##### Table of Contents



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

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31, 2006ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
    OF THE SECURITIES EXCHANGE ACT OF 1934   Commission File Number:
    000-50879
  PLANETOUT INC.
 (Exact name of registrant as
    specified in its charter)
  DELAWARE

94-3391368(State or other jurisdiction
    of
    Incorporation or organization)

(I.R.S. Employer
    Identification No.)1355 Sansome Street,
    San Francisco CA(Address of principal
    executive offices)

94111(Zip Code)   (415) 834-6500
    (Registrants telephone number, including area code)
    Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon Stock,
    $0.001 Par Value Per Share

The NASDAQ Stock Market
    LLC   Securities registered pursuant
    to Section 12(g) of the Act:
    None
  o þ
  o þ
  þ o
  Regulation S-K Form 10-K Form 10-K. o
  Rule 12b-2  o þ o
  Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY
    REFERENCE
  Form 10-K




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##### 



PlanetOut
    Inc.Form 10-K
    For The Fiscal Year Ended December 31, 2006
    Table of Contents
  PagePART IItem 1.


Business


2Item 1A.


Risk
    Factors


15Item 1B.


Unresolved Staff
    Comments


26Item 2.


Properties


26Item 3.


Legal
    Proceedings


26Item 4.


Submission of
    Matters to a Vote of Security Holders


27PART IIItem 5.


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


27Item 6.


Selected Financial
    Data


30Item 7.


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


32Item 7A.


Quantitative and
    Qualitative Disclosures about Market Risk


44Item 8.


Financial
    Statements and Supplementary Data


45Item 9.


Changes in and
    Disagreements with Accountants on Accounting and Financial
    Disclosure


82Item 9A.


Controls and
    Procedures


82Item 9B.


Other
    Information


85PART IIIItem 10.


Directors and
    Executive Officers and Corporate Governance


85Item 11.


Executive
    Compensation


85Item 12.


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


85Item 13.


Certain
    Relationships and Related Transactions, and Director
    Independence


85Item 14.


Principal
    Accounting Fees and Services


85PART IVItem 15.


Exhibits and
    Financial Statement Schedules


85Signatures


89EXHIBIT 12.1EXHIBIT 21.1EXHIBIT 23.1EXHIBIT 23.2EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2    Special
    Note Regarding Forward-Looking Statements
  Form 10-K,
 1




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##### Table of Contents



PART I  Item 1.
    Business  Company
    Overview
  $ The
    Advocate Out The Out Traveler HIVPlus
  run-of-site e-mails,
  e-mail,
  member-to-member e-mail
    Out The Advocate. Out The Advocate,
 2




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##### Table of Contents



Industry
    Background
    Out The Advocate Ugly Betty Project Runway Brothers and Sisters
  LGBT
    Demographics and Media Coverage
  make-up African-American Hispanic-American
      The Advocate
 3




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##### Table of Contents



Advertising
    Services
  year-over-year year-over-year
    year-over-year year-over-year
  Subscription
    Services
    year-over-year year-over-year
  2006/07
  Transaction
    Services
    U.S. e-commerce year-over-year
 4




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##### Table of Contents



Competitive
    Strengths
    Strong Community Affinity. word-of-mouth
  Critical Mass. Out The Advocate
  Diversified Revenue Streams.
  Scalable Business Model.
  Compelling Content.
 5




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##### Table of Contents



Growth
    Strategy
    Growing Our User Base Across Multiple
    Properties.
  
    Cross-Promote Products and Services.  We are
    building on our extensive subscriber base that we have developed
    online through the Gay.com and PlanetOut.com websites and the
    print leadership that we have acquired through The Advocateand Outmagazines by cross-promoting our products and
    services to the LGBT community. Just as we have traditionally
    promoted our various advertising, subscription and transaction
    services through our multiple websites and print properties, we
    are expanding this multi-platform, cross-promotion strategy
    across our various LPI and RSVP properties.
    Increased Marketing.  In addition to
    cross-promotions through our own properties, we plan to expand
    our multi-channel marketing programs to help drive growth in our
    unique visitors, members, subscribers, and customers. We plan to
    continue marketing directly to consumers through targeted online
    advertising, keyword buys and affiliate programs, as well as
    through print advertising and advertising in gay and
    lesbian-identified neighborhoods and other high-traffic
    neighborhoods that attract a gay audience. We also plan to
    increase our visibility through sponsorship of, and
    participation at, community events, such as the Dinah Shore
    Weekend in Palm Springs and LGBT Pride celebration events.
    New Products and Services.  We intend to offer
    new products and services through our multi-platform network.
    For example, we began to offer new and enhanced social
    networking features through our existing services, such as
    enhanced photo management tools and blogs. By enhancing the
    functionality through the development of our technology to
    expand our products and services, we believe we can enhance the
    value of our offerings, attract new users and increase our
    revenue.
    International Expansion.  With advertising
    sales from our international subsidiaries and online
    subscription sales from users outside of the United States
    accounting for approximately 1% and 2% of our total revenue in
    2006, respectively, we believe international expansion presents
    a growth opportunity. One initiative intended to grow our
    long-term international revenue is our international
    gratis campaign. As part of this campaign users outside
    of the United States and Canada are able to access all of our
    online premium subscription services free of charge. While this
    campaign has increased our marketing expenses and reduced the
    short-term growth in our online premium subscription services
    revenue, it is intended to grow critical mass in international
    markets and lay the foundation for future international revenue
    growth from our family of media and entertainment properties.  Capitalizing on Advertising Growth and
    Relationships. e-mail,
 6




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##### Table of Contents



Leveraging and Growing Our Subscriber
    Base.
  Leveraging Leadership into Other LGBT
    Opportunities. African-American Hispanic-American
  Advertising
    Services
    African-American Hispanic-American
    
    Focused Advertising.  We believe we deliver
    access to the largest audience of self-identified gay and
    lesbian people in the world. Our advertising programs allow both
    large national and international advertisers as well as smaller,
    local advertisers to reach the LGBT audience in a cost-effective
    manner. Unlike other vehicles that are just
    gay-themed, our media properties are specifically
    targeted to the unique needs and interests of the gay and
    lesbian audience, a group with demographic characteristics that
    we believe are highly attractive to advertisers.
    Leading LGBT Media Outlets.  In addition to the
    critical mass that we have developed online through the Gay.com,
    Out.com, Advocate.com, and PlanetOut.com websites, we also
    publish leading LGBT print publications, including The
    Advocateand Outmagazines. This combination of
    leading online and offline media properties is unique in the
    North America gay and lesbian market.
    Coordinated, Multi-Platform Campaigns.  We are
    able to leverage our ownership of leading LGBT media properties
    to offer advertisers coordinated, multi-platform campaigns.
    During 2006, we added to our 7




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advertising networks new online and offline vehicles, including
    365gay.com, NBC Universals Outzonetv.com website from
    Bravo, and sponsorship of the Gay Games in Chicago and Dinah
    Shore Weekend.  
    Targeted Campaigns.  In addition to offering
    advertisers the opportunity to reach the broader LGBT audience
    across multiple platforms, we offer the opportunity to more
    closely target specific audiences. For example, advertisers have
    the potential to reach our entire online user base with
    run-of-site
    advertisements or to target only those members who share certain
    common attributes such as age, gender or geographic location. In
    2005, we added the ability to target users based on their online
    behaviors. By dividing our online content offerings into topic
    sections within channels, we provide our advertisers with the
    ability to target their marketing efforts further, by sponsoring
    topic sections or running individual advertisements in channels
    specifically relevant to their particular products and services
    or brand strategy. Similarly, through the various LPI
    properties, we offer advertisers the ability to target members
    with particular interests such as politics and current events,
    fashion and entertainment, travel, or specific health issues.
    Research and Analysis.  We engage third parties
    to conduct independent research on member panels assembled from
    our online membership base regarding the effectiveness of
    specific campaigns as well as other matters of interest to our
    advertisers. Campaign studies examine the effect the campaign
    had on brand awareness, brand attributes, message association,
    brand favorability, purchase intent and advertisement recall and
    can include an analysis of the research and recommendations for
    future advertising campaigns. In addition to benefiting the
    advertiser, this type of research helps educate us on how to
    more effectively position and manage campaigns for our
    advertisers.        Percentage of DomesticAdvertising Revenue inCategory

2006Healthcare &
    pharmaceutical


21
%Travel


19
%Retail / fashion


15
%Entertainment


10
%Telecommunications &
    Internet


8
%Automotive


7
%Finance


7
%Consumer packaged goods


4
%Food / beverages


4
%Electronics


2
%  8




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Subscription
    Services
  Out The Advocate
  Online
    Subscription Services
    The
    Advocate Cargo Details Mens
    Fitness Out
  seven-day three-day
     9




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##### Table of Contents



Gay.com
    and PlanetOut.com Premium Membership Service Operating Metrics
    (excluding free trial promotions) as of and for the periods
    ended December 31:
  2005


2006Total Subscribers


157,360



145,275Gross Additions


164,490



109,657Total Churn


134,657



121,742Churn Rate


7.9
%


6.7
%Net Additions (Reductions)


29,833



(12,085
)     
    Total Subscribers:members with an active, paid
    subscription plan, excluding paid trial subscribers, at the end
    of the period.
    Gross Additions:members who initiate a subscription
    during the period, excluding paid trial subscriptions. Gross
    additions during a period equals Net Additions plus Total churn
    during that period.
    Total Churn:total subscription cancellations during the
    period, including cancellations of paid promotional
    subscriptions, but excluding cancellations of paid 3- and
    7-day trial
    subscriptions and free promotional subscriptions. Subscription
    cancellations include subscriptions cancelled due to failed
    credit cards.
    Churn Rate:Total Churn divided by the average of the
    Total Subscribers measured at the beginning and end of the
    period, divided by the number of months in the period.
    Net Additions (Reductions):Total Subscribers at the end
    of the period minus the total Subscribers at the beginning of
    the period.  7-day
        Print
    Subscription Services
  Out The Advocate year-over-year
 10




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##### Table of Contents



word-of-mouth, e-mail
  Transaction
    Services
    e-commerce t-shirts Queer as
    Folk The L Word Brokeback
    Mountain on-site
  Product
    Development and Technology
    e-commerce
     11




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on-site
  International
    Operations
          gratis
    Competition
   12




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Intellectual
    Property
    Employees
    Executive
    Officers
    Name

Age


PositionExecutive officersKaren Magee


46


Chief Executive OfficerJeffrey T. Soukup


41


President, Chief Operating Officer
    and SecretaryDaniel J. Miller


40


Chief Financial Officer, Treasurer
    and Senior Vice PresidentWilliam Bain


48


Chief Technology Officer   Karen Magee
 13




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Jeffrey T. Soukup business-to-business
  Daniel J. Miller
  William Bain
  Available
    Information
  http://www.planetoutinc.com.
 14




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Item 1A.
    Risk
    Factors  We have a
    history of significant losses. If we do not regain and sustain
    profitability, our financial condition and stock price could
    suffer.
    If we are
    unable to generate revenue from advertising or if we were to
    lose our existing advertisers, our business will
    suffer.
          Our
    success depends, in part, upon the growth of Internet
    advertising and upon our ability to accurately predict the cost
    of customized campaigns.
     15




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If our
    efforts to attract and retain subscribers are not successful,
    our revenue will decrease.
  word-of-mouth
      If we are
    unable to successfully market our 2007 RSVP larger ship
    itineraries, our business will suffer.
    We expect
    our operating results to fluctuate, which may lead to volatility
    in our stock price.
  period-over-period
 16




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Our
    limited operating history makes it difficult to evaluate our
    business.
    If we
    fail to manage our growth, our business will suffer.
    Restrictions
    and covenants in our loan agreement may limit our ability to
    operate our business and could prevent us from obtaining needed
    funds in the future.
     17




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If we are
    unable to successfully expand our international operations, our
    business will suffer.
      Recent
    and potential future acquisitions could result in operating
    difficulties and unanticipated liabilities.
    
    the difficulty of integrating the acquired assets and personnel
    of the acquired businesses into our operations;
    the potential absorption of significant management attention and
    significant financial resources for the ongoing development of
    our business;
    the potential impairment of relationships with and difficulty in
    attracting and retaining employees of the acquired companies or
    our employees as a result of the integration of acquired
    businesses;
    the difficulty of integrating the acquired companys
    accounting, human resources and other administrative systems;
    the potential impairment of relationships with subscribers,
    customers and partners of the acquired companies or our
    subscribers, customers and partners as a result of the
    integration of acquired businesses;
    the difficulty in attracting and retaining qualified management
    to lead the combined businesses;
    the potential difficulties associated with entering new lines of
    business with which we have little experience, such as some of
    the businesses we have acquired from LPI and RSVP;
    the difficulty of complying with additional regulatory
    requirements that may become applicable to us as the result of
    an acquisition, such as various regulations that may become
    applicable to us as a result of our acquisition of LPI,
    including the acquisition of a related entity that produces some
    content and other materials intended for mature
    audiences; and
    the impact of known or unknown liabilities associated with the
    acquired businesses. For example, in our RSVP business, should
    some of the third parties with whom we contract in connection
    with arranging our travel itineraries fail to perform their
    obligations for any reason, as a third-party Austrian riverboat
    tour operator with whom we contracted did in August 2006, we may
    be forced to cancel or reschedule planned trips, lose deposits
    we have made to vendors, refund customer deposits, reimburse
    other costs to our customers and lose customers for those and
    other travel itineraries as a result. 18




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If we do
    not continue to attract and retain qualified personnel, we may
    not be able to expand our business.
    We may
    need additional capital and may not be able to raise additional
    funds on favorable terms or at all, which could increase our
    costs, limit our ability to grow and dilute the ownership
    interests of existing stockholders.
  and/or
  Any
    significant disruption in service on our websites or in our
    computer and communications hardware and software systems could
    harm our business.
   19




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If we are
    unable to compete effectively, we may lose market share and our
    revenue may decline.
      If we are
    unable to protect our domain names, our reputation and brand
    could be harmed if third parties gain rights to, or use, these
    domain names in a manner that would confuse or impair our
    ability to attract and retain customers.
   20




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If we
    fail to adequately protect our trademarks and other proprietary
    rights, or if we get involved in intellectual property
    litigation, our revenue may decline and our expenses may
    increase.
      Existing or future government regulation in the United States
    and other countries could limit our growth and result in loss of
    revenue.
    
    conduct background checks on our members prior to allowing them
    to interact with other members on our websites or,
    alternatively, provide notice on our websites that we have not
    conducted background checks on our members, which may result in
    our members canceling their membership or failing to subscribe
    or renew their subscription, resulting in reduced revenue;
    provide advance notice of any changes to our privacy policies or
    to our policies on sharing non-public information with third
    parties, and if our members or subscribers disagree with these
    policies or changes, they may wish to cancel their membership or
    subscription, which will reduce our revenue;
    with limited exceptions, give consumers the right to prevent
    sharing of their non-public personal information with
    unaffiliated third parties, and if a significant portion of our
    members choose to request that we dont 21




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share their information, our advertising revenue that we receive
    from renting our mailing list to unaffiliated third parties may
    decline;  
    provide notice to residents in some states if their personal
    information was, or is reasonably believed to have been,
    obtained by an unauthorized person such as a computer hacker,
    which may result in our members or subscribers deciding to
    cancel their membership or subscription, reducing our membership
    base and subscription revenue;
    comply with current or future anti-spam legislation by limiting
    or modifying some of our marketing and advertising efforts, such
    as email campaigns, which may result in a reduction in our
    advertising revenue; for instance, two states recently passed
    legislation creating a do not contact registry for
    minors that would make it a criminal violation to send an email
    message to an address on that states registry if the email
    message contained an advertisement for or even a link to a
    website that offered products or services that minors are
    prohibited from accessing;
    comply with the European Union privacy directive and other
    international regulatory requirements by modifying the ways in
    which we collect and share our users personal information;
    if these modifications render our services less attractive to
    our members or subscribers, for example by limiting the amount
    or type of personal information our members or subscribers could
    post to their profiles, they may cancel their memberships or
    subscriptions, resulting in reduced revenue;
    qualify to do business in various states and countries, in
    addition to jurisdictions where we are currently qualified,
    because our websites are accessible over the Internet in
    multiple states and countries, which if we fail to so qualify,
    may prevent us from enforcing our contracts in these states or
    countries and may limit our ability to grow our business;
    limit our domestic or international expansion because some
    jurisdictions may limit or prevent access to our services as a
    result of the availability of some content intended for mature
    viewing on some of our websites and through some of the
    businesses we acquired from LPI which may render our services
    less attractive to our members or subscribers and result in a
    decline in our revenue; and
    limit or prevent access, from some jurisdictions, to some or all
    of the member-generated content available through our websites,
    which may render our services less attractive to our members or
    subscribers and result in a decline in our revenue. For example,
    in June 2005, the United States Department of Justice (the
    DOJ) adopted regulations purporting to implement the
    Child Protection and Obscenity Act of 1988, as amended (the
    CPO Act), by requiring primary and secondary
    producers, as defined in the regulations, of certain adult
    materials to obtain, maintain and make available for inspection
    specified records, such as a performers name, address and
    certain forms of photo identification as proof of a
    performers age. Failure to properly obtain, maintain or
    make these records available for inspection upon request of the
    DOJ could lead to an imposition of penalties, fines or
    imprisonment. We could be deemed a secondary producer under the
    CPO Act because we allow our members to display photographic
    images on our websites as part of member profiles. In addition,
    we may be deemed a primary producer under the CPO Act because a
    portion of one of the businesses we acquired in the LPI
    acquisition is involved in production of adult content.
    Enforcement of these regulations as to secondary producers has
    been stayed pending resolution of a legal challenge on the
    grounds that the regulations exceed the DOJs statutory
    authority to regulate secondary producers, among other grounds.
    In July 2006, the Adam Walsh Child Protection and Safety Act of
    2006 (the Walsh Act) became law, amending the CPO
    Act by expanding the definition of the adult materials covered
    by the CPO Act and by requiring secondary producers to maintain
    and make available specified records under the CPO Act.
    Additionally, in July 2006, the FBI began conducting CPO Act
    record inspections, including inspections of businesses that
    were secondary producers under the CPO Act. The Walsh Act may
    result in the stay on enforcement of the CPO Act being lifted.
    If that occurs or if the FBI continues to inspect businesses
    that are secondary producers and there are no legal challenges
    to the Walsh Act or these challenges are unsuccessful, we will
    be subject to significant and burdensome recordkeeping
    compliance requirements and we will have to evaluate and
    implement additional registration and recordkeeping processes
    and procedures, each of which would result in additional
    expenses to us. If our members and subscribers feel these
    additional restrictions or registration and recordkeeping
    processes and procedures are too burdensome, this may result 22




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in an adverse impact on our subscriber growth and churn which,
    in turn, will have an adverse effect on our financial condition
    and results of operations. Alternatively, if we determine that
    the recordkeeping and compliance requirements would be too
    burdensome, we may be forced to limit the type of content that
    we allow our members to post to their profiles, which will
    result in a loss of features that we believe our members and
    subscribers find attractive, and in turn could result in a
    decline in our subscribers growth.    The risks
    of transmitting confidential information online, including
    credit card information, may discourage customers from
    subscribing to our services or purchasing goods from
    us.
    If we are
    unable to provide satisfactory customer service, we could lose
    subscribers.
    We may be
    the target of negative publicity campaigns or other actions by
    advocacy groups that could disrupt our operations because we
    serve the LGBT community.
    Adult
    content in our media properties may be the target of negative
    publicity campaigns or subject us to restrictive or costly
    regulatory compliance.
   23




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If one or
    more states or countries successfully assert that we should
    collect sales or other taxes on the use of the Internet or the
    online sales of goods and services, our expenses will increase,
    resulting in lower margins.
        We are
    exposed to pricing and production capacity risks associated with
    our magazine publishing business, which could result in lower
    revenues and profit margins.
  The Advocate,
    Out, The Out Traveler HIVPlus,
  We may
    not be able to repay our existing debt; failure to do so or
    refinance the debt could prevent us from implementing our
    strategy and realizing anticipated profits.
   24




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##### Table of Contents



In the
    event of an earthquake, other natural or man-made disaster, or
    power loss, our operations could be interrupted or adversely
    affected, resulting in lower revenue.
    Recent
    regulations related to equity compensation could adversely
    affect our ability to attract and retain key
    personnel.
    In the
    event we are unable to satisfy regulatory requirements relating
    to internal control over financial reporting, or if these
    internal controls are not effective, our business and our stock
    price could suffer.
    Our stock
    price may be volatile and you may lose all or a part of your
    investment.
   25




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##### Table of Contents



e-commerce
  Our
    Stockholder Rights Plan, along with Provisions in our charter
    documents and under Delaware law, could discourage a takeover
    that stockholders may consider favorable.
    
    authorize our board of directors, without stockholder approval,
    to issue up to 5,000,000 shares of undesignated preferred
    stock;
    provide for a classified board of directors;
    prohibit our stockholders from acting by written consent;
    establish advance notice requirements for proposing matters to
    be approved by stockholders at stockholder meetings; and
    prohibit stockholders from calling a special meeting of
    stockholders.    Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties      Item 3.
    Legal
    Proceedings   26




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##### Table of Contents



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


Low2005First Quarter

$
13.65


$
8.10Second Quarter


9.77



6.12Third Quarter


10.39



7.31Fourth Quarter


8.99



6.832006First Quarter

$
10.27


$
7.37Second Quarter


10.07



6.47Third Quarter


7.95



2.66Fourth Quarter


4.86



3.04          27




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##### Table of Contents



Unregistered
    Sales of Equity Securities and Use of Proceeds
  Form S-1 (No. 333-114988)
    Repurchases
    of Equity Securities
  (d)(c)


Maximum Number(a)





Total Number


(or ApproximateTotal Number


(b)


of SharesPurchased


Dollar Value) ofof Shares


Average


as Part of Publicly


Shares that MayPurchased


Price Paid


Announced


Yet Be Purchased UnderPeriod

(1)


per Share


Plans or Programs


the Plans or ProgramsOctober 1, 2006 
    October 31, 2006





$








November 1, 2006 
    November 30, 2006














December 1, 2006 
    December 31, 2006














Total





$








     (1)
    
    PlanetOut does not have any publicly announced plans or programs
    to repurchase shares of its common stock. 28




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##### Table of Contents



Performance
    Measurement Comparison(1)
    Comparison
    of Cumulative Total Return
    among PlanetOut Inc., the Nasdaq Composite Index, 
    and the RDG Internet Composite Index
  
    (1)
    
    This Section is not soliciting material, is not
    deemed filed with the SEC and is not to be
    incorporated by reference in any of our filings under the
    Securities Act of 1933 or the Securities Exchange Act of 1934
    whether made before or after the date hereof and irrespective of
    any general incorporation language in such filing. 29




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Item 6.
    Selected
    Financial Data  Form 10-K. Form 10-K. Form 10-K.
  Year Ended December 31,2002


2003


2004


2005


2006(3)(In thousands, except per share amounts)Revenue:Advertising services

$
4,227


$
4,626


$
6,541


$
11,724


$
26,479Subscription services


8,030



12,727



16,775



21,135



24,447Transaction services


1,700



1,746



1,646



2,732



17,718Total revenue


13,957



19,099



24,962



35,591



68,644Operating costs and expenses:(*)Cost of revenue


6,311



6,696



8,068



11,964



35,205Sales and marketing


5,739



6,554



8,806



11,088



17,344General and administrative(1)


7,099



4,242



5,182



7,036



12,711Restructuring


















791Depreciation and amortization


2,615



2,030



2,457



3,460



5,606Total operating costs and expenses


21,764



19,522



24,513



33,548



71,657Income (loss) from operations


(7,807
)


(423
)


449



2,043



(3,013
)Equity in net loss of
    unconsolidated affiliate(2)


(22
)


(59
)


(94
)


(57
)


Interest expense


(112
)


(193
)


(1,077
)


(238
)


(1,189
)Other income, net


96



72



210



1,199



584Income (loss) before income taxes
    and minority interest


(7,845
)


(603
)


(512
)


2,947



(3,618
)Provision for income taxes


(9
)


(149
)


(25
)


(207
)


(45
)Minority interest in gain of
    consolidated affiliate


















(47
)Net income (loss)


(7,854
)


(752
)


(537
)


2,740



(3,710
)Accretion on redeemable
    convertible preferred stock


(1,709
)


(1,729
)


(1,402
)






Net earnings (loss) attributable
    to common stockholders

$
(9,563
)

$
(2,481
)

$
(1,939
)

$
2,740


$
(3,710
)Net earnings (loss) per share:Basic

$
(6.17
)

$
(1.53
)

$
(0.40
)

$
0.16


$
(0.21
)Diluted

$
(6.17
)

$
(1.53
)

$
(0.40
)

$
0.15


$
(0.21
) 30




---



##### Table of Contents



Year Ended December 31,2002


2003


2004


2005


2006(3)(In thousands, except per share amounts)Weighted-average shares used to
    compute net earnings:Basic


1,551



1,624



4,837



17,116



17,326Diluted


1,551



1,624



4,837



18,192



17,326(*) Stock-based compensation is
    allocated as follows (see Note 11):Cost of revenue

$
255


$
502


$
565


$
177


$
70Sales and marketing


117



419



556



254



41General and administrative


369



676



1,013



568



182Total stock-based compensation

$
741


$
1,597


$
2,134


$
999


$
293   As of December 31,2002


2003


2004


2005


2006(3)(In thousands)Consolidated balance sheet
    data:Cash and cash equivalents

$
2,082


$
2,282


$
43,128


$
18,461


$
9,674Working capital (deficit)


(1,751
)


(2,804
)


39,209



14,761



7,144Total assets


9,974



10,929



59,208



77,338



93,589Long-term liabilities


1,856



545



2,241



10,636



12,647Redeemable convertible preferred
    stock


38,034



41,413











Stockholders equity (deficit)

$
(35,142
)

$
(37,717
)

$
48,764


$
53,052


$
51,145     (1)
    
    Includes a $2,750,000 lease settlement expense in 2002 related
    to an office lease terminated in September 2002.(2)
    
    Represents a minority interest in Gay.it S.p.A., as further
    described in Note 3 to the financial statements.(3)
    
    2006 data reflects the impact of the acquisitions of LPI and
    RSVP. 31




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##### Table of Contents



Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Form 10-K, Form 10-K.
  Overview
  The Advocate Out
  Out The Advocate. Out The Advocate,
     32




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##### Table of Contents



Results
    of Operations
    Year ended December 31,2004


2005


2006(As a percentage of total revenue)Consolidated statements of
    operations data:Revenue:Advertising services


26.2
%


32.9
%


38.6
%Subscription services


67.2



59.4



35.6Transaction services


6.6



7.7



25.8Total revenue


100.0



100.0



100.0Operating costs and expenses:Cost of revenue


32.3



33.6



51.3Sales and marketing


35.3



31.2



25.2General and administrative


20.8



19.8



18.5Restructuring










1.2Depreciation and amortization


9.8



9.7



8.2Total operating costs and expenses


98.2



94.3



104.4Income (loss) from operations


1.8



5.7



(4.4
)Equity in net loss of
    unconsolidated affiliate


(0.4
)


(0.2
)


Interest expense


(4.3
)


(0.7
)


(1.7
)Other income, net


0.8



3.5



0.9Income (loss) before income taxes
    and minority interest


(2.1
)


8.3



(5.2
)Provision for income taxes


(0.1
)


(0.6
)


(0.1
)Minority interest in gain of
    consolidated affiliate










(0.1
)Net income (loss)


(2.2
)%


7.7
%


(5.4
)%   Comparison
    of the Years Ended December 31, 2006 and December 31,
    2005
  Summary
         33




---



##### Table of Contents



Revenue
  Advertising Services.
    Subscription Services. gratis
    Transaction Services. e-commerce
   34




---



##### Table of Contents



Operating
    Costs and Expenses
  Cost of Revenue.
    Sales and Marketing.
    General and Administrative.
    Restructuring. e-commerce
 35




---



##### Table of Contents



Depreciation and Amortization.
    Other
    Income and Expenses
  Equity in Net Loss of Unconsolidated
    Affiliate.
  Interest Expense.
  Other Income, Net.
  Comparison
    of the Years Ended December 31, 2005 and December 31,
    2004
  Revenue
  Advertising Services.
  Subscription Services. gratis
  Transaction Services.
 36




---



##### Table of Contents



Operating
    Costs and Expenses
  Cost of Revenue.
  Sales and Marketing.
  General and Administrative.
  Depreciation and Amortization.
  Other
    Income and Expenses
  Equity in Net Loss of Unconsolidated
    Affiliate.
  Interest Expense.
  Other Income, Net.
  Critical
    Accounting Policies
     37




---



##### Table of Contents



Revenue recognition. No. 00-21, Revenue Arrangements with Multiple
    Deliverables 00-21),
    No. 99-19, Reporting Revenue Gross as a Principal Versus Net as an
    Agent
  Advertising Costs.
  Valuation Allowances.
 38




---



##### Table of Contents



Goodwill and Other Long-lived Assets.
    Capitalized Website Development Costs.
  Stock-based compensation. Share-Based Payment Accounting for Stock Issued to
    Employees
 39




---



##### Table of Contents



Liquidity
    and Capital Resources
      Year Ended December 31,2004


2005


2006(In thousands, except percentage of total assets)Net cash provided by (used in)
    continuing operationsOperating activities

$
4,301


$
5,488


$
(4,618
)Investing activities


(4,836
)


(29,499
)


(14,869
)Financing activities


41,388



(639
)


10,699Effect of exchange rate on cash
    and cash equivalents


(7
)


(17
)


1Net increase (decrease) in cash
    and cash equivalents

$
40,846


$
(24,667
)

$
(8,787
)Cash, cash equivalents and
    short-term investmentsCash and cash equivalents

$
43,128


$
18,461


$
9,674Short-term investments










2,050Total cash, cash equivalents and
    short-term investments

$
43,128


$
18,461


$
11,724Percentage of total assets


72.8
%


23.9
%


12.5
%        40




---



##### Table of Contents



24-month 7-year
 41




---



##### Table of Contents



Off-balance
    Sheet Liabilities
    Other
    Contractual Commitments
    Payments Due by PeriodTotal


2007


2008-2009


2010-2011


2012 & After(In thousands)Contractual
    obligations:Capital lease obligations

$
2,578


$
892


$
1,415


$
271


$
Operating leases


16,259



3,047



6,315



5,831



1,066Deposit commitments


8,797



8,797











Notes payable


19,803



10,403



7,758



1,642



Other


789



628



161







Total contractual obligations

$
48,226


$
23,767


$
15,649


$
7,744


$
1,066   Capital Lease Obligations.
  Operating Leases.
 42




---



##### Table of Contents



Deposit Commitments.
  Notes Payable.
      Other.
  Seasonality
    and Inflation
  e-commerce
    Recent
    Accounting Pronouncements
  Considering the Effects of
    Prior Year Misstatements when Quantifying Misstatements in
    Current Year Financial Statements
  Fair Value
    Measurements
 43




---



##### Table of Contents



Accounting for Uncertainty in Income Taxes, an
    interpretation of FASB
    Statement 109 Accounting for Income Taxes.
  Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk       44




---



##### Table of Contents



Item 8.
    Financial
    Statements and Supplementary Data  PlanetOut
    Inc.
    INDEX TO CONSOLIDATED FINANCIAL STATEMENTS AND SUPPLEMENTARY
    DATA
  PageConsolidated Financial Statements:Reports of
    Independent Registered Public Accounting Firms


46Consolidated
    Balance Sheets


48Consolidated
    Statements of Operations


49Consolidated
    Statements of Redeemable Convertible Preferred Stock and
    Stockholders Equity (Deficit)


50Consolidated
    Statements of Cash Flows


51Notes to
    Consolidated Financial Statements


52Supplementary Financial Data
    (unaudited):Selected Quarterly
    Financial Data for each of the years ended December 31,
    2005 and 2006


80Financial Statement Schedule:Valuation and
    Qualifying Accounts for each of the years ended
    December 31, 2004, 2005 and 2006


81  45




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM            Internal Control 
    Integrated Framework
  
    46




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
      
    47




---



##### Table of Contents



PlanetOut
    Inc.
 CONSOLIDATED BALANCE SHEETS

(In thousands, except per share amounts) December 31,2005


2006ASSETSCurrent assets:Cash and cash equivalents

$
18,461


$
9,674Short-term investments






2,050Restricted cash






2,854Accounts receivable, net


6,030



9,337Inventory


1,349



1,690Prepaid expenses and other current
    assets


2,571



11,336Total current assets


28,411



36,941Property and equipment, net


8,167



10,923Goodwill


28,699



32,572Intangible assets, net


10,909



12,132Other assets


1,152



1,021Total assets

$
77,338


$
93,589LIABILITIES AND
    STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
1,334


$
1,782Accrued expenses and other
    liabilities


2,750



3,472Accrued restructuring






235Deferred revenue, current portion


8,749



14,569Capital lease obligations, current
    portion


309



694Notes payable, current portion net
    of discount


222



8,817Deferred rent, current portion


286



228Total current liabilities


13,650



29,797Deferred revenue, less current
    portion


1,771



1,474Capital lease obligations, less
    current portion


212



1,504Notes payable, less current portion
    and discount


7,075



8,100Deferred rent, less current portion


1,578



1,569Total liabilities


24,286



42,444Minority interest in consolidated
    subsidiaries






Commitments and contingencies
    (Note 8)Stockholders equity:Common stock: $0.001 par
    value, 100,000 shares authorized, 17,248 and
    17,629 shares issued and outstanding at December 31,
    2005 and 2006, respectively


17



17Additional paid-in capital


88,333



89,532Note receivable from stockholder


(603
)


Accumulated other comprehensive loss


(123
)


(122
)Accumulated deficit


(34,572
)


(38,282
)Total stockholders equity


53,052



51,145Total liabilities and
    stockholders equity

$
77,338


$
93,589    48




---



##### Table of Contents



PlanetOut
    Inc.
 CONSOLIDATED STATEMENTS OF OPERATIONS

(In thousands, except per share amounts) Year Ended December 31,2004


2005


2006Revenue:Advertising services

$
6,541


$
11,724


$
26,479Subscription services


16,775



21,135



24,447Transaction services


1,646



2,732



17,718Total revenue


24,962



35,591



68,644Operating costs and expenses:(*)Cost of revenue


8,068



11,964



35,205Sales and marketing


8,806



11,088



17,344General and administrative


5,182



7,036



12,711Restructuring










791Depreciation and amortization


2,457



3,460



5,606Total operating costs and expenses


24,513



33,548



71,657Income (loss) from operations


449



2,043



(3,013
)Equity in net loss of
    unconsolidated affiliate


(94
)


(57
)


Interest expense


(1,077
)


(238
)


(1,189
)Other income, net


210



1,199



584Income (loss) before income taxes


(512
)


2,947



(3,618
)Provision for income taxes


(25
)


(207
)


(45
)Minority interest in gain of
    consolidated affiliate










(47
)Net income (loss)


(537
)


2,740



(3,710
)Accretion on redeemable
    convertible preferred stock


(1,402
)






Net earnings (loss) attributable
    to common stockholders

$
(1,939
)

$
2,740


$
(3,710
)Net earnings (loss) per share:Basic

$
(0.40
)

$
0.16


$
(0.21
)Diluted

$
(0.40
)

$
0.15


$
(0.21
)Weighted-average shares used to
    compute net earnings:Basic


4,837



17,116



17,326Diluted


4,837



18,192



17,326(*)Stock-based compensation is
    allocated as follows (see Note 2):Cost of revenue

$
565


$
177


$
70Sales and marketing


556



254



41General and administrative


1,013



568



182Total stock-based compensation

$
2,134


$
999


$
293    49




---



##### Table of Contents



PlanetOut
    Inc.
  CONSOLIDATED STATEMENTS OF REDEEMABLE
    CONVERTIBLE PREFERRED STOCK
    AND STOCKHOLDERS EQUITY
  Year Ended December 31,2004


2005


2006(In thousands)Redeemable convertible preferred
    stock:Balance, beginning of year

$
41,413


$



$
Issuance of Series D for cash
    on exercise of options


15







Accretion on redeemable convertible
    preferred stock


1,402







Repurchase of Series B
    convertible preferred stock upon termination of employee services


(20
)






Conversion of preferred stock into
    common stock upon completion of initial public offering


(42,810
)






Balance, end of year

$



$



$
Common stock:Balance, beginning of year

$
2


$
17


$
17Issuance of common stock for cash,
    net of offering expenses of $5,226


5







Conversion of preferred stock into
    common stock upon completion of initial public offering


10







Balance, end of year


17



17



17Additional
    paid-in-capital:Balance, beginning of year


17



88,387



88,333Issuance of common stock for cash
    on exercise of options and warrants


44



552



461Unearned stock-based compensation,
    net of cancellations and tax effects of disqualifying
    dispositions


3,406



(687
)


293Issuance of stock options to
    consultants in exchange for services


88







Accretion on redeemable convertible
    preferred stock


(1,402
)






Issuance of common stock for cash,
    net of offering expenses of $5,226


42,896







Issuance of common stock warrants
    in connection with subordinated promissory note


543







Issuance of common stock warrants
    in connection with debt issuance










445Conversion of preferred stock into
    common stock upon completion of initial public offering


42,800







Amount paid to stockholder for
    fractional shares due to reverse stock split


(5
)






Stock-based compensation upon
    acceleration of unvested options






81



Balance, end of year


88,387



88,333



89,532Note receivable from stockholder:Balance, beginning of year


(603
)


(603
)


(603
)Repayment of note receivable from
    stockholder










603Balance, end of year


(603
)


(603
)


Unearned stock-based compensation:Balance, beginning of year


(259
)


(1,619
)


Unearned stock-based compensation,
    net of cancellations


(3,406
)


493



Amortization of unearned
    stock-based compensation, net of cancellations


2,046



600



Stock-based compensation upon
    acceleration of unvested options






526



Balance, end of year


(1,619
)






Accumulated other comprehensive
    loss:Balance, beginning of year


(99
)


(106
)


(123
)Foreign currency translation
    adjustment


(7
)


(17
)


1Balance, end of year


(106
)


(123
)


(122
)Accumulated deficit:Balance, beginning of year


(36,775
)


(37,312
)


(34,572
)Net income (loss)


(537
)


2,740



(3,710
)Balance, end of year


(37,312
)


(34,572
)


(38,282
)Total stockholders equity

$
48,764


$
53,052


$
51,145Number of sharesRedeemable convertible preferred
    stock:Balance, beginning of year


9,293







Issuance of Series D for cash
    on exercise of options


4







Repurchase of Series B upon
    termination of employee services


(26
)






Conversion of preferred stock into
    common stock upon completion of initial public offering


(9,271
)






Balance, end of year










Common stock:Balance, beginning of year


1,728



16,943



17,248Issuance of common stock upon
    exercise of options and warrants


223



306



161Issuance of restricted stock










220Issuance of common stock for cash,
    net of offering expenses of $5,226


5,348







Repurchase of unvested common stock
    upon termination of employee services


(3
)


(1
)


Conversion of preferred stock into
    common stock upon completion of initial public offering


9,647







Balance, end of year


16,943



17,248



17,629    50




---



##### Table of Contents



PlanetOut
    Inc.
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS

(In thousands) Year Ended December 31,2004


2005


2006Cash flows from operating
    activities:Net income (loss)

$
(537
)

$
2,740


$
(3,710
)Adjustments to reconcile net income
    (loss) to net cash provided by (used in) operating activities:Depreciation and amortization


2,457



3,460



5,606Provision for doubtful accounts


34



112



219Restructuring










19Amortization of unearned
    stock-based compensation, net of cancellation and tax effects


2,046



405



293Stock-based compensation upon
    acceleration of vesting of unvested options






608



Amortization of warrant and
    issuance costs in connection with senior subordinated promissory
    note


636







Amortization of debt discount










55Amortization of deferrred rent


354



256



(43
)Issuance of stock and stock options
    and shares in exchange for services


88







Loss on disposal or write-off of
    property and equipment


60



71



46Equity in net loss of
    unconsolidated affiliate


94



57



Changes in operating assets and
    liabilities, net of acquisition effects and restructuring:Accounts receivable


(826
)


(4,067
)


(3,265
)Inventory


4



(668
)


(341
)Prepaid expenses and other assets


(1,304
)


1,221



(3,949
)Accounts payable


1,557



(706
)


372Accrued expenses and other
    liabilities


(1,385
)


1,201



684Accrued restructuring










235Deferred revenue


1,023



798



(839
)Net cash provided by (used in)
    operating activities


4,301



5,488



(4,618
)Cash flows from investing
    activities:Acquisitions, net of issuance of
    note payable and cash acquired






(25,546
)


(5,403
)Purchases of property and equipment


(4,866
)


(3,953
)


(4,562
)Purchases of short-term investments










(2,050
)Changes in restricted cash


30







(2,854
)Net cash used in investing
    activities


(4,836
)


(29,499
)


(14,869
)Cash flows from financing
    activities:Proceeds from exercise of common
    stock and preferred stock options and warrants


59



552



461Proceeds from senior subordinated
    promissory note and related warrants, net of issuance costs


4,907







Repurchase of redeemable
    convertible preferred stock and common stock


(20
)






Repayment of senior subordinated
    promissory notes


(5,000
)






Purchase of fractional shares due
    to reverse stock split


(5
)






Proceeds from repayment of note
    receivable from stockholder










843Principal payments under capital
    lease obligations and notes payable


(1,454
)


(1,191
)


(1,105
)Proceeds from issuance of notes
    payable










10,500Proceeds from issuance of common
    stock in initial public stock offering, net of issuance costs


42,901







Net cash provided by (used in)
    financing activities


41,388



(639
)


10,699Effect of exchange rate on cash and
    cash equivalents


(7
)


(17
)


1Net increase (decrease) in cash and
    cash equivalents


40,846



(24,667
)


(8,787
)Cash and cash equivalents,
    beginning of period


2,282



43,128



18,461Cash and cash equivalents, end of
    period

$
43,128


$
18,461


$
9,674Supplemental disclosure of cash
    flow information:Interest expense paid

$
441


$
105


$
1,189Income taxes paid

$
86


$
172


$
177Supplemental disclosure of noncash
    flow investing and financing activities:Property and equipment and related
    maintenance acquired under capital leases

$
1,991


$
113


$
2,525Accretion on redeemable convertible
    preferred stock

$
1,402


$



$
Unearned stock-based compensation

$
3,406


$
493


$
Conversion of preferred stock to
    common stock upon completion of initial public offering

$
42,810


$



$
Issuance of note payable in
    connection with acquisition

$



$
7,075


$
Issuance of common stock warrants
    in connection with debt issuance

$



$



$
445    51




---



##### Table of Contents



PlanetOut
    Inc.NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  Note 1 
    The Company
    The Advocate, Out, The Out Traveler HIVPlus
  Note 2 
    Summary of Significant Accounting Policies
  Principles
    of Consolidation and Basis of Presentation
      Reverse
    Stock Split
   52




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Reclassifications
    Use of
    Estimates
    Cash
    Equivalents and Short-term Investments
    Restricted
    Cash
    Fair
    Value of Financial Instruments
    Concentration
    of Credit Risk
     53




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Foreign
    Currency Translation
    Inventory
  first-in,
  Property
    and Equipment
      Internal
    Use Software and Website Development Costs
  98-1, Accounting for Costs of Computer Software Developed or
    Obtained for Internal Use (SOP 98-1) No. 00-02, Accounting for Web Site Development Costs 00-02).
 54




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Goodwill
  Goodwill and
    Other Intangible Assets
  Revenue
    Recognition
  No. 00-21, Revenue Arrangements with Multiple
    Deliverables 00-21),
   55




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    No. 99-19, Reporting Revenue Gross as a Principal Versus Net as an
    Agent,
  Advertising
    Event
    Marketing
  sub-events 00-21 Revenue Recognition EITF 99-19, Reporting Revenue Gross as a Principal versus Net as an
    Agent, 00-21 01-14, Income Statement Characterization of Reimbursements
    Received for
    Out-of-Pocket
    Expenses Incurred 00-21, sub-events sub-event
  sub-event
  Sales
    Returns and Allowances
   56




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Allowance
    for Doubtful Accounts
    Equity
    Incentive Plans
    Stock-Based
    Compensation
  Share-Based
    Payment Accounting for Stock Issued to
    Employees
    Accounting for Stock-based Compensation 
    Transition and Disclosure (as amended)
 57




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Year Ended December 31,2004


2005Net earnings (loss) attributable
    to common stockholders, as reported:

$
(1,939
)

$
2,740Add: Employee stock-based
    compensation expense included in reported net income (loss), net
    of tax


2,046



971Less: Total employee stock-based
    compensation expense determined under fair value, net of tax


(2,653
)


(3,815
)Pro forma net loss attributable to
    common stockholders

$
(2,546
)

$
(104
)Net loss per share attributable to
    common stockholders:As reported  basic

$
(0.40
)

$
0.16As reported  diluted

$
(0.40
)

$
0.15Pro forma  basic

$
(0.53
)

$
(0.01
)Pro forma  diluted

$
(0.53
)

$
(0.01
)      58




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year ended December 31,2004

2005

2006Preferred stock
    options:Expected lives (in years)

2.5



Risk free interest rates

2.77 - 4.05%



Dividend yield

10%



Volatility

0%



Common stock options:Expected lives (in years)

5.0

5.0

7.0Risk free interest rates

2.77 - 4.05%

3.59 - 4.55%

4.32 - 4.57%Dividend yield

0%

0%

0%Volatility

0 - 94.6%

85%

75%     Income
    Taxes
    Comprehensive
    Loss
    Net
    Income (Loss) Per Share
   59




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Year Ended December 31,2004


2005


2006Numerator:Net income (loss)

$
(537
)

$
2,740


$
(3,710
)Accretion on redeemable
    convertible preferred stock


(1,402
)






Net earnings (loss) attributable
    to common stockholders

$
(1,939
)

$
2,740


$
(3,710
)Denominator:Weighted-average shares used to
    compute basic EPS


4,837



17,116



17,326Effect of dilutive securities:Dilutive common stock equivalents






1,076



Dilutive potential common shares






1,076



Weighted-average shares used to
    compute diluted EPS


4,837



18,192



17,326Net earnings (loss) per share:Basic

$
(0.40
)

$
0.16


$
(0.21
)Diluted

$
(0.40
)

$
0.15


$
(0.21
)     Year Ended December 31,2004


2005


2006Common stock options and warrants


2,424



700



1,867Common stock subject to repurchase


2



2



2,426



702



1,867   Segment
    Reporting
  Disclosures about Segments of
    an Enterprise and Related Information.
 60




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Variable
    Interest Entity
  (FIN 46-R), Consolidation of Variable Interest Entities,
  Recent
    Accounting Pronouncements
  Considering the Effects of
    Prior Year Misstatements when Quantifying Misstatements in
    Current Year Financial Statements
  Fair Value
    Measurements
  Accounting for Uncertainty in Income Taxes, an
    interpretation of FASB Statement 109 Accounting for Income
    Taxes.
  Note 3 
    Investment in Gay.it S.p.A.
   61




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31,2005Current assets

$
388Non-current assets

$
69Current liabilities

$
322Non-current liabilities

$
   Year Ended December 31,2004


2005Net sales revenue

$
565


$
651Operating expenses

$
743


$
827Net loss from operations

$
(178
)

$
(176
)Net loss

$
(209
)

$
(202
)   Note 4 
    Business Combinations, Goodwill and Intangible Assets
  Business
    Combinations
    NetPost


Tangible


Identifiable





AggregateYear


Acquisition


Assets


Intangible





PurchaseCompany Name

Acquired


Ownership


(Liabilities)


Assets


Goodwill


PriceLPI Media, Inc. and related
    entities


2005



100
%

$
(3,775
)

$
11,100


$
25,296


$
32,621RSVP Productions, Inc.


2006



100
%

$
(63
)

$
2,750


$
3,982


$
6,669  62




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    TotalCustomer





AcquiredYear


Lists and





IntangibleCompany Name

Acquired


User Bases


Tradenames


AssetsLPI Media, Inc. and related
    entities


2005


$
5,400


$
5,700


$
11,100RSVP Productions, Inc.


2006


$
1,810


$
940


$
2,750   LPI
    Media, Inc. Acquisition
      December 31,2004


2005(Unaudited)Revenue

$
54,694


$
60,946Net income

$
(1,837
)

$
2,734Basic earnings per share

$
(0.38
)

$
0.16     RSVP
    Productions Inc. Acquisition
   63




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      December 31,2005


2006(Unaudited)Revenue

$
44,816


$
70,359Net income (loss)

$
1,511


$
(4,210
)Basic earnings per share

$
0.09


$
(0.24
)     Goodwill
    December 31,


Goodwill





December 31,Acquisition

2005


Acquired


Adjustments


2006Acquisitions prior to
    December 31, 2004

$
3,403


$



$



$
3,403LPI


25,296







(109
)


25,187RSVP






3,982







3,982$
28,699


$
3,982


$
(109
)

$
32,572      64




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Intangible
    Assets
    December 31, 2005


December 31, 2006Gross





Net


Gross





NetCarrying


Accumulated


Carrying


Carrying


Accumulated


CarryingAmount


Amortization


Amount


Amount


Amortization


AmountCustomer lists and user bases

$
8,678


$
3,469


$
5,209


$
10,488


$
4,996


$
5,492Tradenames


8,040



2,340



5,700



8,980



2,340



6,640Other intangible assets


726



726







726



726



$
17,444


$
6,535


$
10,909


$
20,194


$
8,062


$
12,132       Fiscal Years:2007

$
1,4232008


1,3962009


1,2572010


1,0932011


277Thereafter


46$
5,492   Note 5 
    Other Balance Sheet Components
  December 31,2004


2005


2006(In thousands)Accounts receivable:Trade accounts receivable

$
2,134


$
7,033


$
10,906Less: Allowance for doubtful
    accounts


(59
)


(259
)


(520
)Less: Provision for returns






(744
)


(1,049
)$
2,075


$
6,030


$
9,337      65




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    December 31,2004


2005


2006(In thousands)InventoryMaterials for future publications

$



$
415


$
370Finished goods available for sale


24



1,019



1,38624



1,434



1,756Less: reserve for obsolete
    inventory






(85
)


(66
)$
24


$
1,349


$
1,690     December 31,2005


2006(In thousands)Prepaid expenses and other
    current assets:Prepaid expenses and other current
    assets

$
2,328


$
4,183Deposits on leased voyages and
    vacations






7,153Receivable from landlord for
    tenant improvement allowance, current portion (Note 2)


243



$
2,571


$
11,336   December 31,2005


2006(In thousands)Property and
    equipment:Computer equipment and software

$
10,402


$
13,569Furniture and fixtures


1,396



1,613Leasehold improvements


1,555



2,269Website development costs


4,783



6,76918,136



24,220Less: Accumulated depreciation and
    amortization


(9,969
)


(13,297
)$
8,167


$
10,923     66




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  December 31,2005


2006(In thousands)Other assets:Other assets

$
921


$
1,021Interest on note receivable from
    stockholder (Note 6)


231



$
1,152


$
1,021   December 31,2005


2006(In thousands)Accrued expenses and other
    liabilities:Accrued payroll and related
    liabilities

$
989


$
1,499Other accrued liabilities


1,761



1,973$
2,750


$
3,472   Note 6 
    Related Party Transactions
  Note Receivable
    Advertising
    Agreement
    Senior
    Subordinated Promissory Note
   67




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Note 7 
    Notes Payable
    December, 312005


2006(In thousands)Notes payable to vendors

$
222


$
47LPI note


7,075



7,075Orix term loan






7,187Orix revolving loan






3,0007,297



17,309Less: discount






(392
)7,297



16,917Less: current portion, net of
    discount


222



8,817Notes payable, less current
    portion and discount

$
7,075


$
8,100       24-month 7-year
 68




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Year Ending December 31,2007

$
8,9972008


4,8752009


1,8752010


1,562$
17,309   Note 8 
    Commitments and Contingencies
  Operating
    Leases
      Year Ending December 31,

Operating Leases2007

$
3,0472008


3,1212009


3,1942010


2,9442011


2,887Thereafter


1,066$
16,259   Capital
    Leases
    Year Ending December 31,

Capital Leases2007

$
8922008


8172009


5982010


2222011


49Total minimum lease payments


2,578Less: Amount representing interest


(380
)Present value of capital lease
    obligations


2,198Less: Current portion


(694
)Long-term portion of capital lease
    obligations

$
1,504  69




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Deposit
    Commitments
    Co-location
    Facility Agreement
    Indemnification
    Contingencies
     70




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  www.fr.gay.com www.ooups.com
  Note 9 
    Redeemable Convertible Preferred Stock
      SharesShares


Issued andSeries

Authorized


OutstandingE


1,273



812D


3,864



3,185C-1


1,188



729C-2


1,667



801C-3


321



221C-4


2,129



1,305C-5


1,967



1,737B


509



50312,918



9,293       one-to-one
   71




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Dividends
    Redemption
    Note 10 
    Warrants
      7-year
  Expected dividend yield


0
%Expected stock price volatility


105
%Risk-free interest rate


4.56
%Expected life of warrants


7 years   Note 11 
    Stock Option Plans
   72




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     73




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Options Outstanding


WeightedWeighted-


AverageShares





Average


Remaining


AggregateAvailable


Number of


Exercise


Contractual Term


Intrinsicfor Grant


Shares


Price


(in Years)


ValueBalances at December 31, 2003


721



1,572


$
1.10Additional shares reserved


904






$
Options granted


(883
)


883


$
9.25Options exercised






(78
)

$
0.56Options cancelled


291



(291
)

$
3.83Conversion of Series D
    redeembable convertible preferred stock options to common
    options upon completion of IPO


37



112


$
4.07Balances at December 31, 2004


1,070



2,198


$
4.19Additional shares reserved


545






$
Options granted


(461
)


461


$
8.48Options exercised






(240
)

$
1.23Options cancelled


(466
)


(307
)

$
7.16Balances at December 31, 2005


688



2,112


$
5.03Additional shares reserved


545






$
Restricted stock granted


(220
)





$
Options granted


(49
)


49


$
9.08Options exercised






(161
)

$
2.89Options cancelled


24



(253
)

$
8.92Balances at December 31, 2006


988



1,747


$
4.77



6.4


$
3,462Vested and expected to vest at
    December 31, 2006






1,732


$
4.75



6.4


$
3,458Options exercisable at
    December 31, 2006






1,694


$
4.64



6.4


$
3,458    74




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     Options OutstandingWeighted-





Options ExercisableAverage


Weighted-





Weighted-Remaining


Average





AverageNumber


Contractual


Exercise


Number


ExerciseRange of Exercise Price

of Shares


Life (Years)


Price


of Shares


Price$ 0.00 - $ 1.46


806



5.6


$
0.45



806


$
0.45$ 1.47 - $ 2.93


33



3.1


$
2.25



33


$
2.25$ 2.94 - $ 4.39


70



5.1


$
4.07



70


$
4.07$ 4.40 - $ 7.33


23



8.4


$
7.05



23


$
7.05$ 7.34 - $ 8.79


273



8.0


$
8.30



253


$
8.30$ 8.80 - $10.26


492



7.4


$
9.16



459


$
9.14$10.27 - $11.72









$







$
$11.73 - $13.19


8



2.1


$
12.23



8


$
12.23$13.20 - $14.66


42



5.0


$
13.90



42


$
13.901,747



6.4


$
4.77



1,694


$
4.64         Options OutstandingWeighted-Shares





AverageAvailable for


Number of


ExerciseGrant


Shares


PriceBalances at December 31, 2003


37



125


$
4.07Options granted






(4
)


4.07Options cancelled






(9
)


4.07Conversion of Series D
    redeembable convertible preferred stock options to common
    options upon completion of IPO


(37
)


(112
)


4.07Balances at December 31, 2004









$
     one-to-one
 75




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   Stock-based
    Compensation Associated with Awards to Employees
    Accounting for Certain Transactions Involving Stock
    Compensation an Interpretation of APB No. 25
  Option
    Cancellation and Regrant Program
      Restricted
    Stock Grants
   76




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
       Weighted AverageGrant-DateShares


Fair ValueUnvested at January 1, 2006





$
Granted


220


$
6.37Vested


(5
)

$
6.67Unvested at December 31, 2006


215


$
6.37   Stock-based
    Compensation Associated with Awards Granted to
    Nonemployees
    Note 12 
    Defined Contribution Plan
    Note 13 
    Restructuring
  e-commerce
 77




---



##### Table of Contents



PlanetOut
    Inc.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
     AccruedRestructuringInitial











As ofRestructuring


Cash








December 31,Charges


Payments


Write-offs


Adjustments


2006(In thousands)Termination benefits

$
631


$
(416
)

$



$
1


$
216Cost of closing redundant
    facilities


203



(120
)


(19
)


(45
)


19Total

$
834


$
(536
)

$
(19
)

$
(44
)

$
235   Note 14 
    Income Taxes
      Year Ended December 31,2004


2005


2006Provision at statutory rate


34.00
%


34.00
%


34.00
%State taxes, net of federal benefit


(1.08
)


1.82



(0.52
)Permanent differences


(116.90
)


13.10



(1.26
)Change in valuation allowance


82.90



(44.24
)


(33.48
)Other


(3.80
)


2.34



0.03Net tax provision


(4.88
)%


7.02
%


(1.23
)%     Year Ended December 31,2004


2005


2006Deferred tax assets:Net operating loss carryforwards

$
14,637


$
12,708


$
13,400Accruals


281



1,581



2,106Other


128



(298
)


(289
)15,046



13,991



15,217Less: Valuation allowance


(15,046
)


(13,991
)


(15,217
)$



$



$
      78




---



##### Table of Contents



Note 15 
    Subsequent Events
  Stockholder
    Rights Plan
    Deposit
    Commitments
    Sale
    of Membership Interest in Variable Interest Entity
   79




---



##### Table of Contents



PlanetOut
    Inc.
 Supplementary
    Data  Selected Quarterly Financial Data
    (Unaudited)    Three Months EndedMar 31,


Jun 30,


Sep 30,


Dec 31,


Mar 31,


Jun 30,


Sep 30,


Dec 31,2005


2005


2005


2005


2006


2006


2006


2006(In thousands except per share amounts)Revenue:Advertising services

$
1,392


$
2,566


$
2,106


$
5,660


$
5,347


$
7,318


$
6,386


$
7,428Subscription services


4,853



5,172



5,077



6,033



6,270



6,321



5,831



6,025Transaction services


420



332



368



1,612



5,956



2,656



3,191



5,915Total revenue


6,665



8,070



7,551



13,305



17,573



16,295



15,408



19,368Operating costs and expenses:(*)Cost of revenues


2,125



2,320



2,177



5,342



9,430



6,872



8,225



10,678Sales and marketing


2,456



2,532



2,551



3,549



3,944



4,427



4,144



4,829General and administrative


1,248



1,615



1,430



2,743



3,080



3,078



2,996



3,557Restructuring






















834



58



(101
)Depreciation and amortization


820



848



787



1,005



1,224



1,300



1,319



1,763Total operating costs and expenses


6,649



7,315



6,945



12,639



17,678



16,511



16,742



20,726Income (loss) from operations


16



755



606



666



(105
)


(216
)


(1,334
)


(1,358
)Equity in net loss of
    unconsolidated affiliate


(9
)


(16
)


(32
)


















Interest expense


(38
)


(30
)


(20
)


(150
)


(197
)


(201
)


(218
)


(573
)Other income, net


239



313



362



285



170



110



96



208Income (loss) before income taxes
    and minority interest


208



1,022



916



801



(132
)


(307
)


(1,456
)


(1,723
)Provision for income taxes


(29
)


(12
)


(75
)


(91
)










(38
)


(7
)Minority interest in gain of
    consolidated affiliate






















(47
)






Net income (loss)

$
179


$
1,010


$
841


$
710


$
(132
)

$
(354
)

$
(1,494
)

$
(1,730
)Net income (loss) per share:Basic

$
0.01


$
0.06


$
0.05


$
0.04


$
(0.01
)

$
(0.02
)

$
(0.09
)

$
(0.10
)Diluted

$
0.01


$
0.06


$
0.05


$
0.04


$
(0.01
)

$
(0.02
)

$
(0.09
)

$
(0.10
)Weighted-average shares used to
    compute net income (loss) per share:Basic


16,939



17,092



17,202



17,261



17,261



17,315



17,333



17,391Diluted


18,269



18,249



18,200



18,194



17,261



17,315



17,333



17,391(*) Stock-based compensation is
    allocated as follows:Cost of revenues

$
12


$
15


$
10


$
140


$
5


$
1


$
11


$
53Sales and marketing


7



18



33



196



1



1



16



23General and administrative


(43
)


109



90



412



79



(101
)


34



170$
(24
)

$
142


$
133


$
748


$
85


$
(99
)

$
61


$
246  80




---



##### Table of Contents



PlanetOut
    Inc.
  FINANCIAL
    STATEMENT SCHEDULE
  Form 10-K
  Balance at


Charged or





ChargesBeginning


Credited to


Charged to


Utilized


Balance atof Period


Net Income (Loss)


Other Accounts


Write-offs


End of Period(In thousands)Allowance for Doubtful
    AccountsYear ended December 31, 2004

$
43


$
34


$



$
(18
)

$
59Year ended December 31, 2005

$
59


$
112


$
175


$
(87
)

$
259Year ended December 31, 2006

$
259


$
384


$
1,440


$
(1,563
)

$
520Allowance for Transaction
    LossesYear ended December 31, 2004

$
55


$
35


$



$



$
90Year ended December 31, 2005

$
90


$
3


$



$



$
93Year ended December 31, 2006

$
93


$
8


$



$



$
101Provision for ReturnsYear ended December 31, 2004

$



$



$



$



$
Year ended December 31, 2005

$



$
839


$



$
(95
)

$
744Year ended December 31, 2006

$
744


$
4,589


$



$
(4,284
)

$
1,049Tax Valuation
    AllowanceYear ended December 31, 2004

$
15,451


$



$



$
(405
)

$
15,046Year ended December 31, 2005

$
15,046


$



$



$
(1,055
)

$
13,991Year ended December 31, 2006

$
13,991


$



$



$
1,226


$
15,217Inventory Obsolescence
    ReservesYear ended December 31, 2004

$



$



$



$



$
Year ended December 31, 2005

$



$
5


$
82


$
(2
)

$
85Year ended December 31, 2006

$
85


$
34


$



$
(53
)

$
66  81




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure  Change in
    Auditors
    Regulation S-K
  Regulation S-K.
    Item 9A.
    Controls
    and Procedures  Evaluation
    of Disclosure Controls and Procedures
      Managements
    Report on Internal Control over Financial
    Reporting.
  Rules 13a-15(f) 15d-15(f) Internal
    Control-Integrated Framework
   82




---



##### Table of Contents



Changes
    in Internal Control over Financial Reporting
   83




---



##### Table of Contents



Report of
    Independent Registered Public Accounting Firm On Internal
    Control
    Over Financial Reporting
    Internal Control  Integrated Framework
        Internal
    Control  Integrated Framework Internal Control  Integrated
    Framework
    
    84




---



##### Table of Contents



Item 9B.
    Other
    Information   PART III  Item 10.
    Directors
    and Executive Officers and Corporate Governance  www.planetoutinc.com www.planetoutinc.com
    Item 11.
    Executive
    Compensation    Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters    Item 13.
    Certain
    Relationships and Related Transactions, and Director
    Independence    Item 14.
    Principal
    Accounting Fees and Services   PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules     85




---



##### Table of Contents



Regulation S-K):
  ExhibitNumber

Description of Documents2
.1

Asset Purchase Agreement dated
    November 8, 2005, by and among: LPI Media Inc. and SpecPub,
    Inc., each a Delaware corporation; Triangle Marketing Services,
    Inc., a Delaware corporation and a wholly owned subsidiary of
    LPI Media Inc.; PlanetOut Inc., a Delaware corporation; and
    Vulcan Acquisition Corp. and SpecPub Acquisition Corp., each a
    Delaware corporation and a wholly owned subsidiary of PlanetOut
    Inc. (filed as Exhibit 2.1 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on November 14, 2005, and amended as disclosed in our
    current report on
    Form 8-K/A,
    File
    No. 000-50879,
    filed on January 20, 2006, each of which is incorporated
    herein by reference). Certain schedules (and similar
    attachments) to Exhibit 2.1 have been omitted in accordance
    with Item 601(b)(2) of
    Regulation S-K.
    PlanetOut will furnish a supplemental copy of any omitted
    schedule (or similar attachment) to the Commission upon request.2
.2

Asset Purchase Agreement dated
    January 19, 2006, by and among: RSVP Productions, Inc., a
    Minnesota corporation; PlanetOut Inc., a Delaware corporation;
    Shuttlecraft Acquisition Corp., a Delaware corporation and a
    wholly owned subsidiary of PlanetOut; and Paul Figlmiller, an
    individual (filed as Exhibit 2.1 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on January 24, 2006, and incorporated herein by
    reference). Certain schedules (and similar attachments) to
    Exhibit 2.2 have been omitted in accordance with
    Item 601(b)(2) of
    Regulation S-K.
    PlanetOut will furnish a supplemental copy of any omitted
    schedule (or similar attachment) to the Commission upon request.3
.1

Amended and Restated Certificate
    of Incorporation, as currently in effect (filed as
    Exhibit 4.1 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on January 8, 2007, and incorporated herein by
    reference).3
.2

Amended and Restated Bylaws, as
    currently in effect (filed as Exhibit 3.4 to our
    Registration Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004, declared effective on
    October 13, 2004, and incorporated herein by reference).4
.1

Specimen of Common Stock
    Certificate (filed as Exhibit 4.1 to our Registration
    Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004, declared effective on
    October 13, 2004, and incorporated herein by reference).4
.2

Form of Senior Debt Indenture
    (filed as Exhibit 4.5 to our Registration Statement on
    Form S-3,
    File
    No. 333-133536,
    filed on April 25, 2006 and incorporated herein by
    reference).4
.3

Form of Subordinated Debt
    Indenture (filed as Exhibit 4.6 to our Registration
    Statement on
    Form S-3,
    File
    No. 333-133536,
    filed on April 25, 2006 and incorporated herein by
    reference).4
.4

Rights Agreement dated as of
    January 4, 2007 among PlanetOut Inc. and Wells Fargo Bank,
    N.A. (filed as Exhibit 99.2 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on January 8, 2007 and incorporated herein by
    reference).4
.5

Form of Rights Certificate (filed
    as Exhibit 99.3 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on January 8, 2007 and incorporated herein by
    reference).10
.1

1996 Stock Option Plan of
    PlanetOut Corporation (filed as Exhibit 10.1 to our
    Registration Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004 and incorporated herein
    by reference).10
.2

1996 Equity Incentive Plan of
    PlanetOut Corporation (filed as Exhibit 10.2 to our
    Registration Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004 and incorporated herein
    by reference).10
.3

Secured Promissory Note dated May
    2001 and Stock Pledge Agreement dated June 29, 2001 by and
    between PlanetOut Partners, Inc. and Mark Elderkin (filed as
    Exhibit 10.4 to our Registration Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004 and incorporated herein
    by reference).10
.4

Online Partners.com, Inc. 1997
    Stock Plan (filed as Exhibit 10.5 to our Registration
    Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004 and incorporated herein
    by reference). 86




---



##### Table of Contents



ExhibitNumber

Description of Documents10
.5

PlanetOut Partners, Inc. 2001
    Equity Incentive Plan (filed as Exhibit 10.6 to our
    Registration Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004 and incorporated herein
    by reference).10
.6

PlanetOut Inc. 2004 Equity
    Incentive Plan (filed as Exhibit 10.7 to our Registration
    Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004 and incorporated herein
    by reference).10
.7

PlanetOut Inc. 2004 Executive
    Officers and Directors Equity Incentive Plan (filed as
    Exhibit 10.8 to our Registration Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004 and incorporated herein
    by reference).10
.8

Form of PlanetOut Inc. 2004 Equity
    Incentive Plan Stock Option Grant Notice and Agreement (filed as
    Exhibit 99.7 to our Registration Statement on
    Form S-8,
    File
    No. 333-121633,
    initially filed on December 23, 2004 and incorporated
    herein by reference).10
.9

Form of PlanetOut Inc. 2004 Equity
    Incentive Plan Restricted Stock Award Agreement (filed as
    Exhibit 99.2 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on December 23, 2005, and incorporated herein by
    reference).10
.10

Office lease dated July 1,
    2004 by and between Blue Jean Equities West and PlanetOut Inc.
    (filed as Exhibit 10.12 to our Registration Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004 and incorporated herein
    by reference).10
.11

Form of directors and
    officers indemnification agreement (filed as
    Exhibit 10.22 to our Registration Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004 and incorporated herein
    by reference).10
.12

Amended and Restated Employment
    Agreement dated as of April 26, 2004 by and between Lowell
    R. Selvin and PlanetOut Inc. (filed as Exhibit 10.24 to our
    Registration Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004, and amended as described
    in Exhibit 99.1 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on December 23, 2005, each of which is incorporated
    herein by reference).10
.13

Amended and Restated Investors
    Rights Agreement by and among the registrant and the parties
    identified on Schedule A thereto (filed as
    Exhibit 10.23 to our Registration Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004 and incorporated herein
    by reference).10
.14

Employment Agreement dated as of
    January 31, 2005 by and between Donna L. Gibbs and
    PlanetOut Inc. (filed as Exhibit 99.1 to our Current Report
    on
    Form 8-K,
    File
    No. 000-50879,
    filed on February 4, 2005, and amended as described in
    Exhibit 99.3 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on May 23, 2005, each of which is incorporated herein
    by reference).10
.15

Form of Stock Option Agreement for
    Non-Employee Directors under the PlanetOut Inc. 2004 Equity
    Incentive Plan (filed as Exhibit 99.2 to our Current Report
    on
    Form 8-K,
    File
    No. 000-50879,
    filed on May 23, 2005, and incorporated herein by
    reference).10
.16

PlanetOut Inc. Management by
    Objective Plan (a description of which is filed as
    Exhibit 99.1 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on May 23, 2005 and incorporated herein by reference).10
.17

Employment Agreement dated as of
    June 30, 2005 and effective July 6, 2005, by and among
    PlanetOut Inc. and Peter Kretzman (filed as Exhibit 99.1 to
    our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on July 7, 2005 and incorporated herein by reference).10
.18

Option Acceleration Program (a
    description of which is filed as Exhibit 99.1 to our
    Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on December 23, 2005 and incorporated herein by
    reference).10
.19

Loan and Security Agreement dated
    January 19, 2006, by and among RSVP Productions, Inc., a
    Minnesota corporation, and PlanetOut Inc., a Delaware
    corporation (filed as Exhibit 2.2 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on January 24, 2006, and incorporated herein by
    reference). 87




---



##### Table of Contents



ExhibitNumber

Description of Documents10
.20

Employment Agreement, dated as of
    February 28, 2006 and effective February 28, 2006, by
    and among PlanetOut Inc. and Daniel J. Miller (filed as
    Exhibit 99.1 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on March 6, 2006 and incorporated herein by
    reference).10
.21

Amended and Restated Employment
    Agreement dated as of April 26, 2004 by and between Mark D.
    Elderkin and PlanetOut Inc. (filed as Exhibit 10.25 to our
    Registration Statement on
    Form S-1,
    File
    No. 333-114988,
    initially filed on April 29, 2004, and amended as described
    in Exhibit 99.1 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on January 31, 2006, each of which is incorporated
    herein by reference).10
.22

Outside Director Compensation
    Program (a description of which is filed as Exhibit 99.1 to
    our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on December 23, 2005, and amended as described in
    Exhibit 99.1 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed January 31, 2006, each of which is incorporated
    herein by reference).10
.23

Employment Agreement, dated as of
    June 20, 2006 by and between Karen Magee and PlanetOut Inc.
    (filed as Exhibit 99.1 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on June 23, 2006 and incorporated herein by
    reference).10
.24

Amended and Restated Employment
    Agreement dated as of August 2, 2006 by and between Jeffrey
    T. Soukup and PlanetOut Inc. (filed as Exhibit 99.1 to our
    Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on August 2, 2006 and incorporated herein by
    reference).10
.25

Loan and Security Agreement dated
    September 28, 2006, by and among: PlanetOut Inc. and its
    direct subsidiaries PlanetOut USA Inc., LPI Media Inc., SpecPub,
    Inc. and RSVP Productions, Inc. as Borrowers; and ORIX Venture
    Finance LLC as Lender (filed as Exhibit 99.1 to our Current
    Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on October 3, 2006 and incorporated herein by
    reference).10
.26

Common Stock Warrant dated
    September 28, 2006 issued to ORIX Venture Finance LLC
    (filed as Exhibit 99.2 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on October 3, 2006 and incorporated herein by
    reference).10
.27

Amendment No. 2, dated
    February 14, 2007 and effective as of December 30,
    2006, to Loan and Security Agreement by and between PlanetOut
    Inc., PlanetOut USA Inc., LPI Media Inc., SpecPub, Inc., RSVP
    Productions, Inc. and ORIX Venture Finance, LLC (filed as
    Exhibit 99.1 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on February 20, 2007 and incorporated herein by
    reference).10
.28

Employment Agreement, dated
    February 14, 2007, by and between William Bain and
    PlanetOut Inc. (filed as Exhibit 99.2 to our Current Report
    on
    Form 8-K,
    File
    No. 000-50879,
    filed on February 20, 2007 and incorporated herein by
    reference).12
.1

Computation of Ratio of Earnings
    to Fixed Charges.16
.1

Letter Regarding Change in
    Accountants dated June 29, 2005 from PricewaterhouseCoopers
    LLP to the Securities and Exchange Commission (filed as
    Exhibit 16.1 to our Current Report on
    Form 8-K,
    File
    No. 000-50879,
    filed on June 30, 2005 and incorporated herein by
    reference).21
.1

List of subsidiaries.23
.1

Consent PricewaterhouseCoopers
    LLP, Independent Registered Public Accounting Firm.23
.2

Consent of Stonefield Josephson,
    Inc., Independent Registered Public Accounting Firm.24
.1

Power of Attorney (see the
    signature page of this Annual Report on
    Form 10-K)31
.1

Certification of Chief Executive
    Officer pursuant to the Securities Exchange Act
    Rules 13a-14(a)
    and
    15d-14(a) as
    Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.31
.2

Certification of Chief Financial
    Officer pursuant to the Securities Exchange Act
    Rules 13a-14(a)
    and
    15d-14(a) as
    Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act
    of 2002.32
.1

Certification of Chief Executive
    Officer pursuant to Section 18 U.S.C section 1350.32
.2

Certification of Chief Financial
    Officer pursuant to Section 18 U.S.C.
    section 1350.  88




---



##### Table of Contents



SIGNATURES      By:
    /s/  DANIEL
    J. MILLER   Chief Financial Officer,
 Senior Vice President and Treasurer
  POWER OF
    ATTORNEY
  attorneys-in-fact Form 10-K, attorneys-in-fact attorneys-in-fact
      Signature

Title

Date/s/  KAREN
    MAGEEKaren
    Magee

Chief Executive Officer (Principal
    Executive Officer) and Director

March 9, 2007/s/  DANIEL
    J. MILLERDaniel
    J. Miller

Chief Financial Officer (Principal
    Financial and Accounting Officer), Senior Vice President and
    Treasurer

March 9, 2007/s/  H.
    WILLIAM
    JESSE, JR.H.
    William Jesse, Jr.

Chairman of the Board

March 9, 2007/s/  LOWELL
    R. SELVINLowell
    R. Selvin

Chairman Emeritus

March 9, 2007/s/  JERRY
    COLONNAJerry
    Colonna

Director

March 9, 2007 89




---



##### Table of Contents



Signature

Title

Date/s/  PHIL
    KLEWENOPhil
    Kleweno

Director

March 9, 2007/s/  ROBERT
    W. KINGRobert
    W. King

Director

March 9, 2007  90