlying market value of BroadVision common stock;
  • the
        timing of receipt and fulfillment of significant orders; and
  •  costs
        associated with litigation, regulatory compliance and other corporate events
        such as operational reorganizations.
 
 **~34~**
 ***Table
            Of Contents***
 As
        a
        result of these factors, we believe that quarter-to-quarter comparisons of
        our
        revenue and operating results are not necessarily meaningful, and that these
        comparisons are not accurate indicators of future performance. Because our
        staffing and operating expenses are based on anticipated revenue levels,
        and
        because a high percentage of our costs are fixed, small variations in the
        timing
        of the recognition of specific revenue could cause significant variations
        in
        operating results from quarter to quarter. If we were unable to adjust spending
        in a timely manner to compensate for any revenue shortfall, any significant
        revenue shortfall would likely have an immediate negative effect on our
        operating results. If our operating results in one or more future quarters
        fail
        to meet the expectations of securities analysts or investors, we would expect
        to
        experience an immediate and significant decline in the trading price of our
        stock.
 
 ***Our
        business currently depends on revenue related to BroadVision e-business
        solutions, and if the market does not increasingly accept these products
        and
        related products and services, our revenue may continue to
        decline.***
  We
        generate our revenue from licenses of BroadVision e-business solutions,
        including process, commerce, portal and content management and related products
        and services. We expect that these products, and future upgraded versions,
        will
        continue to account for a large portion of our revenue in the foreseeable
        future. Our future financial performance will depend on increasing acceptance
        of
        our current product and on the successful development, introduction and customer
        acceptance of new and enhanced versions of our products. If new and future
        versions and updates of our products and services do not gain market acceptance
        when released commercially, or if we fail to deliver the product enhancements
        and complementary third party products that customers want, demand for our
        products and services, and our revenue, may decline.
 
 ***We
        have recently introduced new products, services and technologies and our
        business will be harmed if we are not successful in selling these offerings
        to
        our existing customers and new customers.***
 
 We
        have
        recently introduced a product roadmap for 2007 that includes new products,
        services and technologies, to complement and replace certain of our existing
        products, services and technologies.  We have spent significant resources
        in developing these offerings and training our employees to implement and
        support the offerings, and we plan to add sales and marketing resources. 
We do not yet know whether any of these new offerings will be appealing to
        existing and potential new customers, and if so, whether sales of these new
        offerings will be sufficient for us to offset the costs of development,
        implementation, support and marketing.  Our existing customers may
        determine that our products and services they currently use are sufficient
        for
        their purposes, or that the added benefit from these new offerings is not
        sufficient to merit the additional cost.  As a result we may need to
        decrease our prices or develop modifications.  And while we have performed
        extensive testing of our new products and technologies, their broad-based
        implementation may require more support than we anticipate, which would further
        increase our expenses.  If sales of our new products, services and
        technologies are lower than we expect, or if we must lower our prices or
        delay
        implementation to fix unforeseen problems and develop modifications, our
        operating margins are likely to decrease and we may not be able to operate
        profitably.  A failure to operate profitably would significantly harm our
        business.
 
 **~35~**
 ***Table
            Of Contents***
 ***Our
        management identified a material weakness in the effectiveness of our internal
        control over financial reporting as of December 31, 2005 and as of December
        31, 2006. The 2005 material weakness caused restatement of our historical
        operating results. Additional material weaknesses may be discovered and
        additional restatements may be required in the future.***
  We
        previously reported that as of March 31, 2006, we did not have a sufficient
        number of experienced personnel in our accounting and finance organization
        to
        facilitate an efficient financial statement close process and permit the
        preparation of our financial statements in accordance with U.S. generally
        accepted accounting principles. For example, there were a significant number
        of
        adjustments to our financial statements during the course of the 2005 audit,
        at
        least one of which was individually material and required us to restate several
        prior quarters. Our personnel also lacked certain required skills and
        competencies to oversee the accounting operations and perform certain important
        control functions, such as the review, periodic inspection and investigation
        of
        transactions of our foreign locations. We consider this to be a deficiency
        that
        was also a material weakness in the operation of entity-level controls.
  In
        2006
        we hired several new full-time employees, and we believe that as of December
        31,
        2006, we have retained a sufficient number of experienced personnel in our
        accounting and finance organization to enable us to address the material
        weakness that existed as of December 31, 2005. These new hires have augmented
        the capabilities of our organization, but in many cases they replaced employees
        or part-time contractors who had left us for various reasons. In addition,
        two
        members of our accounting staff that we hired in the third quarter of 2006
        left
        in early 2007. This continued turnover has caused a reduction in our
        institutional knowledge regarding historical events. While we believe that
        the
        recent additions to our accounting and finance organization continue to gain
        familiarity with the complex issues relating mainly to our historical
        operations, as of March 31, 2007 we have been unable to significantly reduce
        the
        rate of turnover in the organization and the full organization had not yet
        been
        in place for a sufficient amount of time to allow us to conclude that no
        material weakness existed as of March 31, 2007. If we are not successful
        in
        retaining experienced personnel in our accounting and finance organization
        in
        order to sufficiently address the reduction in institutional knowledge
        referenced above, there is more than a remote likelihood that our quarterly
        or
        annual financial statements could be materially misstated, which could require
        a
        restatement.
  Maintaining
        sufficient expertise and historical institutional knowledge in our accounting
        and finance organization is dependent upon retaining existing employees and
        filling any open positions with experienced personnel in a timely fashion.
        The
        market for skilled accounting and finance personnel is competitive and we
        may
        have continued difficulty in retaining our staff because (1) in the region
        in which we compete there are many established companies that can offer more
        lucrative compensation packages and (2) some professionals are reluctant to
        deal with our complex accounting issues relating to our historical operations
        Our inability to staff the department with competent personnel with sufficient
        training will affect our internal controls over financial reporting to the
        extent that we may not be able to prevent or detect material misstatements.
        Inferior internal control could also cause investors to lose confidence in
        our
        reported financial information, which could have a negative effect on the
        trading price of our common stock.
 
 ***If
        we are unable to keep pace with the rapid technological changes in online
        commerce and communication, our products and services may fail to be
        competitive.***
 
 Our
        products and services may fail to be competitive if we do not maintain or
        exceed
        the pace of technological developments in Internet commerce and communication.
        Failure to be competitive could cause our revenue to decline. The information
        services, software and communications industries are characterized by rapid
        technological change, changes in customer requirements, frequent new product
        and
        service introductions and enhancements and evolving industry standards and
        practices. The introduction of products and services embodying new technologies
        and the emergence of new industry standards and practices can render existing
        products and services obsolete. Our future success will depend, in part,
        on our
        ability to:
  •  develop
        leading technologies;
  •  enhance
        our existing products and services;
  •  develop
        new products and services that address the increasingly sophisticated and
        varied
        needs of our prospective customers; and
  •  respond
        to technological advances and emerging industry standards and practices on
        a
        timely and cost-effective basis.
 
 **~36~**
 ***Table
            Of Contents***
 ***Our
        sales and product implementation cycles are lengthy and subject to delay,
        which
        make it difficult to predict our quarterly results.***
  Our
        sales
        and product implementation cycles generally span months. Delays in customer
        orders or product implementations, which are difficult to predict, can affect
        the timing of revenue recognition and adversely affect our quarterly operating
        results. Licensing our products is often an enterprise-wide decision by
        prospective customers. The importance of this decision requires that we engage
        in a lengthy sales cycle with prospective customers. A successful sales cycle
        may last up to nine months or longer. Our sales cycle is also affected by
        a
        number of other factors, some of which we have little or no control over,
        including the volatility of the overall software market, the business condition
        and purchasing cycle of each prospective customer, and the performance of
        our
        technology partners, systems integrators and resellers. The implementation
        of
        our products can also be time and resource intensive, and subject to unexpected
        delays. Delays in either product sales or implementations could cause our
        operating results to vary significantly from quarter to quarter.
  ***Current
        and potential competitors could make it difficult for us to acquire and retain
        customers now and in the future.***
 
 The
        market for our products is intensely competitive. We expect competition in
        this
        market to persist and increase in the future. If we fail to compete successfully
        with current or future competitors, we may be unable to attract and retain
        customers. Increased competition could also result in price reductions for
        our
        products and lower profit margins and reduced market share, any of which
        could
        harm our business, results of operations and financial condition.
  Many
        of
        our competitors have significantly greater financial, technical, marketing
        and
        other resources, greater name recognition, a broader range of products and
        a
        larger installed customer base, any of which could provide them with a
        significant competitive advantage. In addition, new competitors, or alliances
        among existing and future competitors, may emerge and rapidly gain significant
        market share. Some of our competitors, particularly established software
        vendors, may also be able to provide customers with products and services
        comparable to ours at lower or at aggressively reduced prices in an effort
        to
        increase market share or as part of a broader software package they are selling
        to a customer. We may be unable to match competitor's prices or price
        reductions, and we may fail to win customers that choose to purchase an
        information technology solution as part of a broader software and services
        package. As a result, we may be unable to compete successfully with current
        or
        new competitors.
 
 ***Because
        a significant portion of our sales activity occurs at the end of each fiscal
        quarter, delays in a relatively small number of license transactions could
        adversely affect our quarterly operating results.***
  A
        significant proportion of our sales are concentrated in the last month of
        each
        fiscal quarter. Gross margins are high for our license transactions. Customers
        and prospective customers may use these conditions in an attempt to obtain
        more
        favorable terms. While we endeavor to avoid making concessions that could
        result
        in lower margins, the negotiations often result in delays in closing license
        transactions. Small delays in a relatively small number of license transactions
        could have a significant impact on our reported operating results for that
        quarter.
  ***We
        have substantially modified our business and operations and will need to
        manage
        and support these changes effectively in order for our business plan to
        succeed.***
  We
        have
        substantially expanded and subsequently contracted our business and operations
        since our inception in 1993. We grew from 652 employees at the end of 1999
        to
        2,412 employees at the end of 2000 and then reduced our numbers to 1,102
        at the
        end of 2001, 449 at the end of 2002, 367 at the end of 2003, 337 at the end
        of
        2004, 181 at the end of 2005, and 159 at the end of 2006. On March 31, 2007,
        we
        had approximately 169 employees. As a consequence of our employee base growing
        and then contracting so rapidly, we entered into significant contracts for
        facilities space for which we ultimately determined we did not have a future
        use. We announced during the third and fourth quarters of 2004 that we had
        agreed with the landlords of various facilities to renegotiate future lease
        commitments, extinguishing a total of approximately $155 million of future
        obligations. The management of the expansion and later reduction of our
        operations has taken a considerable amount of our management's attention
        during
        the past several years. As we manage our business to introduce and support
        new
        products, we will need to continue to monitor our workforce and make appropriate
        changes as necessary. If we are unable to support past changes and implement
        future changes effectively, we may have to divert additional resources away
        from
        executing our business plan and toward internal administration. If our expenses
        significantly outpace our revenues, we may have to make additional changes
        to
        our management systems and our business plan may not succeed.
  **~37~**
 ***Table
            Of Contents***
 ***We
        may face liquidity challenges and need additional financing in the
        future.***
  We
        currently expect to be able to fund our working capital requirements from
        our
        existing cash and cash equivalents and our anticipated cash flows from
        operations and subleases through at least March 31, 2008. However, we could
        experience unforeseen circumstances, such as an economic downturn, difficulties
        in retaining customers and/or key employees, or other factors that could
        increase our use of available cash and require us to seek additional financing.
        We may find it necessary to obtain additional equity or debt financing due
        to
        the factors listed above or in order to support a more rapid expansion, develop
        new or enhanced products or services, respond to competitive pressures, acquire
        complementary businesses or technologies or respond to unanticipated
        requirements.
 
 We
        may
        seek to raise additional funds through private or public sales of securities,
        strategic relationships, bank debt, financing under leasing arrangements
        or
        otherwise. If additional funds are raised through the issuance of equity
        securities, the percentage ownership of our stockholders will be reduced,
        stockholders may experience additional dilution or any equity securities
        we sell
        may have rights, preferences or privileges senior to those of the holders
        of our
        common stock. We expect that obtaining additional financing on acceptable
        terms
        would be difficult, at best. If adequate funds are not available or are not
        available on acceptable terms, we may be unable to pay our debts as they
        become
        due, develop our products, take advantage of future opportunities or respond
        to
        competitive pressures or unanticipated requirements, which could have a material
        adverse effect on our business, financial condition and future operating
        results.
 
 ***We
        are dependent on direct sales personnel and third-party distribution channels
        to
        achieve revenue growth.***
  To
        date,
        we have sold our products primarily through our direct sales force. Our ability
        to achieve significant revenue growth in the future largely will depend on
        our
        success in recruiting, training and retaining sufficient direct sales personnel
        and establishing and maintaining relationships with distributors, resellers
        and
        systems integrators. Our products and services require a sophisticated sales
        effort targeted at the senior management of our prospective customers. New
        hires
        as well as employees of our distributors, resellers and systems integrators
        require training and take time to achieve full productivity. Our recent hires
        may not become as productive as necessary, and we may be unable to hire and
        retain sufficient numbers of qualified individuals in the future. We have
        entered into strategic alliance agreements with partners, under which partners
        have agreed to resell and support our current BroadVision product suite.
        These
        contracts are generally terminable by either party upon 30 days' notice of
        an uncured material breach or for convenience upon 90 days' notice prior to
        the end of any annual term. Termination of any of these alliances could harm
        our
        expected revenues. We may be unable to expand our other distribution channels,
        and any expansion may not result in revenue increases. If we fail to maintain
        and expand our direct sales force or other distribution channels, our revenues
        may not grow or they may decline. Revenue generated from third-party
        distributors in recent years has not been significant.
  ***Failure
        to maintain relationships with third-party systems integrators could harm
        our
        ability to achieve our business plan.***
  Our
        relationships with third-party systems integrators who deploy our products
        have
        been a key factor in our overall business strategy, particularly because
        many of
        our current and prospective customers rely on integrators to develop, deploy
        and
        manage their online marketplaces. Our efforts to manage our relationships
        with
        systems integrators may not succeed, which could harm our ability to achieve
        our
        business plan due to a variety of factors, including:
  **~38~**
 ***Table
            Of Contents***
 •  Systems
        integrators may not view their relationships with us as valuable to their
        own
        businesses. The related arrangements typically may be terminated by either
        party
        with limited notice and in some cases are not covered by a formal agreement.
  •  Under
        our
        business model, we often rely on our system integrators' employees to perform
        implementations. If we fail to work together effectively, or if these parties
        perform poorly, our reputation may be harmed and deployment of our products
        may
        be delayed or inadequate.
  •  Systems
        integrators may attempt to market their own products and services rather
        than
        ours.
  •  Our
        competitors may have stronger relationships with our systems integrators
        than us
        and, as a result, these integrators may recommend a competitor's products
        and
        services over ours.
  •  If
        we
        lose our relationships with our systems integrators, we will not have the
        personnel necessary to deploy our products effectively, and we will need
        to
        commit significant additional sales and marketing resources in an effort
        to
        reach the markets and customers served by these parties.
  ***We
        may be unable to manage or grow our international operations and assets,
        which
        could impair our overall growth or financial position.***
  We
        derive
        a significant portion of our revenue from our operations outside North America.
        In the twelve months ended December 31, 2006, approximately 40% of our
        revenues were derived from international sales. In the three months ended
        March
        31, 2007, approximately 46% of our revenue was derived from international
        sales.
        If we are unable to manage or grow our existing international operations,
        we may
        not generate sufficient revenue required to establish and maintain these
        operations, which could slow our overall growth and impair our operating
        margins.
  As
        we
        rely materially on our operations outside of North America, we are subject
        to
        significant risks of doing business internationally, including:
  •  difficulties
        in staffing and managing foreign operations and safeguarding foreign
        assets;
  •  unexpected
        changes in regulatory requirements;
  •  export
        controls relating to encryption technology and other export restrictions;
  •  tariffs
        and other trade barriers;
  •  difficulties
        in staffing and managing foreign operations;
  •  political
        and economic instability;
  •  fluctuations
        in currency exchange rates;
  •  reduced
        protection for intellectual property rights in some countries;
  •  cultural
        barriers;
  •  seasonal
        reductions in business activity during the summer months in Europe and certain
        other parts of the world; and
  •  potentially
        adverse tax consequences.
 
 **~39~**
 ***Table
            Of Contents***
 Management
        of international operations presents special challenges, particularly at
        our
        reduced staffing levels. For example, in December 2005, an inappropriate
        transfer of approximately $60,000 was made from our bank account in Japan
        to a
        consulting services provider affiliated with two officers of our Japan
        subsidiary without the approvals required under our internal control policies.
        Although this transfer was later detected, the funds were recaptured and
        the
        services of the Japan subsidiary officers involved were terminated, we face
        the
        risk that other similar misappropriations of assets may occur in the
        future.
 
 In
        addition, our international sales growth will be limited if we are unable
        to
        establish additional foreign operations, expand international sales channel
        management and support, hire additional personnel, customize products for
        local
        markets and develop relationships with international service providers,
        distributors and system integrators. Even if we are able to successfully
        expand
        our international operations, we may not succeed in maintaining or expanding
        international market demand for our products.
 
 ***Our
        success and competitive position will depend on our ability to protect our
        proprietary technology.***
  Our
        success and ability to compete are dependent to a significant degree on our
        proprietary technology. We hold a U.S. patent, issued in January 1998, on
        elements of the BroadVision platform, which covers electronic commerce
        operations common in today's web business. We also hold a U.S. patent,
        issued in November 1996, acquired as part of the Interleaf acquisition on
        the
        elements of the extensible electronic document processing system for creating
        new classes of active documents. Although we hold these patents, they may
        not
        provide an adequate level of intellectual property protection. In addition,
        litigation may be necessary in the future to enforce our intellectual property
        rights, to protect our trade secrets, or to determine the validity and scope
        of
        the proprietary rights of others. It is also possible that third parties
        may
        claim we have infringed their patent, trademark, copyright or other proprietary
        rights. Claims may be made for indemnification resulting from allegations
        of
        infringement. Intellectual property infringement claims may be asserted against
        us as a result of the use by third parties of our products. Claims or
        litigation, with or without merit, could result in substantial costs and
        diversions of resources, either of which could harm our business.
  We
        also
        rely on copyright, trademark, service mark, trade secret laws and contractual
        restrictions to protect our proprietary rights in products and services.
        We have
        registered "BroadVision", "iGuide", "BroadVision Self-Service Suite",
        "BroadVision Process", "BroadVision Commerce", "BroadVision Portal",
        "BroadVision Content" and "Interleaf" as trademarks in the United States
        and in
        other countries. It is possible that our competitors or other companies will
        adopt product names similar to these trademarks, impeding our ability to
        build
        brand identity and possibly confusing customers.
  As
        a
        matter of company policy, we enter into confidentiality and assignment
        agreements with our employees, consultants and vendors. We also control access
        to and distribution of our software, documents and other proprietary
        information. Notwithstanding these precautions, it may be possible for an
        unauthorized third party to copy or otherwise obtain and use our software
        or
        other proprietary information or to develop similar software independently.
        Policing unauthorized use of our products will be difficult, particularly
        because the global nature of the Internet makes it difficult to control the
        ultimate destination or security of software and other transmitted data.
        The
        laws of other countries may afford us little or no effective protection of
        our
        intellectual property.
  ***A
        breach of the encryption technology that we use could expose us to liability
        and
        harm our reputation, causing a loss of customers.***
  If
        any
        breach of the security technology embedded in our products were to occur,
        we
        would be exposed to liability and our reputation could be harmed, which could
        cause us to lose customers. A significant barrier to online commerce and
        communication is the secure exchange of valuable and confidential information
        over public networks. We rely on encryption and authentication technology,
        including Open SSL and public key cryptography technology featuring the major
        encryption algorithms RC2 and MDS, to provide the security and authentication
        necessary to effect the secure exchange of confidential information. Advances
        in
        computer capabilities, new discoveries in the field of cryptography or other
        events or developments could cause a breach of the RSA or other algorithms
        that
        we use to protect customer transaction data.
 
 **~40~**
 ***Table
            Of Contents***
 ***The
        loss or malfunction of technology licensed from third parties could delay
        the
        introduction of our products and services.***
  We
        rely
        in part on technology that we license from third parties, including relational
        database management systems from Oracle and Sybase, Informix object request
        broker software from IONA Technologies PLC, and database access technology
        from
        Rogue Wave Software. The loss or malfunction of any of these technology licenses
        could harm our business. We integrate or sublicense this technology with
        internally developed software to perform key functions. For example, our
        products and services incorporate data encryption and authentication technology
        licensed from Open SSL. Third-party technology licenses might not continue
        to be
        available to us on commercially reasonable terms, or at all. Moreover, the
        licensed technology may contain defects that we cannot control. Problems
        with
        our technology licenses could cause delays in introducing our products or
        services until equivalent technology, if available, is identified, licensed
        and
        integrated. Delays in introducing our products and services could adversely
        affect our results of operations.
 
 ***Our
        officers, key employees and highly skilled technical and managerial personnel
        are critical to our business, and they may not remain with us in the
        future.***
  Our
        performance substantially depends on the performance of our officers and
        key
        employees. We also rely on our ability to retain and motivate qualified
        personnel, especially our management and highly skilled development teams.
        The
        loss of the services of any of our officers or key employees, particularly
        our
        founder, Chief Executive Officer and interim Chief Financial Officer,
        Dr. Pehong Chen, could cause us to incur increased operating expenses and
        divert senior management resources in searching for replacements. The loss
        of
        their services also could harm our reputation if our customers were to become
        concerned about our future operations. We do not carry "key person" life
        insurance policies on any of our employees. Our future success also depends
        on
        our continuing ability to identify, hire, train and retain other highly
        qualified technical and managerial personnel. Competition for these personnel
        is
        intense, especially in the Internet industry. We have in the past experienced,
        and may continue to experience, difficulty in hiring and retaining sufficient
        numbers of highly skilled employees. The significant downturn in our business
        and the uncertainty created by the execution and subsequent termination of
        our
        merger agreement with an affiliate of Vector Capital Corporation has had
        and may
        continue to have a negative impact on our operations. We have restructured
        our
        operations by reducing our workforce and implementing other cost containment
        activities. These actions could lead to disruptions in our business, reduced
        employee morale and productivity, increased attrition, and problems with
        retaining existing and recruiting future employees.
 
 ***Limitations
        on the online collection of profile information could impair the effectiveness
        of our products.***
  Online
        users' resistance to providing personal data, and laws and regulations
        prohibiting use of personal data gathered online without express consent
        or
        requiring businesses to notify their web site visitors of the possible
        dissemination of their personal data, could limit the effectiveness of our
        products. This in turn could adversely affect our sales and results of
        operations.
  One
        of
        the principal features of our products is the ability to develop and maintain
        profiles of online users to assist business managers in determining the nature
        of the content to be provided to these online users. Typically, profile
        information is captured when consumers, business customers and employees
        visit a
        web site and volunteer information in response to survey questions concerning
        their backgrounds, interests and preferences. Profiles can be augmented over
        time through the subsequent collection of usage data. Although our products
        are
        designed to enable the development of applications that permit web site visitors
        to prevent the distribution of any of their personal data beyond that specific
        web site, privacy concerns may nevertheless cause visitors to resist providing
        the personal data necessary to support this profiling capability. The mere
        perception by prospective customers that substantial security and privacy
        concerns exist among online users, whether or not valid, may indirectly inhibit
        market acceptance of our products.
 
 **~41~**
 ***Table
            Of Contents***
 In
        addition, new laws and regulations could heighten privacy concerns by requiring
        businesses to notify web site users that the data captured from them while
        online may be used by marketing entities to direct product messages to them.
        We
        are subject to increasing regulation at the federal and state levels relating
        to
        online privacy and the use of personal user information. Several states have
        proposed legislation that would limit the uses of personal user information
        gathered online or require online services to establish privacy policies.
        In
        addition, the U.S. Federal Trade Commission, or FTC, has urged Congress to
        adopt legislation regarding the collection and use of personal identifying
        information obtained from individuals when accessing web sites. The FTC has
        settled several proceedings resulting in consent decrees in which Internet
        companies have been required to establish programs regarding the manner in
        which
        personal information is collected from users and provided to third parties.
        We
        could become a party to a similar enforcement proceeding. These regulatory
        and
        enforcement efforts could also harm our customers' ability to collect
        demographic and personal information from users, which could impair the
        effectiveness of our products.
 
 ***We
        may not have adequate back-up systems, and natural or manmade disasters could
        damage our operations, reduce our revenue and lead to a loss of
        customers.***
  We
        do not
        have fully redundant systems for service at an alternate site. A disaster
        could
        severely harm our business because our service could be interrupted for an
        indeterminate length of time. Our operations depend upon our ability to maintain
        and protect our computer systems at our facility in Redwood City, California,
        which reside on or near known earthquake fault zones. Although these systems
        are
        designed to be fault tolerant, they are vulnerable to damage from fire, floods,
        earthquakes, power loss, acts of terrorism, telecommunications failures and
        similar events. In addition, our facilities in California could be subject
        to
        electrical blackouts if California faces another power shortage similar to
        that
        of 2001. Although we do have a backup generator that would maintain critical
        operations, this generator could fail. We also have significantly reduced
        our
        workforce in a short period of time, which has placed different requirements
        on
        our systems and has caused us to lose personnel knowledgeable about our systems,
        both of which could make it more difficult to quickly resolve system
        disruptions. Disruptions in our internal business operations could harm our
        business by resulting in delays, disruption of our customers' business, loss
        of
        data, and loss of customer confidence.
  **Risks
        related to BroadVision common stock**
 
 ***One
        stockholder beneficially owns a substantial portion of the outstanding
        BroadVision common stock, and as a result exerts substantial control over
        the
        company.***
 
 As
        of
        April 30, 2007, Dr. Pehong Chen, our Chairman, CEO and interim CFO, beneficially
        owned approximately 42.0 million shares of our common stock, which represents
        approximately 39% of the outstanding common stock as of such date. As a result,
        Dr. Chen exerts substantial control over all matters coming to a vote of
        our
        stockholders, including with respect to:
 
 •   the composition of our board of directors and, through it, any
        determination with respect to our business direction and policies, including
        the
        appointment and removal of officers;
  •   any determinations with respect to mergers and other business
        combinations;
  •   our acquisition or disposition of assets;
  •   our financing activities; and
  •   the payment of dividends on our capital stock.
 
 This
        control by Dr. Chen could depress the market price of our common stock or
        delay
        or prevent a change in control of BroadVision.
  **~42~**
 ***Table
            Of Contents***
 ***Our
        stock price has been highly volatile.***
  The
        trading price of BroadVision common stock has been highly volatile. For example,
        the trading price of BroadVision common stock has ranged from $0.32 per
        share to $9.05 per share between January 1, 2004 and May 10, 2007. On
        May 10, 2007 the closing price of BroadVision common stock was $2.76 per
        share.
        Our stock price is subject to wide fluctuations in response to a variety
        of
        factors, including:
  •  quarterly
        variations in operating results;
  •  announcements
        of technological innovations;
  •  announcements
        of new software or services by us or our competitors;
  •  changes
        in financial estimates by securities analysts;
  •  general
        economic conditions; or
  •  other
        events or factors that are beyond our control.
 
 In
        addition, the stock market has experienced significant price and volume
        fluctuations that have particularly affected the trading prices of equity
        securities of many technology companies. These fluctuations have often been
        unrelated or disproportionate to the operating performance of these companies.
        Any negative change in the public's perception of the prospects of Internet
        or
        electronic commerce companies could further depress our stock price regardless
        of our results. Other broad market fluctuations may decrease the trading
        price
        of BroadVision common stock. In the past, following declines in the market
        price
        of a company's securities, securities class action litigation, such as the
        class
        action lawsuits filed against us and certain of our officers and directors
        in
        early 2001, has often been instituted against that company. Litigation could
        result in substantial costs and a diversion of management's attention and
        resources.
  **Item 2.
        Unregistered Sales of Equity Securities and Use of
        Proceeds**
  Not
        applicable.
  **Item 3.
        Defaults Upon Senior
        Securities**
  Not
        applicable.
  **Item 4.
        Submission of Matters to a Vote of Security
        Holders**
  Not
        applicable.
  **Item 5.
        Other Information**
  Not
        applicable.
  **~43~**
 ***Table
            Of Contents***
 **Item 6.
        Exhibits**
  **(a) Exhibits**
 **Exhibits**
                
                **Description**3.1
                    (1)
                
                Amended
                    and Restated Certificate of Incorporation.3.2
                    (2)
                
                Certificate
                    of Amendment of Certificate of Incorporation.3.3
                    (4)
                
                Certificate
                    of Amendment of Certificate of Incorporation.3.4
                    (3)
                
                Amended
                    and Restated Bylaws.4.1
                    (1)
                
                References
                    are hereby made to Exhibits 3.1 to 3.310.1
                    (5)
                
                Sublease
                    dated December 21, 2006 between BroadVision, Inc. and Dexterra,
                    Inc.10.2
                    (6)
                
                Form
                    of Restricted Stock Bonus Agreement under 2006 Equity Incentive
                    Plan.10.3
                    (6)
                
                BroadVision,
                    Inc. Severance Benefit Plan.10.4
                    (6)
                
                2007
                    Employee Profit Sharing Plan Framework Document.31.1
                
                Certification
                    of the Chief Executive Officer and Chief Financial Officer of
                    BroadVision.32.1
                
                Certification
                    of the Chief Executive Officer and Chief Financial Officer of
                    BroadVision
                    pursuant to Section 906 of the Sarbanes-Oxley Act of
                    2002.
 (1)
                
                Incorporated
                    by reference to the Company's Registration Statement on Form
                    S-1 filed on
                    April 19, 1996 as amended by Amendment No. 1 filed on May 9,
                    1996, Amendment No. 2 filed on May 29, 1996 and Amendment
                    No. 3 filed on June 17, 1996.(2)
                
                Incorporated
                    by reference to the Company's Proxy Statement filed on May 14,
                    2002.(3)
                
                Incorporated
                    by reference to the Company's Current Report on Form 8-K filed
                    on December
                    22, 2005.(4)
                
                Incorporated
                    by reference to the Company's Form 10-K for the fiscal year ended
                    December
                    31, 2006 filed on March 26, 2007.(5)
                
                Incorporated
                    by reference to the Company's Current Report on Form 8-K filed
                    January 10,
                    2007.(6)
                
                Incorporated
                    by reference to the Company's Current Report on Form 8-K filed
                    March 30,
                    2007.
  **~44~**
 ***Table
            Of Contents***
 **SIGNATURES**
  Pursuant
        to the requirements of the Securities Exchange Act of 1934, the registrant
        has
        duly caused this report to be signed on its behalf by the undersigned thereunto
        duly authorized.
  
 **BROADVISION,
                  INC.**Date:
                  May 14, 2007
              
              By:
              
              */s/
                  Pehong Chen*Pehong
                  ChenChairman
                  of the Board, President, Chief Executive Officer and Interim Chief
                  Financial Officer
 
 **~45~**
 ***Table
            Of Contents***
 **EXHIBIT INDEX**
 **Exhibits**
                
                **Description**3.1
                    (1)
                
                Amended
                    and Restated Certificate of Incorporation.3.2
                    (2)
                
                Certificate
                    of Amendment of Certificate of Incorporation.3.3(4)
                
                Certificate
                    of Amendment of Certificate of Incorporation.3.4
                    (3)
                
                Amended
                    and Restated Bylaws.4.1
                    (1)
                
                References
                    are hereby made to Exhibits 3.1 to 3.3.10.1
                    (5)
                
                Sublease
                    dated December 21, 2006 between BroadVision, Inc. and Dexterra,
                    Inc.10.2
                    (6)
                
                Form
                    of Restricted Stock Bonus Agreement under 2006 Equity Incentive
                    Plan.10.3
                    (6)
                
                BroadVision,
                    Inc. Severance Benefit Plan.10.4
                    (6)
                
                2007
                    Employee Profit Sharing Plan Framework Document.31.1
                
                Certification
                    of the Chief Executive Officer and Chief Financial Officer of
                    BroadVision.32.1
                
                Certification
                    of the Chief Executive Officer and Chief Financial Officer of
                    BroadVision
                    pursuant to Section 906 of the Sarbanes-Oxley Act of
                    2002.
 (1)
                
                Incorporated
                    by reference to the Company's Registration Statement on Form
                    S-1 filed on
                    April 19, 1996 as amended by Amendment No. 1 filed on May 9,
                    1996, Amendment No. 2 filed on May 29, 1996 and Amendment
                    No. 3 filed on June 17, 1996.(2)
                
                Incorporated
                    by reference to the Company's Proxy Statement filed on May 14,
                    2002.(3)
                
                Incorporated
                    by reference to the Company's Current Report on Form 8-K filed
                    on December
                    22, 2005.(4)
                
                Incorporated
                    by reference to the Company's Form 10-K for the fiscal year ended
                    December
                    31, 2006 filed on March 26, 2007.(5)
                
                Incorporated
                    by reference to the Company's Current Report on Form 8-K filed
                    January 10,
                    2007.(6)
                
                Incorporated
                    by reference to the Company's Current Report on Form 8-K filed
                    March 30,
                    2007.




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