##### 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, 2007ORo

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(Address of principal
    executive offices)

94107   (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-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 (as to directors), 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 2008 Annual
    Meeting of Stockholders.




---



##### 





TABLE OF
    CONTENTS
   
  PagePART IItem 1.

Business


4Item 1A.

Risk Factors


14Item 1B.

Unresolved Staff Comments


25Item 2.

Properties


25Item 3.

Legal Proceedings


25Item 4.

Submission of Matters to a Vote of Security
    Holders


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


30Item 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


45Item 11

Executive Compensation


45Item 12.

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


46Item 13.

Certain Relationships and Related Transactions
    and Director Independence


46Item 14.

Principal Accountant Fees and Services


46PART IVItem 15.

Exhibits and Financial Statement Schedules


47Signatures


48EXHIBIT 2.2EXHIBIT 23.1EXHIBIT 31.1EXHIBIT 31.2EXHIBIT 32.1EXHIBIT 32.2   2




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Statement
    regarding forward-looking statements
    
    our future financial results;
    our future growth and offering of new products or services;
    our future advertising and marketing activities; and
    our future investment in technology.      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
      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.
  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.
  Our
    Strategy
    Expand our base of registered members.
  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
      Basic and premium membership.
 8




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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 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 9




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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.
  BizBuySell.
 10




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Sales and
    Marketing
            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.


42


Chief Executive Officer and Chairman of the Board of DirectorsThomas Byrne


41


President and Chief Operating OfficerBrent Stumme


46


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


40


Chief Strategy Officer and Senior Vice President, Corporate
    DevelopmentWayne Warthen


44


Chief Technology Officer and Senior Vice President, Information
    Technology   Richard J. Boyle, Jr.
  Thomas Byrne
  Brent Stumme
 13




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Jason Greenman
  Wayne Warthen
  Item 1A.
    Risk
    Factors.    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
 14




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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.
    We may
    be unable to compete successfully with our current or future
    competitors.
        © ©
 15




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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.
    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;
    costs related to acquisitions of businesses or
    technologies; and
    other factors outside of our control.    and/or
 16




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
    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.    
    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.   17




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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.
      We may
    be unable to effectively manage our growth.
    We
    could face liability for information on our
    website.
     18




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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.
      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.
     19




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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.
        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.
   20




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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 normal daily
    operations of the 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.     21




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Unless
    we develop, maintain and protect our brand identity, our
    business may not grow and our financial results may
    suffer.
    If we
    are unable to effectively implement enhanced systems and
    internal controls, we may incur increased general and
    administrative costs, which could reduce our profitability, and
    investor confidence in us may decrease, which could cause our
    stock price to decline.
    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.
  Share-Based Payment Accounting
    for Stock-Based Compensation Accounting for Stock
    Issued to Employees
 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.
      We may
    be subject to regulation of our advertising and customer
    solicitation or other newly-adopted laws and
    regulations.
   23




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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
    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; 24




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
    not providing for cumulative voting in the election of directors;
    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.    Item 3.
    Legal
    Proceedings.     25




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


Low2006Second Quarter (June 7 to June 30, 2006)

$
19.92


$
14.11Third Quarter

$
19.18


$
10.48Fourth Quarter

$
17.07


$
12.672007First Quarter

$
17.99


$
14.50Second Quarter

$
24.21


$
15.02Third Quarter

$
26.37


$
16.76Fourth Quarter

$
23.90


$
13.22     Dividend
    policy
    Unregistered
    Sales of Equity Securities
    Use of
    Proceeds
  Form S-1 333-132138)
      Issuer
    Purchases of Equity Securities
   26




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Performance
    Graph
    Comparative
    Returns
  
  Culmulative Total Return6/7/2006

12/29/2006

12/31/2007LOOPNET, INC.


100.00



99.87
(1)


93.67
(1)NASDAQ STOCK MARKET (U.S)


100.00



112.25



123.26GOLDMAN SACHS INTERNET TRADING INDEX


100.00



116.95



127.45   (1)
    
    Based on the initial public offering price of $12.00 per share
    on June 6, 2006, the cumulative total return is $124.83 and
    $117.08 on 12/29/06 and 12/31/07, respectfully.   27




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Item 6.
    Selected
    Financial Data.  Form 10-K.
  Form 10-K. Form 10-K.
  Year Ended December 31,2003


2004


2005


2006


2007(In thousands, except per share data)Consolidated Statements of Operations Data:Revenues

$
10,480


$
17,036


$
30,977


$
48,411


$
70,729Cost of revenue(1)


1,984



2,562



3,825



5,599



8,033Gross profit


8,496



14,474



27,152



42,812



62,696Operating expenses(1):Sales and marketing


1,704



3,193



6,252



9,506



14,667Technology and product development


2,289



2,686



3,746



4,341



6,427General and administrative


3,180



4,889



5,955



7,803



12,253Total operating expenses


7,173



10,768



15,953



21,650



33,347Income from operations


1,323



3,706



11,199



21,162



29,349Interest and other income, net


282



132



494



2,883



5,046Income from continuing operations


1,605



3,838



11,693



24,045



34,395Discontinued operations:Gain on sale of assets, net


287















Income from discontinued operations


287















Income before taxes


1,892



3,838



11,693



24,045



34,395Income tax expense (benefit)


188



118



(7,243
)


8,550



13,268Net income

$
1,704


$
3,720


$
18,936


$
15,495


$
21,127Net income per shareBasic

$



$
0.06


$
0.58


$
0.42


$
0.55Diluted

$



$
0.04


$
0.54


$
0.40


$
0.52     (1)
    
    Stock-based compensation is allocated as follows:  28




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Year Ended December 31,2003


2004


2005


2006


2007(In thousands)Cost of revenue

$



$
1


$
18


$
151


$
357Sales and marketing






251



146



686



1,358Technology and product development






236



350



195



600General and administrative






1,188



150



421



1,180Total






1,676



664



1,453



3,495   Year Ended December 31,2003


2004


2005


2006


2007(In thousands)Consolidated Balance Sheet Data:Cash, cash equivalents and short-term investments

$
5,174


$
8,724


$
21,865


$
89,028


$
107,889Working capital


2,915



5,100



16,939



81,884



94,667Total assets


6,034



12,971



35,177



100,205



137,359Total liabilities


2,727



4,255



6,604



10,202



15,506Reedeemable convertible preferred stock


39,712



39,712



39,962







Total shareholders (deficit) equity


(36,405
)


(30,996
)


(11,389
)


90,003



121,853   Year Ended December 31,2003


2004


2005


2006


2007(In thousands)Consolidated Statement of Cash Flows Data:Cash flow provided by operating activities

$
2,944


$
6,921


$
14,490


$
23,205


$
30,301Depreciation and amortization


377



278



505



611



1,154Capital expenditures


(243
)


(500
)


(719
)


(665
)


(1,797
)   Year Ended December 31,2003


2004


2005


2006


2007Other Operating Data (unaudited):LoopNet registered members at end of period


450,876



703,111



1,116,589



1,766,508



2,567,729LoopNet premium members at end of period


21,203



35,482



57,461



78,952



88,340  29




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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.
  Overview
  www.LoopNet.com
   30




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Our
    Revenues and Expenses
    
    LoopNet premium membership fees;
    BizBuySell BrokerWorks membership fees and paid listings;
    advertising on, and lead generation from, our marketplaces,
    LoopLink product license fees; and
    LoopNet RecentSales membership fees.    
    the increased adoption of our premium membership services by the
    commercial real estate industry;
    increases in the average monthly subscription price of our
    premium membership product;
    the increased adoption of out RecentSales services by the
    commercial real estate industry, and
    our acquisition of BizBuySell in October, 2004, and the
    increased adoption of our services by the operating business for
    sale industry.  www.LoopNet.com www.BizBuySell.com
        Critical
    Accounting Policies and Estimates
   31




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Revenue
    Recognition
    Income
    Taxes
        Accounting for Uncertainty in Income Taxes
 32




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Website
    Development Costs
  EITF 00-2,
  Stock-Based
    Compensation
  Share-Based Payment Accounting for
    Stock-Based Compensation Accounting for Stock Issued
    to Employees
          Seasonality
    and Cyclicality
     33




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Results
    of Operations
    Year Ended December 31,2005


2006


2007Revenues


100.0
%


100.0
%


100.0
%Cost of revenues


12.3



11.6



11.4Gross profit


87.7



88.4



88.6Operating expenses:Sales and marketing


20.2



19.6



20.7Technology and product development


12.1



9.0



9.1General and administrative


19.2



16.1



17.3Total operating expenses


51.5



44.7



47.1Income from operations


36.2



43.7



41.5Interest and other income, net


1.6



6.0



7.1Income before taxes


37.8



49.7



48.6Income tax expense (benefit)


(23.3
)


17.7



18.8Net income


61.1
%


32.0
%


29.9
%   Comparison
    of Years Ended December 31, 2006 and 2007
  Revenues
  Year Ended December 31,Percent2006


2007


Increase


Change(Dollars in thousands)Revenues

$
48,411


$
70,729


$
22,318



46.1
%Premium members at year-end


78,952



88,340



9,388



11.9
%      34




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Cost
    of Revenues
  Year Ended December 31,Percent2006


2007


Increase


Change(Dollars in thousands)Cost of revenues

$
5,599


$
8,033


$
2,434



43.5
%Percentage of revenues


11.6
%


11.4
%         Sales
    and Marketing
  Year Ended December 31,Percent2006


2007


Increase


Change(Dollars in thousands)Sales and marketing

$
9,506


$
14,667


$
5,161



54.3
%Percentage of revenues


19.6
%


20.7
%           Technology
    and Product Development
  Year Ended December 31,Percent2006


2007


Increase


Change(Dollars in thousands)Technology and product development

$
4,341


$
6,427


$
2,086



48.1
%Percentage of revenues


9.0
%


9.1
%    35




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##### Table of Contents



General
    and Administrative
  Year Ended December 31,Percent2006


2007


Increase


Change(Dollars in thousands)General and administrative

$
7,803


$
12,253


$
4,450



57.0
%Percentage of revenues


16.1
%


17.3
%           Stock-Based
    Compensation
      Year Ended December 31,Increase/


Percent2006


2007


(Decrease)


ChangeCost of revenue

$
151


$
357


$
206



136.4
%Selling and marketing


686



1,358



672



98.0
%Technology and product development


195



600



405



207.7
%General and administrative


421



1,180



759



180.3
%Total

$
1,453


$
3,495


$
2,042



140.5
%   Interest
    Income
   36




---



##### Table of Contents



Income
    Taxes
    Comparison
    of Years Ended December 31, 2005 and 2006
  Revenues
  Year Ended December 31,Percent2005


2006


Increase


Change(Dollars in thousands)Revenues

$
30,977


$
48,411


$
17,434



56.3
%Premium members at year-end


57,461



78,952



21,491



37.4
%     Cost
    of Revenues
  Year Ended December 31,Percent2005


2006


Increase


Change(Dollars in thousands)Cost of revenues

$
3,825


$
5,599


$
1,774



46.4
%Percentage of revenues


12.3
%


11.6
%       Sales
    and Marketing
  Year Ended December 31,Percent2005


2006


Increase


Change(Dollars in thousands)Sales and marketing

$
6,252


$
9,506


$
3,254



52.0
%Percentage of revenues


20.2
%


19.6
%        37




---



##### Table of Contents



Technology
    and Product Development
  Year Ended December 31,Percent2005


2006


Increase


Change(Dollars in thousands)Technology and product development

$
3,746


$
4,341


$
595



15.9
%Percentage of revenues


12.1
%


9.0
%       General
    and Administrative
  Year Ended December 31,Percent2005


2006


Increase


ChangeGeneral and administrative

$
5,955


$
7,803


$
1,848



31.0
%Percentage of revenues


19.2
%


16.1
%       Stock-Based
    Compensation
      Year Ended December 31,Increase/


Percent2005


2006


(Decrease)


Change(Dollars in thousands)Cost of revenue

$
18


$
151


$
133



738.9
%Selling and marketing


146



686



540



369.9
%Technology and product development


350



195



(155
)


(44.3
)%General and administrative


150



421



271



180.7
%Total

$
664


$
1,453


$
789



118.8
%   Interest
    Income
   38




---



##### Table of Contents



Income
    Taxes
    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. 31,2006


2006


2006


2006


2007


2007


2007


2007(In thousands, except per share data)Revenues

$
10,226


$
11,631


$
12,707


$
13,847


$
15,515


$
17,022


$
18,627


$
19,565Cost of revenues(1)


1,228



1,366



1,421



1,584



1,780



1,874



2,072



2,308Gross profit


8,998



10,265



11,286



12,263



13,735



15,148



16,555



17,257Operating expenses(1):Sales and marketing


1,949



2,183



2,776



2,598



3,259



3,577



3,916



3,914Technology and product development


960



1,032



1,146



1,203



1,350



1,569



1,699



1,809General and administrative


1,478



1,751



2,147



2,427



2,569



2,849



3,211



3,623Total operating expenses


4,387



4,966



6,069



6,228



7,178



7,995



8,826



9,346Income from operations


4,611



5,299



5,217



6,035



6,557



7,153



7,729



7,911Interest and other income


253



465



1,028



1,137



1,193



1,313



1,242



1,298Income before taxes


4,864



5,764



6,245



7,172



7,750



8,466



8,971



9,209Income tax expense


1,899



2,321



2,479



1,851



3,201



3,367



3,193



3,508Net income

$
2,965


$
3,443


$
3,766


$
5,321


$
4,549


$
5,099


$
5,778


$
5,701Net income per share:Basic

$
0.08


$
0.09


$
0.10


$
0.14


$
0.12


$
0.13


$
0.15


$
0.15Diluted

$
0.06


$
0.09


$
0.09


$
0.13


$
0.11


$
0.13


$
0.14


$
0.14     (1)
    
    Includes stock-based compensation as follows:  39




---



##### Table of Contents



Quarter EndedMar. 31,


June 30,


Sept. 30,


Dec. 31,


Mar. 31,


June 30,


Sept. 30,


Dec. 31,2006


2006


2006


2006


2007


2007


2007


2007(In thousands)Cost of revenues

$
8


$
24


$
54


$
65


$
67


$
94


$
96


$
100Sales and marketing


51



87



301



247



238



351



363



405Technology and product development


23



32



64



76



91



150



169



191General and administrative


32



56



190



143



159



280



365



375Total

$
114


$
199


$
609


$
531


$
555


$
875


$
993


$
1,071   Quarter EndedMar. 31,


June 30,


Sept. 30,


Dec. 31,


Mar. 31,


June 30,


Sept. 30,


Dec. 31,2006


2006


2006


2006


2007


2007


2007


2007Revenues


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%


100.0
%Cost of revenues


12.0



11.7



11.2



11.4



11.5



11.0



11.1



11.8Gross profit


88.0



88.3



88.8



88.6



88.5



89.0



88.9



88.2Operating expenses:Sales and marketing


19.0



18.8



21.8



18.8



21.0



21.0



21.0



20.0Technology and product development


9.4



8.9



9.0



8.7



8.7



9.2



9.1



9.2General and administrative


14.5



15.1



16.9



17.5



16.6



16.7



17.2



18.5Total operating expenses


42.9



42.7



47.8



45.0



46.3



46.9



47.4



47.8Income from operations


45.1



45.6



41.1



43.6



42.3



42.1



41.5



40.4Interest and other income


2.5



4.0



8.1



8.2



7.7



7.7



6.7



6.6Income before taxes


47.6



49.6



49.1



51.8



50.0



49.8



48.2



47.1Income tax expense


18.6



20.0



19.5



13.4



20.6



19.8



17.1



17.9Net income


29.0
%


29.6
%


29.6
%


38.4
%


29.3
%


30.0
%


31.0
%


29.1
%     Liquidity
    and Capital Resources
   Year Ended December 31,2005


2006


2007(In thousands)Cash provided by operating activities

$
14,490


$
23,205


$
30,301Cash (used in) investing activities


(1,719
)


(665
)


(18,827
)Cash provided by financing activities


296



44,485



7,300    40




---



##### Table of Contents



Operating
    Activities
    Investing
    Activities
        Financing
    Activities
        Off-Balance
    Sheet Arrangements
    Tabular
    Disclosure of Contractual Obligations and Known Future Cash
    Requirements
     41




---



##### Table of Contents



Payments Due by Period2012 and2008


2009


2010


2011


thereafter


Total(Dollars in thousands)Operating lease obligations

$
1,084


$
640


$
652


$
271


$
0


$
2,647   Advertising
    and Media Contracts
    Future
    Capital Requirements
    Recent
    Accounting Pronouncements
  Business Combinations
 42




---



##### Table of Contents



Noncontrolling Interests in Consolidated Financial Statements Consolidated Financial Statements,
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
  Fair Value Measurements
  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. 10-K.
 43




---



##### 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. Form 10-K
  Item 9B.
    Other
    Information.  Rule 10b5-1
    Trading Plan. Rule 10b5-1 Form 10-K,
  Rule 10b5-1
  2008 Bonus Plan.
  Option Grants to Named Executive
    Officers.
 44




---



##### Table of Contents



PART III  Proxy
    Statement
  Item 10.
    Directors,
    Executive Officers and Corporate Governance.      
    Information regarding directors of the Company who are standing
    for reelection 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 proxy statement and is not incorporated by reference
    herein.
        (415) 243-4200
  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. 45




---



##### 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


1,847,519


$
2.00



2006 Equity Incentive Plan


1,790,863


$
16.09



6,755,607Equity Compensation Plans not Approved by Stockholders


None



None



NoneTotal


3,638,382


$
8.93



6,755,607
(1)     (1)
    
    Excludes 1,556,332 shares authorized for issuance on
    January 31, 2008 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.   46




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules.      Regulation S-K)
  2
.2*

Amendment to Stock Purchase Agreement with Cityfeet.com3
.1

First Amended and Restated Certificate of Incorporation
    (incorporated herein by reference to the registrants
    Form 10-Q
    filed on August 4, 2006)3
.2

Bylaws (incorporated herein by reference to the
    registrants
    Form 10-Q
    filed on August 4, 2006)4
.1

Specimen Common Stock Certificate (incorporated herein by
    reference to the registrants
    Form S-1/A
    filed on April 27, 2006)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
    the registrants
    Form S-1
    filed on March 1, 2006)10
.1+

LoopNet, Inc. 2001 Stock Option and Purchase Plan (incorporated
    herein by reference to the registrants
    Form S-1
    filed on March 16, 2006)10
.2+

Form of Option Agreement under 2001 Stock Option and Purchase
    Plan (incorporated herein by reference to the registrants
    Form S-1
    filed on March 1, 2006)10
.3+

LoopNet, Inc. 2006 Equity Incentive Plan (incorporated herein by
    reference to the registrants
    Form S-1/A
    filed on June 6, 2006)10
.4+

Form of Option Agreement under 2006 Equity Incentive Plan
    (incorporated herein by reference to the registrants
    Form S-1/A
    filed on April 27, 2006)10
.5+

Form of Indemnification Agreement (incorporated herein by
    reference to the registrants
    Form S-1/A
    filed on April 27, 2006)10
.6

Lease, dated January 14, 2005, between S&F Huntington
    Millennium LLC and LoopNet, Inc. (incorporated herein by
    reference to the registrants
    Form S-1
    filed on March 1, 2006)10
.7

Office Lease, dated January 8, 2003, between
    PWREF/MCC-China Basin L.L.C. and LoopNet, Inc. (incorporated
    herein by reference to the registrants
    Form S-1/A
    filed on April 3, 2006)10
.8

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 the registrants
    Form S-1/A
    filed on April 3, 2006)10
.9+

Director Compensation Policy (incorporated herein by reference
    to the registrants
    Form S-1/A
    filed on April 27, 2006)10
.10+

Fiscal Year 2008 Bonus Plan (incorporated herein by reference to
    the registrants
    Form 8-K
    filed on February 5, 2008)10
.11+

Form of Restricted Stock Unit Agreement under 2006 Equity
    Incentive Plan (incorporated herein by reference to the
    registrants
    Form 8-K
    filed on February 5, 2008)23
.1*

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

Power of Attorney (see signature page)31
.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
     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 4, 2008/s/  Brent
    StummeBrent
    Stumme

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

March 4, 2008/s/  Noel
    J. FentonNoel
    J. Fenton

Director

March 4, 2008/s/  William
    A. MillichapWilliam
    A. Millichap

Director

March 4, 2008 48




---



##### Table of Contents



Signature

Title

Date/s/  Thomas
    E. UntermanThomas
    E. Unterman

Director

March 4, 2008/s/  Dennis
    ChookaszianDennis
    Chookaszian

Director

March 4, 2008/s/  Scott
    IngrahamScott
    Ingraham

Director

March 4, 2008/s/  William
    ByrnesWilliam
    Byrnes

Director

March 4, 2008  49




---



##### Table of Contents



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  The Board of
    Directors and Stockholders
               Ernst &
    Young LLP
   51




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM               
    52




---



##### Table of Contents



LOOPNET,
    INC.CONSOLIDATED BALANCE SHEETS(In thousands, except share data)
  December 31,


December 31,2006


2007AssetsCurrent assets:Cash and cash equivalents

$
85,790


$
104,564Short-term investments


3,238



3,325Accounts receivable, net of allowance of $57 and $105,
    respectively


1,138



1,190Prepaid expenses and other current assets


1,518



796Deferred income taxes


402



298Total current assets


92,086



110,173Property and equipment, net


1,020



2,051Goodwill


2,417



15,233Intangibles, net


1,312



2,461Deferred income taxes


3,083



5,196Deposits and other noncurrent assets


287



2,245Total assets

$
100,205


$
137,359Liabilities and stockholders equityCurrent liabilities:Accounts payable

$
169


$
828Accrued compensation and benefits


2,200



2,479Accrued liabilities


864



1,964Income taxes payable






698Deferred revenue


6,969



9,537Total current liabilities


10,202



15,506Commitments and contingenciesStockholders equity:Common stock, $.001 par value, 125,000,000 shares
    authorized; 37,897,114 and 38,908,302 shares issued and
    outstanding at December 31, 2006 and 2007, respectively


38



39Additional paid in capital


97,072



107,866Accumulated other comprehensive loss


(31
)


(103
)Retained earnings (deficit)


(7,076
)


14,051Total stockholders equity


90,003



121,853Total liabilities and stockholders equity

$
100,205


$
137,359    53




---



##### Table of Contents



LOOPNET,
    INC.CONSOLIDATED STATEMENTS OF INCOME(In thousands, except share data)
  Year Ended December 31,2005


2006


2007Revenues

$
30,977


$
48,411


$
70,729Cost of revenue


3,825



5,599



8,033Gross margin


27,152



42,812



62,696Operating expenses:Sales and marketing


6,252



9,506



14,667Technology and product development


3,746



4,341



6,427General and administrative


5,955



7,803



12,253Total operating expenses


15,953



21,650



33,347Income from operations


11,199



21,162



29,349Interest and other income, net


494



2,883



5,046Income before tax


11,693



24,045



34,395Income tax expense (benefit)


(7,243
)


8,550



13,268Net Income

$
18,936


$
15,495


$
21,127Net income per shareBasic

$
0.58


$
0.42


$
0.55Diluted

$
0.54


$
0.40


$
0.52Number of shares used in per share calculations:Basic


7,259



36,767



38,291Diluted


35,092



38,686



40,672    54




---



##### Table of Contents



LOOPNET,
    INC.CONSOLIDATED STATEMENT OF STOCKHOLDERS EQUITY
    (DEFICIT)
 (In thousands)
  Accumulated


TotalAdditional


Deferred


Stockholders


Retained


Other


StockholdersCommon Stock


Paid-in


stock-based


Notes


Earnings


Comprehensive


EquityShares


Amount


Capital


compensation


Receivable


(Deficit)


(Loss)


(Deficit)Balance at December 31, 2004


7,197



7



11,374



(512
)


(352
)


(41,507
)


(6
)


(30,996
)Exercise of stock options


828



1



81



















82Issuance of Restricted Stock


490



1



48



















49Stockholders note receivable


















(86
)










(86
)Interest on stockholders note receivable


















(15
)










(15
)Stock-based compensation on revalued options










236



















236Deferred stock-based compensation related to options granted to
    employees










743



(743
)














Amortization of deferred stock-based compensation net of
    forfeitures for terminated employees














428















428Unrealized loss on marketable securities


























(23
)


(23
)Net income






















18,936







18,936Total comprehensive income






























18,913Balance at December 31, 2005


8,515


$
9


$
12,482


$
(827
)

$
(453
)

$
(22,571
)

$
(29
)

$
(11,389
)Exercise of stock options


549



1



135



















136Exercise of warrants


1,362



1



2



















3Interest on stockholders note receivable


















(3
)










(3
)Collection of stockholders note receivable


















456











456Conversion of reedemable convertible preferrred stock


24,000



24



40,387



















40,411SFAS 123R adoption










(827
)


827















Stock-based compensation expense










1,453



















1,453Tax benefit from exercise of stock options










1,131



















1,131Net proceeds from issuance of common stock, net of transaction
    costs


3,471



3



42,309



















42,312Unrealized loss on marketable securities


























(2
)


(2
)Net income






















15,495







15,495Total comprehensive income






























15,493Balance 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



















5,688Unrealized 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
)

$
121,853    55




---



##### Table of Contents



LOOPNET,
    INC.CONSOLIDATED STATEMENTS OF CASH FLOWS
 (In thousands)
  Year Ended December 31,2005


2006


2007Cash flows from operating activities:Net income

$
18,936


$
15,495


$
21,127Adjustments to reconcile net income to net cash provided by
    operating activities:Depreciation and amortization expense


505



611



1,154Stock-based compensation


664



1,453



3,495Tax benefits from exercise of stock options










(5,688
)Deferred income tax (benefit)


(7,622
)


4,137



(527
)Changes in operating assets and liabilities:Accounts receivable


(157
)


(608
)


129Prepaid expenses and other assets


(184
)


(1,481
)


630Income taxes payable


(72
)


(16
)


6,387Accounts payable


6



103



615Accrued expenses and other current liabilities


4



265



232Accrued compensation and benefits


301



917



221Deferred revenue


2,109



2,329



2,526Net cash provided by operating activities


14,490



23,205



30,301Cash flows from investing activities:Purchase of property and equipment


(719
)


(665
)


(1,797
)Purchase of investments










(38,303
)Sale of investments










36,275Acquisitions, net of cash acquired


(1,000
)






(15,002
)Net cash used in investing activities


(1,719
)


(665
)


(18,827
)Cash flows from financing activities:Proceeds from sale of common stock, net of issuance costs paid






42,309



Net proceeds from exercise of stock options


46



139



1,612Net proceeds from exercise of warrants


250



450



Net proceeds from payment of notes receivable on options
    exercised and restricted stock purchased






456



Tax benefit from exercise of stock options






1,131



5,688Net cash provided by financing activities


296



44,485



7,300Net increase in cash and cash equivalents


13,067



67,025



18,774Cash and cash equivalents at beginning of period


5,698



18,765



85,790Cash and cash equivalents at end of period

$
18,765


$
85,790


$
104,564Supplemental disclosures of cash flow information:Cash paid during the period for income taxes

$
449


$
4,115


$
6,154Settlement of contingent purchase price

$



$



$
1,300    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
        Stock
    Split
    Use of
    Estimates
      Cash
    and Cash Equivalents
   57




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Short-term
    Investments
  Accounting for Certain Investments in Debt and
    Equity Securities.
  Concentration
    of Risk
      Fair
    Value of Financial Instruments
    Accounts
    Receivable
    Property
    and Equipment
    Website
    Development Costs
  EITF 00-2, Accounting for Web Site Development Costs,
  Long-Lived
    Assets Including Goodwill and other Intangible
    Assets
   58




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Goodwill and
    Other Intangible Assets.
  Accounting for the Impairment of Long-Lived Assets and for
    Long-Lived Assets to Be Disposed.
    EstimatedUseful LifeBizBuySell Acquisition (October 1, 2004)Broker Relationships


8.3 yearsAdvertising Relationships


1.5 yearsTechnology


3 yearsDomain name


Indefinite   EstimatedUseful LifeCityfeet Acquisition (August 2, 2007)Newspaper Relationships


5 yearsAdvertising Relationships


3 yearsPay for Performance Relationships


2 yearsTechnology


3 yearsDomain name


5 years       Income
    Taxes
   59




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Accounting for Uncertainty in Income Taxes
  Business
    Segment
    Revenue
    Recognition
  Revenue Recognition
    Cost
    of Revenues
    Sales
    and Marketing
     60




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Technology
    and Product Development
    General
    and Administrative
    Comprehensive
    Income
    Stock-Based
    Compensation
  Share-Based
    Payment Accounting for Stock-Based Compensation Accounting for
    Stock Issued to Employees
  Accounting for Stock Issued to Employees, Accounting for Certain Transactions Involving Stock
    Compensation Accounting for Stock-Based Compensation, Accounting for Stock-Based
    Compensation
  Recent
    Accounting Pronouncements
  Business Combinations
 61




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  Noncontrolling Interests in Consolidated Financial Statements Consolidated Financial Statements,
  The
    Fair Value Option for Financial Assets and Financial
    Liabilities
  Fair Value Measurements
  (2)
    Earnings
    per Share  No. 03-6, Participating Securities and the Two 
    Class Method under FASB Statement 128 No. 03-6 No. 03-6
  Earnings Per Share
 62




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2005


2006


2007Weighted average common shares outstanding(1)


7,259



8,028



38,291Weighted average shares outstanding used to compute basic net
    income per share after conversion of redeemable convertible
    preferred stock; one class of common shares was outstanding for
    the period from June 7 to June 30, 2006






36,767Weighted average common shares outstanding


7,259



23,913



38,291Add dilutive common equivalents:Stock options


2,094



2,562



2,101Warrants






259



Unvested restricted stock(2)


933



568



280Redeemable convertible preferred stock


21,827



10,341



Redeemable convertible preferred warrants


2,979



1,043



Shares used to compute diluted net income per share


35,092



38,686



40,672     (1)
    
    For the year ended December 31, 2006 where the Company had
    two classes of equity securities, it followed EITF Issue
    No. 03-6,
    Participating Securities and the Two-Class Method under
    FASB Statement 128.(2)
    
    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 31,2005

2006

2007Stock options


24



971



416  63




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year Ended December 31,2005


2006


2007Calculation of basic net income per share(1):Net income

$
18,936


$
6,665



N/AAssumed preferred stock dividends


2,159



978



N/ANet income, net of assumed stock dividends

$
16,777


$
5,687



N/APercent of net income allocable to common shareholders(2)


25
%


26
%


N/ANet income allocable to common shareholders


4,194



1,479



N/AWeighted average common shares outstanding


7,259



8,028



N/ABasic net income per share  two-class method

$
0.58


$
0.18



N/ANet income for period during which single class of equity
    securities was outstanding





$
8,830


$
21,127Weighted average common shares outstanding






36,767



38,291Basic earnings per share for period during which single class of
    equity securities were outstanding





$
0.24Basic earnings per share

$
0.58


$
0.42


$
0.55Calculation of diluted net income per share:Net income

$
18,936


$
15,495


$
21,127Weighted average diluted shares outstanding


35,092



38,686



40,672Diluted net income per share

$
0.54


$
0.40


$
0.52     (1)
    
    For the year ended December 31, 2006 where the Company had
    two classes of equity securities, it followed EITF Issue
    No. 03-6,
    Participating Securities and the Two-Class Method under
    FASB Statement 128.(2)
    
    Calculation of percent of net income allocable to common
    shareholders:  Year Ended December 31,2005


2006


2007Weighted average common shares outstanding


7,259



8,028



N/AWeighted average redeemable convertible preferred shares
    outstanding


21,827



22,896



N/AWeighted average common shares and preferred shares outstanding


29,086



30,924



N/APercent of net income allocable to common shareholders


25
%


26
%


N/A   (3)
    Acquisitions     64




---



##### Table of Contents



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

$
610Technology


98Domain name


850Goodwill


2,417$
3,975         Customer relationships

$
484Developed technology


510Domain name


410Deferred tax asset


1,913Net assets acquired


169Goodwill


12,816$
16,302    65




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    (4)
    Property
    and Equipment, net    As of December 31,2006


2007Computer equipment and purchased software

$
5,071


$
7,495Office equipment and furniture (includes leasehold improvements)


561



6925,632



8,187Less accumulated depreciation and amortization


(4,612
)


(6,136
)$
1,020


$
2,051   (5)
    Intangible
    Assets, net    As of December 31,2006


2007Cost:Customer relationships

$
610


$
1,094Technology


98



608Domain name


850



1,260Total cost


1,558



2,962Accumulated amortization:Customer relationships


(172
)


(298
)Technology


(74
)


(169
)Domain name






(34
)Total accumulated amortization


(246
)


(501
)Total

$
1,312


$
2,461     2008

$
4552009


4462010


3412011


1542012 and thereafter


126$
1,522  66




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
  (6)
    Income
    Taxes    Year Ended December 31,2005


2006


2007Current:Federal

$
287


$
3,631


$
11,056State


92



932



2,739Total

$
379


$
4,562


$
13,795Deferred:Federal

$
(6,207
)

$
3,259


$
(447
)State


(1,415
)


728



(80
)Total

$
(7,622
)

$
3,987


$
(527
)Income tax expense (benefit)

$
(7,243
)

$
8,550


$
13,268     Year Ended December 31,2005


2006


2007Statutory federal tax rate


34.0
%


34.0
%


35.0
%State tax rate, net of federal benefit


(7.5
)%


4.6
%


5.1
%Change in valuation allowance


(88.4
)%


(4.9
)%


(2.1
)%Other adjustments


0.0
%


1.9
%


0.6
%Effective tax rate


(61.9
)%


35.6
%


38.6
%     As of December 31,2006


2007Deferred tax assets:Net operating loss carryforwards

$
10,945


$
13,545Property and equipment


8



(14
)Tax credits


1,210



1,234Deferred income


726



1,350Intangibles


0



(507
)Valuation allowance


(9,404
)


(10,114
)Total deferred tax assets

$
3,485


$
5,494    67




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
        (7)
    Stock
    Option Plan       68




---



##### 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, 2004


2,884,464


$
0.10



1,675,286


$
0.10Granted


921,684


$
1.31Exercised


(827,702
)

$
0.10Cancelled


(294,668
)

$
0.17Outstanding at December 31, 2005


2,683,778


$
0.51



1,214,352


$
0.11Granted


1,803,976


$
9.40Exercised


(548,841
)

$
0.25Cancelled


(201,145
)

$
6.14Outstanding 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


$
4.59     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


750,454



5.55


$
0.10



611,513


$
0.10$ 0.23 - $ 4.08


1,097,065



7.89



3.29



398,393



3.11$10.65 - $12.00


217,912



5.45



11.89



65,384



11.88$12.10 - $12.98


102,292



5.69



12.38



29,183



12.38$13.00 - $14.86


236,600



6.10



13.80



47,724



14.02$15.25 - $15.58


163,096



5.59



15.26



50,995



15.26$15.83 - $17.51


622,088



6.20



16.13



111,641



16.11$18.24 - $19.09


205,375



6.26



18.67



21,485



18.60$19.10 - $22.92


223,000



6.59



21.71



2,498



20.12$22.93 - $24.40


20,500



6.54



24.15



312



24.403,638,382



6.51


$
8.93



1,339,128


$
4.59



6.15  69




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
    Year EndedDecember 31,2005Net income, as reported

$
18,936Add: Stock-based employee compensation expense included in net
    income available to stockholders, net of related tax effects


664Deduct: Total stock-based employee compensation expense
    determined under fair value based method for all awards, net of
    related tax effects


(650
)Pro forma net income

$
18,950Earnings per shareBasic  as reported

$
0.58Diluted  as reported

$
0.54Basic  pro forma

$
0.58Diluted  pro forma

$
0.54       Year Ended December 31,2005


2006


2007Risk-free interest rate


4.05
%


4.76
%


4.43
%Expected volatility


0
%


53
%


44
%Expected life


4 years



5.3 years



4.6 yearsDividend yield


0
%


0
%


0
%        70




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      Year Ended December 31,2005


2006


2007Cost of revenues

$
18


$
151


$
357Sales and marketing


146



686



1,358Technology and product development


350



195



600General and administrative


150



421



1,180Total

$
664


$
1,453


$
3,495   (8)
    Commitments
    and Contingencies  Leases
    2008

$
1,0842009


6402010


6522011


2712012 and thereafter


0$
2,647     Litigation
     71




---



##### Table of Contents



LOOPNET,
    INC.
  NOTES TO
    CONSOLIDATED FINANCIAL
    STATEMENTS  (Continued)
      (9)
    401(k)
    Plan   72




---



##### Table of Contents



EXHIBIT INDEX
  2
.2*

Amendment to Stock Purchase Agreement with Cityfeet.com3
.1

First Amended and Restated Certificate of Incorporation
    (incorporated herein by reference to the registrants
    Form 10-Q
    filed on August 4, 2006)3
.2

Bylaws (incorporated herein by reference to the
    registrants
    Form 10-Q
    filed on August 4, 2006)4
.1

Specimen Common Stock Certificate (incorporated herein by
    reference to the registrants
    Form S-1/A
    filed on April 27, 2006)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
    the registrants
    Form S-1
    filed on March 1, 2006)10
.1+

LoopNet, Inc. 2001 Stock Option and Purchase Plan (incorporated
    herein by reference to the registrants
    Form S-1
    filed on March 16, 2006)10
.2+

Form of Option Agreement under 2001 Stock Option and Purchase
    Plan (incorporated herein by reference to the registrants
    Form S-1
    filed on March 1, 2006)10
.3+

LoopNet, Inc. 2006 Equity Incentive Plan (incorporated herein by
    reference to the registrants
    Form S-1/A
    filed on June 6, 2006)10
.4+

Form of Option Agreement under 2006 Equity Incentive Plan
    (incorporated herein by reference to the registrants
    Form S-1/A
    filed on April 27, 2006)10
.5+

Form of Indemnification Agreement (incorporated herein by
    reference to the registrants
    Form S-1/A
    filed on April 27, 2006)10
.6

Lease, dated January 14, 2005, between S&F Huntington
    Millennium LLC and LoopNet, Inc. (incorporated herein by
    reference to the registrants
    Form S-1
    filed on March 1, 2006)10
.7

Office Lease, dated January 8, 2003, between
    PWREF/MCC-China Basin L.L.C. and LoopNet, Inc. (incorporated
    herein by reference to the registrants
    Form S-1/A
    filed on April 3, 2006)10
.8

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 the registrants
    Form S-1/A
    filed on April 3, 2006)10
.9+

Director Compensation Policy (incorporated herein by reference
    to the registrants
    Form S-1/A
    filed on April 27, 2006)10
.10+

Fiscal Year 2008 Bonus Plan (incorporated herein by reference to
    the registrants
    Form 8-K
    filed on February 5, 2008)10
.10+

Form of Restricted Stock Unit Agreement under 2006 Equity
    Incentive Plan (incorporated herein by reference to the
    registrants
    Form 8-K
    filed on February 5, 2008)23
.1*

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

Power of Attorney (see signature page)31
.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.