##### Table of Contents





UNITED STATES SECURITIES AND
    EXCHANGE COMMISSION
 Washington, 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,
    2009ORo

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(State or other jurisdiction
    of
    incorporation or organization)

77-0463987(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 Form 10-K Form 10-K. þ
  12b-2
  Large
    accelerated
    filer o
    Accelerated
    filer þ
    Non-accelerated
    filer o
    Smaller reporting
    company o (Do not check if a smaller
    reporting company)
  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 2010 Annual Meeting of Stockholders.




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##### 





TABLE OF
    CONTENTS
   
 PagePART IItem 1.


Business


4Item 1A.


Risk Factors


14Item 1B.


Unresolved Staff Comments


25Item 2.


Properties


25Item 3.


Legal Proceedings


26Item 4.


[Reserved]


26PART IIItem 5.


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


26Item 6.


Selected Financial Data


28Item 7.


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


29Item 7A.


Quantitative and Qualitative Disclosures About
    Market Risk


43Item 8.


Financial Statements and Supplementary Data


43Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


43Item 9A.


Controls and Procedures


43Item 9B.


Other Information


44PART IIIItem 10.


Directors Executive Officers, and Corporate
    Governance


44Item 11


Executive Compensation


44Item 12.


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


45Item 13.


Certain Relationships and Related Transactions
    and Director Independence


45Item 14.


Principal Accountant Fees and Services


45PART IVItem 15.


Exhibits and Financial Statement Schedules


46Signatures


48EX-10.6EX-10.7EX-10.8EX-10.14EX-23.1EX-31.1EX-31.2EX-32.1EX-32.2   2




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Statement
    regarding forward-looking statements
    
    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
  Internet
    Site
  www.LoopNet.com Form 10-K, Form 10-Q, Form 8-K, Form 10-K.
  Where You
    Can Find Additional Information
  Form 10-K, 20549-0102. 1-800-SEC-0330. (http://www.sec.gov)
 3




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




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The
    LoopNet Model
      Leading commercial real estate online
    marketplace.
 5




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Comprehensive member-generated content
    offering. up-to-date
  Compelling member experience.
    The
    LoopNet Advantage
    Benefits
    to Property Listers
  Broad marketing exposure.
  Cost-effective and measurable marketing
    method.
 6




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Detailed and
    up-to-date
    property listing information.
  Benefits
    to Property Searchers
  Access to a large number of property
    listings.
  Real-time, comprehensive information.
  Customized search engine. sub-type,
  Our
    Strategy
    Expand our base of registered members. word-of-mouth
  Derive revenue from premium members.
 7




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Offer complementary products and services.
  Enhance the functionality of our
    marketplace.
  Expand into new markets.
  Increase opportunities to advertise to our member
    base.
  Products
    and Services
   8




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Basic and premium membership. free-of-charge
    Basic

PremiumMembership

MembershipListing BenefitsDetailed Property Listings

ü

üMyLoopNet  Listing Management Center

ü

üEnhanced Listing Exposure



üProspectList  Lead Generation



üMarketing Exposure Statistics



üControlled Access Marketing



üSearching 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.  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 9




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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.  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.
    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.
  Advertising and lead generation.
 10




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Business-for-Sale.
  REApplications.
  Sales and
    Marketing
    word-of-mouth
        Competition
   11




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® ®
    Technology
    and Infrastructure
           12




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Intellectual
    Property
      Employees
    Executive
    Officers
    Name

Age

PositionRichard J. Boyle, Jr.


44


Chief Executive Officer and Chairman of the Board of DirectorsThomas Byrne


43


President and Chief Operating OfficerBrent Stumme


47


Chief Financial Officer and Senior Vice President, Finance and
    AdministrationJason Greenman


42


Chief Strategy Officer and Senior Vice President, Corporate
    DevelopmentWayne Warthen


46


Chief Technology Officer and Senior Vice President, Information
    Technology   Richard J. Boyle, Jr.
 13




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Thomas Byrne
  Brent Stumme
  Jason Greenman
  Wayne Warthen
  Item 1A.
    Risk
    Factors.    The
    ongoing decline 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; 14




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
    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.    
    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.
   15




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and/or
    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.
  word-of-mouth
  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.
   16




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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 not able to successfully identify or integrate acquisitions,
    our managements attention could be diverted, and efforts
    to integrate acquisitions could consume significant
    resources.
   17




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
    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;
    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.        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 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; 18




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
    the amount and timing of litigation related expenses;
    costs related to acquisitions of businesses or
    technologies; and
    other factors outside of our control.  end-of-year
  and/or
  If we
    are unable to introduce new or upgraded services or products
    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 unable to enforce or defend our ownership and use of
    intellectual property, our business, competitive position and
    operating results could be harmed.
       19




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We
    could face liability for information on our website or general
    litigation claims.
        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.
  word-of-mouth,
 20




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Our
    business depends on retaining and attracting capable management
    and operating personnel.
      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.
       21




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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, such
    as expensing of stock options, could result in unfavorable
    accounting charges or require us to change our compensation
    policies.
   22




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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.
     23




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We may
    be subject to regulation of our advertising and customer
    solicitation or other newly-adopted laws and
    regulations.
      Our
    stock price may be volatile and you may be unable to sell your
    shares at or above the purchase price.
  Form 10-K,
     24




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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.      Item 1B.
    Unresolved
    Staff Comments.    Item 2.
    Properties.   25




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Item 3.
    Legal
    Proceedings.    patents-in-suit patents-in-suit
    Item 4.
    Reserved. PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities.  Market
    information
    High


Low2009First Quarter

$
7.59


$
5.04Second Quarter

$
9.20


$
5.93Third Quarter

$
9.27


$
7.27Fourth Quarter

$
11.47


$
8.292008First Quarter

$
15.48


$
10.60Second Quarter

$
14.47


$
10.59Third Quarter

$
12.50


$
9.25Fourth Quarter

$
10.17


$
4.75     Dividend
    policy
   26




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Performance
    Graph
    Comparative
    Returns
  
  Cumulative Total Return6/7/2006


12/29/2006


12/31/2007


12/31/2008


12/31/2009LOOPNET, INC.


100.00



99.87
(1)


93.67
(1)


45.47
(1)


66.20
(1)NASDAQ COMPOSITE INDEX


100.00



112.25



123.26



73.29



105.45S&P NORTH AMERICAN TECH INTERNET TRADING INDEX


100.00



116.95



127.45



67.32



118.18     (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 and $82.75 on 12/29/06, 12/31/07, 12/31/08 and
    12/31/09, respectfully.    Issuer
    Purchases of Equity Securities
     27




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Item 6.
    Selected
    Financial Data.  Form 10-K.
  Form 10-K. Form 10-K.
  Year Ended December 31,2005


2006


2007


2008


2009(In thousands, except per share data)Consolidated Statements of Operations Data:Revenues

$
30,977


$
48,411


$
70,729


$
86,074


$
76,487Cost of revenue(1)


3,825



5,599



8,033



10,858



11,060Gross profit


27,152



42,812



62,696



75,216



65,427Operating expenses(1):Sales and marketing


6,252



9,506



14,667



18,825



15,064Technology and product development


3,746



4,341



6,427



9,075



10,707General and administrative


5,955



7,803



12,253



18,739



21,868Total operating expenses


15,953



21,650



33,347



46,639



47,639Income from operations


11,199



21,162



29,349



28,577



17,788Interest and other income, net


494



2,883



5,046



1,998



211Income from continuing operations


11,693



24,045



34,395



30,575



17,999Income tax expense (benefit)


(7,243
)


8,550



13,268



12,297



6,246Net income


18,936



15,495



21,127



18,278



11,753Convertible preferred stock accretion of discount


















(240
)Net income applicable to common stockholders

$
18,936


$
15,495


$
21,127


$
18,278


$
11,513Net income per share applicable to common stockholdersBasic

$
0.58


$
0.42


$
0.55


$
0.51


$
0.28Diluted

$
0.54


$
0.40


$
0.52


$
0.49


$
0.27     (1)
    
    Stock-based compensation is allocated as follows:  Year Ended December 31,2005


2006


2007


2008


2009(In thousands)Cost of revenue

$
18


$
151


$
357


$
570


$
495Sales and marketing


146



686



1,358



2,198



894Technology and product development


350



195



600



1,311



2,298General and administrative


150



421



1,180



1,855



3,140Total

$
664


$
1,453


$
3,495


$
5,934


$
6,827   28




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Year Ended December 31,2005


2006


2007


2008


2009(In thousands)Consolidated Balance Sheet Data:Cash, cash equivalents and short-term investments

$
21,865


$
89,028


$
107,889


$
64,587


$
129,011Working capital


16,939



81,884



94,667



52,529



117,210Total assets


35,177



100,205



137,359



108,210



174,249Total liabilities


6,604



10,202



15,506



15,759



14,747Redeemable convertible preferred stock


39,962















48,207Total shareholders (deficit) equity


(11,389
)


90,003



121,853



92,451



111,295   Year Ended December 31,2005


2006


2007


2008


2009(In thousands)Consolidated Statement of Cash Flows Data:Cash flow provided by operating activities

$
14,490


$
23,205


$
30,301


$
25,105


$
18,632Depreciation and amortization


505



611



1,154



2,199



2,601Capital expenditures


(719
)


(665
)


(1,797
)


(1,319
)


(1,437
)   Year Ended December 31,2005

2006

2007

2008

2009(In thousands)Other Operating Data (unaudited):LoopNet registered members at end of year


1,116,589



1,766,508



2,567,729



3,251,260



3,925,534LoopNet premium members at end of year


57,461



78,952



88,340



77,283



68,378   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.
  Overview
  www.LoopNet.com free-of-charge,
 29




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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 listings on our marketplace; and
    the number of property profiles viewed by visitors to LoopNet.       30




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Our
    Revenues and Expenses
    
    LoopNet premium membership fees;
    other property advertising fees, such as Cityfeet.com 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 out RecentSales services by the commercial real
    estate industry; and
    the adoption of our services by the operating business for sale
    industry.   31




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business-for-sale
    Critical
    Accounting Policies and Estimates
      Revenue
    Recognition
    Income
    Taxes
     32




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Website
    Development Costs
    Stock-Based
    Compensation
        Seasonality
    and Cyclicality
    end-of-year
   33




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Results
    of Operations
    Year Ended December 31,2007


2008


2009Revenues


100.0
%


100.0
%


100.0
%Cost of revenue


11.4



12.6



14.5Gross profit


88.6



87.4



85.5Operating expenses:Sales and marketing


20.7



21.9



19.7Technology and product development


9.1



10.5



14.0General and administrative


17.3



21.8



28.6Total operating expenses


47.1



54.2



62.3Income from operations


41.5



33.2



23.3Interest and other income, net


7.1



2.3



0.3Income from continuing operations


48.6



35.5



23.5Income tax expense


18.8



14.3



8.2Net income


29.9



21.2



15.4Convertible preferred stock accretion of discount










(0.3
)Net income applicable to common stockholders


29.9
%


21.2
%


15.1
%   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
%    34




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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

$
18,739


$
21,868


$
3,129



16.7
%Percentage of revenues


21.8
%


28.6
%    35




---



##### Table of Contents



Stock-Based
    Compensation
        Cost of revenue

$
(132
)Sales and marketing


(1,177
)Technology and product development


135General and administrative


438Total

$
(736
)     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
%   Interest
    Income
   36




---



##### Table of Contents



Income
    Taxes
    Comparison
    of Years Ended December 31, 2007 and 2008
  Revenues
  Year Ended December 31,Increase/


Percent2007


2008


Decrease


Change(Dollars in thousands)Revenues

$
70,729


$
86,074


$
15,345



21.7
%Premium members at year-end


88,340



77,283



(11,057
)


(12.5
)%     Cost
    of Revenues
  Year Ended December 31,Percent2007


2008


Increase


Change(Dollars in thousands)Cost of revenues

$
8,033


$
10,858


$
2,825



35.2
%Percentage of revenues


11.4
%


12.6
%     Sales
    and Marketing
  Year Ended December 31,Percent2007


2008


Increase


Change(Dollars in thousands)Sales and marketing

$
14,667


$
18,825


$
4,158



28.3
%Percentage of revenues


20.7
%


21.9
%     Technology
    and Product Development
  Year Ended December 31,Percent2007


2008


Increase


Change(Dollars in thousands)Technology and product development

$
6,427


$
9,075


$
2,648



41.2
%Percentage of revenues


9.1
%


10.5
%    37




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##### Table of Contents



General
    and Administrative
  Year Ended December 31,Percent2007


2008


Increase


Change(Dollars in thousands)General and administrative

$
12,253


$
18,739


$
6,486



52.9
%Percentage of revenues


17.3
%


21.8
%     Stock-Based
    Compensation
      Year Ended December 31,Increase/


Percent2007


2008


(Decrease)


Change(Dollars in thousands)Cost of revenue

$
357


$
570


$
213



59.7
%Sales and marketing


1,358



2,198



840



61.9
%Technology and product development


600



1,311



711



118.5
%General and administrative


1,180



1,855



675



57.2
%Total

$
3,495


$
5,934


$
2,439



69.8
%   Interest
    Income
    Income
    Taxes
   38




---



##### 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. 31,2008


2008


2008


2008


2009


2009


2009


2009(In thousands, except per share data)Revenues

$
20,590


$
22,027


$
22,403


$
21,054


$
20,102


$
19,248


$
18,795


$
18,341Cost of revenue(1)


2,414



2,704



2,876



2,864



2,892



2,777



2,670



2,721Gross profit


18,176



19,323



19,527



18,190



17,210



16,471



16,125



15,620Operating expenses(1):Sales and marketing


4,841



4,822



4,711



4,450



4,507



4,237



2,650



3,670Technology and product development


1,993



2,355



2,301



2,427



2,559



2,654



2,833



2,660General and administrative


4,056



4,949



5,227



4,507



5,437



6,434



5,547



4,449Total operating expenses


10,890



12,126



12,239



11,384



12,503



13,325



11,030



10,779Income from operations


7,286



7,197



7,288



6,806



4,707



3,146



5,095



4,841Interest and other income, net


975



478



459



85



12



95



52



51Income from continuing operations


8,261



7,675



7,747



6,891



4,719



3,241



5,147



4,892Income tax expense


3,407



3,141



2,927



2,821



1,930



1,386



1,342



1,587Net income


4,854



4,534



4,820



4,070



2,789



1,855



3,805



3,305Convertible preferred stock accretion of discount






















(71
)


(85
)


(85
)Net income applicable to common shareholders

$
4,854


$
4,534


$
4,820


$
4,070


$
2,789


$
1,784


$
3,720


$
3,220Net income per share applicable to common shareholdersBasic

$
0.13


$
0.13


$
0.14


$
0.12


$
0.08


$
0.04


$
0.09


$
0.08Diluted

$
0.12


$
0.12


$
0.13


$
0.12


$
0.08


$
0.04


$
0.09


$
0.07     (1)
    
    Stock-based compensation is allocated as follows:  Quarter EndedMar. 31,


June 30,


Sept. 30,


Dec. 31,


Mar. 31,


June 30,


Sept. 30,


Dec. 31,2008


2008


2008


2008


2009


2009


2009


2009(In thousands)Cost of revenue

$
115


$
139


$
153


$
163


$
167


$
189


$
4


$
134Sales and marketing


553



525



554



565



600



637



(755
)


412Technology and product development


246



327



347



392



486



560



699



554General and administrative


438



515



465



437



590



711



1,174



665Total

$
1,352


$
1,506


$
1,519


$
1,557


$
1,843


$
2,097


$
1,122


$
1,765   39




---



##### Table of Contents



Quarter EndedMar. 31,


June 30,


Sept. 30,


Dec. 31,


Mar. 31,


June 30,


Sept. 30,


Dec. 31,2008


2008


2008


2008


2009


2009


2009


2009Revenues


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%Cost of revenues


11.7



12.3



12.8



13.6



14.4



14.4



14.2



14.8Gross profit


88.3



87.7



87.2



86.4



85.6



85.6



85.8



85.2Operating expenses:Sales and marketing


23.5



21.9



21.0



21.1



22.4



22.0



14.1



20.0Technology and product development


9.7



10.7



10.3



11.5



12.7



13.8



15.1



14.5General and administrative


19.7



22.5



23.3



21.4



27.0



33.4



29.5



24.3Total operating expenses


52.9



55.1



54.6



54.1



62.2



69.2



58.7



58.8Income from operations


35.4



32.7



32.5



32.3



23.4



16.3



27.1



26.4Interest and other income


4.7



2.2



2.0



0.4



0.1



0.5



0.3



0.3Income before taxes


40.1



34.8



34.6



32.7



23.5



16.8



27.4



26.7Income tax expense


16.5



14.3



13.1



13.4



9.6



7.2



7.1



8.7Net income


23.6



20.6



21.5



19.3



13.9



9.6



20.2



18.0Convertible preferred stock accretion of discount






















(0.4
)


(0.5
)


(0.5
)Net income applicable to common shareholders


23.6
%


20.6
%


21.5
%


19.3
%


13.9
%


9.3
%


19.8
%


17.6
%   Liquidity
    and Capital Resources
    Year Ended December 31,2007


2008


2009(In thousands)Cash provided by operating activities

$
30,301


$
25,105


$
18,632Cash used in investing activities


(18,827
)


(14,903
)


(2,999
)Cash provided by (used in) financing activities


7,300



(53,441
)


48,613            40




---



##### Table of Contents



Rule 10b-18
  Operating
    Activities
    Investing
    Activities
        Financing
    Activities
        Off-Balance
    Sheet Arrangements
    Contractual
    Obligations and Known Future Cash Requirements
   41




---



##### Table of Contents



Payments Due by Period2014 and2010

2011

2012

2013

Thereafter

Total(Dollars in thousands)Operating lease obligations

$
2,778


$
2,462


$
2,116


$
2,167


$
3,174


$
12,697   Advertising
    and Media Contracts
    Future
    Capital Requirements
    Recent
    Accounting Pronouncements
  tm
       42




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures About Market Risk.    Item 8.
    Financial
    Statements and Supplementary Data.    Form 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.
  Managements Report on Internal Control over
    Financial Reporting. Rules 13a-15(f). Internal Control 
    Integrated Framework
     43




---



##### Table of Contents



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
  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.
  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. 44




---



##### Table of Contents



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.  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


1,254,627


$
2.37



2006 Equity Incentive Plan


5,197,998


$
10.90



5,892,912Equity Compensation Plans not Approved by Stockholders


None



None



NoneTotal


6,452,625


$
9.24



5,892,912
(1)     (1)
    
    Excludes 1,382,703 shares authorized for issuance on
    February 3, 2010 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.   45




---



##### Table of Contents



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
    December 10, 2008 (incorporated herein by reference to
    Exhibit 3.1 to the registrants
    Form 8-K
    filed on December 12, 2008, 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 Plan10
.7+*

Form of Performance-Based Restricted Stock Unit Agreement under
    2006 Equity Incentive Plan10
.8+*

Form of Indemnification Agreement10
.9

Lease, dated January 14, 2005, between S&F Huntington
    Millennium LLC and LoopNet, Inc. (incorporated herein by
    reference to Exhibit 10.6 to the registrants
    Form S-1
    filed on March 1, 2006, Registration
    No. 333-132138)10
.10

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
.11

First Amendment to Office Lease, dated August 16, 2005
    between Stockbridge/MCC-China Basin L.L.C. and LoopNet, Inc.
    (incorporated herein by reference to Exhibit 10.6 to the
    registrants
    Form S-1/A
    filed on April 3, 2006, Registration
    No. 333-132138)10
.12

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) 46




---



##### Table of Contents



10
.13+

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
.14+*

Fiscal Year 2010 Bonus Plan10
.15+

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
.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. 47




---



##### 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
   48




---



##### Table of Contents



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 1, 2010/s/  Brent
    StummeBrent
    Stumme

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

March 1, 2010/s/  Noel
    J. FentonNoel
    J. Fenton

Director

March 1, 2010/s/  Thomas
    E. UntermanThomas
    E. Unterman

Director

March 1, 2010/s/  Dennis
    ChookaszianDennis
    Chookaszian

Director

March 1, 2010/s/  Scott
    IngrahamScott
    Ingraham

Director

March 1, 2010/s/  William
    ByrnesWilliam
    Byrnes

Director

March 1, 2010/s/  James
    T. FarrellJames
    T. Farrell

Director

March 1, 2010  49




---



##### 



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


51Report of Independent Registered Public
    Accounting Firm


52Financial StatementsConsolidated Balance Sheets


53Consolidated Statements of Income


54Consolidated Statements of Stockholders
    Equity


55Consolidated Statements of Cash Flows


56Notes to Consolidated Financial Statements


57   50




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
    ON INTERNAL CONTROL OVER FINANCIAL REPORTING                 Ernst &
    Young LLP
    51




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM             Ernst &
    Young LLP
    52




---



##### Table of Contents



LOOPNET,
    INC.
 CONSOLIDATED
    BALANCE SHEETS  December 31,


December 31,2008


2009(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents

$
61,325


$
125,571Short-term investments


3,262



3,440Accounts receivable, net of allowance of $121 and $213,
    respectively


1,564



1,308Prepaid expenses and other current assets


1,530



1,080Deferred income taxes, net


607



558Total current assets


68,288



131,957Property and equipment, net


2,208



2,216Goodwill


23,056



23,368Intangibles, net


5,678



4,487Deferred income taxes, net, non-current


5,829



8,059Deposits and other noncurrent assets


3,151



4,162Total assets

$
108,210


$
174,249LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
622


$
546Accrued liabilities


2,020



2,027Accrued compensation and benefits


2,759



2,995Income taxes payable






154Deferred revenue


10,358



9,025Total current liabilities


15,759



14,747Commitments and contingenciesSeries A convertible preferred stock






48,207Stockholders equity:Common stock, $.001 par value, 125,000,000 shares
    authorized; 39,218,665 and 39,493,526 shares issued,
    respectively; and 34,292,704 and 34,567,565 shares
    outstanding, respectively


39



39Additional paid in capital


114,915



122,388Other comprehensive loss


(276
)


(418
)Treasury stock, at cost, 4,925,961 shares


(54,556
)


(54,556
)Retained earnings


32,329



43,842Total stockholders equity


92,451



111,295Total liabilities and stockholders equity

$
108,210


$
174,249    53




---



##### Table of Contents



LOOPNET,
    INC.
 CONSOLIDATED
    STATEMENTS OF INCOME  Year Ended December 31,2007


2008


2009(In thousands, except share data)Revenues

$
70,729


$
86,074


$
76,487Cost of revenue


8,033



10,858



11,060Gross margin


62,696



75,216



65,427Operating expenses:Sales and marketing


14,667



18,825



15,064Technology and product development


6,427



9,075



10,707General and administrative


12,253



18,739



21,868Total operating expenses


33,347



46,639



47,639Income from operations


29,349



28,577



17,788Interest and other income, net


5,046



1,998



211Income before tax


34,395



30,575



17,999Income tax expense


13,268



12,297



6,246Net income


21,127



18,278



11,753Convertible preferred stock accretion of discount










(240
)Net income applicable to common stockholders

$
21,127


$
18,278


$
11,513Net income per share applicable to common stockholdersBasic

$
0.55


$
0.51


$
0.28Diluted

$
0.52


$
0.49


$
0.27Number of shares used in per share calculations:Basic


38,291



35,772



41,860Diluted


40,672



37,110



42,844    54




---



##### Table of Contents



LOOPNET,
    INC.



CONSOLIDATED
    STATEMENT OF STOCKHOLDERS EQUITY  AccumulatedAdditional


Retained


Other








TotalCommon Stock


Paid-in


Earnings


Comprehensive


Treasury Stock


StockholdersShares


Amount


Capital


(Deficit)


Loss


Shares


Amount


Equity(In thousands, except share data)Balance at December 31, 2006


37,897


$
38


$
97,072


$
(7,076
)

$
(31
)





$



$
90,003Exercise of stock options


1,011



1



1,611



















1,612Stock-based compensation expense










3,495



















3,495Tax benefit from exercise of stock options










5,688



















5,688Change in unrealized loss on marketable securities


















(72
)










(72
)Net income














21,127















21,127Total comprehensive income






























21,055Balance 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
)

$
111,295    55




---



##### Table of Contents



LOOPNET,
    INC.
 CONSOLIDATED
    STATEMENTS OF CASH FLOWS  Year Ended December 31,2007


2008


2009(In thousands)Cash flows from operating activities:Net income

$
21,127


$
18,278


$
11,753Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization expense


1,154



2,199



2,601Stock-based compensation


3,495



5,934



6,827Tax benefits from exercise of stock options


(5,688
)


(759
)


(388
)Deferred income tax


(527
)


(1,683
)


(2,180
)Changes in assets and liabilities, net of effects of
    acquisitions:Accounts receivable


129



23



256Prepaid expenses and other assets


630



(678
)


388Income taxes payable


6,387



61



542Accounts payable


615



(211
)


(76
)Accrued expenses and other current liabilities


232



1,304



7Accrued compensation and benefits


221



198



236Deferred revenue


2,526



439



(1,334
)Net cash provided by operating activities


30,301



25,105



18,632Cash flows from investing activities:Purchase of property and equipment


(1,797
)


(1,319
)


(1,437
)Purchase of investments


(38,303
)


(1,000
)


(1,250
)Sale of investments


36,275







Acquisitions, net of cash


(15,002
)


(12,584
)


(312
)Net cash used in investing activities


(18,827
)


(14,903
)


(2,999
)Cash flows from financing activities:Net proceeds from exercise of stock options


1,612



356



258Net proceeds from sale of convertible preferred stock










47,967Repurchase of common stock






(54,556
)


Tax benefit from exercise of stock options


5,688



759



388Net cash provided by (used in) financing activities


7,300



(53,441
)


48,613Net increase (decrease) in cash and cash equivalents


18,774



(43,239
)


64,246Cash and cash equivalents at beginning of year


85,790



104,564



61,325Cash and cash equivalents at end of year

$
104,564


$
61,325


$
125,571Supplemental disclosures of cash flow information:Cash paid during the year for income taxes

$
6,154


$
14,444


$
8,535Settlement of contingent purchase price

$
1,300


$



$
312    56




---



##### 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
   57




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Concentration
    of Risk
      Fair
    Value of Financial Instruments
    Accounts
    Receivable
    Property
    and Equipment
    Website
    Development Costs
  ,
  Long-Lived
    Assets Including Goodwill and Other Intangible
    Assets
       58




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      EstimatedUseful LifeCityfeet Acquisition (August 2, 2007)Newspaper Relationships


5 yearsAdvertising Relationships


3 yearsPay for Performance Relationships


2 yearsTechnology


3 yearsDomain name


5 years   EstimatedUseful LifeREApplications Acquisition (April 7, 2008)Customer Relationships


7 yearsTechnology


5 yearsDomain name


7 years   EstimatedUseful LifeLandAndFarm Acquisition (July 29, 2008)Customer Relationships


0.5 to 8 yearsTechnology


4 yearsNon-competition Agreement


3 yearsTrade names/Trademarks


Indefinite       Income
    Taxes
     59




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Business
    Segment
    Revenue
    Recognition
      Cost
    of Revenues
    Sales
    and Marketing
      Technology
    and Product Development
   60




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  General
    and Administrative
    Comprehensive
    Income
  available-for-sale
  Stock-Based
    Compensation
    Recent
    Accounting Pronouncements
  Accounting
    Standard
    Codification tm
       61




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (2)
    Earnings
    per Share    Year Ended December 31,2007


2008


2009Weighted average common shares outstanding


38,291



35,772



34,420Convertible preferred stock










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


38,291



35,772



41,860Add dilutive common equivalents:Stock options


2,101



1,270



930Restricted stock units






8



54Unvested restricted stock(1)


280



60



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


40,672



37,110



42,844     (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 31,2007

2008

2009Stock options


416



3,294



4,673Restricted stock units










113  62




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2007

2008

2009Calculation of basic net income per share applicable to
    common shareholders:Net income

$
21,127


$
18,278


$
11,753Convertible preferred stock accretion of discount










(240
)Net income applicable to common shareholders

$
21,127


$
18,278


$
11,513Shares used to compute basic net income applicable to common
    shareholders


38,291



35,772



41,860Basic net income per share applicable to common
    shareholders

$
0.55


$
0.51


$
0.28Calculation of diluted net income per share applicable to
    common shareholders:Net Income

$
21,127


$
18,278


$
11,753Convertible preferred stock accretion of discount










(240
)Net income applicable to common shareholders

$
21,127


$
18,278


$
11,513Shares used to compute diluted net income applicable to common
    shareholders


40,672



37,110



42,844Dilutive net income per share applicable to common
    shareholders

$
0.52


$
0.49


$
0.27   (3)
    Acquisitions  Cityfeet.com,
    Inc.
       63




---



##### Table of Contents



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

$
484Developed technology


510Domain name


410Deferred tax asset


1,913Net assets acquired


169Goodwill


12,816$
16,302     REApplications,
    Inc.
        Customer relationships

$
120Domain name


480Developed technology


2,490Net assets acquired


38Deferred tax liability


(947
)Goodwill


6,994$
9,175    64




---



##### Table of Contents



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

$
497Trade names/Trademarks


254Developed technology


279Non-competition agreements


63Net assets (liabilities) acquired


(19
)Deferred tax liability


(319
)Goodwill


1,667$
2,422    65




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (4)
    Property
    and Equipment, net    As of December 31,2008


2009Computer equipment and purchased software

$
7,591


$
6,363Office equipment and furniture (includes leasehold improvements)


1,270



1,0578,861



7,420Less accumulated depreciation and amortization


(6,653
)


(5,204
)Property and equipment, net

$
2,208


$
2,216     (5)
    Goodwill
    and Intangible Assets, net    Balance as of December 31, 2006

$
2,417Goodwill acquired


12,816Balance 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

$
23,368    66




---



##### Table of Contents



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


2009Cost:Customer relationships

$
1,711


$
1,711Technology


3,377



3,377Non-competition agreement


63



63Domain name


1,994



1,994Total cost


7,145



7,145Accumulated amortization:Customer relationships


(550
)


(831
)Technology


(741
)


(1,479
)Non-competition agreement


(9
)


(30
)Domain name


(167
)


(318
)Total accumulated amortization


(1,467
)


(2,658
)Intangible assets, net

$
5,678


$
4,487     2010

$
1,0792011


9342012


8362013


2752014 and thereafter


259$
3,383    67




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
   (6)
    Income
    Taxes    Year Ended December 31,2007


2008


2009Current:Federal

$
11,056


$
11,136


$
6,688State


2,739



2,901



1,767Total

$
13,795


$
14,037


$
8,455Deferred:Federal

$
(447
)

$
(1,204
)

$
(1,513
)State


(80
)


(536
)


(696
)Total

$
(527
)

$
(1,740
)

$
(2,209
)Income tax expense

$
13,268


$
12,297


$
6,246     Year Ended December 31,2007


2008


2009Statutory federal tax rate


35.0
%


35.0
%


35.0
%State tax rate, net of federal benefit


5.1
%


5.0
%


3.9
%Change in valuation allowance


(2.1
)%


(1.9
)%


(4.4
)%Other adjustments


0.6
%


2.1
%


0.2
%Effective tax rate


38.6
%


40.2
%


34.7
%     As of December 31,2008


2009Deferred tax assets (liabilities):Net operating loss carryforwards

$
12,769


$
11,480Depreciation and amortization


(469
)


(92
)Stock-based compensation


2,401



5,122Accruals and allowances


357



379Tax credits


1,235



1,235Intangibles


(1,750
)


(1,750
)Valuation allowance


(8,881
)


(8,084
)Other


774



327Deferred tax assets, net

$
6,436


$
8,617    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
 69




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Voting
    Dividends
      Liquidation
    winding-up)
   70




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  winding-up)
    Conversion
    Redemption
    at the option of the Company
    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, 2006


3,737,768


$
4.53



1,349,454


$
0.76Granted


1,157,500


$
17.56Exercised


(1,011,172
)

$
1.59Cancelled


(245,714
)

$
12.84Outstanding 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


$
9.11     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


424,700



3.30


$
0.10



424,700


$
0.10$0.23  $4.08


829,927



5.94



3.53



745,669



3.47$5.70  $7.96


2,126,177



6.12



7.21



419,882



7.25$8.00  $11.67


1,119,433



5.41



10.55



413,852



11.00$12.00  $12.98


605,279



4.46



12.11



380,602



12.10$13.00  $14.21


355,000



4.67



13.56



245,788



13.64$15.25  $15.75


113,296



3.59



15.30



95,300



15.29$16.07  $17.45


561,838



4.20



16.11



388,329



16.11$17.67  $19.09


112,475



4.16



18.71



96,990



18.78$19.35  $24.40


204,500



4.59



22.02



119,883



22.026,452,625



5.26


$
9.24



3,331,025


$
9.11



4.84  72




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended December 31,2007


2008


2009Risk-free interest rate


4.43
%


2.80
%


2.19
%Expected volatility


44
%


42
%


49
%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, 2007





$




Granted


195,000


$
11.47Vested





$
Cancelled





$
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



1.49  73




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended December 31,2007


2008


2009Cost of revenue

$
357


$
570


$
495Sales and marketing


1,358



2,198



894Technology and product development


600



1,311



2,298General and administrative


1,180



1,855



3,140Total

$
3,495


$
5,934


$
6,827   (10)
    Commitments
    and Contingencies  Leases
    2010

$
2,7782011


2,4622012


2,1162013


2,1672014 and thereafter


3,174$
12,697     Litigation
    patents-in-suit patents-in-suit
 74




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (11)
    401(k)
    Plan    (12)
    Subsequent
    Events   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 December
    10, 2008 (incorporated herein by reference to Exhibit 3.1 to the
    registrants Form 8-K filed on December 12, 2008, 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 Plan10
.7+*

Form of Performance-Based Restricted Stock Unit Agreement under
    2006 Equity Incentive Plan10
.8+*

Form of Indemnification Agreement10
.9

Lease, dated January 14, 2005, between S&F Huntington
    Millennium LLC and LoopNet, Inc. (incorporated herein by
    reference to Exhibit 10.6 to the registrants Form S-1
    filed on March 1, 2006, Registration No. 333-132138)10
.10

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
.11

First Amendment to Office Lease, dated August 16, 2005 between
    Stockbridge/MCC-China Basin L.L.C. and LoopNet, Inc.
    (incorporated herein by reference to Exhibit 10.6 to the
    registrants Form S-1/A filed on April 3, 2006,
    Registration No. 333-132138)10
.12

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
.13+

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
.14+*

Fiscal Year 2010 Bonus Plan10
.15+

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) 76




---



##### 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