##### 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, 2010ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission file number:
    000-52026
 LOOPNET, INC.
 (Exact name of registrant as
    specified in its charter)
  Delaware

77-0463987(State or other jurisdiction
    of
    incorporation or organization)

(I.R.S. Employer
    Identification No.)   185 Berry Street, Suite 4000
 San Francisco, CA 94107
 (Address of principal executive
    offices)
  (415) 243-4200
 (Registrants telephone
    number, including area code)
  N/A
 (Former name, former address and
    former fiscal year, if changed since last report)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Class

Name of Each Exchange on Which RegisteredCommon Stock

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 N/A
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer þ

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

Smaller reporting
    company o   Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE
  Items 10, 11, 12, 13, and 14 of Part III
    incorporate by reference information from the Registrants
    Proxy Statement to be filed with the Securities and Exchange
    Commission in connection with the solicitation of proxies for
    the Registrants 2011 Annual Meeting of Stockholders.




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##### 





TABLE OF
    CONTENTS
  PagePART IItem 1.


Business


4Item 1A.


Risk Factors


16Item 1B.


Unresolved Staff Comments


27Item 2.


Properties


27Item 3.


Legal Proceedings


27Item 4.


[Reserved]


27PART IIItem 5.


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


28Item 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


46Item 8.


Financial Statements and Supplementary Data


46Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


46Item 9A.


Controls and Procedures


46Item 9B.


Other Information


47PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


47Item 11


Executive Compensation


48Item 12.


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


48Item 13.


Certain Relationships and Related Transactions
    and Director Independence


49Item 14.


Principal Accountant Fees and Services


49PART IVItem 15.


Exhibits and Financial Statement Schedules


49Signatures


51EX-10.11EX-10.13EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   2




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STATEMENT
    REGARDING FORWARD-LOOKING STATEMENTS
  Form 10-K,
  
    our future financial results;
    our future advertising and marketing activities;
    our future investments in technology, new products and services
    or companies; and
    trends in the commercial real estate market and the general
    economy.      Form 10-K
 3




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PART I  Item 1.
    Business.    www.LoopNet.com,
        Managements Discussion and Analysis of Financial
    Condition and Results of Operations.
 4




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Industry
    Background
                  The
    LoopNet Model
   5




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Scale in our commercial real estate online
    marketplace.
  Expansive member-generated content
    offering.
  Compelling member experience.
     6




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The
    LoopNet Advantage
    Benefits
    to Property Listers
  Broad marketing exposure.
  Cost-effective and measurable marketing
    method.
  Detailed and up-to-date property listing
    information.
  Benefits
    to Property Searchers
  Access to a large number of detailed and up-to-date property
    listings.
  Single-source access to business-critical
    information.
 7




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Customized search engine.
  Our
    Strategy
    Increasing the number of marketplace users.
  Increasing revenue from premium members.
  Offering complementary products and
    services.
  Enhancing the functionality of our current
    offerings.
 8




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Expanding into new markets.
  Products
    and Services
      Basic and premium membership.
    Basic

PremiumMembership

MembershipListing BenefitsDetailed Property Listings

ü

üMyLoopNet  Listing Management Center

ü

üEnhanced Listing Exposure



üProspectList  Lead Generation



üMarketing Exposure Statistics



üControlled Access Marketing



ü 9




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Basic

PremiumMembership

MembershipSearching BenefitsListings Search Engine

ü

üMyLoopNet  Searching Management Center

ü

üEnhanced Listings Access



üPropertyAlert  Email Alerts of New Listings

Weekly

DailyReporting and Map-Based Presentations



üMapSearch

ü

ü   
    Property listing.  Our property listing service
    allows customers to quickly and easily submit listings on
    properties available for sale or for lease, enabling them to
    reach a large audience of commercial real estate transaction
    participants. All listings submitted to the LoopNet online
    marketplace are processed through a listing quality assessment
    mechanism. Members can submit an unlimited number of listings
    and include detailed property listing information, including
    building description, financial and tenant information,
    photographs and key property characteristics. Our service
    automatically compiles this information into a
    professional-quality online brochure.
    MyLoopNet-Listing Management Center.  Members
    can use MyLoopNet to manage various features of their LoopNet
    membership, including managing their listings and tracking the
    exposure their property profiles have received.
    Enhanced Listing Exposure.  Property listings
    submitted by basic members can only be viewed by premium
    members. Property listings submitted by premium members are
    available for viewing by all registered members and have premium
    placement on search results.
    ProspectList.  Premium members have exclusive
    access to ProspectList, a reverse lookup search function that
    enables property listers to market listings to specific agents,
    buyers and tenants who have posted their property purchase or
    lease criteria on LoopNet and requested that they be contacted
    with property listings that match those criteria.
    Marketing Exposure Statistics.  Premium members
    have access in MyLoopNet to various statistics on the number of
    exposures being generated for their listings on LoopNet.
    Controlled Access Marketing.  Premium members
    can use Controlled Access Marketing to password-protect their
    listings. For example, a premium member might choose to limit
    access to a property listing such that searchers can only access
    the listing details after agreeing to a confidentiality
    agreement with the listing agent.
    Property searching.  We developed our property
    search engine specifically for the commercial real estate
    market. Members use our proprietary search engine to identify
    properties available for sale or for lease on our online
    marketplace that meet their criteria. Members can search for
    properties based on a broad scope of commercial real estate
    specifications, including property type and sub-type, location,
    building and lot size, and price range. Members can also search
    using map-based geographic searching combined with various
    property listing attributes, including a keyword search
    capability.
    MyLoopNet  Searching Management
    Center.  Members can use MyLoopNet to manage
    various features of their LoopNet membership, including saving
    links to multiple property profiles and detailed search
    parameters for future use. Members can also use MyLoopNet to
    specify the criteria for PropertyAlert emails.
    Enhanced Listings Access.  Basic members are
    able to view summary details of their search results but can
    only view property profiles submitted by premium members.
    Premium members have full access to all property listings and
    profiles.
    PropertyAlert.  Members can use PropertyAlert
    to receive email alerts with new property listings that meet
    their selection criteria. Premium members receive email alerts
    daily, while basic members receive email alerts weekly. 10




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
    Reporting and Map-Based Presentations.  Premium
    members can automatically generate professional-quality reports
    and maps of properties they have selected to use for
    presentations to clients and interested parties.
    MapSearch.  Members have access to MapSearch,
    an interactive and dynamic aerial and satellite image map
    interface for property searches.  LoopLink.
  RecentSales.
  Property Research Database.
  Advertising and lead generation.
  Land-for-Sale.
  Business-for-Sale.
  REApplications.
 11




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Sales and
    Marketing
            Competition
      ® ®
     12




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Technology
    and Infrastructure
           13




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Intellectual
    Property
      Employees
    Executive
    Officers
    Name

Age

PositionRichard J. Boyle, Jr.


45


Chief Executive Officer and Chairman of the Board of DirectorsBrent Stumme


48


Chief Financial Officer and Senior Vice President, Finance and
    AdministrationThomas Byrne


44


President and Chief Operating OfficerJason Greenman


41


Chief Strategy Officer and Senior Vice President, Corporate
    DevelopmentWayne Warthen


47


Chief Technology Officer and Senior Vice President, Information
    TechnologyMichael Handelsman


44


Senior Vice President and Group General Manager, Marketplace
    VerticalsFrederick Saint


45


Senior Vice President, Product and Business DevelopmentBryan Smith


45


Senior Vice President, Sales and Services  14




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Richard J. Boyle, Jr.
  Thomas Byrne
  Brent Stumme
  Jason Greenman
  Wayne Warthen
  Michael Handelsman
  Frederick Saint
  Bryan Smith
 15




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Information
    Available to Investors
  www.LoopNet.com, Form 10-K, Form 10-Q, Form 8-K, Form 10-K
  Item 1A.
    Risk
    Factors.  Form 10-K
  The
    ongoing uncertainty in the commercial real estate market and
    overall economy could negatively affect our revenues, expenses
    and operating results.
    
    periods of economic slowdown or recession globally, in the
    United States or locally;
    inflation;
    flows of capital into or out of real estate investment in the
    United States or various regions of the United States;
    rates of unemployment;
    interest rates;
    the availability and cost of capital;
    wage and salary levels; or
    concerns about any of the foregoing.   16




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
    economic slowdown or recession;
    changes in levels of rent or appreciation of asset values;
    changing interest rates;
    tax and accounting policies;
    the availability and cost of capital;
    costs of construction;
    increased unemployment;
    lower consumer confidence;
    lower wage and salary levels;
    war, terrorist attacks or natural disasters; or
    the public perception that any of these conditions may occur.    Our
    business is largely based on a subscription model, and
    accordingly, any failure to increase the number of our customers
    or retain existing customers could cause our revenues to
    decline.
    and/or
   17




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We
    rely on our marketing efforts to generate new registered
    members. If our marketing efforts are ineffective, we could fail
    to attract new registered members, which could reduce the
    attractiveness of our marketplace to current and potential
    customers and lead to a reduction in our revenues.
    If we
    are unable to obtain or retain listings from commercial real
    estate brokers, agents, and property owners, our marketplace
    could be less attractive to current or potential customers,
    which could result in a reduction in our revenues.
    We may
    be unable to compete successfully with our current or future
    competitors.
  land-for-sale businesses-for-sale
 18




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Our
    current focus on internal and external investments for long term
    growth may result in flat revenue growth rates and place
    downward pressure on our operating margin in the near
    future.
    If we
    are unable to introduce new or upgraded services, products or
    enabling technologies that our customers recognize as valuable,
    we may fail to attract new customers or retain existing
    customers. Our efforts to develop new and upgraded products and
    services could require us to incur significant
    costs.
    If we
    are not able to successfully identify or integrate acquisitions,
    our managements attention could be diverted, and efforts
    to integrate acquisitions could consume significant
    resources.
    
    difficulties in integrating the operations, technologies, and
    products of the acquired companies;
    diversion of managements attention from the normal daily
    operations of our business;
    inability to maintain the key business relationships and the
    reputations of acquired businesses;
    entry into markets in which we have limited or no prior
    experience and in which competitors have stronger market
    positions; 19




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
    dependence on unfamiliar affiliates and partners;
    insufficient revenues to offset increased expenses associated
    with acquisitions;
    reduction or replacement of the sales of existing services by
    sales of products or services from acquired lines of business;
    responsibility for the liabilities of acquired businesses;
    inability to maintain our internal standards, controls,
    procedures and policies; and
    potential loss of key employees of the acquired companies.        The
    number of our registered members is higher than the number of
    actual members.
    Our
    operating results and revenues are subject to fluctuations that
    may cause our stock price to decline, and our quarterly
    financial results may be subject to seasonality, each of which
    could cause our stock price to decline.
  Form 10-K:
  
    rates of member adoption and retention;
    changes in our pricing strategy and timing of changes;
    changes in our marketing or other corporate strategies;
    our introduction of and investments in new products and services
    or changes to existing products and services;
    the amount and timing of our operating expenses and capital
    expenditures;
    the amount and timing of non-cash stock-based charges;
    costs related to acquisitions of businesses or
    technologies; and 20




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
    other factors outside of our control.    and/or
  If we
    are unable to enforce or defend our ownership and use of
    intellectual property, our business, competitive position and
    operating results could be harmed.
          We
    could face liability for information on our website or general
    litigation claims.
   21




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If we
    are unable to convince commercial real estate brokers and other
    commercial real estate professionals that our services and
    products are superior to traditional methods of listing,
    searching, and marketing commercial real estate, they could
    choose not to use our marketplace, which could reduce our
    revenues or increase our expenses.
    Our
    business depends on retaining and attracting capable management
    and operating personnel.
     22




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Certain
    U.S. and foreign laws could subject us to claims or otherwise
    harm our business.
          If we
    fail to protect confidential information against security
    breaches, or if our members or potential members are reluctant
    to use our marketplace because of privacy concerns, we might
    face additional costs, and activity in our marketplace could
    decline.
       23




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Our
    services may infringe the intellectual property rights of others
    and we may be subject to claims of intellectual property rights
    infringement.
        Unless
    we develop, maintain and protect our brand identity, our
    business may not grow and our financial results may
    suffer.
    Changes
    in or interpretations of accounting rules and regulations could
    result in unfavorable accounting charges or adversely affect our
    reported financial results.
   24




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If our
    operating results do not meet the expectations of investors or
    equity research analysts, our market price may decline and we
    may be subject to class action litigation.
    If our
    website or our other services experience system failures, our
    customers may be dissatisfied and our operations could be
    impaired.
      Our
    internal network infrastructure could be disrupted or
    penetrated, which could materially impact our ability to provide
    our services and our customers confidence in our
    services.
      We may
    not be able to successfully halt the operations of websites that
    aggregate our data, as well as data from other companies, such
    as copycat websites that may misappropriate our
    data.
   25




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Our
    stock price may be volatile and you may be unable to sell your
    shares at or above the purchase price.
  Form 10-K,
      Our
    principal stockholders, executive officers and directors own a
    significant percentage of our stock, and as a result, the
    trading price for our shares may be depressed and these
    stockholders can take actions that may be adverse to your
    interests.
    Our
    charter documents and Delaware law could prevent a takeover that
    stockholders consider favorable and could also reduce the market
    price of our stock.
    
    providing for a classified board of directors with staggered,
    three-year terms;
    not providing for cumulative voting in the election of directors
    or imposing a majority voting standard;
    authorizing the board to issue, without stockholder approval,
    preferred stock rights senior to those of common stock;
    prohibiting stockholder action by written consent;
    limiting the persons who may call special meetings of
    stockholders; and
    requiring advance notification of stockholder nominations and
    proposals. 26




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Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.    Item 3.
    Legal
    Proceedings.  patents-in-suit patents-in-suit
    Item 4.
    Reserved. 27




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

Low2010First Quarter

$
11.86


$
8.86Second Quarter

$
12.72


$
8.50Third Quarter

$
12.95


$
9.73Fourth Quarter

$
13.08


$
10.382009First Quarter

$
7.59


$
5.04Second Quarter

$
9.20


$
5.93Third Quarter

$
9.27


$
7.27Fourth Quarter

$
11.47


$
8.29     Dividend
    policy
   28




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Performance
    Graph
    Comparative
    Returns
  
  Cumulative
    Total Return
  6/7/2006


12/29/2006


12/31/2007


12/31/2008


12/31/2009


12/31/2010LOOPNET, INC.



100.00




99.87
(1)



93.67
(1)



45.47
(1)



66.20
(1)



74.07
(1)NASDAQ COMPOSITE INDEX



100.00




112.25




123.26




73.29




105.45




123.29S&P NORTH AMERICAN TECH INTERNET TRADING INDEX



100.00




116.95




127.45




67.32




118.18




160.95     (1)
    
    Based on the initial public offering price of $12.00 per share
    on June 6, 2006, the cumulative total return is $124.83,
    $117.08, $56.83, $82.75 and $92.58 on 12/29/06, 12/31/07,
    12/31/08, 12/31/09 and 12/31/10, respectfully.    Issuer
    Purchases of Equity Securities
     29




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Item 6.
    Selected
    Financial Data.  Form 10-K.
  Form 10-K. Form 10-K.
  Year Ended December 31,2006


2007


2008


2009


2010(In thousands, except per share data)Consolidated Statements of Operations Data:Revenues

$
48,411


$
70,729


$
86,074


$
76,487


$
78,002Cost of revenue(1)


5,599



8,033



10,858



11,060



12,562Gross profit


42,812



62,696



75,216



65,427



65,440Operating expenses:Sales and marketing(1)


9,506



14,667



18,825



15,064



16,785Technology and product development(1)


4,341



6,427



9,075



10,707



12,231General and administrative(1)


7,697



11,997



17,773



20,677



15,693Amortization of acquired intangible assets


106



256



966



1,191



2,083Total operating expenses


21,650



33,347



46,639



47,639



46,792Income from operations


21,162



29,349



28,577



17,788



18,648Interest and other (expense) income, net


2,883



5,046



1,998



211



(2,461
)Income before tax


24,045



34,395



30,575



17,999



16,187Income tax expense


8,550



13,268



12,297



6,246



461Net income


15,495



21,127



18,278



11,753



15,726Convertible preferred stock accretion of discount














(240
)


(339
)Net income applicable to common stockholders

$
15,495


$
21,127


$
18,278


$
11,513


$
15,387Net income per share applicable to common stockholdersBasic

$
0.42


$
0.55


$
0.51


$
0.28


$
0.38Diluted

$
0.40


$
0.52


$
0.49


$
0.27


$
0.36     (1)
    
    Stock-based compensation is allocated as follows:  30




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Year Ended December 31,2006


2007


2008


2009


2010(In thousands)Cost of revenue

$
151


$
357


$
570


$
495


$
546Sales and marketing


686



1,358



2,198



894



1,786Technology and product development


195



600



1,311



2,298



2,680General and administrative


421



1,180



1,855



3,140



3,220Total

$
1,453


$
3,495


$
5,934


$
6,827


$
8,232   Year Ended December 31,2006

2007

2008

2009

2010(In thousands)Consolidated Balance Sheet Data:Cash, cash equivalents and short-term investments

$
89,028


$
107,889


$
64,587


$
129,011


$
92,285Working capital


81,884



94,667



52,529



117,210



79,917Total assets


100,205



137,359



108,210



174,249



171,990Total liabilities


10,202



15,506



15,759



14,747



18,765Redeemable convertible preferred stock














48,207



48,546Total shareholders equity


90,003



121,853



92,451



111,295



104,679   Year Ended December 31,2006

2007

2008

2009

2010(In thousands)Consolidated Statement of Cash Flows Data:Cash flow provided by operating activities

$
23,205


$
30,301


$
25,105


$
18,632


$
21,262Depreciation and amortization


611



1,154



2,199



2,601



3,480Capital expenditures


(665
)


(1,797
)


(1,319
)


(1,437
)


(1,197
)   Year Ended December 31,2006

2007

2008

2009

2010Other Operating Data (unaudited):LoopNet registered members at end of year


1,766,508



2,567,729



3,251,260



3,925,534



4,626,973LoopNet premium members at end of year


78,952



88,340



77,283



68,378



68,608  31




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations.  You should read the following discussion and analysis by our
    management of our financial condition and results of operations
    in conjunction with our consolidated financial statements and
    the accompanying notes included elsewhere in this Annual Report
    on Form 10-K
    . This discussion and other parts of this Annual Report on Form
    10-K contain
    forward-looking statements that involve risks and uncertainties,
    such as statements of our plans, objectives, expectations and
    intentions. Our actual results could differ materially from
    those discussed in the forward-looking statements. Factors that
    could cause or contribute to such differences include, but are
    not limited to, those discussed in Item 1A of Part I,
    Risk Factors. No forward-looking statement is a
    guarantee of future performance and you should not place undue
    reliance on any forward-looking statement, Except as otherwise
    required by law, we undertake no obligation to update or revise
    any forward-looking statement contained in this report and do
    not intend to do so.
  Overview
    Key
    Operating Metrics and Trends
    
    the number of our registered members;
    the number of monthly unique visitors to our marketplace;
    the number of our premium members;
    the average monthly subscription price paid by our premium
    members;
    the cancellation rate of our premium members;
    the number of active commercial real estate listings on our
    marketplace;
    the number of property profiles viewed by visitors to LoopNet;
    the number of unique paying subscribers to our other commercial
    real estate subscription products and services; and
    the average monthly subscription price paid by our unique
    subscribers to our commercial real estate subscription products
    and services.   32




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Our
    Revenues and Expenses
    
    LoopNet premium membership fees;
    other property advertising fees, such as Cityfeet.com,
    LandsofAmerica and LandAndFarm.com;
    BizBuySell and BizQuest membership fees and paid listings;
    advertising on, and lead generation from, our marketplaces;
    LoopLink product license fees; and
    LoopNet RecentSales membership fees.    
    the adoption of our premium membership services by the
    commercial real estate industry and cancellation rates;
    the average monthly subscription price of our premium membership
    product;
    the adoption of our RecentSales and Property Research Database
    services and other new products and services by the commercial
    real estate industry; and
    the adoption of our services by the operating business for sale
    industry.     34




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Seasonality
    and Cyclicality
        Results
    of Operations
    Year Ended December 31,2008

2009

2010Revenues


100.0
%


100.0
%


100.0
%Cost of revenue


12.6



14.5



16.1Gross profit


87.4



85.5



83.9Operating expenses:Sales and marketing


21.9



19.7



21.5Technology and product development


10.5



14.0



15.7General and administrative


20.7



27.0



20.1Amortization of acquired intangible assets


1.1



1.6



2.7Total operating expenses


54.2



62.3



60.0Income from operations


33.2



23.3



23.9Interest and other (expense) income, net


2.3



0.3



(3.2
)Income before tax


35.5



23.5



20.8Income tax expense


14.3



8.2



0.6Net income


21.2



15.4



20.2Convertible preferred stock accretion of discount






(0.3
)


(0.4
)Net income applicable to common stockholders


21.2
%


15.1
%


19.7
%  35




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Comparison
    of Years Ended December 31, 2009 and 2010
  Revenues
  Year Ended December 31,Percent2009

2010

Increase

Change(Dollars in thousands)Revenues

$
76,487


$
78,002


$
1,515



2.0
%Premium members at year-end


68,378



68,608



230



0.3
%     Cost
    of Revenues
  Year Ended December 31,Percent2009

2010

Increase

Change(Dollars in thousands)Cost of revenues

$
11,060


$
12,562


$
1,502



13.6
%Percentage of revenues


14.5
%


16.1
%         Sales
    and Marketing
  Year Ended December 31,Percent2009

2010

Increase

Change(Dollars in thousands)Sales and marketing

$
15,064


$
16,785


$
1,721



11.4
%Percentage of revenues


19.7
%


21.5
%        36




---



##### Table of Contents



Technology
    and Product Development
  Year Ended December 31,Percent2009

2010

Increase

Change(Dollars in thousands)Technology and product development

$
10,707


$
12,231


$
1,524



14.2
%Percentage of revenues


14.0
%


15.7
%         General
    and Administrative
  Year Ended December 31,Percent2009

2010

Decrease

Change(Dollars in thousands)General and administrative

$
20,677


$
15,693


$
(4,984
)


(24.1
)%Percentage of revenues


27.0
%


20.1
%         Amortization
    of Acquired Intangible Assets
  Year Ended December 31,Percent2009

2010

Increase

Change(Dollars in thousands)Amortization of acquired intangible assets

$
1,191


$
2,083


$
892



74.9
%Percentage of revenues


1.6
%


2.7
%        37




---



##### Table of Contents



Stock-Based
    Compensation
  Year Ended December 31,Percent2009

2010

Increase

Change(Dollars in thousands)Cost of revenue

$
495


$
546


$
51



10.3
%Sales and marketing


894



1,786



892



99.8
%Technology and product development


2,298



2,680



382



16.6
%General and administrative


3,140



3,220



80



2.5
%Total

$
6,827


$
8,232


$
1,405



20.6
%     Interest
    and Other (Expense) Income, Net
    Income
    Tax Expense
    Comparison
    of Years Ended December 31, 2008 and 2009
  Revenues
  Year Ended December 31,Percent2008

2009

Decrease

Change(Dollars in thousands)Revenues

$
86,074


$
76,487


$
(9,587
)


(11.1
)%Premium members at year-end


77,283



68,378



(8,905
)


(11.5
)%     Cost
    of Revenues
  Year Ended December 31,Percent2008

2009

Increase

Change(Dollars in thousands)Cost of revenues

$
10,858


$
11,060


$
202



1.9
%Percentage of revenues


12.6
%


14.5
%    38




---



##### Table of Contents



Sales
    and Marketing
  Year Ended December 31,Percent2008

2009

Decrease

Change(Dollars in thousands)Sales and marketing

$
18,825


$
15,064


$
(3,761
)


(20.0
)%Percentage of revenues


21.9
%


19.7
%     Technology
    and Product Development
  Year Ended December 31,Percent2008

2009

Increase

Change(Dollars in thousands)Technology and product development

$
9,075


$
10,707


$
1,632



18.0
%Percentage of revenues


10.5
%


14.0
%     General
    and Administrative
  Year Ended December 31,Percent2008

2009

Increase

Change(Dollars in thousands)General and administrative

$
17,773


$
20,677


$
2,904



16.3
%Percentage of revenues


20.6
%


27.0
%     Amortization
    of Acquired Intangible Assets
  Year Ended December 31,Percent2008

2009

Increase

Change(Dollars in thousands)Amortization of acquired intangible assets

$
966


$
1,191


$
225



23.3
%Percentage of revenues


1.1
%


1.6
%    39




---



##### Table of Contents



Stock-Based
    Compensation
  Year Ended December 31,Increase/


Percent2008


2009


Decrease


Change(Dollars in thousands)Cost of revenue

$
570


$
495


$
(75
)


(13.2
)%Sales and marketing


2,198



894



(1,304
)


(59.3
)%Technology and product development


1,311



2,298



987



75.3
%General and administrative


1,855



3,140



1,285



69.3
%Total

$
5,934


$
6,827


$
893



15.1
%         Cost of revenue

$
(132
)Sales and marketing


(1,177
)Technology and product development


135General and administrative


438Total

$
(736
)   Interest
    and Other (Expense) Income, Net
    Income
    Tax Expense
   40




---



##### Table of Contents



Quarterly
    Consolidated Statements of Income Data
  Form 10-K.
  Quarter EndedMar. 31,


June 30,


Sept. 30,


Dec. 31,


Mar. 31,


June 30,


Sept. 30,


Dec. 31,2009


2009


2009


2009


2010


2010


2010


2010(In thousands, except per share data)Revenues

$
20,102


$
19,248


$
18,795


$
18,341


$
18,822


$
19,364


$
19,779


$
20,037Cost of revenue(1)


2,892



2,777



2,670



2,721



2,846



3,001



3,015



3,699Gross profit


17,210



16,471



16,125



15,620



15,976



16,363



16,764



16,338Operating expenses:Sales and marketing(1)


4,507



4,237



2,650



3,670



4,290



4,191



4,093



4,211Technology and product development(1)


2,559



2,654



2,833



2,660



2,949



2,948



3,157



3,178General and administrative(1)


5,135



6,135



5,251



4,155



4,371



3,244



4,496



3,582Amortization of acquired intangible assets


302



299



296



294



445



481



516



641Total operating expenses


12,503



13,325



11,030



10,779



12,055



10,864



12,262



11,612Income from operations


4,707



3,146



5,095



4,841



3,921



5,499



4,502



4,726Interest and other (expense) income, net


12



95



52



51



(104
)


(264
)


(301
)


(1,791
)Income before tax


4,719



3,241



5,147



4,892



3,817



5,235



4,201



2,935Income tax (benefit) expense


1,930



1,386



1,342



1,587



1,417



1,929



1,463



(4,348
)Net income


2,789



1,855



3,805



3,305



2,400



3,306



2,738



7,283Convertible preferred stock accretion of discount






(71
)


(85
)


(85
)


(85
)


(85
)


(85
)


(85
)Net income applicable to common shareholders

$
2,789


$
1,784


$
3,720


$
3,220


$
2,315


$
3,221


$
2,653


$
7,198Net income per share applicable to common shareholdersBasic

$
0.08


$
0.04


$
0.09


$
0.08


$
0.06


$
0.08


$
0.07


$
0.18Diluted

$
0.08


$
0.04


$
0.09


$
0.07


$
0.05


$
0.07


$
0.06


$
0.17     (1)
    
    Stock-based compensation is allocated as follows:  Quarter EndedMar. 31,


June 30,


Sept. 30,


Dec. 31,


Mar. 31,


June 30,


Sept. 30,


Dec. 31,2009


2009


2009


2009


2009


2009


2009


2009(In thousands)Cost of revenue

$
167


$
189


$
4


$
134


$
128


$
154


$
132


$
132Sales and marketing


600



637



(755
)


412



485



444



409



449Technology and product development


486



560



699



554



682



684



675



638General and administrative


590



711



1,174



665



827



810



798



785Total

$
1,843


$
2,097


$
1,122


$
1,765


$
2,122


$
2,092


$
2,014


$
2,004   41




---



##### Table of Contents



Quarter EndedMar. 31,


June 30,


Sept. 30,


Dec. 31,


Mar. 31,


June 30,


Sept. 30,


Dec. 31,2009


2009


2009


2009


2010


2010


2010


2010Revenues


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%Cost of revenues


14.4



14.4



14.2



14.8



15.1



15.5



15.2



18.5Gross profit


85.6



85.6



85.8



85.2



84.9



84.5



84.8



81.5Operating expenses:Sales and marketing


22.4



22.0



14.1



20.0



22.8



21.6



20.7



21.0Technology and product development


12.7



13.8



15.1



14.5



15.7



15.2



16.0



15.9General and administrative


25.5



31.9



27.9



22.7



23.2



16.8



22.7



17.9Amortization of acquired intangible assets


1.5



1.6



1.6



1.6



2.4



2.5



2.6



3.2Total operating expenses


62.2



69.2



58.7



58.8



64.0



56.1



62.0



58.0Income from operations


23.4



16.3



27.1



26.4



20.8



28.4



22.8



23.6Interest and other (expense) income


0.1



0.5



0.3



0.3



(0.6
)


(1.4
)


(1.5
)


(8.9
)Income before tax


23.5



16.8



27.4



26.7



20.3



27.0



21.2



14.6Income tax (benefit) expense


9.6



7.2



7.1



8.7



7.5



10.0



7.4



(21.7
)Net income


13.9



9.6



20.2



18.0



12.8



17.1



13.8



36.3Convertible preferred stock accretion of discount






(0.4
)


(0.5
)


(0.5
)


(0.5
)


(0.4
)


(0.4
)


(0.4
)Net income applicable to common shareholders


13.9
%


9.3
%


19.8
%


17.6
%


12.3
%


16.6
%


13.4
%


35.9
%   Liquidity
    and Capital Resources
    Year Ended December 31,2008

2009

2010(In thousands)Cash provided by operating activities

$
25,105


$
18,632


$
21,262Cash used in investing activities


(14,903
)


(2,999
)


(27,795
)Cash (used in) provided by financing activities


(53,441
)


48,613



(30,265
)          42




---



##### Table of Contents



Rule 10b-18
  Operating
    Activities
    Investing
    Activities
        Financing
    Activities
        Off-Balance
    Sheet Arrangements
    Contractual
    Obligations and Known Future Cash Requirements
   43




---



##### Table of Contents



Payments Due by Period2015 and2011

2012

2013

2014

Thereafter

Total(Dollars in thousands)Operating lease obligations

$
3,028


$
2,994


$
3,022


$
3,080


$
3,837


$
15,961   Advertising
    and Media Contracts
    Future
    Capital Requirements
    Critical
    Accounting Policies and Estimates
      Revenue
    Recognition
    Income
    Tax Expense
   44




---



##### Table of Contents



Long-Lived
    Assets Including Goodwill and Other Intangible
    Assets
         45




---



##### Table of Contents



Stock-Based
    Compensation
        Recent
    Accounting Pronouncements
    Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.    Item 8.
    Financial
    Statements and Supplementary Data.  10-K.
  Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure.    Item 9A.
    Controls
    and Procedures.  Evaluation of disclosure controls and
    procedures. Form 10-K.
 46




---



##### Table of Contents



Managements Report on Internal Control over
    Financial Reporting. Rules 13a-15(f). Internal Control
     Integrated Framework
      Changes in internal control over financial
    reporting.
  Item 9B.
    Other
    Information.   PART III  Proxy Statement
  Item 10.
    Directors,
    Executive Officers and Corporate Governance.      
    Information regarding directors of the Company and any persons
    nominated to become directors of the Company is set forth under
    Nominees and Continuing Directors.
    Information regarding the Companys Audit Committee and
    designated audit committee financial experts is set
    forth under Corporate Governance  Board
    Committees  Audit Committee.
    Information regarding Section 16(a) beneficial ownership
    reporting compliance is set forth under Section 16(a)
    Beneficial Ownership Reporting Compliance.  Code of
    Business Conduct and Ethics
   47




---



##### Table of Contents



www.LoopNet.com The Companys web site address
    provided above is not intended to function as a hyperlink, and
    the information on the Companys web site is not and should
    not be considered part of this Annual Report on
    Form 10-K
    and is not incorporated by reference herein.
  Stockholder
    Nominations of Directors
    he/she his/her
  his/her his/her Regulation S-K his/her and/or
  Item 11.
    Executive
    Compensation.    
    Information regarding the Companys compensation of its
    named executive officers is set forth under Executive
    Compensation.
    Information regarding the Companys compensation of its
    directors is set forth under Executive
    Compensation  Director Compensation.  Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters.    
    Information regarding security ownership of certain beneficial
    owners, directors and executive officers is set forth under
    Common Stock Ownership of Certain Beneficial Owners and
    Management. 48




---



##### Table of Contents



Equity
    Compensation Plan Information
    Number of SecuritiesAvailable forNumber of Securities



Issuance Underto be Issued

Weighted-Average

Equity Compensationupon Exercise of

Exercise Price of

Plans (ExcludingOutstanding Options,

Outstanding Options,

Securities ReflectedPlan Name and Type

Warrants and Rights

Warrants and Rights

in the First Column)Equity compensation plans approved by stockholders2001 Stock Option and Purchase Plan


1,068,704


$
2.60



2006 Equity Incentive Plan


7,884,964


$
10.71



3,389,501Equity Compensation Plans not Approved by Stockholders


None



None



NoneTotal


8,953,668


$
9.75



3,389,501
(1)     (1)
    
    Excludes 1,287,353 shares authorized for issuance on
    February 2, 2011 in connection with our 2006 Equity
    Incentive Plan. The 2006 Equity Incentive Plan is subject to an
    automatic annual increase of the least of
    (a) 1,800,000 shares, (b) 4% of the shares
    outstanding as of the end of the prior fiscal year, and
    (c) a lesser number as determined by the Companys
    Board of Directors or Compensation Committee.  Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence.    Item 14.
    Principal
    Accountant Fees and Services.    PART IV Item 15.  Exhibits
    and Financial Statement Schedules.      Regulation S-K)
  3
.1

First Amended and Restated Certificate of Incorporation
    (incorporated herein by reference to Exhibit 3.1 to the
    registrants Form 10-Q filed on August 4, 2006, File No.
    000-52026)3
.2

Certificate of Designations of Series A Convertible Preferred
    Stock of the Company, filed with the Secretary of the State of
    the State of Delaware on March 30, 2009 (incorporated herein by
    reference to Exhibit 3.1 to the Companys Current Report on
    Form 8-K filed with the SEC on April 2, 2009,
    File No. 000-52026)3
.3

Amended and Restated Bylaws of LoopNet, Inc., effective February
    2, 2011 (incorporated herein by reference to Exhibit 3.1 to the
    registrants Form 8-K filed on February 4, 2011, File No.
    000-52026)4
.1

Specimen Common Stock Certificate (incorporated herein by
    reference to Exhibit 4.1 to the registrants Form S-1/A
    filed on April 27, 2006, Registration No. 333-132138) 49




---



##### Table of Contents



4
.2

Amended and Restated Investor Rights Agreement by and among
    LoopNet, Inc. and certain holders of preferred stock, dated as
    of November 30, 2001 (incorporated herein by reference to
    Exhibit 4.2 to the registrants Form S-1 filed on March 1,
    2006, Registration No. 333-132138)4
.3

Investors Rights Agreement, dated as of April 14, 2009, by
    and among the Company and certain investors (incorporated herein
    by reference to Exhibit B to the Schedule 13D filed with the SEC
    on April 24, 2009 by Calera Capital Partners IV, L.P., Calera
    Capital Partners IV Side-By-Side, L.P., Calera Capital
    Investors IV, L.P., and Calera Capital Management IV, Inc., File
    No. 005-82495)10
.1+

LoopNet, Inc. 2001 Stock Option and Purchase Plan (incorporated
    herein by reference to Exhibit 10.1 to the registrants
    Form S-1 filed on March 16, 2006, Registration No. 333-132138)10
.2+

Form of Option Agreement under 2001 Stock Option and Purchase
    Plan (incorporated herein by reference to Exhibit 10.2 to the
    registrants Form S-1 filed on March 1, 2006, Registration
    No. 333-132138)10
.3+

LoopNet, Inc. 2006 Equity Incentive Plan (incorporated herein by
    reference to Exhibit 10.3 to the registrants Form S-1/A
    filed on June 6, 2006, Registration No. 333-132138)10
.4+

Form of Option Agreement under 2006 Equity Incentive Plan
    (incorporated herein by reference to Exhibit 10.4 to the
    registrants Form S-1/A filed on April 27, 2006,
    Registration No. 333-132138)10
.5+

Form of Restricted Stock Unit Agreement under 2006 Equity
    Incentive Plan (incorporated herein by reference to Exhibit
    10.11 to the registrants Form 8-K filed on February 5,
    2008, File No. 000-52026)10
.6+

Form of Performance-Based Option Agreement under 2006 Equity
    Incentive Plan (incorporated herein by reference to Exhibit 10.6
    to the registrants Form 10-K filed on March 1, 2010, File
    No. 000-52026)10
.7+

Form of Performance-Based Restricted Stock Unit Agreement under
    2006 Equity Incentive Plan (incorporated herein by reference to
    Exhibit 10.7 to the registrants Form 10-K filed on March
    1, 2010, File No. 000-52026)10
.8+

Form of Indemnification Agreement (incorporated herein by
    reference to Exhibit 10.8 to the registrants Form 10-K
    filed on March 1, 2010, File No. 000-52026)10
.9

Office Lease, dated January 8, 2003, between PWREF/MCC-China
    Basin L.L.C. and LoopNet, Inc. (incorporated herein by reference
    to Exhibit 10.7 to the registrants Form S-1/A filed on
    April 3, 2006, Registration No. 333-132138)10
.10

Seventh Amendment to Office Lease, dated January 8, 2003 between
    PWREF/MCC-China Basin L.L.C. and LoopNet, Inc. (incorporated
    herein by reference to Exhibit 10.12 to the registrants
    Form 10-Q filed on May 9, 2008, File No. 000-52026)10
.11*

Office Lease, dated November 30, 2010 between Americas
    Christian Credit Union and LoopNet, Inc.10
.12+

Director Compensation Policy (incorporated herein by reference
    to Exhibit 10.11 to the registrants Form S-1/A filed on
    April 27, 2006, Registration No. 333-132138)10
.13+*

Incentive Bonus Plan10
.14+

Form of Change of Control Severance Agreement (incorporated
    herein by reference to Exhibit 10.1 to the registrants
    Form 8-K filed on December 24, 2008, File No. 000-52026)10
.15+

Amendment No. 1 to the Change of Control Severance Agreement
    (incorporated herein by reference to Exhibit 10.1 to the
    registrants Form 8-K filed on February 4, 2011, File No.
    000-52026)10
.16+

Securities Purchase Agreement, dated as of March 29, 2009, by
    and among the Company and certain purchasers (incorporated
    herein by reference to Exhibit A to the Schedule 13D filed with
    the SEC on April 24, 2009 by Calera Capital Partners IV, L.P.,
    Calera Capital Partners IV Side-By-Side, L.P., Calera
    Capital Investors IV, L.P., and Calera Capital Management IV,
    Inc., File No. 005-82495)23
.1*

Consent of Ernst & Young LLP, independent registered public
    accounting firm24
.1*

Power of Attorney31
.1*

Rule 13a-14(a) Certification (CEO)31
.2*

Rule 13a-14(a) Certification (CFO)32
.1*

Section 1350 Certification (CEO)32
.2*

Section 1350 Certification (CFO)   *
    
    Filed herewith.+
    
    Management contract or compensatory plan. 50




---



##### Table of Contents



SIGNATURES      By:
    /s/  Richard
    J. Boyle, Jr.  Richard J. Boyle, Jr.
 Chief Executive Officer, and
 Chairman of the Board of Directors
    By:
    /s/  Brent
    Stumme  Brent Stumme
 Chief Financial Officer and
 Senior Vice President, Finance
 and Administration
    POWER OF
    ATTORNEY
  Form 10-K,
    Signature

Title

Date/s/  Richard
    J. Boyle, Jr.Richard
    J. Boyle, Jr.

Chief Executive Officer, and Chairman of the Board of Directors
    
    (Principal Executive Officer)

March 3, 2011/s/  Brent
    StummeBrent
    Stumme

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

March 3, 2011/s/  Noel
    J. FentonNoel
    J. Fenton

Director

March 3, 2011/s/  Thomas
    E. UntermanThomas
    E. Unterman

Director

March 3, 2011 51




---



##### Table of Contents



Signature

Title

Date/s/  Dennis
    ChookaszianDennis
    Chookaszian

Director

March 3, 2011/s/  Scott
    IngrahamScott
    Ingraham

Director

March 3, 2011/s/  William
    ByrnesWilliam
    Byrnes

Director

March 3, 2011/s/  James
    T. FarrellJames
    T. Farrell

Director

March 3, 2011  52




---



##### 



INDEX TO
    FINANCIAL STATEMENTS
   
 PageReport of Independent Registered Public
    Accounting Firm on Internal Control Over Financial Reporting


54Report of Independent Registered Public
    Accounting Firm


55Financial StatementsConsolidated Balance Sheets


56Consolidated Statements of Income


57Consolidated Statements of Stockholders
    Equity


58Consolidated Statements of Cash Flows


59Notes to Consolidated Financial Statements


60   53




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON INTERNAL CONTROL OVER FINANCIAL REPORTING                 Ernst &
    Young LLP
    54




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             Ernst &
    Young LLP
    55




---



##### Table of Contents



LOOPNET,
    INC.



CONSOLIDATED
    BALANCE SHEETS  December 31,


December 31,2009


2010(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents

$
125,571


$
88,773Short-term investments


3,440



3,512Accounts receivable, net of allowance of $213 and $236,
    respectively


1,308



1,494Prepaid expenses and other current assets


1,080



1,095Deferred income taxes, net


558



1,317Total current assets


131,957



96,191Property and equipment, net


2,216



2,010Goodwill


23,368



41,507Intangibles, net


4,487



8,940Deferred income taxes, net, non-current


8,059



17,134Deposits and other non-current assets


4,162



6,208Total assets

$
174,249


$
171,990LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
546


$
471Accrued liabilities


2,027



3,393Accrued compensation and benefits


2,995



3,522Income taxes payable


154



Deferred revenue


9,025



8,888Total current liabilities


14,747



16,274Other long-term liabilities






2,491Commitments and contingenciesSeries A convertible preferred stock


48,207



48,546Stockholders equity:Common stock, $.001 par value, 125,000,000 shares
    authorized; 39,493,526 and 39,866,097 shares issued,
    respectively; and 34,567,565 and 32,183,836 shares
    outstanding, respectively


39



40Additional paid in capital


122,388



132,019Other comprehensive loss


(418
)


(389
)Treasury stock, at cost, 4,925,961 and 7,682,261 shares,
    respectively


(54,556
)


(86,220
)Retained earnings


43,842



59,229Total stockholders equity


111,295



104,679Total liabilities and stockholders equity

$
174,249


$
171,990    56




---



##### Table of Contents



LOOPNET,
    INC.



CONSOLIDATED
    STATEMENTS OF INCOME  Year Ended December 31,2008


2009


2010(In thousands, except per share data)Revenues

$
86,074


$
76,487


$
78,002Cost of revenue


10,858



11,060



12,562Gross margin


75,216



65,427



65,440Operating expenses:Sales and marketing


18,825



15,064



16,785Technology and product development


9,075



10,707



12,231General and administrative


17,773



20,677



15,693Amortization of acquired intangible assets


966



1,191



2,083Total operating expenses


46,639



47,639



46,792Income from operations


28,577



17,788



18,648Interest and other (expense) income, net


1,998



211



(2,461
)Income before tax


30,575



17,999



16,187Income tax expense


12,297



6,246



461Net income


18,278



11,753



15,726Convertible preferred stock accretion of discount






(240
)


(339
)Net income applicable to common stockholders

$
18,278


$
11,513


$
15,387Net income per share applicable to common stockholders:Basic

$
0.51


$
0.28


$
0.38Diluted

$
0.49


$
0.27


$
0.36Number of shares used in per share calculations:Basic


35,772



41,860



40,615Diluted


37,110



42,844



42,371    57




---



##### Table of Contents



LOOPNET,
    INC.



CONSOLIDATED
    STATEMENT OF STOCKHOLDERS EQUITY  AccumulatedAdditional





Other








TotalCommon Stock


Paid-in


Retained


Comprehensive


Treasury Stock


StockholdersShares


Amount


Capital


Earnings


Loss


Shares


Amount


Equity(In thousands)Balance at December 31, 2007


38,908


$
39


$
107,866


$
14,051


$
(103
)





$



$
121,853Exercise of stock options


311







356



















356Stock-based compensation expense










5,934



















5,934Repurchase of common stock






















4,926



(54,556
)


(54,556
)Tax benefit from exercise of stock options










759



















759Change in unrealized loss on marketable securities


















(173
)










(173
)Net income














18,278















18,278Total comprehensive income






























18,105Balance at December 31, 2008


39,219


$
39


$
114,915


$
32,329


$
(276
)


4,926


$
(54,556
)

$
92,451Stock-based activity awards


274







258



















258Stock-based compensation expense










6,827



















6,827Tax benefit from exercise of stock options










388



















388Convertible preferred stock accretion of discount














(240
)














(240
)Change in unrealized loss on
    available-for-sale
    investments


















(250
)










(250
)Change in unrealized loss on marketable securities


















108











108Net income














11,753















11,753Total comprehensive income






























11,611Balance at December 31, 2009


39,493


$
39


$
122,388


$
43,842


$
(418
)


4,926


$
(54,556
)

$
111,295Stock-based activity awards


373



1



867



















868Stock-based compensation expense










8,232



















8,232Repurchase of common stock






















2,756



(31,664
)


(31,664
)Tax benefit from exercise of stock options










532



















532Convertible preferred stock accretion of discount














(339
)














(339
)Change in unrealized loss on marketable securities


















29











29Net income














15,726















15,726Total comprehensive income






























15,755Balance at December 31, 2010


39,866


$
40


$
132,019


$
59,229


$
(389
)


7,682


$
(86,220
)

$
104,679    58




---



##### Table of Contents



LOOPNET,
    INC.



CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended December 31,2008


2009


2010(In thousands)Cash flows from operating activities:Net income

$
18,278


$
11,753


$
15,726Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization expense


2,199



2,601



3,480Stock-based compensation


5,934



6,827



8,232Tax benefits from exercise of stock options


(759
)


(388
)


(532
)Deferred income tax


(1,683
)


(2,180
)


(9,834
)Impairment of equity investment










1,420Changes in assets and liabilities, net of effects of
    acquisitions:Accounts receivable


23



256



(20
)Prepaid expenses and other assets


(678
)


388



1,498Income taxes payable


61



542



(154
)Accounts payable


(211
)


(76
)


(75
)Accrued expenses and other liabilities


1,304



7



1,295Accrued compensation and benefits


198



236



528Deferred revenue


439



(1,334
)


(302
)Net cash provided by operating activities


25,105



18,632



21,262Cash flows from investing activities:Purchase of property and equipment


(1,319
)


(1,437
)


(1,197
)Purchase of investments


(1,000
)


(1,250
)


(4,485
)Acquisitions, net of cash acquired


(12,584
)


(312
)


(22,113
)Net cash used in investing activities


(14,903
)


(2,999
)


(27,795
)Cash flows from financing activities:Net proceeds from exercise of stock options


356



308



1,104Net proceeds from sale of convertible preferred stock






47,967



Tax withholding related to net share settlements of restricted
    stock units






(50
)


(237
)Repurchase of common stock


(54,556
)






(31,664
)Tax benefit from exercise of stock options


759



388



532Net cash (used in) provided by financing activities


(53,441
)


48,613



(30,265
)Net (decrease) increase in cash and cash equivalents


(43,239
)


64,246



(36,798
)Cash and cash equivalents at beginning of year


104,564



61,325



125,571Cash and cash equivalents at end of year

$
61,325


$
125,571


$
88,773Supplemental disclosures of cash flow information:Cash paid during the year for income taxes

$
14,444


$
8,535


$
9,791Settlement of contingent purchase price

$



$
312


$
188    59




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS
  (1)
    The
    Company and Summary of Significant Accounting Policies  Organization
    and Basis of Presentation
        Use of
    Estimates
    Cash
    and Cash Equivalents
    Short-term
    Investments
    Concentration
    of Risk
   60




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Fair
    Value of Financial Instruments
    Accounts
    Receivable
    Property
    and Equipment
    Website
    Development Costs
  ,
  Long-Lived
    Assets Including Goodwill and Other Intangible
    Assets
           61




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Income
    Tax Expense
      Business
    Segment
    Revenue
    Recognition
      Cost
    of Revenues
   62




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Sales
    and Marketing
      Technology
    and Product Development
    General
    and Administrative
    Comprehensive
    Income
  available-for-sale
  Stock-Based
    Compensation
    Recent
    Accounting Pronouncements
   63




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (2)
    Earnings
    per Share    Year Ended December 31,2008

2009

2010Weighted average common shares outstanding


35,772



34,420



33,175Convertible preferred stock






7,440



7,440Shares used to compute basic net income applicable to common
    stockholders


35,772



41,860



40,615Add dilutive common equivalents:Stock options


1,270



930



1,308Restricted stock units


8



54



448Unvested restricted stock(1)


60







Shares used to compute diluted net income applicable to common
    stockholders


37,110



42,844



42,371     (1)
    
    Outstanding unvested common stock purchased by employees is
    subject to repurchase by the Company and therefore is not
    included in the calculation of the weighted-average shares
    outstanding for basic earnings per share.    Year Ended December 31,2008

2009

2010Stock options


3,294



4,673



3,595Restricted stock units






113



55  64




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2008


2009


2010Calculation of basic net income per share applicable to
    common shareholders:Net income

$
18,278


$
11,753


$
15,726Convertible preferred stock accretion of discount






(240
)


(339
)Net income applicable to common shareholders

$
18,278


$
11,513


$
15,387Shares used to compute basic net income applicable to common
    shareholders


35,772



41,860



40,615Basic net income per share applicable to common
    shareholders

$
0.51


$
0.28


$
0.38Calculation of diluted net income per share applicable to
    common shareholders:Net Income

$
18,278


$
11,753


$
15,726Convertible preferred stock accretion of discount






(240
)


(339
)Net income applicable to common shareholders

$
18,278


$
11,513


$
15,387Shares used to compute diluted net income applicable to common
    shareholders


37,110



42,844



42,371Dilutive net income per share applicable to common
    shareholders

$
0.49


$
0.27


$
0.36   (3)
    Property
    and Equipment, net    As of December 31,2009


2010Computer equipment and purchased software

$
6,363


$
6,839Office equipment and furniture (includes leasehold improvements)


1,057



1,1027,420



7,941Less accumulated depreciation and amortization


(5,204
)


(5,931
)Property and equipment, net

$
2,216


$
2,010     (4)
    Acquisitions  business-for-sale
 65




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Customer relationships

$
1,852Trade names


2,521Developed technology


2,068Non-competition agreements


95Goodwill


17,951Total

$
24,487       (5)
    Goodwill
    and Intangible Assets, net    Balance as of December 31, 2007

$
15,233Goodwill acquired


8,349Goodwill adjustment


(526
)Balance as of December 31, 2008


23,056Goodwill adjustment


312Balance as of December 31, 2009


23,368Goodwill acquired


17,951Goodwill adjustment


188Balance as of December 31, 2010

$
41,507    66




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    As of December 31,2009


2010Cost:Customer relationships

$
1,711


$
3,563Technology


3,377



5,445Non-competition agreement


63



158Domain name


1,994



4,515Total cost


7,145



13,681Accumulated amortization:Customer relationships


(831
)


(1,416
)Technology


(1,479
)


(2,791
)Non-competition agreement


(30
)


(65
)Domain name


(318
)


(469
)Total accumulated amortization


(2,658
)


(4,741
)Intangible assets, net

$
4,487


$
8,940     2011

$
2,5562012


1,8072013


6402014


1982015 and thereafter


114$
5,315   (6)
    Income
    Tax Expense    Year Ended December 31,2008


2009


2010Current:Federal

$
11,136


$
6,688


$
8,025State


2,901



1,767



2,352Total

$
14,037


$
8,455


$
10,377Deferred:Federal

$
(1,204
)

$
(1,513
)

$
(9,066
)State


(536
)


(696
)


(850
)Total

$
(1,740
)

$
(2,209
)

$
(9,916
)Income tax expense

$
12,297


$
6,246


$
461  67




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2008

2009

2010Statutory federal tax rate


35.0
%


35.0
%


35.0
%State tax rate, net of federal benefit


5.0
%


3.9
%


6.0
%Change in valuation allowance


(1.9
)%


(4.4
)%


(39.6
)%Other adjustments


2.1
%


0.2
%


1.5
%Effective tax rate


40.2
%


34.7
%


2.9
%     As of December 31,2009


2010Deferred tax assets (liabilities):Net operating loss carryforwards

$
11,480


$
10,108Depreciation and amortization


(92
)


598Stock-based compensation


5,122



7,235Accruals and allowances


379



364Tax credits


1,235



1,235Intangibles


(1,750
)


(1,750
)Valuation allowance


(8,084
)


(564
)Other


327



1,225Deferred tax assets, net

$
8,617


$
18,451          68




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (7)
    Series A
    Convertible Preferred Stock    Form 8-K
      Gross Proceeds

$
50,000Costs and expenses of issuance


(2,033
)Accretion of discount


240Net convertible preferred stock at December 31, 2009

$
48,207   Form 8-K
  Voting
    Dividends
   69




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Liquidation
    winding-up)
  winding-up)
    Conversion
    Redemption
    at the option of the Company
   70




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Redemption
    at the option of the Holder
    (8)
    Treasury
    Stock    (9)
    Stock
    Option Plan       71




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Options Outstanding

Options ExercisableWeighted



WeightedAverage



AverageNumber of

Exercise

Number of

ExerciseShares

Price

Shares

PriceOutstanding at December 31, 2007


3,638,382


$
8.93



1,339,128


$
4.59Granted


1,600,496


$
11.62Exercised


(310,357
)

$
1.15Cancelled


(291,281
)

$
13.41Outstanding at December 31, 2008


4,637,240


$
10.10



2,175,935


$
7.96Granted


2,391,697


$
7.37Exercised


(232,802
)

$
1.32Cancelled


(343,510
)

$
13.15Outstanding at December 31, 2009


6,452,625


$
9.24



3,331,025


$
9.11Granted


2,987,000


$
10.37Exercised


(285,670
)

$
3.86Cancelled


(200,287
)

$
11.17Outstanding at December 31, 2010


8,953,668


$
9.75



4,548,818


$
9.73       Options Outstanding


Options ExercisableWeighted











WeightedAverage


Weighted





Weighted


AverageNumber


Remaining


Average





Average


RemainingOptions


Contractual


Exercise


Number


Exercise


ContractualExercise Prices

Outstanding


Life (Years)


Price


Exercisable


Price


Life (Years)$0.10


311,113



2.5


$
0.10



311,113


$
0.10$0.23  $4.08


757,591



5.0



3.63



757,591



3.62$5.70  $7.96


2,063,218



5.1



7.21



924,274



7.21$8.00  $9.97


2,070,981



6.1



9.85



271,678



9.44$10.00  $11.99


1,818,983



5.3



11.04



588,757



11.03$12.00  $12.98


607,249



3.5



12.10



491,625



12.10$13.18  $15.61


461,296



3.4



13.98



406,002



14.06$16.07  $16.94


554,659



3.2



16.10



521,611



16.10$17.06  $19.68


136,766



3.2



18.77



129,004



18.77$20.80  $24.40


171,812



3.6



22.35



147,163



22.35$0.10  $24.40


8,953,668



4.9


$
9.75



4,548,818


$
9.73



4.1    72




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended December 31,2008

2009

2010Risk-free interest rate


2.80
%


2.19
%


1.93
%Expected volatility


42
%


49
%


48
%Expected life


4.6 years



4.6 years



4.6 yearsDividend yield


0
%


0
%


0
%             Unvested Restricted Stock UnitsWeightedWeighted

AverageAverage

RemainingNumber of

Grant Date

ContractualShares

Fair Value

Life (Years)Outstanding at December 31, 2008


195,000


$
11.47



1.74Granted


245,000


$
7.19Vested


(48,750
)

$
11.47Cancelled





$
Outstanding at December 31, 2009


391,250


$
8.79



1.49Granted


1,122,500


$
10.29Vested


(110,000
)

$
9.09Cancelled





$
Outstanding at December 31, 2010


1,403,750


$
9.98



3.74    73




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        Year Ended December 31,2008


2009


2010Cost of revenue

$
570


$
495


$
546Sales and marketing


2,198



894



1,786Technology and product development


1,311



2,298



2,680General and administrative


1,855



3,140



3,220Total

$
5,934


$
6,827


$
8,232   (10)
    Commitments
    and Contingencies  Leases
    2011

$
3,0282012


2,9942013


3,0222014


3,0802015 and thereafter


3,837$
15,961     Litigation
  patents-in-suit patents-in-suit
   74




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (11)
    401(k)
    Plan   75




---



##### Table of Contents



EXHIBIT INDEX
  3
.1

First Amended and Restated Certificate of Incorporation
    (incorporated herein by reference to Exhibit 3.1 to the
    registrants
    Form 10-Q
    filed on August 4, 2006, File
    No. 000-52026)3
.2

Certificate of Designations of Series A Convertible
    Preferred Stock of the Company, filed with the Secretary of the
    State of the State of Delaware on March 30, 2009
    (incorporated herein by reference to Exhibit 3.1 to the
    Companys Current Report on
    Form 8-K
    filed with the SEC on April 2, 2009, File
    No. 000-52026)3
.3

Amended and Restated Bylaws of LoopNet, Inc., effective
    February 2, 2011 (incorporated herein by reference to
    Exhibit 3.1 to the registrants
    Form 8-K
    filed on February 4, 2011, File
    No. 000-52026)4
.1

Specimen Common Stock Certificate (incorporated herein by
    reference to Exhibit 4.1 to the registrants
    Form S-1/A
    filed on April 27, 2006, Registration
    No. 333-132138)4
.2

Amended and Restated Investor Rights Agreement by and among
    LoopNet, Inc. and certain holders of preferred stock, dated as
    of November 30, 2001 (incorporated herein by reference to
    Exhibit 4.2 to the registrants
    Form S-1
    filed on March 1, 2006, Registration
    No. 333-132138)4
.3

Investors Rights Agreement, dated as of April 14,
    2009, by and among the Company and certain investors
    (incorporated herein by reference to Exhibit B to the
    Schedule 13D filed with the SEC on April 24, 2009 by
    Calera Capital Partners IV, L.P., Calera Capital
    Partners IV
    Side-By-Side,
    L.P., Calera Capital Investors IV, L.P., and Calera Capital
    Management IV, Inc., File
    No. 005-82495)10
.1+

LoopNet, Inc. 2001 Stock Option and Purchase Plan (incorporated
    herein by reference to Exhibit 10.1 to the
    registrants
    Form S-1
    filed on March 16, 2006, Registration
    No. 333-132138)10
.2+

Form of Option Agreement under 2001 Stock Option and Purchase
    Plan (incorporated herein by reference to Exhibit 10.2 to
    the registrants
    Form S-1
    filed on March 1, 2006, Registration
    No. 333-132138)10
.3+

LoopNet, Inc. 2006 Equity Incentive Plan (incorporated herein by
    reference to Exhibit 10.3 to the registrants
    Form S-1/A
    filed on June 6, 2006, Registration
    No. 333-132138)10
.4+

Form of Option Agreement under 2006 Equity Incentive Plan
    (incorporated herein by reference to Exhibit 10.4 to the
    registrants
    Form S-1/A
    filed on April 27, 2006, Registration
    No. 333-132138)10
.5+

Form of Restricted Stock Unit Agreement under 2006 Equity
    Incentive Plan (incorporated herein by reference to
    Exhibit 10.11 to the registrants
    Form 8-K
    filed on February 5, 2008, File
    No. 000-52026)10
.6+

Form of Performance-Based Option Agreement under 2006 Equity
    Incentive Plan (incorporated herein by reference to
    Exhibit 10.6 to the registrants
    Form 10-K
    filed on March 1, 2010, File
    No. 000-52026)10
.7+

Form of Performance-Based Restricted Stock Unit Agreement under
    2006 Equity Incentive Plan (incorporated herein by reference to
    Exhibit 10.7 to the registrants
    Form 10-K
    filed on March 1, 2010, File
    No. 000-52026)10
.8+

Form of Indemnification Agreement (incorporated herein by
    reference to Exhibit 10.8 to the registrants
    Form 10-K
    filed on March 1, 2010, File
    No. 000-52026)10
.9

Office Lease, dated January 8, 2003, between
    PWREF/MCC-China Basin L.L.C. and LoopNet, Inc. (incorporated
    herein by reference to Exhibit 10.7 to the
    registrants
    Form S-1/A
    filed on April 3, 2006, Registration
    No. 333-132138)10
.10

Seventh Amendment to Office Lease, dated January 8, 2003
    between PWREF/MCC-China Basin L.L.C. and LoopNet, Inc.
    (incorporated herein by reference to Exhibit 10.12 to the
    registrants
    Form 10-Q
    filed on May 9, 2008, File
    No. 000-52026)10
.11*

Office Lease, dated November 30, 2010 between
    Americas Christian Credit Union and LoopNet, Inc.10
.12+

Director Compensation Policy (incorporated herein by reference
    to Exhibit 10.11 to the registrants
    Form S-1/A
    filed on April 27, 2006, Registration
    No. 333-132138)10
.13+*

Incentive Bonus Plan10
.14+

Form of Change of Control Severance Agreement (incorporated
    herein by reference to Exhibit 10.1 to the
    registrants
    Form 8-K
    filed on December 24, 2008, File
    No. 000-52026)10
.15+

Amendment No. 1 to the Change of Control Severance
    Agreement (incorporated herein by reference to Exhibit 10.1
    to the registrants
    Form 8-K
    filed on February 4, 2011, File
    No. 000-52026) 76




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##### Table of Contents



10
.16+

Securities Purchase Agreement, dated as of March 29, 2009,
    by and among the Company and certain purchasers (incorporated
    herein by reference to Exhibit A to the Schedule 13D
    filed with the SEC on April 24, 2009 by Calera Capital
    Partners IV, L.P., Calera Capital Partners IV
    Side-By-Side,
    L.P., Calera Capital Investors IV, L.P., and Calera Capital
    Management IV, Inc., File
    No. 005-82495)23
.1*

Consent of Ernst & Young LLP, independent registered
    public accounting firm24
.1*

Power of Attorney31
.1*

Rule 13a-14(a)
    Certification (CEO)31
.2*

Rule 13a-14(a)
    Certification (CFO)32
.1*

Section 1350 Certification (CEO)32
.2*

Section 1350 Certification (CFO)     *
    
    Filed herewith.+
    
    Management contract or compensatory plan. 77