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 June 30,
2008
 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., Suite 550, North Bldg,
                
                94063Redwood
      City, California(Address of principal executive offices)
                
                (Zip code)
 (650) 331-1000
   þ o
  o þ o
  o þ
 As of
July 31, 2008 there were 109,490,316 shares of the Registrant's Common Stock
issued and outstanding.
 
  BROADVISION, INC. AND
SUBSIDIARIES FORM 10-Q Quarter Ended June 30,
2008
 TABLE OF
CONTENTS
 PART
      I.
                  
                  FINANCIAL INFORMATIONItem 1.
                  
                  Financial StatementsCondensed Consolidated Balance Sheets at June 30,
      2008 (unaudited) and December 31, 2007
                  
                  1Condensed Consolidated Income Statements and Comprehensive
      Income - three and six months ended
                      June 30, 2008 and
    2007 (unaudited)
                  
                  2Condensed Consolidated Statements of Cash Flows for
      the six months ended June 30, 2008 and
      2007 (unaudited)
                  
                  3Notes to Condensed Consolidated Financial
      Statements (unaudited)
                  
                  4Item 2.
                  
                  Management's
      Discussion and Analysis of Financial Condition and Results ofOperations
                  
                  14Item 3.
                  
                  Quantitative and Qualitative Disclosures About Market
      Risk
                  
                  19Item 4.
                  
                  Controls and Procedures
                  
                  19PART II.
                  
                  OTHER
      INFORMATIONItem 1.
                  
                  Legal Proceedings
                  
                  20Item 1A.
                  
                  Risk Factors
                  
                  20Item 2.
                  
                  Unregistered Sales of Equity Securities and Use of
      Proceeds
                  
                  28Item 3.
                  
                  Defaults Upon Senior Securities
                  
                  28Item 4.
                  
                  Submission of Matters to a Vote of Security
      Holders
                  
                  29Item 5.
                  
                  Other Information
                  
                  29Item 6.
                  
                  Exhibits
                  
                  30SIGNATURES
 EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1
  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)
  June
      30,
                      
                      
                      December
      31,2008
                      
                      
                      2007(unaudited)
                      
                      
                      
                      *ASSETSCurrent
      assets:Cash
      and cash equivalents
                      
                      $
                      55,606
                      
                      
                      $
                      53,973Short-term
      investments
                      
                      
                      3,486
                      
                      
                      
                      -Accounts
      receivable, less allowance for doubtful accounts of $513 as of
      June 30, 2008 and $585 as of December 31, 2007
                      
                      
                      7,029
                      
                      
                      
                      7,614Prepaid
      and other current assets
                      
                      
                      1,977
                      
                      
                      
                      1,410Restricted
      cash, current portion
                      
                      
                      20
                      
                      
                      
                      20Total
      current assets
                      
                      
                      68,118
                      
                      
                      
                      63,017Property
      and equipment, net
                      
                      
                      580
                      
                      
                      
                      688Restricted
      cash, net of current portion
                      
                      
                      1,000
                      
                      
                      
                      1,000Goodwill
                      
                      
                      25,066
                      
                      
                      
                      25,066Other
      assets
                      
                      
                      557
                      
                      
                      
                      541Total
      assets
                      
                      $
                      95,321
                      
                      
                      $
                      90,312LIABILITIES
      AND STOCKHOLDERS’ EQUITYCurrent
      liabilities:Accounts
      payable
                      
                      $
                      1,210
                      
                      
                      $
                      1,359Accrued
      expenses
                      
                      
                      5,897
                      
                      
                      
                      6,386Warrant
      liability
                      
                      
                      1,115
                      
                      
                      
                      4,195Unearned
      revenue
                      
                      
                      2,505
                      
                      
                      
                      2,857Deferred
      maintenance
                      
                      
                      9,494
                      
                      
                      
                      7,726Total
      current liabilities
                      
                      
                      20,221
                      
                      
                      
                      22,523Other
      non-current liabilities
                      
                      
                      2,906
                      
                      
                      
                      3,024Total
      liabilities
                      
                      
                      23,127
                      
                      
                      
                      25,547Commitments
      and contingenciesStockholders’
      equity:Convertible
      preferred stock, $0.0001 par value; 1,000 shares authorized as of June 30,
      2008 and December 31, 2007; none issued and outstanding
                      
                      
                      -
                      
                      
                      
                      -Common
      stock, $0.0001 par value; 280,000 shares authorized; 109,247 shares
      issued and outstanding as of June 30, 2008 and 108,929 shares issued and
      outstanding as of December 31, 2007
                      
                      
                      11
                      
                      
                      
                      10Additional
      paid-in capital
                      
                      
                      1,258,070
                      
                      
                      
                      1,257,132Accumulated
      other comprehensive (loss) income
                      
                      
                      (290
                      )
                      
                      
                      16Accumulated
      deficit
                      
                      
                      (1,185,597
                      )
                      
                      
                      (1,192,393
                      )Total
      stockholders’ equity
                      
                      
                      72,194
                      
                      
                      
                      64,765Total
      liabilities and stockholders’ equity
                      
                      $
                      95,321
                      
                      
                      $
                      90,312*
      Derived from audited consolidated financial statements filed in the
      Company’s 2007 Annual Report on Form 10-K.
  See Accompanying Notes to Condensed
Consolidated Financial Statements
  ~ 1
~
 Table of Contents
  BROADVISION, INC. AND
      SUBSIDIARIESCONDENSED
      CONSOLIDATED INCOME STATEMENTS AND COMPREHENSIVE
      INCOME(In thousands, except par share
      amounts)(Unaudited)
 Three
      Months Ended June 30,
                        
                        
                        Six
      Months Ended June 30,2008
                        
                        
                        2007
                        
                        
                        2008
                        
                        
                        2007Revenues:Software
      licenses
                        
                        $
                        2,448
                        
                        
                        $
                        5,494
                        
                        
                        $
                        6,425
                        
                        
                        $
                        11,228Services
                        
                        
                        5,582
                        
                        
                        
                        7,774
                        
                        
                        
                        11,635
                        
                        
                        
                        14,785Total
      revenues
                        
                        
                        8,030
                        
                        
                        
                        13,268
                        
                        
                        
                        18,060
                        
                        
                        
                        26,013Cost
      of revenues:Cost
      of software licenses
                        
                        
                        6
                        
                        
                        
                        22
                        
                        
                        
                        13
                        
                        
                        
                        34Cost
      of services
                        
                        
                        2,155
                        
                        
                        
                        2,215
                        
                        
                        
                        4,408
                        
                        
                        
                        4,608Total
      cost of revenues
                        
                        
                        2,161
                        
                        
                        
                        2,237
                        
                        
                        
                        4,421
                        
                        
                        
                        4,642Gross
      profit
                        
                        
                        5,869
                        
                        
                        
                        11,031
                        
                        
                        
                        13,639
                        
                        
                        
                        21,371Operating
      expenses:Research
      and development
                        
                        
                        2,309
                        
                        
                        
                        2,483
                        
                        
                        
                        4,646
                        
                        
                        
                        5,138Sales
      and marketing
                        
                        
                        1,961
                        
                        
                        
                        1,781
                        
                        
                        
                        3,846
                        
                        
                        
                        3,850General
      and administrative
                        
                        
                        1,603
                        
                        
                        
                        1,479
                        
                        
                        
                        3,301
                        
                        
                        
                        2,546Restructuring (credit)
      charge
                        
                        
                        (5
                        )
                        
                        
                        306
                        
                        
                        
                        (23
                        )
                        
                        
                        584Total
      operating expenses
                        
                        
                        5,868
                        
                        
                        
                        6,049
                        
                        
                        
                        11,770
                        
                        
                        
                        12,118Operating
      income
                        
                        
                        1
                        
                        
                        
                        4,982
                        
                        
                        
                        1,869
                        
                        
                        
                        9,253Interest
      income, net
                        
                        
                        337
                        
                        
                        
                        555
                        
                        
                        
                        801
                        
                        
                        
                        910Gain
      (loss) on revaluation of warrants
                        
                        
                        625
                        
                        
                        
                        3,104
                        
                        
                        
                        3,079
                        
                        
                        
                        (4,238
                        )Other
      income, net
                        
                        
                        476
                        
                        
                        
                        29
                        
                        
                        
                        1,334
                        
                        
                        
                        305Income
      before provision for income taxes
                        
                        
                        1,439
                        
                        
                        
                        8,670
                        
                        
                        
                        7,083
                        
                        
                        
                        6,230Provision
      for income taxes
                        
                        
                        (4
                        )
                        
                        
                        (230
                        )
                        
                        
                        (287
                        )
                        
                        
                        (286
                        )Net
      income
                        
                        $
                        1,435
                        
                        
                        $
                        8,440
                        
                        
                        $
                        6,796
                        
                        
                        $
                        5,944Basic
      net income per share
                        
                        $
                        0.01
                        
                        
                        $
                        0.08
                        
                        
                        $
                        0.06
                        
                        
                        $
                        0.06Diluted
      net income per share
                        
                        $
                        0.01
                        
                        
                        $
                        0.08
                        
                        
                        $
                        0.06
                        
                        
                        $
                        0.05Shares
      used in computing:Weighted
      average shares-basic
                        
                        
                        109,300
                        
                        
                        
                        107,424
                        
                        
                        
                        109,131
                        
                        
                        
                        107,047Weighted
      average shares-diluted
                        
                        
                        110,308
                        
                        
                        
                        111,035
                        
                        
                        
                        110,387
                        
                        
                        
                        110,027Comprehensive
      income:Net
      income
                        
                        $
                        1,435
                        
                        
                        $
                        8,440
                        
                        
                        $
                        6,796
                        
                        
                        $
                        5,944Other
      comprehensive (loss) gain, net of tax:Foreign
      currency translation adjustment
                        
                        
                        (311
                        )
                        
                        
                        106
                        
                        
                        
                        (306
                        )
                        
                        
                        80Total
      comprehensive income
                        
                        $
                        1,124
                        
                        
                        $
                        8,546
                        
                        
                        $
                        6,490
                        
                        
                        $
                        6,024
 See Accompanying Notes to Condensed
Consolidated Financial Statements
  ~ 2
~
 Table of Contents
   BROADVISION, INC. AND SUBSIDIARIESCONDENSED
      CONSOLIDATED STATEMENTS OF CASH FLOWS(In thousands, Unaudited)
 Six
      Months Ended June 30,2008
                        
                        
                        2007Cash
      flows from operating activities:Net
      income
                        
                        $
                        6,796
                        
                        
                        $
                        5,944Adjustments
      to reconcile net income to net cash provided by operating
      activities:Depreciation
      and amortization
                        
                        
                        130
                        
                        
                        
                        609Reversal
      of accounts receivable allowance
                        
                        
                        (72
                        )
                        
                        
                        (637
                        )Stock-based
      compensation
                        
                        
                        474
                        
                        
                        
                        593(Gain) / loss
      on revaluation of warrants
                        
                        
                        (3,079
                        )
                        
                        
                        4,238Changes
      in operating assets and liabilities:Accounts
      receivable
                        
                        
                        657
                        
                        
                        
                        2,103Prepaid
      and other current assets
                        
                        
                        (567
                        )
                        
                        
                        (445
                        )Other
      non-current assets
                        
                        
                        (16
                        )
                        
                        
                        6Accounts
      payable and accrued expenses
                        
                        
                        (260
                        )
                        
                        
                        (1,259
                        )Restructuring
      accrual
                        
                        
                        (245
                        )
                        
                        
                        (406
                        )Unearned
      revenue and deferred maintenance
                        
                        
                        1,416
                        
                        
                        
                        (1,668
                        )Other
      non-current liabilities
                        
                        
                        (252
                        )
                        
                        
                        (596
                        )Net
      cash provided by operating activities
                        
                        
                        4,982
                        
                        
                        
                        8,482Cash
      flows from investing activities:Purchases
      of property and equipment
                        
                        
                        (22
                        )
                        
                        
                        (413
                        )Purchases
      of short-term investments
                        
                        
                        (3,486
                        )
                        
                        
                        -Transfer
      from restricted cash
                        
                        
                        -
                        
                        
                        
                        201Net
      cash used for investing activities
                        
                        
                        (3,508
                        )
                        
                        
                        (212
                        )Cash
      flows from financing activities:Proceeds
      from issuance of common stock, net
                        
                        
                        465
                        
                        
                        
                        814Net
      cash provided by financing activities
                        
                        
                        465
                        
                        
                        
                        814Effect
      of exchange rates on cash and cash equivalents
                        
                        
                        (306
                        )
                        
                        
                        80Net
      increase in cash and cash equivalents
                        
                        
                        1,633
                        
                        
                        
                        9,164Cash
      and cash equivalents at beginning of period
                        
                        
                        53,973
                        
                        
                        
                        37,003Cash
      and cash equivalents at end of period
                        
                        $
                        55,606
                        
                        
                        $
                        46,167Supplemental
      information of noncash activities:Reclassification
      of tax liability to accumulated deficit
                        
                        $
                        -
                        
                        
                        $
                        388
 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
  There
have been no material changes in our critical accounting policies, estimates and
judgments during the six month period ended June 30, 2008 compared to the
disclosures in Part II, Item 8 of our Annual Report on Form 10-K for the year
ended December 31, 2007, filed with the Securities and Exchange Commission on
February 20, 2008.
   Basis of
Presentation
 The condensed consolidated financial results and related information as of and
for the three and six months ended June 30, 2008 and 2007 are unaudited. The
Condensed Consolidated Balance Sheet at December 31, 2007 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 ("U.S. GAAP"). The
unaudited condensed consolidated financial statements should be reviewed in
conjunction with the audited consolidated financial statements and related notes
contained in our 2007 Annual Report on Form 10-K filed with the SEC on February
20, 2008.
 
 The
accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with U.S. GAAP for interim financial information and with
the instructions in Form 10-Q and Article 10 of Regulation S-X. Accordingly,
these statements do not include all of the information and footnotes required by
U.S. GAAP 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 and six months ended June 30, 2008 are not necessarily
indicative of the results that may be expected for the remainder of the year
ending December 31, 2008 or any future interim period. The condensed
consolidated financial statements include our accounts and our wholly owned
subsidiaries. All significant intercompany accounts and transactions have been
eliminated in the consolidation.
 Use of
Estimates
  The
preparation of our Condensed Consolidated Financial Statements in conformity
with U.S. GAAP 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, we evaluate our estimates, including
those related to allowance for doubtful accounts, stock-based compensation,
investments, goodwill and intangible assets, income taxes and restructuring, as
well as contingencies and litigation. 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
Condensed Consolidated Financial Statements.
  ~ 4
~
 Table of Contents
 Revenue Recognition
  Consulting
revenues are generally accounted for separately from new software license
revenues because the arrangements qualify as service transactions as defined in
Statement of Position (“SOP”) No. 97-2, Software Revenue Recognition(“SOP 97-2”), as amended by 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 more significant
factors considered in determining whether the revenue should be accounted for
separately include the nature of services (i.e., consideration of whether the
services are essential to the functionality of the licensed product), degree of
risk, availability of services from other vendors, timing of payments and impact
of milestones or acceptance criteria on the realizability of the software
license fee. Revenues for consulting services are generally recognized as the
services are performed. If there is a significant uncertainty about the project
completion or receipt of payment for the consulting services, revenue is
deferred until the uncertainty is sufficiently resolved. For the fixed or “not
to exceed” fees contracts, revenue are recognized based on SOP No. 81-1, Accounting for Performance of
Construction-Type and Certain Production-Type Contracts(“SOP
81-1”).  We estimate the proportional performance on contracts on a
basis of utilizing hours incurred to date as a percentage of total estimated
hours to complete the project.
  Maintenance
revenues, which include revenues bundled with software license agreements that
entitle the customers to technical support and future unspecified enhancements
to our products, are deferred and recognized ratably over the related agreement
period, generally twelve months.
 
 Our
consulting services, which consist of consulting, maintenance and training, were
delivered through the BroadVision Global Services (“BVGS”) organization until
December 2007. In January 2008, we renamed BVGS to Worldwide E-Business Solution
Organization (“WebSo”).  In order to support our customers’ expanded
needs relating to recently launched products, WebSo involves more internal
departments than did the BVGS organization.   The services that
we provide are not essential to the functionality of the software. We record
reimbursement from our customers for out-of-pocket expenses as an increase to
services revenues.
 
 Stock-Based
Compensation
 We measure stock-based compensation at the grant date based on the award’s fair
value and recognize the expense ratably over the requisite vesting period, net
of estimated forfeitures, for all stock-based awards granted after January 1,
2006 and all stock- based awards granted prior to, but not vested as of, January
1, 2006.
 We have elected to calculate an award’s
fair value based on the Black-Scholes option pricing model.  The
Black-Scholes model requires various assumptions, including expected option life
and volatility.  If any of the assumptions used in the Black-Scholes
model or the estimated forfeiture rate change significantly, stock-based
compensation expense may differ materially in the future from that recorded in
the current period.
 
 We
currently have in effect the following stock-based compensation plans: the 2006
Equity Incentive Plan (the “Equity Plan”), the 2000 Non-Officer Plan and
Non-plan Grants, and the Employee Stock Purchase Plan (the “Purchase Plan”).
These are described in detail in Note 1 of Notes to Condensed Consolidated
Financial Statements in our 2007 Annual Report on
Form 10-K.
 
 ~ 5
~
 Table of
Contents
 The
following table sets forth the total stock-based compensation expense recognized
in our Condensed Consolidated Income Statements for the three and six months
ended June 30, 2008 and 2007:
 Three
      Months Ended June 30,
                        
                        
                        Six
      Months Ended June 30,2008
                        
                        
                        2007
                        
                        
                        2008
                        
                        
                        2007Cost
      of services
                        
                        $
                        36,245
                        
                        
                        $
                        55,942
                        
                        
                        $
                        73,211
                        
                        
                        $
                        109,764Research
      and development
                        
                        
                        80,890
                        
                        
                        
                        109,993
                        
                        
                        
                        119,778
                        
                        
                        
                        232,229Sales
      and marketing
                        
                        
                        82,316
                        
                        
                        
                        69,269
                        
                        
                        
                        136,053
                        
                        
                        
                        137,201General
      and administrative
                        
                        
                        89,188
                        
                        
                        
                        58,152
                        
                        
                        
                        144,756
                        
                        
                        
                        114,008$
                        288,639
                        
                        
                        $
                        293,356
                        
                        
                        $
                        473,798
                        
                        
                        $
                        593,202
 As of
June 30, 2008, the total compensation cost expense to be recognized related to
the non-vested stock options, net of estimated forfeitures, is approximately
$571,000 for the remainder of year 2008, $1,028,000 for year 2009, $900,000 for
year 2010, and $213,000 for year 2011.
 Earnings Per Share
Information
  Basic net
income (loss) per share is computed using the weighted-average number of shares
of common stock outstanding less shares subject to repurchase. Diluted net
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, and
shares subject to repurchase, if any using the as-if converted method. There
were 8.2 million and 2.7 million potential common shares excluded from the
determination of diluted net income per share for the three months ended June
30, 2008 and 2007, 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 the current market price. We excluded
6.1 million and 3.4 million potential common shares from the determination of
diluted net income per share for the six months ended June 30, 2008 and
2007, 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 net income per share computational data for the periods presented
(in thousands, except per share amounts):
   Three
      Months Ended June 30,
                            
                            
                            Six
      Months Ended June 30,2008
                            
                            
                            2007
                            
                            
                            2008
                            
                            
                            2007Net
      income
                            
                            $
                            1,435
                            
                            
                            $
                            8,440
                            
                            
                            $
                            6,796
                            
                            
                            $
                            5,944Weighted-average
      common shares outstanding used to compute basic net income per
      share
                            
                            
                            109,300
                            
                            
                            
                            107,424
                            
                            
                            
                            109,131
                            
                            
                            
                            107,047Weighted-average
      common equivalent shares from outstanding common stock options and
      warrants
                            
                            
                            8
                            
                            
                            
                            3,611
                            
                            
                            
                            1,256
                            
                            
                            
                            2,980Total
      weighted-average common and common equivalent shares outstanding used to
      compute diluted net income per share
                            
                            
                            109,308
                            
                            
                            
                            111,035
                            
                            
                            
                            110,387
                            
                            
                            
                            110,027Basic
      net income per share
                            
                            $
                            0.01
                            
                            
                            $
                            0.08
                            
                            
                            $
                            0.06
                            
                            
                            $
                            0.06Diluted
      net income per share
                            
                            $
                            0.01
                            
                            
                            $
                            0.08
                            
                            
                            $
                            0.06
                            
                            
                            $
                            0.05
  ~ 6
~
 Table of Contents
 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.
  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 Income
Statements. For the six-month periods ended June 30, 2008, and 2007, translation
(loss) and gain was ($306,000), and $80,000, respectively.  These
amounts are included in the accumulated other comprehensive income (loss)
account in the Condensed Consolidated Balance Sheets.
 Comprehensive Income
(Loss)
  Comprehensive
income (loss) includes net income and other comprehensive income (loss), which
primarily consists of foreign currency translation adjustments. Total
comprehensive income (loss) is presented in the accompanying Condensed
Consolidated Income Statements. Total accumulated other comprehensive income
(loss) is displayed as a separate component of stockholder's equity in the
accompanying Condensed Consolidated Balance Sheets. The accumulated balances of
other comprehensive income (loss) consist of the following, net of taxes
(in thousands):
 Accumulated
      OtherComprehensiveIncome
      (Loss)Balance,
      December 31, 2007
                      
                      $
                      16Net
      change during period
                      
                      
                      (306
                      )Balance,
      June 30, 2008
                      
                      $
                      (290
                      )  Recent Accounting
Pronouncements
  In May
2008, the Financial Accounting Standard Board (“FASB”) issued Statement of
Financial Accounting Standards (“SFAS”) No. 162, The Hierarchy of Generally Accepted
Accounting Principles(“SFAS 162”).SFAS 162 defines
the order in which accounting principles that are generally accepted should be
followed. SFAS 162 is effective 60 days following the SEC’s approval
of the Public Company Accounting Oversight Board amendments to AU
Section 411, The Meaning
of Present Fairly in Conformity with Generally Accepted Accounting
Principles. We do not expect the adoption of SFAS 162 to have a
material impact on our consolidated financial statements.
 In
December 2007, the FASB issued SFAS No. 141 (revised 2007), Business Combination ("SFAS
141R"), which replaces FASB Statement No. 141. SFAS 141R establishes principles
and requirements for how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities assumed, any
noncontrolling interest in the acquiree and the goodwill acquired. SFAS 141R
also establishes disclosure requirements which will enable users to evaluate the
nature and financial effects of the business combination. SFAS 141R is to be
applied prospectively to business combinations for which the acquisition date is
on or after an entity's fiscal year that begins after December 15, 2008. We are
currently evaluating the potential impact, if any, of the adoption of SFAS 141R
on our Condensed Consolidated Financial Statements.
 ~ 7
~
 Table of
Contents
 In
December 2007, the FASB issued SFAS No. 160, Noncontrolling Interests in
Consolidated Financial Statements - an amendment of Accounting Research Bulletin
No. 51 ("SFAS 160"), which establishes accounting and reporting standards
for ownership interests in subsidiaries held by parties other than the parent,
the amount of consolidated net income attributable to the parent and to the
noncontrolling interest, changes in a parent's ownership interest and the
valuation of retained noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS 160 also establishes reporting requirements that provide
sufficient disclosures that clearly identify and distinguish between the
interests of the parent and the interests of the noncontrolling
owners. SFAS 160 is effective as of the beginning of an entity's fiscal
year that begins after December 15, 2008. We are currently evaluating the
potential impact, if any, of the adoption of SFAS 160 on our Condensed
Consolidated Financial Statements.
 
 Effective
January 1, 2008, we adopted the provisions of SFAS 159, The Fair Value Option for Financial
Assets and Financial Liabilities—Including an amendment of FAS 115(“SFAS 159”),which gives a company the option to irrevocably elect to measure certain
financial assets and financial liabilities at fair value on an
instrument-by-instrument basis with the resulting changes in fair value recorded
in earnings. The objective of SFAS 159 is to reduce both the complexity in
accounting for financial instruments and the volatility in earnings caused by
using different measurement attributes for financial assets and financial
liabilities. We chose not to elect the fair value option for our financial
assets and liabilities existing at January 1, 2008, and did not elect the
fair value option on financial assets and liabilities transacted during the six
months ended June 30, 2008. Therefore, the adoption of SFAS 159 had no
impact on our financial statements.
 
 Effective
January 1, 2008, we adopted the provisions of SFAS No. 157, air Value Measurements (“SFAS
157”), for financial assets and liabilities and any other assets and liabilities
carried at fair value.  This pronouncement defines fair value,
establishes a framework for measuring fair value and expands disclosures about
fair value measurements. In February 2008, the FASB agreed to a one-year
deferral for the implementation of SFAS 157 for other non-financial assets and
liabilities. Our adoption of SFAS 157 did not have a material effect on our
financial statements for financial assets and liabilities and any other assets
and liabilities carried at fair value.
 Note 2. Selected Condensed
Consolidated Balance Sheet Detail
  Cash,
Cash Equivalents and Short-term Investments
 We
consider all highly liquid instruments with maturity of three months or less
when purchased to be cash equivalents.   Our cash and cash
equivalents as of June 30, 2008 include $15.0 million in cash and $40.6 million
in money market funds.  Short-term investments include time deposits
that have maturities greater than three months but less than one year. As of
June 30, 2008, all investments are classified as short-term
investments.
 Short-term investments are classified as available-for-sale and are reported at
fair value, with unrealized gains and losses recorded in stockholders' equity as
a component of other comprehensive income/loss. Realized gains and losses on
sales of all investments are reported in results of operations and computed
using the specific identification method.
  Our cash,
cash equivalents, and short-term investments consisted of the following as of
June 30, 2008 and December 31, 2007 (in thousands):
 June
      30, 2008
                      
                      
                      December
      31, 2007Fair
      value
                      
                      
                      Fair
      value(unaudited)Cash
      and cash equivalents
                      
                      $
                      55,606
                      
                      
                      $
                      53,973Short-term
      investments
                      
                      
                      3,486
                      
                      
                      
                      -Total
      cash, cash equivalents, and short-term investments
                      
                      $
                      59,092
                      
                      
                      $
                      53,973 
 ~ 8
~
 Table of
Contents
 Property and equipment
consisted of the following (in thousands):
  June
      30,
                          
                          
                          December
      31,2008
                          
                          
                          2007(unaudited)Furniture
      and fixtures
                          
                          $
                          604
                          
                          
                          $
                          654Computers
      and software
                          
                          
                          5,426
                          
                          
                          
                          5,359Leasehold
      improvements
                          
                          
                          1,300
                          
                          
                          
                          1,2967,330
                          
                          
                          
                          7,309Less
      accumulated depreciation and amortization
                          
                          
                          (6,750
                          )
                          
                          
                          (6,621
                          )Property
      and equipment, net
                          
                          $
                          580
                          
                          
                          $
                          688
  Accrued expenses consisted of the
following (in thousands):
  June
      30,
                          
                          
                          December
      31,2008
                          
                          
                          2007(unaudited)Employee
      benefits
                          
                          $
                          1,248
                          
                          
                          $
                          1,076Commissions
      and bonuses
                          
                          
                          289
                          
                          
                          
                          656Sales
      and other taxes
                          
                          
                          1,223
                          
                          
                          
                          1,245Income
      tax and tax contingency reserves
                          
                          
                          604
                          
                          
                          
                          427Restructuring
                          
                          
                          381
                          
                          
                          
                          439Customer
      advances
                          
                          
                          283
                          
                          
                          
                          288Royalties
                          
                          
                          1,376
                          
                          
                          
                          1,376Other
                          
                          
                          493
                          
                          
                          
                          879Total
      accrued expenses
                          
                          $
                          5,897
                          
                          
                          $
                          6,386
  Note 3. Warrants and Other
Non-Current Liabilities
  Warrants
  As of
June 30, 2008, the following warrants to purchase our common stock were
outstanding:
 Underlying
                        
                        ExerciseShares
                        
                        Price per
      ShareIssued
      to landlord in real estate buyout transaction in
      August 2004
                        
                        
                        700,000
                        
                        $
                        5.00Issued
      to convertible notes investors in November 2004
                        
                        
                        3,865,811
                        
                        $
                        1.48Total
      warrants
                        
                        
                        4,566,431
 Gains
(l osses) on
the revaluation of warrants were recorded as follows (in
thousands):
  Three
      Months Ended June 30,
                      
                      
                      Six
      Months Ended June 30,2008
                      
                      
                      2007
                      
                      
                      2008
                      
                      
                      2007Warrants
      related to the Notes
                      
                      $
                      588
                      
                      
                      $
                      2,794
                      
                      
                      $
                      2,915
                      
                      
                      $
                      (3,866
                      )Warrants
      related to real estate buyout
                      
                      
                      37
                      
                      
                      
                      310
                      
                      
                      
                      164
                      
                      
                      
                      (372
                      )Gain
      (loss) on revaluation of warrants
                      
                      $
                      625
                      
                      
                      $
                      3,104
                      
                      
                      $
                      3,079
                      
                      
                      $
                      (4,238
                      )  ~ 9
~
 Table of Contents
 Other Non-Current
Liabilities
  Other
non-current liabilities consist of the following (in
thousands):
 June
      30,
                          
                          
                          December
      31,2008
                          
                          
                          2007(unaudited)Restructuring
                          
                          $
                          709
                          
                          
                          $
                          895Deferred
      maintenance and unearned revenue
                          
                          
                          1,500
                          
                          
                          
                          1,481Other
                          
                          
                          697
                          
                          
                          
                          648Total
      other non-current liabilities
                          
                          $
                          2,906
                          
                          
                          $
                          3,024
  Note 4. Commitments and
Contingencies
 
 Warranties and
Indemnification
  We
provide a warranty to our customers that our software will perform substantially
in accordance with the documentation we provide with the software, typically for
a period of 90 days following receipt of the software. Historically, costs
related to these warranties have been immaterial. Accordingly, we have not
recorded any warranty liabilities as of June 30, 2008 and December 31,
2007.
 
 Our
software license agreements typically provide for indemnification of customers
for intellectual property infringement claims caused by use of a current release
of our software consistent with the terms of the license agreement. The term of
these indemnification clauses is generally perpetual. The potential future
payments we 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 indemnification provisions have been
immaterial. We also maintain liability insurance that limits our exposure. As a
result, we believe the potential liability of these indemnification clauses is
minimal. Accordingly, we have not recorded any liabilities for these agreements
as of June 30, 2008 and December 31, 2007.
 
 We
entered into agreements whereby we indemnify our 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 we could be required to make under these indemnification agreements may
be unlimited; however, we have a director and officer insurance policy that
limits our exposure and enables us to recover a portion of any future amounts
paid. As a result of our insurance policy coverage, we believe the estimated
fair value of these indemnification agreements is insignificant. Accordingly, we
have no liabilities recorded for these agreements as of either June 30, 2008 or
December 31, 2007. We assess 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
  We lease
our headquarters facility and other facilities under noncancelable operating
lease agreements expiring in or prior to the year 2012. Under the terms of these
agreements, we are required to pay property taxes, insurance and normal
maintenance costs.
 
 ~ 10
~
 Table of
Contents
 A summary
of total future minimum lease payments under noncancelable operating lease
agreements is as follows (in millions):
 OperatingPeriods ending
      June 30,
                      
                      Leases2008
                      
                      $
                      1.02009
                      
                      
                      1.92010
                      
                      
                      1.42011
                      
                      
                      1.22012
      and thereafter
                      
                      
                      0.6Total
      minimum facilities payments
                      
                      $
                      6.1
 These
future minimum lease payments are net of approximately $2.7 million of
sublease income to be received under sublease agreements. As of June 30, 2008,
we have accrued $1.1 million of estimated future facilities costs as a
restructuring accrual.
 
 Standby Letter of Credit
Commitments
  As of June 30, 2008 and December 31,
2007, we had $1.0 million, of outstanding commitments in the form of a
standby letter of credit, in favor of our landlord to secure obligations under
our facility leases.  This standby letter of credit is collateralized
by the restricted cash listed in the Condensed Consolidated Balance
Sheets.
 Note 5. Geographic, Segment and
Significant Customer Information
  We
operate in one segment, electronic business commerce solutions. Our reportable
segment includes our facilities in North and South America (Americas), Europe
and Asia Pacific and the Middle East (Asia/Pacific). We consider our CEO to be
our chief operating decision-maker. Our 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
                      
                      
                      Six
      Months EndedJune
      30,
                      
                      
                      June
      30,2008
                      
                      
                      2007
                      
                      
                      2008
                      
                      
                      2007Software
      licenses
                      
                      $
                      2,448
                      
                      
                      $
                      5,494
                      
                      
                      $
                      6,425
                      
                      
                      $
                      11,228Consulting
      services
                      
                      
                      1,247
                      
                      
                      
                      1,852
                      
                      
                      
                      2,751
                      
                      
                      
                      3,138Maintenance
                      
                      
                      4,335
                      
                      
                      
                      5,922
                      
                      
                      
                      8,884
                      
                      
                      
                      11,647Total
      revenues
                      
                      $
                      8,030
                      
                      
                      $
                      13,268
                      
                      
                      $
                      18,060
                      
                      
                      $
                      26,013
 We sell
our products and provide services worldwide through a direct sales force and
through a channel of independent distributors, value-added resellers ("VARs")
and Application Service Providers (“ASP”). In addition, the sales of our
products are promoted through independent professional consulting organizations
known as systems integrators. We provided services worldwide through our BVGS
Organization until December 2007 and in January 2008 renamed the organization
WebSo.  In order to support our customers’ expanded needs relating to
recently launched products, WebSo involves more internal departments than did
the BVGS organization.   We also provide services worldwide
indirectly through distributors, VARs, ASPs, and systems integrators. We
currently operate in three primary geographical territories: Americas, Europe
and Asia/Pacific.
  ~ 11
~
 Table of
Contents
 Disaggregated
financial information regarding our geographic revenues and long-lived assets is
as follows (in thousands):
  Three
      Months Ended
                      
                      
                      Six
      Months EndedJune
      30,
                      
                      
                      June
      30,2008
                      
                      
                      2007
                      
                      
                      2008
                      
                      
                      2007Revenues:Americas
                      
                      $
                      4,111
                      
                      
                      $
                      8,498
                      
                      
                      $
                      9,037
                      
                      
                      $
                      15,408Europe
                      
                      
                      2,759
                      
                      
                      
                      2,808
                      
                      
                      
                      6,428
                      
                      
                      
                      6,818Asia/Pacific
                      
                      
                      1,160
                      
                      
                      
                      1,962
                      
                      
                      
                      2,595
                      
                      
                      
                      3,787Total
      revenues
                      
                      $
                      8,030
                      
                      
                      $
                      13,268
                      
                      
                      $
                      18,060
                      
                      
                      $
                      26,013 
 June
      30,
                        
                        
                        December
      31,2008
                        
                        
                        2007Long-Lived
      Assets:
                        
                        (unaudited)Americas
                        
                        $
                        25,483
                        
                        
                        $
                        25,581Europe
                        
                        
                        42
                        
                        
                        
                        62Asia/Pacific
                        
                        
                        121
                        
                        
                        
                        111Total
      long-lived assets
                        
                        $
                        25,646
                        
                        
                        $
                        25,754   For
the three-month and six-month periods ended June 30, 2008, no single customer
accounted for more than 10% of our revenues. For the three-month and
six-month periods ended June 30, 2007, no single customer accounted for more
than 10% of our revenues.
 Note 6. Restructuring
Charges
 
 As
of June 30, 2008, the total restructuring accrual of $1.1 million consisted of
the following (in millions):
  Current
                        
                        Non-Current
                        
                        TotalExcess
      Facilities
                        
                        
                        0.4
                        
                        
                        0.7
                        
                        
                        1.1
 We
expect to pay the excess facilities amounts related to restructured or abandoned
leased space as follows (in millions):
  Total
      FutureMinimumYears
      ending December 31,
                      
                      Payments2008
                      
                      $
                      0.32009
                      
                      
                      0.42010
                      
                      
                      0.22011
                      
                      
                      0.12012
      and thereafter
                      
                      
                      0.1Total
      minimum facilities payments
                      
                      $
                      1.1
 ~ 12
~
 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 No. 146, Accounting
for Costs Associated with Exit or Disposal Activities (in
thousands):
 AmountsAccrued
                      
                      
                      Charged
      toRestructuring
                      
                      
                      Restructuring
                      
                      
                      
                      
                      
                      AccruedCosts
                      
                      
                      Costs
                      
                      
                      Amounts
      Paid
                      
                      
                      RestructuringBeginning
                      
                      
                      and
      Other
                      
                      
                      or
      Written Off
                      
                      
                      Costs,
      EndingThree
      Months Ended June 30, 2008Lease
      cancellations and commitments
                      
                      $
                      (5
                      )
                      
                      $
                      39
                      
                      
                      $
                      12
                      
                      
                      $
                      46Three
      Months Ended June 30, 2007Lease
      cancellations and commitments
                      
                      $
                      118
                      
                      
                      $
                      2
                      
                      
                      $
                      (62
                      )
                      
                      $
                      59Six
      Months Ended June 30, 2008Lease
      cancellations and commitments
                      
                      $
                      8
                      
                      
                      $
                      12
                      
                      
                      $
                      26
                      
                      
                      $
                      46Six
      Months Ended June 30, 2007Lease
      cancellations and commitments
                      
                      $
                      77
                      
                      
                      $
                      113
                      
                      
                      $
                      (131
                      )
                      
                      $
                      59
 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 Emerging Issues Task Force Issue No. 94-3, Liability Recognition for Certain
Employee Termination Benefits and Other Costs to Exit an Activity (including
Certain Costs Incurred in a Restructuring)  (in
thousands):
 AmountsAccrued
                      
                      
                      Charged
      toRestructuring
                      
                      
                      Restructuring
                      
                      
                      
                      
                      
                      AccruedCosts,
                      
                      
                      Costs
                      
                      
                      Amounts
      Paid
                      
                      
                      RestructuringBeginning
                      
                      
                      and
      Other
                      
                      
                      or
      Written Off
                      
                      
                      Costs,
      EndingThree
      Months Ended June 30, 2008Lease
      cancellations and commitments
                      
                      $
                      1,216
                      
                      
                      $
                      (51
                      )
                      
                      $
                      (122
                      )
                      
                      $
                      1,043Three
      Months Ended June 30, 2007Lease
      cancellations and commitments
                      
                      $
                      1,966
                      
                      
                      $
                      300
                      
                      
                      $
                      (525
                      )
                      
                      $
                      1,741Termination
      payments to employees and related costs
                      
                      
                      352
                      
                      
                      
                      4
                      
                      
                      
                      -
                      
                      
                      
                      356$
                      2,318
                      
                      
                      $
                      304
                      
                      
                      $
                      (525
                      )
                      
                      $
                      2,097Six
      Months Ended June 30, 2008Lease
      cancellations and commitments
                      
                      $
                      1,326
                      
                      
                      $
                      (42
                      )
                      
                      $
                      (241
                      )
                      
                      $
                      1,043Six
      Months Ended June 30, 2007Lease
      cancellations and commitments
                      
                      $
                      2,138
                      
                      
                      $
                      462
                      
                      
                      $
                      (859
                      )
                      
                      $
                      1,741Termination
      payments to employees and related costs
                      
                      
                      347
                      
                      
                      
                      9
                      
                      
                      
                      -
                      
                      
                      
                      356$
                      2,485
                      
                      
                      $
                      471
                      
                      
                      $
                      (859
                      )
                      
                      $
                      2,097
 Note 7. Related Party
Transactions
  In June
2007, we executed a software license agreement with a third party in which Dr.
Pehong Chen, our CEO and largest stockholder, is a board member. In March 2008,
we executed a renewal of the license agreement and we recognized license revenue
starting April 1, 2008.  The contract value of the renewed agreement
is $62,000.  As of June 30, 2008, we recognized revenue of
approximately $16,000.
 ~ 13
~
 Table of
Contents
 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.
 Critical Accounting Policies,
Estimates and Judgments
  There
have been no material changes in our critical accounting policies, estimates and
judgments during the six month period ended June 30, 2008 compared to the
disclosures in Part II, Item 8 of our Annual Report on Form 10-K for the year
ended December 31, 2007, other than as disclosed herein.
   Revenue
Recognition
  Consulting
revenues are generally accounted for separately from new software license
revenues because the arrangements qualify as service transactions as defined in
SOP 97-2. The more significant factors considered in determining whether the
revenue should be accounted for separately include the nature of services (i.e.,
consideration of whether the services are essential to the functionality of the
licensed product), degree of risk, availability of services from other vendors,
timing of payments and impact of milestones or acceptance criteria on the
realizability of the software license fee. Revenues for consulting services are
generally recognized as the services are performed. If there is a significant
uncertainty about the project completion or receipt of payment for the
consulting services, revenue is deferred until the uncertainty is sufficiently
resolved. For the fixed or “not to exceed” fees contracts, revenue are
recognized based on SOP 81-1.  We estimate the proportional
performance on contracts on a basis of utilizing hours incurred to date as a
percentage of total estimated hours to complete the project.
  Maintenance
revenues, which include revenues bundled with software license agreements that
entitle the customers to technical support and future unspecified enhancements
to our products, are deferred and recognized ratably over the related agreement
period, generally twelve months.
 
 Our
consulting services, which consist of consulting, maintenance and training, were
delivered through the BVGS organization until December 2007. In January 2008, we
renamed BVGS to WebSo.  In order to support our customers’ expanded
needs relating to recently launched products, WebSo involves more internal
departments than did the BVGS organization.    The services
that we provide are not essential to the functionality of the software. We record reimbursement from our customers for
out-of-pocket expenses as an increase to services
revenues.
 ~ 14
~
 Table of Contents
  Results of
Operations
  Revenues
 Total revenuesdecreased 40% during the three months ended June 30,
2008, to $8.0 million, as compared to $13.3 million for the three months
ended June 30, 2007. Total revenues decreased 31% during the six months ended
June 30, 2008, to $18.1 million, as compared to $26.0 million for the
six months ended June 30, 2007. A summary of our revenues by geographic
region is as follows (dollars in thousands,
unaudited):
 SoftwareLicenses
                      
                      
                      %
                      
                      
                      Services
                      
                      
                      %
                      
                      
                      Total
                      
                      
                      %Three
      Months Ended:June
      30, 2008Americas
                      
                      $
                      1,410
                      
                      
                      
                      58
                      %
                      
                      $
                      2,701
                      
                      
                      
                      48
                      %
                      
                      $
                      4,111
                      
                      
                      
                      51
                      %Europe
                      
                      
                      753
                      
                      
                      
                      31
                      
                      
                      
                      2,006
                      
                      
                      
                      36
                      
                      
                      
                      2,759
                      
                      
                      
                      35Asia
      Pacific
                      
                      
                      285
                      
                      
                      
                      11
                      
                      
                      
                      875
                      
                      
                      
                      16
                      
                      
                      
                      1,160
                      
                      
                      
                      14Total
                      
                      $
                      2,448
                      
                      
                      
                      100
                      %
                      
                      $
                      5,582
                      
                      
                      
                      100
                      %
                      
                      $
                      8,030
                      
                      
                      
                      100
                      %June
      30, 2007Americas
                      
                      $
                      3,302
                      
                      
                      
                      60
                      %
                      
                      $
                      5,196
                      
                      
                      
                      67
                      %
                      
                      $
                      8,498
                      
                      
                      
                      64
                      %Europe
                      
                      
                      1,368
                      
                      
                      
                      25
                      
                      
                      
                      1,440
                      
                      
                      
                      19
                      
                      
                      
                      2,808
                      
                      
                      
                      21Asia
      Pacific
                      
                      
                      824
                      
                      
                      
                      15
                      
                      
                      
                      1,138
                      
                      
                      
                      14
                      
                      
                      
                      1,962
                      
                      
                      
                      15Total
                      
                      $
                      5,494
                      
                      
                      
                      100
                      %
                      
                      $
                      7,774
                      
                      
                      
                      100
                      %
                      
                      $
                      13,268
                      
                      
                      
                      100
                      %Six
      Months Ended:June
      30, 2008Americas
                      
                      $
                      3,568
                      
                      
                      
                      56
                      %
                      
                      $
                      5,469
                      
                      
                      
                      47
                      %
                      
                      $
                      9,037
                      
                      
                      
                      50
                      %Europe
                      
                      
                      1,964
                      
                      
                      
                      30
                      
                      
                      
                      4,464
                      
                      
                      
                      38
                      
                      
                      
                      6,428
                      
                      
                      
                      36Asia
      Pacific
                      
                      
                      893
                      
                      
                      
                      14
                      
                      
                      
                      1,702
                      
                      
                      
                      15
                      
                      
                      
                      2,595
                      
                      
                      
                      14Total
                      
                      $
                      6,425
                      
                      
                      
                      100
                      %
                      
                      $
                      11,635
                      
                      
                      
                      100
                      %
                      
                      $
                      18,060
                      
                      
                      
                      100
                      %June
      30, 2007Americas
                      
                      $
                      6,414
                      
                      
                      
                      57
                      %
                      
                      $
                      8,994
                      
                      
                      
                      61
                      %
                      
                      $
                      15,408
                      
                      
                      
                      59
                      %Europe
                      
                      
                      3,222
                      
                      
                      
                      29
                      
                      
                      
                      3,596
                      
                      
                      
                      24
                      
                      
                      
                      6,818
                      
                      
                      
                      26Asia
      Pacific
                      
                      
                      1,592
                      
                      
                      
                      14
                      
                      
                      
                      2,195
                      
                      
                      
                      15
                      
                      
                      
                      3,787
                      
                      
                      
                      15Total
                      
                      $
                      11,228
                      
                      
                      
                      100
                      %
                      
                      $
                      14,785
                      
                      
                      
                      100
                      %
                      
                      $
                      26,013
                      
                      
                      
                      100
                      %
 
 We
experienced declines in revenues as a result of a decline in general economic
conditions and the fact that we operate in a very competitive
industry.  Financial comparisons discussed herein may not be
indicative of future performance.  We believe one of our major
remaining challenges is increasing prospective customers’ prioritization of
purchasing our products and services over competing IT projects.
  Software license
revenuesdecreased 55% during
the three months ended June 30, 2008, to $2.4 million, as compared to
$5.5 million for the three months ended June 30, 2007.  Software
license revenues decreased 43% during the six months ended June 30, 2008,
to $6.4 million, as compared to $11.2 million for the six months ended
June 30, 2007.  The decrease was caused primarily by a shift in
our core business focus to attracting a balanced portfolio of new customers, as
well as a weak economy.  Economic uncertainties also negatively
impacted the timing of spending decisions and the spending level of prospective
customers.   We attribute the decline to a delay in spending as
our customers adjust to the uncertain economic climate, particularly those in
the financial services and government segments.  We believe our sales
of products to the financial services sector may have also been adversely
affected by the deterioration of the mortgage markets and corresponding adverse
effects on our potential customers.
 ~ 15
~
 Table of
Contents
 Services revenuesconsisting of
consulting revenues, customer training revenues and maintenance revenues
decreased 28% during the three months ended June 30, 2008, to $5.6 million, as
compared to $7.8 million for the three months ended June 30, 2007. Services
revenues (including maintenance and consulting) decreased 21% during the six
months ended June 30, 2008, to $11.6 million, as compared to
$14.8 million for the six months ended June 30, 2007. The decrease in
service revenues was mainly attributable to lower maintenance revenues.
Maintenance revenues decreased 27% for the three months ended June 30, 2008, to
$4.3 million, as compared to $5.9 million for the three months ended
June 30, 2007.  Maintenance revenues decreased 23% for the six months
ended June 30, 2008, to $8.9 million, as compared to $11.6 million for
the six months ended June 30,2007.  This decrease in maintenance
revenues was due to a decline in demand for additional licenses by
customers.  Consulting and training revenues decreased 33% for the
three months ended June 30, 2008, to $1.2 million, as compared to
$1.8 million for the three months ended June 30,
2007.  Consulting revenues decreased 10% for the six months ended
June 30, 2008, to $2.8 million, as compared to $3.1 million for
the six months ended June 30, 2007. This decrease in consulting revenues
was attributable to a decline in demand for new licenses from our customers.
Consulting revenues tend to trail license revenues by 6 to 12
months.
 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 June 30,
                      
                      
                      Six
      Months Ended June 30,2008
                      
                      
                      
                      %
                      (1)
                      
                      2007
                      
                      
                      
                      %
                      (1)
                      
                      2008
                      
                      
                      
                      %
                      (1)
                      
                      2007
                      
                      
                      
                      %
                      (1)Cost
      of software licenses
                      
                      $
                      6
                      
                      
                      
                      -
                      %
                      
                      $
                      22
                      
                      
                      
                      -
                      %
                      
                      $
                      13
                      
                      
                      
                      -
                      %
                      
                      $
                      34
                      
                      
                      
                      -
                      %Cost
      of services
                      
                      
                      2,155
                      
                      
                      
                      27
                      %
                      
                      
                      2,215
                      
                      
                      
                      17
                      %
                      
                      
                      4,408
                      
                      
                      
                      24
                      %
                      
                      
                      4,608
                      
                      
                      
                      18
                      %Total
      cost of revenues
                      
                      $
                      2,161
                      
                      
                      
                      27
                      %
                      
                      $
                      2,237
                      
                      
                      
                      17
                      %
                      
                      $
                      4,421
                      
                      
                      
                      24
                      %
                      
                      $
                      4,642
                      
                      
                      
                      18
                      %
 (1)
                          Expressed
      as a percent of total revenues for the period
  indicated.
 Cost of software licensesdecreased 73% during the three months ended June 30, 2008, to $6,000, as
compared to $22,000 for the three months ended June 30, 2007.  Cost of
software licenses decreased 62% during the six months ended June 30, 2008,
to $13,000, as compared to $34,000 for the six months ended June 30,
2007.  This decrease is primarily a result of a decrease in the
portion of license revenues generated from royalty-bearing
products.
  Cost of servicesdecreased 3%
during the three months ended June 30, 2008, to $2.1 million, as compared
to $2.2 million for the three months ended June 30,
2007.   Cost of servicesdecreased 4% during the
six months ended June 30, 2008, to $4.4 million, as compared to
$4.6 million for the six months ended June 30, 2007.  This
decrease was the result of the reduction in consulting expenses and less
services revenue.
  Gross margindecreased to 73%
during the three months ended June 30, 2008 from 83% for the three months ended
June 30, 2007. Gross margin decreased to 76% during the six months ended
June 30, 2008 from 82% for the six months ended June 30,
2007.  This decrease is a result of a decline in total revenues along
with steady cost of revenues.
  ~ 16
~
 Table
of Contents
 A
summary of operating expenses, including as a percentage of total revenues, is
set forth in the following table (dollars in thousands, unaudited):
  Three
      Months Ended
                        
                        
                        Six
      Months EndedJune
      30,
                        
                        
                        June
      30,2008
                        
                        
                        
                        %
                        (1)
                        
                        2007
                        
                        
                        
                        %
                        (1)
                        
                        2008
                        
                        
                        
                        %
                        (1)
                        
                        2007
                        
                        
                        
                        %
                        (1)Research
      and development
                        
                        $
                        2,309
                        
                        
                        
                        29
                        %
                        
                        $
                        2,483
                        
                        
                        
                        19
                        %
                        
                        $
                        4,646
                        
                        
                        
                        26
                        %
                        
                        $
                        5,138
                        
                        
                        
                        20
                        %Sales
      and marketing
                        
                        
                        1,961
                        
                        
                        
                        24
                        
                        
                        
                        1,781
                        
                        
                        
                        13
                        
                        
                        
                        3,846
                        
                        
                        
                        21
                        
                        
                        
                        3,850
                        
                        
                        
                        15General
      and administrative
                        
                        
                        1,603
                        
                        
                        
                        20
                        
                        
                        
                        1,479
                        
                        
                        
                        11
                        
                        
                        
                        3,301
                        
                        
                        
                        18
                        
                        
                        
                        2,546
                        
                        
                        
                        10Restructuring
      charges
                        
                        
                        (5
                        )
                        
                        
                        -
                        
                        
                        
                        306
                        
                        
                        
                        2
                        
                        
                        
                        (23
                        )
                        
                        
                        -
                        
                        
                        
                        584
                        
                        
                        
                        2Total
      operating expenses
                        
                        $
                        5,868
                        
                        
                        
                        73
                        %
                        
                        $
                        6,049
                        
                        
                        
                        45
                        %
                        
                        $
                        11,770
                        
                        
                        
                        65
                        %
                        
                        $
                        12,118
                        
                        
                        
                        47
                        %
 (1)
                      Expressed
      as a percent of total revenues for the period
  indicated.
 Research and
development expensesdecreased 8% during the three months ended June 30,
2008, to $2.3 million, as compared to $2.5 million for the three
months ended June 30, 2007.  Research and development expenses
decreased 10% during the six months ended June 30, 2008, to
$4.6 million, as compared to $5.1 million for the six months ended
June 30, 2007.  During the six months ended June 30, 2008, we
increased our headcount from our China operation and reduced our overall
contractor expense.  The net result of these activities has been an
overall research and development expense reduction for the six months ended
June 30, 2008.
  Sales and marketing expensesincreased 11% during
the three months ended June 30, 2008, to $2.0 million, as compared to $1.8
million for the three months ended June 30, 2007.  The increase was
the result of the expansion of our sales and marketing functions during the
second quarter of 2008.  Sales and marketing expensesdecreased
3% during the six months ended June 30, 2008, to $3.8 million, as compared
to $3.9 million for the six months ended June 30, 2007.  This
decrease was the result of minor cost reductions in a number of areas, including
a reduction in consultant cost during the six months ended June 30,
2008.
  General and administrative expensesincreased 7% during the
three months ended June 30, 2008, to $1.6 million, as compared to $1.5 million
for the three months ended June 30, 2007.  General and administrative
expensesincreased 32% during the six months ended
June 30, 2008, to $3.3 million, as compared to $2.5 million for
the six months ended June 30, 2007. This increase is primarily as a
result of a one-time reduction of approximately $550,000 due to a settlement
with our telephone provider for the six months ended June 30,
2007.
  Interest income, netdecreased 39% for the three months ended
June 30, 2008, to $337,000, as compared to $555,000 for the three months ended
June 30, 2007.  Interest income, net decreased 12% for the six months
ended June 30, 2008, to $801,000, as compared to $910,000 for the six
months ended June 30, 2007.  The decrease is due to a decline in
interest rates.
  Gain on revaluation of warrantsdecreased 80% for the three months ended
June 30, 2008, to $625,000, as compared to a gain of $3,104,000 for the three
months ended June 30, 2007.   Gain on revaluation of warrantswas $3,079,000 for the
six months ended June 30, 2008 as compared to loss on revaluation of
warrants of $4,238,000 for the six months ended June 30,
2007.  These changes are primarily due to fluctuations in our stock
price during the relevant periods.
 Other income, net,increased 1541%
during the three months ended June 30, 2008, to $476,000, as compared to $29,000
for the three months ended June 30, 2007.  Other income, net,increased 326% for the
six months ended June 30, 2008, to $1.3 million, as compared to $305,000
for the six months ended June 30, 2007.  The changes were
primarily due to unrealized gains on the foreign exchange
transactions.
  Provision for income taxes expensedecreased 98% during the three months
ended June 30, 2008, to $4,000, as compared to a provision of $230,000 for the
three months ended June 30, 2007.  Provision for income taxes was
$287,000 for the six months ended June 30, 2008 as compared to a provision of
$286,000 for the six months ended June 30, 2007. The provision primarily
relates to Alternative Minimum Taxes (AMT) calculated at both Federal and State
levels after application of net operating loss (NOL) carryforwards.  The
decrease is primarily due to changes in the amount of income generated from
certain jurisdictions in the second quarter of year 2008.
 ~ 17
~
 Table of
Contents
  Liquidity and Capital
Resources
  Overview
  Our
consolidated balance sheet strengthened considerably throughout 2007 and in the
first half of 2008 compared to prior periods.  As of June 30, 2008, we
had $55.6 million of cash and cash equivalents and $3.5 million short-term
investment, with no long-term debt borrowings. This compares with a balance of
$54.0 million at December 31, 2007. The increase was due primarily to the $5.0
million cash generated from our operations in the six months ended June 30,
2008.
  Revenues
for the first six months of 2008 were $18.1 million, compared to revenues of
$26.0 million for the first six months of 2007. License revenue for the first
six months of 2008 was $6.4 million compared to $11.2 million for the first six
months of 2007. The majority of our license revenue for the first six months of
2008 was generated by our core Business Agility SuiteTM, Commerce Agility SuiteTM
and eMerchandisingTM solutions and from customers such as Saipem SPA, Zain,
Raiffeisen Hungary and several other international customers. License revenues
decreased in all regions as compared to the first six months of 2007. The
decline in revenue was caused primarily by a shift in our core business focus to
attracting a balanced portfolio of new customers, as well as a weak
economy.  We attribute the overall decline in revenues in part to the
general economic slowdown in 2008.
 We
continued to focus on expense control in the second quarter of 2008. Operating
expenses for the second quarter of 2008 were $5.9 million, as compared to $6.1
million for the second quarter of 2007. For the three months ended of June 30,
2008 and 2007, we had a gain of $625,000 and of $3.1 million, respectively, on
the revaluation of warrants. As a result, for the three months ended June 30,
2008, net income was $1.4 million, or $0.01 per diluted share. This compares to
net income of $8.4 million, or $0.08 per diluted share, for the three months
ended June 30, 2007.
 
 The
following table represents our liquidity at June 30, 2008 and December 31, 2007
(dollars in thousands):
 June
      30,
                      
                      
                      December
      31,2008
                      
                      
                      2007(unaudited)Cash
      and cash equivalents
                      
                      $
                      55,606
                      
                      
                      $
                      53,973Restricted
      cash, current portion
                      
                      $
                      20
                      
                      
                      $
                      20Short-term
      investments
                      
                      $
                      3,486
                      
                      
                      $
                      -Working
      capital
                      
                      $
                      47,897
                      
                      
                      $
                      40,494Working
      capital ratio
                      
                      
                      3.37
                      
                      
                      
                      2.80
  Cash Provided By Operating
Activities
  Cash
provided by operating activities was $5.0 million for the six months ended June
30, 2008. Net cash provided by operating activities in this period consisted
primarily of $3.5 million in operating profit (excluding restructuring charges
and revaluation of warrants) generated from sales margin improvement and
company-wide cost reduction efforts, plus the increase of $1.5 million in the
other areas, such as accounts payable, accrued expenses, unearned revenue
accounts, accounts receivable and other liabilities.
  Cash
provided by operating activities was $8.5 million for the six months ended June
30, 2007. Net cash provided by operating activities in this period consisted
primarily of $9.8 million in operating profit (excluding restructuring charges)
generated from sales margin improvement and company-wide cost reduction efforts,
offset by payment of $1.3 million of accounts payable and accrued expenses and
reduction in accounts receivable and unearned revenue accounts.
 ~ 18
~
 Table of
Contents
 Cash
Used For Investing Activities
  Cash used for investing activities was
$3.5 million for the six months ended June 30, 2008. This figure reflects a $3.5
million  investment in a 6-month Time Deposit. Cash used for investing
activities was $212,000 for the six months ended June 30, 2007. This figure
reflects the release of $201,000 of restricted cash, offset by $413,000 in
expenditures for the purchase of property and equipment and leasehold
improvements related to the relocation of our corporate
headquarters.
  Cash
Provided By Financing Activities
  Cash
provided by financing activities was $465,000 for the six months ended June 30,
2008, primarily consisting of cash received in connection with the exercise of
stock options and employees’ purchases of common stock under the Employee Stock
Purchase Plan. Cash provided by financing activities was $814,000 for the six
months ended June 30, 2007, primarily consisting of cash received in connection
with employees' exercise of stock options and purchases of stock.
  Leases
and Other Contractual Obligations
  We lease
our headquarters facility and other facilities under non-cancelable operating
lease agreements expiring through the year 2012. $1.0 million of restricted cash
as shown on our Condensed Consolidated Balance Sheets represents collateral for
the letter of credit.  This letter of credit has been issued in
connection with our facility lease obligation.
 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 June 30,
2008 and 2007. 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.
  Item 4. Controls and Procedures
  Evaluation of Disclosure Controls
and Procedures
 
 Our Chief
Executive Officer and our Chief Financial Officer have concluded, based on an
evaluation of the effectiveness of our disclosure controls and procedures (as
defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of
1934, as amended) by our management, with the participation of our Chief
Executive Officer and our Chief Financial Officer, that our disclosure controls
and procedures were effective at the reasonable assurance level as of the end of
the period covered by this report.
 
 Changes
in Internal Control over Financial Reporting
  There has
been no change in our internal control over financial reporting during the
quarter ended June 30, 2008 that has materially affected, or is reasonably
likely to materially affect, our internal control over financial
reporting.
 
 Limitations
on the Effectiveness of Controls
  Our
management, including our Chief Executive Officer and Chief Financial Officer,
does not expect that our disclosure controls and procedures or our internal
controls will prevent all errors and all 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 our Company have been detected.
 ~ 19
~
 Table of
Contents
 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
have recently generated positive operating income and cash flow, we have
incurred substantial cumulative net operating losses and negative cash flows
from operations since 2000. As of June 30, 2008, 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.
 
 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.
  ~ 20
~
 Table of
Contents
 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.
 
 In early
2007, we introduced a product roadmap that included new products, services and
technologies, to complement and replace certain of our existing products,
services and technologies.  We formally released the BroadVision 8.1
version at the end of the third quarter of 2007. We have spent significant
resources in developing these offerings and training our employees to implement
and support the offerings, and we plan to add additional sales and marketing
resources to support these new products, services and technologies.  We do
not yet know whether any of these new offerings will appeal 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 the BroadVision
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.  Although 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.
  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.
  Prior to
year 2006 our quarterly operating results have varied significantly and are
likely to continue to vary significantly in the future even though our recent
quarterly operating results have relatively stabilized. We cannot guarantee that
our quarterly operating results in the future will not fluctuate significantly.
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 may
continue to experience significant fluctuations in our future 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.
  ~ 21
~
 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.
  If we are unable to maintain our
disclosure controls and procedures, including our internal control over
financial reporting, our ability to report our financial results on a timely and
accurate basis may be adversely affected.
  We have
evaluated our disclosure controls and procedures as such term is defined in Rule
13a-15(e) under the Securities Exchange Act of 1934, as well as our internal
control over financial reporting as required by Section 404 of the
Sarbanes-Oxley Act of 2002. Our independent registered public accounting firm
has performed a similar evaluation of our internal control over financial
reporting. Effective controls are necessary for us to provide reliable financial
reports and effectively prevent fraud. If we cannot provide reliable financial
reports or prevent fraud, our operating results could be harmed. As of
December 31, 2007, we concluded that our internal controls over financial
reporting were effective, as further described below in Item 9A, Controls
and Procedures.
  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. GAAP. 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. Despite taking a variety of remedial
measures, we were unable to conclude that no material weakness existed as of
December 31, 2006. Accordingly, when our management assessed the effectiveness
of our internal control over financial reporting as of December 31, 2006,
this assessment identified one material weakness.
  While we
have remedied this material weakness as of December 31, 2007, 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.  We lost three
experienced senior accountants in March and April 2008 to established companies
who offered more lucrative compensation packages. 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.
  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.
  ~ 22
~
 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.
  ~ 23
~
 Table of
Contents
 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 181 at the
end of 2005, and 159 at the end of 2006. On June 30, 2008, we had 219
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.
  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 June 30, 2009. 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 may take a significant amount of time before achieving
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.
  ~ 24
~
 Table
of Contents
 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:
  ●
                      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 six months ended June 30, 2008, approximately 50% 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.
 
 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.
  During
the second quarter of 2007, we recorded, for the first time, modest subscription
and consulting revenues related to our new CHRM on-demand solution, which
we officially launched in Beijing in August 2007.  Our
international sales growth could 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.
  ~ 25
~
 Table
of Contents
 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, Interleaf and Interleaf Xtreme 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 our 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 MD5, to provide the security and authentication
necessary to affect 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.
  ~ 26
~
 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. 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 and Chief Executive 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 over the past
several years 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.
 
 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.
  ~ 27
~
 Table
of Contents
  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 us.
 
 As of
June 30, 2008, Dr. Pehong Chen, our Chairman and CEO, beneficially owned
approximately 40.3 million shares of our common stock, which represents
approximately 37% 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.
  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 $0.41 per share to
$4.57 per share between January 1, 2006 and June 30, 2008. On August
5, 2008 the closing price of BroadVision common stock was $0.72 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;●
                      low
      trading volume on the OTC Bulletin Board;●
                      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.
  ~ 28
~
 Table
of Contents
  Item 4. Submission of Matters to a Vote of Security
Holders
  We held our 2008 annual meeting on June 5, 2008. The following proposals
were submitted to and approved by the stockholders at the meeting.
  1)
                          
                          Pehong
      Chen, James D. Dixon, Robert Lee and Francois Stieger were elected members
      of the Board of Directors to serve until the 2009 Annual Meeting of
      Stockholders and until their successors are elected and qualified. 
      The results of the voting were as
follow:
 For
                            
                            WithheldPehong
      Chen
                            
                            
                            84,028,998
                            
                            579,286James
      D. Dixon
                            
                            
                            84,049,321
                            
                            558,963Robert
      Lee
                            
                            
                            84,042,243
                            
                            566,041Francois
      Stieger
                            
                            
                            84,063,062
                            
                            545,222
 
  2)
                        
                        The
      appointment of Odenberg, Ullakko, Muranishi & Co. LLP as independent
      auditors for the Company's fiscal year ending December 31, 2008 was
      ratified and approved. The vote was 88,007,236 votes for to 416,122 votes
      against with 184,926 votes
abstaining.
 
 3)
                        
                        The
      BroadVision, Inc. 2006 Equity Incentive Plan was approved to add an
      additional 3,000,000 shares to the number of share of common stock
      issuable under 2006 Equity Incentive Plan. There were 60,952,077 votes for
      to 1,437,205 votes against with 41,505 votes abstaining and 22,177,497
      broker non-votes.
 Item 5. Other
Information
  Not
applicable.
   ~ 29
~
 Table of Contents
  Item 6.
Exhibits
  Exhibits
                      
                      Description3.1
      (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 3.331.1
                      
                      Certification
      of the Chief Executive Officer of BroadVision.31.2
                      
                      Certification
      of the 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 27, 2007.
  ~ 30
~
 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:
      August 6, 2008
                      
                      By:
                      
                      /s/ Pehong
      ChenPehong
      ChenChairman
      of the Board, President and Chief Executive Officer
  BROADVISION,
      INC.Date:
      August 6, 2008
                      
                      By:
                      
                      /s/Shin-Yuan
      TzouShin-Yuan
      TzouChief
      Financial Officer
   ~ 31
~
 Table of Contents
  EXHIBIT INDEX
 
 Exhibits
                      
                      Description3.1
      (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 3.331.1
                      
                      Certification
      of the Chief Executive Officer of BroadVision.31.2
                      
                      Certification
      of the 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 27, 2007.
 
 ~ 32
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Contents