10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2012

OR

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to             

Commission file number: 001-33707

CONSTANT CONTACT, INC.

(Exact name of registrant as specified in its charter)

Delaware	04-3285398
(State or other jurisdiction of incorporation)	(I.R.S. Employer Identification No.)
1601 Trapelo Road, Third Floor Waltham, Massachusetts	02451
(Address of principal executive offices)	(Zip Code)

(781) 472-8100

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  þ    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  þ    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check one):

Large accelerated filer	þ	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  þ

As of July 30, 2012, there were 30,497,232 shares of the registrant’s Common Stock, par value $.01 per share, outstanding.

CONSTANT CONTACT, INC.

INDEX

	PAGE NUMBER
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS		1
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)		1
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)		2
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (UNAUDITED)		3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)		4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)		5
ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS		19
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK		28
ITEM 4. CONTROLS AND PROCEDURES		28
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS		29
ITEM 1A. RISK FACTORS		29
ITEM 6. EXHIBITS		41
SIGNATURES		42

Part I. Financial Information

Item  1. Financial Statements

Constant Contact, Inc.

Condensed Consolidated Balance Sheets

(Unaudited)

	June 30, 2012			December 31, 2011
	(In thousands, except share and per share data)
ASSETS
Current assets
Cash and cash equivalents	$	21,316		$	49,589
Marketable securities		59,785			90,523
Accounts receivable, net of allowance for doubtful accounts		110			58
Prepaid expenses and other current assets		8,942			8,891
Total current assets		90,153			149,061
Property and equipment, net		36,851			34,263
Restricted cash		750			750
Goodwill		95,505			18,935
Acquired intangible assets, net		7,974			3,046
Deferred taxes		14,228			12,960
Other assets		2,860			2,363
Total assets	$	248,321		$	221,378
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities
Accounts payable	$	9,049		$	8,906
Accrued expenses		17,739			10,515
Deferred revenue		31,467			28,983
Total current liabilities		58,255			48,404
Other long-term liabilities		7,898			2,052
Total liabilities		66,153			50,456
Commitments and contingencies (Note 8)
Stockholders’ equity
Preferred stock; $0.01 par value; 5,000,000 shares authorized; no shares issued or outstanding at June 30, 2012 and December 31, 2011		—			—
Common stock; $0.01 par value; 100,000,000 shares authorized at June 30, 2012 and December 31, 2011; 30,490,569 and 30,110,895 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively		305			301
Additional paid-in capital		201,568			190,039
Accumulated other comprehensive income		18			61
Accumulated deficit		(19,723	)		(19,479	)
Total stockholders’ equity		182,168			170,922
Total liabilities and stockholders’ equity	$	248,321		$	221,378

The accompanying notes are an integral part of these condensed consolidated financial statements.

1

Constant Contact, Inc.

Condensed Consolidated Statements of Operations

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands, except per share data)	2012			2011			2012			2011
Revenue	$	62,072		$	52,527		$	122,010		$	102,542
Cost of revenue		18,434			15,233			36,033			29,916
Gross profit		43,638			37,294			85,977			72,626
Operating expenses
Research and development		9,804			7,549			19,275			14,987
Sales and marketing		25,836			22,515			51,554			46,749
General and administrative		8,404			5,918			15,968			11,696
Total operating expenses		44,044			35,982			86,797			73,432
(Loss) income from operations		(406	)		1,312			(820	)		(806	)
Interest income and other income (expense), net		62			95			133			184
(Loss) income before income taxes		(344	)		1,407			(687	)		(622	)
Income tax (expense) benefit		(118	)		(133	)		443			53
Net (loss) income	$	(462	)	$	1,274		$	(244	)	$	(569	)
Net (loss) income per share:
Basic	$	(0.02	)	$	0.04		$	(0.01	)	$	(0.02	)
Diluted	$	(0.02	)	$	0.04		$	(0.01	)	$	(0.02	)
Weighted average shares outstanding used in computing per share amounts:
Basic		30,380			29,497			30,275			29,404
Diluted		30,380			30,770			30,275			29,404

The accompanying notes are an integral part of these condensed consolidated financial statements.

2

Constant Contact, Inc.

Condensed Consolidated Statements of Comprehensive Income (Loss)

(Unaudited)

	Three Months Ended June 30,						Six Months Ended June 30,
(In thousands)	2012			2011			2012			2011
Net (loss) income	$	(462	)	$	1,274		$	(244	)	$	(569	)
Other comprehensive income (loss):
Net unrealized gains (losses) on marketable securities, net of tax		(23	)		47			(43	)		47
Reclassification adjustment for realized gains on available-for-sale securities included in net income (loss)		—			(12	)		—			(12	)
Total other comprehensive (loss) income		(23	)		35			(43	)		35
Comprehensive (loss) income	$	(485	)	$	1,309		$	(287	)	$	(534	)

The accompanying notes are an integral part of these condensed consolidated financial statements.

3

Constant Contact, Inc.

Condensed Consolidated Statements of Cash Flows

(Unaudited)

	Six Months Ended June 30,
(In thousands)	2012			2011
Cash flows from operating activities
Net loss	$	(244	)	$	(569	)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization		8,969			7,032
Amortization of premium on investments		296			331
Stock-based compensation expense		7,075			5,851
Recovery of bad debts		(3	)		—
Gain on sales of marketable securities		—			(12	)
Deferred income taxes		(644	)		158
Taxes paid related to net share settlement of restricted stock units		(326	)		—
Changes in operating assets and liabilities, net of effects from acquisitions:
Accounts receivable		(1	)		(3	)
Prepaid expenses and other current assets		(2	)		(1,328	)
Other assets		(406	)		(1,032	)
Accounts payable		95			1,851
Accrued expenses		(537	)		1,674
Deferred revenue		1,874			2,812
Other long-term liabilities		(39	)		(119	)
Net cash provided by operating activities		16,107			16,646
Cash flows from investing activities
Purchases of marketable securities		(28,357	)		(88,209	)
Proceeds from maturities of marketable securities		31,167			19,144
Proceeds from sales of marketable securities		27,600			66,224
Acquisition of businesses, net of cash acquired		(68,487	)		(15,000	)
Acquisition of property and equipment, including costs capitalized for development of internal use software		(10,644	)		(8,829	)
Net cash used in investing activities		(48,721	)		(26,670	)
Cash flows from financing activities
Proceeds from issuance of common stock pursuant to the exercise of stock options		3,657			2,309
Income tax benefit from the exercise of stock options		148			—
Proceeds from issuance of common stock pursuant to employee stock purchase plan		536			435
Net cash provided by financing activities		4,341			2,744
Net decrease in cash and cash equivalents		(28,273	)		(7,280	)
Cash and cash equivalents, beginning of period		49,589			32,892
Cash and cash equivalents, end of period	$	21,316		$	25,612
Supplemental disclosure of noncash investing activities:
Capitalization of stock-based compensation	$	443		$	271
Fair value of contingent consideration in connection with acquisition included in accrued expenses and other long-term liabilities	$	12,152		$	—

The accompanying notes are an integral part of these condensed consolidated financial statements.

4

Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

1. Nature of the Business

Constant Contact, Inc. (the “Company”) was incorporated as a Massachusetts corporation on August 25, 1995. The Company reincorporated in the State of Delaware in 2000. The Company provides on-demand email marketing, social media marketing, event marketing, local deals and online survey products to small organizations, including small businesses, associations and non-profits. The Company’s email marketing product allows customers to create, send and track email marketing campaigns. The Company’s Social Campaigns^™ product allows customers to create, publish, promote and run campaigns on Facebook^®. The Company’s event marketing product enables customers to promote and manage events, track event registrations and collect online payments. The Company’s online survey product enables customers to create and send surveys and analyze the responses. The Company’s SaveLocal^TM product makes it quick and easy for customers to create, run and manage local deals. Social media marketing features in all of the Company’s products allow customers to easily manage and optimize their presence across multiple social media networks. These products are designed for small organizations and are marketed directly by the Company and through a wide variety of partners. In June 2012, the Company acquired SinglePlatform, Corp. (“SinglePlatform”), a company that helps small businesses get discovered through web and mobile searches by providing a single place to update relevant business information.

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include those of the Company and its subsidiaries, after elimination of all intercompany accounts and transactions. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

The condensed consolidated balance sheet at December 31, 2011 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of June 30, 2012 and for the three and six months ended June 30, 2012 and 2011 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2011 included in the Company’s Annual Report on Form 10-K, File Number 001-33707, on file with the SEC.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position as of June 30, 2012 and consolidated results of operations for the three and six months ended June 30, 2012 and 2011 and consolidated cash flows for the six months ended June 30, 2012 and 2011 have been made. The condensed consolidated results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the results of operations and cash flows that may be expected for the year ending December 31, 2012.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates these estimates, judgments and assumptions, including those related to revenue recognition, stock-based compensation, goodwill and acquired intangible assets, capitalization of software and website development costs, contingent consideration liability and income taxes. The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from these estimates.

5

Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

Revenue Recognition

The Company provides access to its products primarily through subscription arrangements whereby the customer is charged a fee for access for a defined term. Subscription arrangements include access to use the Company’s software via the Internet and support services, such as telephone, email and chat support. When there is evidence of an arrangement, the fee is fixed or determinable and collectability is deemed reasonably assured, the Company recognizes revenue on a daily basis over the subscription period as the services are delivered. Delivery is considered to have commenced at the time the customer has paid for the products and has access to the account via a log-in and password. The Company also generates revenue from its SaveLocal product by charging a fee to its customers based on the number of deals sold by its customers. The Company recognizes revenue from the fee charged when there is evidence of an arrangement, the fee is fixed or determinable and collectability is deemed reasonably assured. The Company also offers ancillary services to its customers related to its products such as custom services and training. Custom services and training revenue is accounted for separate from subscription revenue as those services have value on a standalone basis, do not involve a significant degree of risk or unique acceptance criteria and as the fair value of the Company’s subscription services is evidenced by their availability on a standalone basis. Custom services and training revenue is recognized as the services are performed.

Goodwill and Acquired Intangible Assets

The Company records goodwill when consideration paid in a business acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company performs its annual assessment for impairment of goodwill on November 30^th and has determined that there is a single reporting unit for the purpose of conducting this annual goodwill impairment assessment. For purposes of assessing potential impairment, the Company annually estimates the fair value of the reporting unit (based on the Company’s market capitalization) and compares this amount to the carrying value of the reporting unit (as reflected by the Company’s total stockholders’ equity). If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge would be required.

Effective January 1, 2012, the Company adopted new guidance that simplifies the goodwill impairment test. The amendment permits the Company to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in goodwill accounting standard. Adoption of the new guidance did not have an effect on the Company’s consolidated financial statements.

Intangible assets are recorded at their estimated fair values at the date of acquisition. The Company amortizes acquired intangible assets over their estimated useful lives based on the pattern of consumption of the economic benefits or, if that pattern cannot be readily determined, on a straight-line basis.

Capitalization of Software and Web Site Development Costs

Research and development costs are expensed as incurred and primarily include salaries, fees to consultants and other related costs. Relative to development costs of its on-demand products and website, the Company capitalizes certain direct costs to develop functionality as well as certain upgrades and enhancements that are probable to result in additional functionality. The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized as part of property and equipment until the software is substantially complete and ready for its intended use. Capitalized software is amortized over a three-year period in the expense category to which the software relates.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss), as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. The Company’s only elements of other comprehensive income (loss) are unrealized gains and losses on available-for-sale securities and translation adjustments.

6

Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

Effective January 1, 2012, the Company adopted new guidance applicable to comprehensive income. Under this guidance the Company has two options for presenting comprehensive income. The Company can present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. As the new guidance relates only to how comprehensive income is disclosed and does not change the items that must be reported as comprehensive income, adoption of the new guidance did not have an effect on the Company’s consolidated financial statements.

In December 2011, the Financial Accounting Standards Board indefinitely deferred the requirement to present reclassification adjustments of other comprehensive income by line item on the face of the income statement.

Marketable Securities

The Company’s marketable securities are classified as available-for-sale and are carried at fair value with the unrealized gains and losses reported as a component of accumulated other comprehensive income in stockholders’ equity. Realized gains and losses and declines in value judged to be other than temporary are included as a component of interest income and other income (expense), net based on the specific identification method.

At June 30, 2012, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Treasury Notes	$	23,194	$	25	$	—		$	23,219
Corporate and Agency Bonds		35,563		6		(3	)		35,566
Certificates of Deposit		1,000		—		—			1,000
Total	$	59,757	$	31	$	(3	)	$	59,785

At June 30, 2012, marketable securities consisted of investments that mature within one year with the exception of treasury notes with a fair value of $10,207, which have maturities within two years.

At December 31, 2011, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Treasury Notes	$	32,037	$	49	$	—		$	32,086
Corporate and Agency Bonds		55,428		13		(1	)		55,440
Certificates of Deposit		1,000		—		(1	)		999
Commercial Paper		1,998		—		—			1,998
Total	$	90,463	$	62	$	(2	)	$	90,523

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, are used to measure fair value:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

7

Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs are developed based on the best information available, which might include the Company’s own data.

Effective January 1, 2012, the Company adopted new guidance applicable to fair value measurements. This accounting guidance clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. Adoption of the new guidance did not have an effect on the Company’s consolidated financial statements.

During the three and six months ended June 30, 2012 and 2011, there were no transfers between Level 1, Level 2 and Level 3.

The following tables present the Company’s fair value hierarchy for its assets and liabilities which are measured at fair value on a recurring basis as of June 30, 2012 and December 31, 2011:

	Fair Value Measurements at June 30, 2012 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market instruments	$	4,158	$	—	$	—	$	4,158
U.S. Treasury notes		23,219		—		—		23,219
Corporate and Agency bonds		—		35,566		—		35,566
Certificates of deposit		—		1,000		—		1,000
Commercial paper		—		—		—		—
Total Financial Assets	$	27,377	$	36,566	$	—	$	63,943
Financial Liabilities:
Contingent consideration liability associated with acquisition of SinglePlatform, Corp.	$	—	$	—	$	12,152	$	12,152
Total Financial Liabilities	$	—	$	—	$	12,152	$	12,152
	Fair Value Measurements at December 31, 2011 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market instruments	$	12,778	$	—	$	—	$	12,778
U.S. Treasury notes		32,086		—		—		32,086
Corporate and Agency bonds		—		55,440		—		55,440
Certificates of deposit		—		999		—		999
Commercial paper		—		1,998		—		1,998
Total	$	44,864	$	58,437	$	—	$	103,301

The Company has revised its classification of certain marketable securities with a fair value of $58,437 as of December 31, 2011, from Level 1 measurements to Level 2 measurements to reflect the inputs used to price these securities as described above. The Company has concluded that this misclassification is immaterial to the Company’s financial statements for all prior periods presented.

Contingent consideration is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions and estimates to forecast a range of outcomes for the contingent consideration. The Company will assess these assumptions and estimates on a quarterly basis as additional data impacting the assumptions is obtained. Changes in the fair value of contingent consideration related to updated assumptions and estimates will be recognized within the consolidated statements of operations.

8

Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

The following table provides quantitative information associated with the fair value measurement of the Company’s Level 3 inputs:

Liability	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
Contingent consideration	$	12,152	Income approach— discounted cash flow	Revenue earn-out—probability of low case (scenario) for total revenue.		7.5	%
				Revenue earn-out—probability of base case (scenario) for total revenue.		30	%
				Revenue earn-out—probability of target case (scenario) for total revenue.		62.5	%
				Discount rate for revenue earn-out		5.3	%

The significant unobservable inputs used in the fair value measurement of contingent consideration are the probabilities of successful achievement of the targeted revenues, the six month periods in which the revenues are expected to be achieved and the discount rate. Increases or decreases in any of the probabilities of success would result in a higher or lower fair value measurement, respectively. Increases or decreases in the actual achievement of milestones in the relevant period as compared to the estimated achievement would result in a higher or lower fair value measurement, respectively.

Changes in the fair value of Level 3 contingent consideration liability associated with acquisition were as follows:

	Contingent Consideration
Balance at December 31, 2011	$	—
Acquisition of SinglePlatform, Corp.		12,152
Balance at June 30, 2012	$	12,152

Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of unrestricted common shares outstanding for the period.

Diluted net income (loss) per share is computed by dividing net income (loss) by the sum of the weighted average number of unrestricted common shares outstanding during the period and the weighted average number of potential common shares from the assumed exercise of stock options and the vesting of shares of restricted common stock and restricted stock units using the “treasury stock” method when the effect is not anti-dilutive.

The following is a summary of the shares used in computing diluted net income (loss) per share:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Weighted average shares used in calculating basic net income (loss) per share		30,380		29,497		30,275		29,404
Stock options		—		1,230		—		—
Warrants		—		1		—		—
Unvested restricted stock and restricted stock units		—		42		—		—
Shares used in computing diluted net income (loss) per share		30,380		30,770		30,275		29,404

9

Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

The following common stock equivalents were excluded from the computation of diluted net income (loss) per share because they had an anti-dilutive impact either because the proceeds under the treasury stock method were in excess of the average fair market value for the period or because the Company had a net loss in the period:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
			(In thousands)
Options to purchase common stock		5,098		1,477		5,023		3,630
Warrants to purchase common stock		1		—		1		1
Unvested restricted stock and restricted stock units		388		—		350		205
Total options and warrants exercisable into common stock, restricted stock units issuable in common stock and restricted stock		5,487		1,477		5,374		3,836

Accounting for Stock-Based Compensation

The Company values all stock-based compensation, including grants of stock options, restricted stock and restricted stock units, at fair value on the date of grant, and expenses the fair value over the applicable service period. The straight-line method is applied to all grants with service conditions, while the graded vesting method is applied to all grants with both service and performance conditions.

Income Taxes

Income taxes are provided for tax effects of transactions reported in the financial statements and consist of income taxes currently due plus deferred income taxes related to timing differences between the basis of certain assets and liabilities for financial statement and income tax reporting purposes. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation allowance is provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.

Segment Data

The Company manages its operations as a single segment for purposes of assessing performance and making operating decisions. Revenue is generated predominately in the U.S. and all significant assets are held in the U.S.

3. Acquisitions

Bantam Networks

On February 15, 2011, the Company acquired substantially all of the assets, excluding cash, of Bantam Networks, LLC (“Bantam Networks”) for a cash purchase price of $15,000. Bantam Networks was a contact management and social customer relationship management (“CRM”) software provider. The Company purchased the assets of Bantam Networks in order to expand the CRM functionality of its products.

The Company allocated the purchase price as follows:

Developed technology	$	1,800
Goodwill		13,200
Total assets acquired	$	15,000

The developed technology was valued using the cost to replace method. The estimated economic life of the developed technology is three years and amortization will commence once the software is ready for its intended use.

Goodwill was recognized for the excess purchase price over the fair value of the assets acquired. Goodwill is primarily attributable to Bantam Networks’ knowledge of CRM and expertise in working with contact management software. Goodwill from the Bantam Networks acquisition is included within the Company’s one reporting unit and is included in the Company’s enterprise-level annual review for impairment. Goodwill resulting from the acquisition of Bantam Networks is deductible for tax purposes.

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Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

The following table presents the pro forma results of the historical condensed consolidated statements of operations of the Company and Bantam Networks for the three month period ended June 30, 2011, giving effect to the merger as if it occurred on January 1, 2010:

	Six months ended June 30,
	2011
Pro forma revenue	$	102,542
Pro forma net loss	$	(696	)

The pro forma net loss presented primarily includes adjustments for revenue, amortization, interest income and income taxes. This pro forma information does not purport to indicate the results that would have actually been obtained had the acquisition been completed on the assumed date, or which may be realized in the future.

CardStar

On January 13, 2012, the Company acquired by merger all of the outstanding capital stock of CardStar, Inc. (“CardStar”) for a cash purchase price of $5,750. CardStar is a leading developer of mobile applications that extend the use of loyalty cards and mobile coupons among consumers. The Company purchased CardStar in order to accelerate its entrance into the mobile marketing and loyalty space.

The Company allocated the purchase price as follows:

Developed technology	$	624
Net deferred tax assets		553
Goodwill		4,573
Total assets acquired	$	5,750

The developed technology was valued using the cost to replace method and has an estimated economic life of three years.

Goodwill was recognized for the excess purchase price over the fair value of the assets acquired. Goodwill is primarily attributable to CardStar’s knowledge of mobile applications and coupons and loyalty cards. Goodwill from the CardStar acquisition is included within the Company’s one reporting unit and will be included in the Company’s enterprise-level annual review for impairment. Goodwill resulting from the acquisition of CardStar is not deductible for tax purposes.

Single Platform

On June 12, 2012, the Company acquired by merger all of the outstanding capital stock of SinglePlatform. SinglePlatform provides small businesses a single place to update their business information and delivers that information across its publishing network. The Company purchased SinglePlatform in order to expand its product offerings and allow its customers to engage their customers earlier in the customer lifecycle. The total preliminary purchase price of $75,200 consisted of a cash payment of $63,048, subject to certain adjustments, and $12,152 representing the fair value of contingent consideration of up to $30,000 payable upon achievement of certain revenue targets over the next two years. The cash payment may be adjusted for certain working capital adjustments which are identified by the Company within 90 days of the acquisition date. These adjustments, if any, will affect the final amount of the purchase price and the allocation of that purchase price to the working capital accounts. The Company expects to finalize the purchase price and allocations in the period ending September 30, 2012. The former shareholders of SinglePlatform are eligible to receive consideration of up to $30,000, which is contingent on the fulfillment of certain revenue targets within the period from July 1, 2012 to June 30, 2014, measured in six month intervals. If such conditions are achieved, the consideration is payable in cash. Using a discounted cash flow method and a probability weighted estimate of future revenue, the Company recorded an estimated liability of $12,152 as of the acquisition date. The estimated undiscounted range of outcomes for the contingent consideration is $0 to $21,095. The Company will continue to assess the probability that the revenue targets will be met and at what level, and any subsequent changes in the estimated fair value of the liability will be reflected in earnings until the liability is fully settled. There was no change to the acquisition date amount recognized or any changes in the range of outcomes or assumptions used to develop the fair value as of June 30, 2012.

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Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

The following table summarizes the preliminary purchase price for SinglePlatform and the preliminary allocation of the purchase price:

Purchase consideration:
Total cash paid, net of cash acquired	$	62,737
Cash acquired		311
Fair value of contingent consideration		12,152
Total purchase price consideration	$	75,200
Assets acquired and liabilities assumed:
Cash	$	311
Accounts receivable		48
Prepaid expenses and other current assets		60
Property and equipment		14
Identifiable intangible assets		4,760
Other assets		91
Net deferred tax assets		72
Goodwill		71,997
Total assets acquired		77,353
Accounts payable, accrued expenses and other current liabilities		(1,543	)
Deferred revenue		(610	)
Total liabilities assumed		(2,153	)
Total allocation of purchase price consideration	$	75,200

The following table presents the estimated fair values and useful lives of identifiable intangible assets acquired:

	Amount		Weighted Average Useful Life
			(in years)
Developed technology	$	850		3
Customer relationships		2,630		3.75
Publisher relationships		710		5
Trade name		570		5
Total identifiable intangible assets	$	4,760		3.95

The developed technology and the customer and publisher relationships were valued using the cost to replace method. The trade name was valued using the relief from royalty method.

Goodwill was recognized for the excess purchase price over the fair value of the net assets acquired. Goodwill is primarily attributable to the workforce of the acquired business (which is not eligible for separate recognition as an identifiable intangible asset) and the expected synergistic benefits of being able to market SinglePlatform’s product to the Company’s customer base and being able to market the Company’s products to SinglePlatform’s customer base. Goodwill from the SinglePlatform acquisition is included within the Company’s one reporting unit and will be included in the Company’s enterprise-level annual review for impairment. Goodwill resulting from the acquisition of SinglePlatform is not deductible for tax purposes.

The following table presents the pro forma results of the historical condensed consolidated statements of operations of the Company and SinglePlatform for the three and six month periods ended June 30, 2012 and 2011, giving effect to the merger as if it occurred on January 1, 2011:

	Three months ended June 30,					Six months ended June 30,
	2012			2011		2012			2011
Pro forma revenue	$	62,326			52,620	$	122,474		$	102,714
Pro forma net loss (income)	$	(1,048	)		757		(1,826	)	$	(1,588	)

The pro forma net loss (income) presented primarily includes adjustments for amortization, elimination of transaction costs, interest income and income taxes. This pro forma information does not purport to indicate the results that would have actually been obtained had the acquisition been completed on the assumed date, or which may be realized in the future.

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Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

Transactions costs related to the acquisitions were $574 and $722 for the three and six months ended June 30, 2012, respectively, and $63 and $264 for the three and six months ended June 30, 2011, respectively, which the Company recorded as general and administrative expense. The operating expenses of the acquired entities have been included in the consolidated financial statements beginning on their respective acquisition dates but have not been disclosed as the Company does not account for the results of the acquired entities separate from its own results. The operations of CardStar prior to the acquisition were not material to the consolidated results of the Company.

4. Goodwill and Acquired Intangible Assets

The carrying amount of goodwill was $18,935 as of December 31, 2011. The change in the carrying amount of goodwill for the six months ended June 30, 2012 was as follows:

Balance as of December 31, 2011	$	18,935
Goodwill related to the acquisition of CardStar, Inc.		4,573
Goodwill related to the acquisition of SinglePlatform, Corp.		71,997
Balance as of June 30, 2012	$	95,505

Goodwill is not amortized, but instead is reviewed for impairment at least annually in the fourth quarter or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired.

Intangible assets consist of the following:

			June 30, 2012						December 31, 2011
	Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology		3 years	$	4,357		797	$	3,560		2,883	$	513	$	2,370
Customer relationships		3.75 years		3,315		160		3,155		685		9		676
Publisher relationships		5 years		710		12		698		—		—		—
Trade name		5 years		570		9		561		—		—		—
			$	8,952	$	978	$	7,974	$	3,568	$	522	$	3,046

The Company amortizes the intangible assets over the estimated useful lives noted above. For the developed technology and publisher relationship assets, as the pattern of consumption of the economic benefits of the intangible assets cannot be reliably determined, the Company amortizes these acquired intangible assets over their estimated useful lives on a straight-line basis. The Company also amortizes the trade name asset over its estimated useful life on a straight-line basis as the straight-line basis is not materially different than the pattern of consumption of economic benefit basis. Customer relationships are amortized over their useful life based on the pattern of consumption of economic benefit of the asset. Amortization commences once the asset has been placed in service.

Amortization expense for intangible assets was $292 and $81 for the three months ended June 30, 2012 and 2011, respectively. Amortization expense for intangible assets was $456 and $161 for the six months ended June 30, 2012 and 2011, respectively. Amortization of developed technology and publisher relationships is recorded within cost of revenue and the amortization of customer relationships and trade name is recorded within sales and marketing expense. Future estimated amortization expense for assets placed in service as of June 30, 2012 is as follows:

Remainder of 2012	$	1,216
2013		1,953
2014		1,596
2015		983
2016		320
2017		106
Total	$	6,174

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Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

Amortization of developed technology totaling $1,800 as of June 30, 2012 has not yet commenced as the software is not yet ready for its intended use.

5. Stock-Based Awards

Stock Incentive Plan

The Company’s 2011 Stock Incentive Plan (the “2011 Plan”) permits the Company to make grants of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights and other stock-based awards with a maximum term of seven years. These awards may be granted to the Company’s employees, officers, directors, consultants, and advisors. The Company reserved 4,200,000 shares of its common stock for issuance under the 2011 Plan. Additionally, per the terms of the 2011 Plan, shares of common stock previously reserved for issuance under the 2007 Stock Incentive Plan as well as shares reserved for outstanding awards under the 1999 Stock Option/Stock Issuance Plan for which the awards are cancelled, forfeited, repurchased or otherwise result in common stock not being issued will be added to the number of shares available for issuance under the 2011 Plan. Awards that are granted with a per share or per unit purchase price less than 100% of fair market value as of the date of grant (e.g., restricted stock and restricted stock unit awards) shall count towards the total number of shares reserved for issuance under the 2011 Plan on a two-for-one basis. As of June 30, 2012, 2,809,657 shares of common stock were available for issuance under the 2011 Plan.

Inducement Award Plan

In June 2012, the Compensation Committee of the Board of Directors adopted the Constant Contact, Inc. 2012 Inducement Award Plan (the “2012 Inducement Plan”). The 2012 Inducement Plan provides for the grant of nonstatutory stock options and restricted stock unit awards as an inducement to an individual’s entering into employment with Constant Contact or in connection with an acquisition. The Company may issue up to an aggregate of 257,780 shares of common stock pursuant to the 2012 Inducement Plan, subject to adjustment in the event of stock splits and other similar events. Shares issued under the 2012 Inducement Plan may consist in whole or in part of authorized but unissued shares or may be issued shares that the Company has reacquired (provided that open market purchases of shares using the proceeds from the exercise of awards do not increase the number of shares available for future grants). Options granted under the 2012 Inducement Plan must be granted at an exercise price that is not less than 100% of the fair market value of the common stock on the date of grant and may not be granted for a term in excess of seven years.

If an award granted under the 2012 Inducement Plan expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of common stock subject to such award being repurchased by the Company) or otherwise results in any common stock not being issued, the unused common stock covered by such award will become available for issuance pursuant to a new award under the 2012 Inducement Plan. As of June 30, 2012, there were no shares of common stock available for issuance under the 2012 Inducement Plan.

Stock Purchase Plan

The Company’s 2007 Employee Stock Purchase Plan, as amended (the “Purchase Plan”), became effective upon the completion of the Company’s initial public offering. Six-month offering periods begin on January 1 and July 1 of each year, during which employees may elect to purchase shares of the Company’s common stock according to the terms of the offering. The per share purchase price for offerings is equal to 85% of the closing market price of the Company’s common stock on the last day of the offering period. The first offering period of 2012 began on January 1, 2012 and was completed on June 30, 2012. The second offering period of 2012 began on July 1, 2012 and will be completed on December 31, 2012. As of June 30, 2012, 153,383 shares of common stock were available for issuance to participating employees under the Purchase Plan.

Stock-Based Compensation Expense

The Company applies the fair value recognition provisions for all stock-based awards granted or modified in accordance with authoritative guidance. Under this guidance the Company records compensation costs over the requisite service period of the award based on the grant-date fair value. The straight-line method is applied to all grants with service conditions, while the graded vesting method is applied to all grants with both service and performance conditions.

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Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

The Company recognized stock-based compensation expense on all awards in the following expense categories:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Cost of revenue	$	450	$	422	$	829	$	733
Research and development		851		866		1,823		1,529
Sales and marketing		996		824		1,671		1,456
General and administrative		1,479		1,130		2,752		2,133
	$	3,776	$	3,242	$	7,075	$	5,851

The Company capitalized $219 and $164 of stock-based compensation related to the development of internal use software for the three months ended June 30, 2012 and 2011, respectively, and $443 and $271 of stock-based compensation related to the development of internal use software for the six months ended June 30, 2012 and 2011, respectively.

6. Income Taxes

For the three and six months ended June 30, 2012, the Company recorded an income tax expense of $118 and an income tax benefit of $443, respectively. For the three and six months ended June 30, 2011, the Company recorded an income tax expense of $133 and an income tax benefit of $53, respectively. Income tax is related to federal, state, and to a lesser extent, foreign tax obligations. The Company’s effective tax rate may vary from period to period based on changes in estimated taxable income or loss, changes to federal, state or foreign tax laws, deductibility of certain costs and expenses, and as a result of acquisitions. For the three and six months ended June 30, 2012, the Company’s effective tax rate varied from the statutory tax rate primarily due to the book expense related to incentive stock options, which is non-deductable for tax purposes, offset by state research and development credits that reduced the Company’s tax benefit and by non-deductable transaction expenses incurred by the Company that were treated as a discrete item and reduced the Company’s tax benefit.

During 2011 the Company had recorded a full valuation allowance against its net deferred tax assets which was released in the fourth quarter of 2011. For the three and six months ended June 30, 2011, the Company’s income tax benefit consisted of a current income tax expense of $54 and a current income tax benefit of $211, respectively, and a deferred income tax expense of $79 and $158, respectively. The current income tax expense/benefit recorded related to the Company’s net income/loss for the period multiplied by its estimated annual effective tax rate for 2011. The deferred income tax expense related to the amortization for tax purposes of goodwill from the acquisition of Bantam Networks.

The Company had net deferred tax assets of $13,827 at December 31, 2011, which increased to $15,084 at June 30, 2012, primarily as a result of the income tax benefit recorded for the six months ended June 30, 2012 and the net deferred tax assets relating to Cardstar net operating loss carryforwards recorded at the time of the Cardstar acquisition.

The Company has not recorded any amounts for unrecognized tax benefits as of June 30, 2012 or December 31, 2011. As of June 30, 2012 and December 31, 2011, the Company had no accrued interest or tax penalties recorded.

7. Accrued Expenses and Other Long-Term Liabilities

The following table presents the components of selected balance sheet items as of June 30, 2012 and December 31, 2011:

	June 30, 2012		December 31, 2011
Accrued expenses:
Payroll and payroll related	$	4,755	$	3,148
Licensed software and maintenance		1,197		1,197
Marketing programs		1,123		2,079
Contingent consideration liability associated with acquisition of SinglePlatform, Corp.		6,267		—
Other accrued expenses		4,397		4,091
Total accrued expenses	$	17,739	$	10,515
Other long-term liabilities:
Accrued rent	$	2,013	$	2,052
Contingent consideration liability associated with acquisition of SinglePlatform, Corp.		5,885		—
Total other long-term liabilities	$	7,898	$	2,052

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Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

8. Commitments and Contingencies

Office Leases

In May 2009, the Company entered into a lease for its headquarters space in Waltham, Massachusetts (the “Lease”). The Lease, effective through September 30, 2015 with one five-year extension option, includes space under a lease that existed at that time as well as additional space that has been made available to the Company at various points during the term of the Lease. The Lease also includes payment escalations and rent holidays. Under the Lease, the landlord is responsible for making certain improvements to the leased space at an agreed upon cost to the landlord. If the landlord and the Company mutually agree to make improvements that cost in excess of the agreed upon landlord cost, the landlord bills that excess cost to the Company as additional rent. This additional rent is included in the net calculation of lease incentives, so that rent expense per square foot is recognized on a straight-line basis over the remaining term of occupancy. The Company has amended the Lease twice to add a small amount of additional space. All other terms and conditions of these amendments, inclusive of the landlord’s obligations to make certain improvements, are consistent with the Lease.

The Company leases a sales and support office in Colorado under a lease agreement effective through April 2019 with three three-year extension options. The agreement contains certain lease incentives and payment escalations. The Company also leases small amounts of general office space in Florida, New York, California and the United Kingdom under lease agreements that expire at various dates through 2017.

Lease incentives, payment escalations and rent holidays specified in the lease agreements are accrued or deferred as appropriate such that rent expense per square foot is recognized on a straight-line basis over the terms of occupancy.

At June 30, 2012, the Company had both prepaid rent and accrued rent balances related to its office leases. The prepaid rent balance was $1,042 at June 30, 2012, of which $416 was included in prepaid expenses and other current assets and $626 was included in other assets. The accrued rent balance was $2,172 at June 30, 2012, of which $269 was included in accrued expenses and $1,903 was included in other long-term liabilities. At December 31, 2011, the Company had both prepaid rent and accrued rent balances related to its office leases. The prepaid rent balance was $1,192 at December 31, 2011, of which $429 was included in prepaid expenses and other current assets and $763 was included in other assets. The accrued rent balance was $2,292 at December 31, 2011, of which $264 was included in accrued expenses and $2,028 was included in other long-term liabilities.

Total rent expense under office leases was $1,652 and $3,165 for the three and six months ended June 30, 2012, respectively, and $1,523 and $3,000 for the three and six months ended June 30, 2011, respectively.

As of June 30, 2012, future minimum lease payments under noncancelable office leases are as follows:

Remainder of 2012	$	3,042
2013		6,324
2014		6,361
2015		5,204
2016		1,587
Thereafter		2,557
Total	$	25,075

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Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

Third-Party Hosting Agreements

The Company has agreements with two affiliated vendors to provide specialized space and equipment and related services from which the Company hosts its software applications.

Payment escalations and rent holidays specified in these agreements are accrued or deferred as appropriate such that rent expense per square foot is recognized on a straight-line basis over the terms of occupancy. At June 30, 2012, the Company had prepaid rent of $983, which was included in other assets and accrued rent of $110 which was included in other long-term liabilities.

Total rent expense under hosting agreements was $994 and $1,900 for the three and six months ended June 30, 2012, respectively, and $884 and $1,741 for the three and six months ended June 30, 2011, respectively.

The agreements include payment commitments that expire at various dates through mid-2017. As of June 30, 2012, future minimum payments under the agreements are as follows:

Remainder of 2012	$	2,341
2013		3,841
2014		3,624
2015		3,734
2016		3,845
Thereafter		775
Total	$	18,160

Vendor Commitments

As of June 30, 2012, the Company had issued both cancellable and non-cancellable purchase orders to various vendors and entered into contractual commitments with various vendors totaling $19,257 related primarily to marketing programs and other non-marketing goods and services to be delivered over the next twelve months.

Letters of Credit and Restricted Cash

As of June 30, 2012 and December 31, 2011, the Company maintained a letter of credit totaling $750 for the benefit of the landlord of the Company’s corporate headquarters lease. The landlord can draw against the letter of credit in the event of default by the Company. The Company was required to maintain a cash balance of at least $750 as of June 30, 2012 and December 31, 2011, respectively, to secure the letter of credit. This amount was classified as restricted cash in the balance sheet at June 30, 2012 and December 31, 2011.

Contingent Consideration

The former shareholders of SinglePlatform are eligible to receive consideration of up to $30,000, which is contingent on the fulfillment of certain revenue targets within the period from July 1, 2012 to June 30, 2014, measured in six month intervals. If such conditions are achieved, the consideration is payable in cash. As of June 30, 2012, the Company had accrued $12,152, representing the fair value of the contingent consideration liability, of which $6,267 was included in accrued expenses and $5,885 was included in other long-term liabilities.

Indemnification Obligations

The Company enters into standard indemnification agreements with the Company’s channel partners and certain other third parties in the ordinary course of business. Pursuant to these agreements, the Company indemnifies and agrees to reimburse the indemnified party for losses incurred by the indemnified party in connection with certain intellectual property infringement and other claims by any third party with respect to the Company’s business and technology. Based on historical information and information known as of June 30, 2012, the Company does not expect it will incur any significant liabilities under these indemnification agreements.

Legal Matters

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of its business. The Company is not presently a party to any legal proceedings that, in its opinion, would have a material adverse effect on the Company’s business, results of operations or financial condition.

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Constant Contact, Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(amounts in thousands, except share and per share amounts)

9. 401(k) Savings Plan

The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Company contributions to the plan may be made at the discretion of the Board of Directors. The Company elected to make matching contributions for the plan years ending December 31, 2012 and 2011 at a rate of 100% of each employee’s contribution up to a maximum matching contribution of 3% of the employee’s compensation and at a rate of 50% of each employee’s contribution in excess of 3% up to a maximum of 5% of the employee’s compensation.

Through June 30, 2012 and 2011, the Company made matching contributions of $1,197 and $955 for the plan years ended December 31, 2012 and 2011, respectively.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

The following discussion and analysis of our financial condition and results of operations should be read in conjunction with the unaudited condensed consolidated financial statements and the related notes thereto included elsewhere in this Quarterly Report on Form 10-Q and the audited consolidated financial statements and notes thereto and management’s discussion and analysis of financial condition and results of operations for the year ended December 31, 2011 included in our Annual Report on Form 10-K, filed with the Securities and Exchange Commission, or SEC, on February 28, 2012. This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These statements are often identified by the use of words such as “may,” “will,” “expect,” “believe,” “anticipate,” “intend,” “could,” “estimate,” or “continue,” and similar expressions or variations. Such forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, those discussed in the section titled “Risk Factors,” set forth in Part II, Item 1A of this Quarterly Report on Form 10-Q and elsewhere in this report. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. We anticipate that subsequent events and developments will cause our views to change. However, while we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

Executive Overview

We provide online marketing solutions, including email marketing, social media marketing, event marketing, local deals and surveys, for small organizations, including small businesses, associations and non-profits. We seek to help our customers succeed and have a long history of delivering affordable, easy-to-use products, support, knowhow and coaching with a personal touch, all of which empower our customers to create and grow their customer relationships.

We market our products and acquire our customers through a variety of sources including online marketing such as search engines and advertising on online networks and other websites, offline marketing through television and radio advertising, local seminars, relationships with our partners, referrals from our growing customer base, general brand awareness and the inclusion of a link to our website in the footer of substantially all of the emails sent by our customers.

We have grown rapidly since launching our first on-demand product in 2000. We ended the first half of 2012 with approximately 525,000 unique paying customers, excluding customers from our wholly owned subsidiary, SinglePlatform, Corp., or SinglePlatform, and had revenue for the first half of 2012 of $122 million.

Our business strategy focuses on expanding beyond email marketing to support a multi-product strategy to drive high customer lifetime value through gains in average revenue per customer, retention and gross margin. We believe increasing our customer’s lifetime value will be a key contributor to our continued success. To drive lifetime value we will continue to invest in acquiring new customers, cross-selling our products to our large and growing customer base, driving increased product usage by our customers and improving customer retention rates. We will continue to invest in broadening our platform of engagement marketing solutions, which we believe will better help our customers create and grow their customer and member relationships. We have made numerous investments over the past six months to drive future growth, including:

• We launched Social Campaigns^TM in January 2012. Social Campaigns allows users to create, publish, promote and run campaigns on Facebook^® that offer promotions or content targeted toward those who “Like” them and to incent others to “Like” and share them. Social Campaigns can be published to a customer’s email list, to existing Facebook fans, on LinkedIn^® and to Twitter^® followers.

• In January 2012, we acquired CardStar, Inc., or CardStar, a leading developer of mobile applications that extend the use of loyalty cards and mobile coupons among consumers. The CardStar application consolidates membership and rewards cards on smartphones, letting consumers use a single application rather than a series of physical cards. Merchants can track purchase behavior to reward loyalty, simply and easily. We will continue to operate CardStar’s free mobile loyalty application, which currently has over two million active users, and which is available on major mobile platforms, including iPhone^®, Android^™, and Blackberry^®. See also Note 3, Acquisitions, of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

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• In February 2012, we launched SaveLocal^TM to our existing customers. SaveLocal, which is a new online tool that helps small businesses run local deals, gives merchants control of the deal and allows small businesses to incentivize social sharing to attract qualified new customers, and drive repeat business at an affordable price. In June 2012, we began offering SaveLocal to the broader market.

• In June 2012, we acquired SinglePlatform, a company that helps small businesses get discovered through web and mobile searches by providing a single place to update important business information. SinglePlatform enables businesses to reach more than 200 million consumers across its extensive publishing network, which includes network sites such as Foursquare, New York Times, YP and Urbanspoon. See also Note 3, Acquisitions, of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q.

Key Financial and Operating Metrics

In connection with the ongoing operation of our business, our management regularly reviews key financial and operating metrics. Given our growth strategy, we pay particular attention to customer life-time value, customer acquisition metrics, number of products per customer and average revenue per customer. We also consider other financial and operating metrics such as revenue, gross margin, expenses, trialer growth, customer attrition, customer satisfaction rates, success in cross selling and growing customer list sizes, average speed of answer for customer support calls, email deliverability rates and capital expenditures, among others. Management considers these financial and operating metrics critical to understanding and improving our business, reviewing our historical performance, benchmarking our performance versus other companies and identifying current and future trends, and for planning purposes.

In addition, we consider the following non-GAAP financial measures to be key indicators of our financial performance:

• “adjusted EBITDA,” which we define as GAAP net income (loss) plus depreciation and amortization and stock-based compensation, and adjusted for interest and other income (expense) and income taxes;

• “adjusted EBITDA margin,” which we define as adjusted EBITDA divided by revenue;

• “non-GAAP net income,” which we define as GAAP net income (loss) plus stock-based compensation and adjusted for the non-cash portion of income taxes; and

• “free cash flow,” which we define as net cash flow from operating activities less acquisition of property and equipment.

We believe that these non-GAAP financial measures are useful to management and investors in evaluating our operating performance for the periods presented and provide a tool for evaluating our ongoing operations. These non-GAAP financial measures, however, are not a measure of financial performance under accounting principles generally accepted in the United States of America, or GAAP, and should not be considered a substitute for GAAP financial measures, including but not limited to net income (loss) or cash flows from operating, investing and financing activities and may not be comparable to similarly titled measures reported by other companies.

Certain Trends and Uncertainties

The following represents a summary of certain trends and uncertainties, which could have a significant impact on our financial condition and results of operations. This summary is not intended to be a complete list of potential trends and uncertainties that could impact our business in the long or short term. The summary should be considered along with the factors set forth under Part II. Item 1A —”Risk Factors” and elsewhere in this Quarterly Report on Form 10-Q.

• We continue to closely monitor current economic conditions both in the U.S. and abroad, particularly as they impact small businesses, associations and non-profits. We believe that small organizations continue to experience some amount of economic hardship. If this economic hardship continues or worsens, our financial results could be adversely impacted.

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• Our long term strategy is substantially dependent on our ability to continue to generate interest in our existing products and to expand our product offerings to serve the online marketing needs of small businesses, associations and non-profits. If we fail to do either of these, our financial results could be adversely impacted.

• We believe that given the size of our potential market and the relatively low barriers to entry, competition will continue to increase. Increased competition could result from existing competitors or new competitors that enter the market because of the potential opportunity. We will continue to closely monitor competitive activity and respond accordingly. Increased competition could have an adverse effect on our financial condition and results of operations.

• In connection with our acquisition of SinglePlatform, we incurred an obligation to the former shareholders of SinglePlatform to pay additional cash consideration of up to $30.0 million, contingent on the fulfillment of certain revenue targets over the next two years, measured in six month intervals. Based on certain assumptions and estimates, we recorded an estimated liability of $12.2 million as of the acquisition date, which did not change as of June 30, 2012. We will assess these assumptions and estimates on a quarterly basis. Changes in the estimated liability related to updated assumptions and estimates and to the actual revenue achievement will be recognized within the consolidated statements of operations. If our assumptions and estimates change significantly or if actual revenue achievement is significantly different than our estimates, our results of operations and cash flows could be materially affected. See also Note 3, Acquisitions, of the Notes to Condensed Consolidated Financial Statements included elsewhere in this Quarterly Report on Form 10-Q. In addition, our operating results could be adversely impacted if we fail to successfully integrate SinglePlatform, if we fail to continue to successfully sell SinglePlatform’s product or if the acquisition significantly disrupts our ongoing operations.

• We believe that as we continue to grow revenue at expected rates, our cost of revenue and operating expenses, including sales and marketing, research and development and general and administrative expenses, will increase in absolute dollar amounts. For a description of the general trends we anticipate in various expense categories, see “Cost of Revenue and Operating Expenses” below.

Sources of Revenue

We derive our revenue principally from subscription fees from our customers. Our revenue is driven primarily by the number of paying customers and the subscription fees for our products and is not concentrated within any one customer or group of customers. In 2011, our top 100 customers accounted for less than 1% of our total revenue. We do not require our customers to commit to a contractual term; however, our customers are required to prepay for subscriptions on a monthly, semi-annual, or annual basis by providing a credit card or bank check. Fees are recorded initially as deferred revenue and then recognized as revenue on a daily basis over the prepaid subscription period.

We also generate a small amount of revenue from ancillary services related to our products, which primarily consist of custom services and training through our experts program. Revenue generated from professional services and training accounted for approximately 1% of gross revenue through the first half of 2012 and 2011. In February 2012, we launched our SaveLocal product for which we charge a fee based on the number of deals sold by our customers. We have not yet generated significant revenue from this product. On June 12, 2012,we acquired SinglePlatform. We will continue to sell SinglePlatform’s subscription-based product. Our financial results for the second quarter of 2012 did not reflect significant revenue from SinglePlatform.

Cost of Revenue and Operating Expenses

We allocate certain occupancy and general office related expenses, such as rent, utilities, office supplies and depreciation of general office assets to cost of revenue and operating expense categories based on headcount. As a result, an occupancy expense allocation is reflected as personnel related costs in cost of revenue and each operating expense category.

Cost of Revenue. Cost of revenue consists primarily of wages and benefits for software operations and customer support personnel, credit card processing fees and depreciation and amortization, maintenance and hosting of our software applications underlying our product offerings. We allocate a portion of customer support costs relating to assisting trial customers to sales and marketing expense.

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The expenses related to our hosted software applications are affected by the number of customers who subscribe to our products and the complexity and redundancy of our software applications and hosting infrastructure. We expect cost of revenue to increase in absolute dollars as we expect to increase our number of customers but to decrease as a percentage of revenue over time as we gain efficiencies created by our expected revenue growth and cost savings.

Research and Development. Research and development expenses consist primarily of wages and benefits for product strategy and development personnel. We have focused our research and development efforts on improving ease of use, functionality and technological scalability of our existing products as well as on the development of new product offerings. We primarily expense research and development costs. However, direct development costs related to software enhancements that add functionality are capitalized and amortized over their useful life. We expect that in 2012 our research and development expenses will increase both in absolute dollars and as a percentage of revenue due to our expanded investment in our product roadmap, inclusive of our investment in SinglePlatform. Over the longer term we expect our research and development expenses to increase in absolute dollars but decrease as a percentage of revenue as we expect to grow our revenue at a faster rate.

Sales and Marketing. Sales and marketing expenses consist primarily of advertising and promotional costs, wages and benefits for sales and marketing personnel, partner referral fees and the portion of customer support costs that relate to assisting trial customers. Advertising costs consist primarily of pay-per-click advertising with search engines, other online and offline advertising media, including television and radio, as well as the costs to create and produce these advertisements. Advertising costs are expensed as incurred. Promotional costs consist primarily of public relations, memberships and event costs. In order to continue to grow our business and brand and category awareness, inclusive of our investments in the SinglePlatform business, we expect that we will continue to commit substantial resources to our sales and marketing efforts. As a result, we expect sales and marketing expenses will increase in absolute dollars, but over time decrease as a percentage of revenue as we expect to grow our revenue at a faster rate.

General and Administrative. General and administrative expenses consist primarily of wages and benefits for administrative, human resources, internal information technology support, finance and accounting personnel, professional fees, board compensation and expenses, certain taxes and other corporate expenses. We expect that general and administrative expenses will increase as we continue to add personnel in connection with the anticipated growth of our business, inclusive of our acquisitions, and incur costs related to operating as a public company. Therefore, we expect that our general and administrative expenses will increase in absolute dollars, but over time decline slightly as a percentage of revenue as we expect to grow our revenue at a faster rate.

Critical Accounting Policies

Our consolidated financial statements are prepared in accordance with GAAP. The preparation of our financial statements and related disclosures requires us to make estimates, assumptions and judgments that affect the reported amount of assets, liabilities, revenue, costs and expenses, and related disclosures. We believe that of our significant accounting policies, which are described in the notes to the condensed consolidated financial statements appearing elsewhere in this Quarterly Report on Form 10-Q and in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the SEC, the following accounting policies involve the most judgment and complexity:

• Revenue recognition;

• Income taxes;

• Goodwill and acquired intangible assets;

• Fair value of financial instruments;

• Software and website development costs; and

• Stock-based compensation.

Accordingly, we believe the policies set forth above are critical to fully understanding and evaluating our financial condition and results of operations. If actual results or events differ materially from the estimates, judgments and assumptions used by us in applying these policies, our reported financial condition and results of operations could be materially affected.

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There have been no material changes in our critical accounting policies since December 31, 2011, except with respect to the addition to our revenue recognition policy to accommodate our new SaveLocal product, which is described in “Sources of Revenue” above and which policy is described in more detail in Note 2, Summary of Significant Accounting Policies, of the Notes to the Condensed Consolidated Financial Statements appearing elsewhere in this Quarterly Report on Form 10-Q. For further information please see the discussion of critical accounting policies included in our Annual Report on Form 10-K for the year ended December 31, 2011, as filed with the SEC.

Results of Operations

Three Months Ended June 30, 2012 compared to Three Months Ended June 30, 2011

Revenue

	Three Months Ended June 30,
	2012		2011		Change
	(Dollars in thousands)
Revenue	$	62,072	$	52,527		18	%

Revenue increased by $9.5 million from 2011 to 2012. The increase resulted primarily from an approximately 12% increase in the number of average monthly customers and an approximately 6% increase in average revenue per customer. The increase in average revenue per customer was due to an increase in average customer list size and from add-ons to our email marketing product and an increase in pricing for our event marketing product. We expect our average revenue per customer to increase over time.

Cost of Revenue

	Three Months Ended June 30,
	2012			2011			Change
	(Dollars in thousands)
Cost of revenue	$	18,434		$	15,233			21	%
Percent of revenue		30	%		29	%

Cost of revenue increased by $3.2 million from 2011 to 2012. The increase resulted primarily from increased customer support personnel costs of $1.5 million to support our customer growth and increased personnel costs of $428,000 in our operations group to manage our infrastructure. Depreciation, hosting and maintenance costs increased by $1.2 million as a result of scaling and adding capacity to our hosting infrastructure inclusive of the effects of transitioning to a new datacenter in California in 2011.

Research and Development

	Three Months Ended June 30
	2012			2011			Change
	(Dollars in thousands)
Research and development	$	9,804		$	7,549			30	%
Percent of revenue		16	%		14	%

Research and development expenses increased by $2.3 million from 2011 to 2012. The increase was due primarily to additional personnel related costs as a result of our continued hiring of research and development employees as well as an increase in consulting expense incurred, both to further develop and enhance our products.

Sales and Marketing

	Three Months Ended June 30,
	2012			2011			Change
	(Dollars in thousands)
Sales and marketing	$	25,836		$	22,515			15	%
Percent of revenue		42	%		43	%

Sales and marketing expenses increased by $3.3 million from 2011 to 2012. The increase in absolute dollars consisted in large part of increased personnel related costs of $2.5 million primarily as a result of adding employees related to customer acquisition, cross-selling to our customer base and enabling increased usage and better retention. Partner referral fees increased by $556,000 as the number of new customers generated from our partners increased.

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General and Administrative

	Three Months Ended June 30
	2012			2011			Change
	(Dollars in thousands)
General and administrative	$	8,404		$	5,918			42	%
Percent of revenue		14	%		11	%

General and administrative expenses increased by $2.5 million from 2011 to 2012. The increase was due primarily to additional personnel related costs of $1.5 million largely as a result of increasing the number of general and administrative employees to support our overall growth. We also incurred an increase of approximately $1.0 million in consulting and professional services fees. Approximately $511,000 of this increase consisted of transaction costs associated with our acquisition of SinglePlatform in June 2012 and the remainder of the increase was associated with the growth of our business. We incurred $574,000 of transactions costs in the three months ended June 30, 2012 as compared to $63,000 in the second quarter of 2011.

Interest income and other income (expense), net

	Three Months Ended June 30,
	2012		2011		Change
	(Dollars in thousands)
Interest income and other income (expense) net	$	62	$	95		(35	)%

Interest income and other income (expense), net decreased by $33,000 from 2011 to 2012 due primarily to a decrease in interest earned on our investment portfolio.

Income Taxes

For the three months ended June 30, 2012, we recorded an income tax expense of $118,000. For the three months ended June 30, 2011, we recorded an income tax expense of $133,000. Income tax is related to federal, state, and to a lesser extent, foreign tax obligations. Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss, changes to federal, state or foreign tax laws, deductibility of certain costs and expenses, and as a result of acquisitions. For the three months ended June 30, 2012, our effective tax rate varied from the statutory tax rate primarily due to the book expense related to incentive stock options, which is non-deductable for tax purposes, offset by state research and development credits that reduced our tax benefit and by non-deductable transaction expenses we incurred that were treated as a discrete item and reduced our tax benefit.

During 2011, we had recorded a full valuation allowance against our net deferred tax assets, which allowance was released in the fourth quarter of 2011. For the three months ended June 30, 2011, our income tax expense consisted of a current income tax expense of $54,000 and a deferred income tax expense of $79,000. The current income tax expense recorded related to our net income for the period multiplied by our estimated annual effective tax rate for 2011. The deferred income tax expense related to the amortization for tax purposes of goodwill from the acquisition of Bantam Networks.

Six Months Ended June 30, 2012 compared to Six Months Ended June 30, 2011

Revenue

	Six Months Ended June 30,
	2012		2011		Change
	(Dollars in thousands)
Revenue	$	122,010	$	102,542		19	%

Revenue increased by $19.5 million from 2011 to 2012. The increase resulted primarily from an approximately 13% increase in the number of average monthly customers and an approximately 6% increase in average revenue per customer. The increase in average revenue per customer was due to an increase in average customer list size and from add-ons to our email marketing product and an increase in pricing for our event marketing product. We expect our average revenue per customer to increase over time.

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Cost of Revenue

	Six Months Ended June 30,
	2012			2011			Change
	(Dollars in thousands)
Cost of revenue	$	36,033		$	29,916			20	%
Percent of revenue		30	%		29	%

Cost of revenue increased by $6.1 million from 2011 to 2012. The increase resulted primarily from increased customer support personnel costs of $3.1 million to support our customer growth and increased personnel costs of $615,000 in our operations group to manage our infrastructure. Depreciation, hosting and maintenance costs increased by $1.8 million as a result of scaling and adding capacity to our hosting infrastructure inclusive of the effects of transitioning to a new datacenter in California in 2011.

Research and Development

	Six Months Ended June 30
	2012			2011			Change
	(Dollars in thousands)
Research and development	$	19,275		$	14,987			29	%
Percent of revenue		16	%		15	%

Research and development expenses increased by $4.3 million from 2011 to 2012. The increase was due primarily to additional personnel related costs as a result of our continued hiring of research and development employees as well as an increase in consulting expense incurred, both to further develop and enhance our products.

Sales and Marketing

	Six Months Ended June 30,
	2012			2011			Change
	(Dollars in thousands)
Sales and marketing	$	51,554		$	46,749			10	%
Percent of revenue		42	%		46	%

Sales and marketing expenses increased by $4.8 million from 2011 to 2012. The increase in absolute dollars consisted in large part of increased personnel related costs of $5.0 million primarily as a result of adding employees related to customer acquisition, cross-selling to our customer base and enabling increased usage and better retention. Partner referral fees increased by $1.1 million as the number of new customers generated from our partners increased. These increases were partially offset by a decrease of $2.2 million of advertising and promotional expenditures due primarily to a change in the mix and timing of advertising campaigns.

General and Administrative

	Six Months Ended June 30
	2012			2011			Change
	(Dollars in thousands)
General and administrative	$	15,968		$	11,696			37	%
Percent of revenue		13	%		11	%

General and administrative expenses increased by $4.3 million from 2011 to 2012. The increase was due primarily to additional personnel related costs of $3.1 million largely as a result of increasing the number of general and administrative employees to support our overall growth. We also incurred an increase of approximately $1.3 million in consulting and professional services fees. Approximately $458,000 of this increase consisted of transaction costs associated with our acquisitions and the remainder of the increase was associated with the growth of our business. We incurred $722,000 of transactions costs in the six months ended June 30, 2012 as compared to $264,000 in the first half of 2011.

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Interest income and other income (expense), net

	Six Months Ended June 30,
	2012		2011		Change
	(Dollars in thousands)
Interest income and other income (expense) net	$	133	$	184		(28	)%

Interest income and other income (expense), net decreased by $51,000 from 2011 to 2012 due primarily to a decrease in interest earned on our investment portfolio.

Income Taxes

For the six months ended June 30, 2012, we recorded an income tax benefit of $443,000. For the six months ended June 30, 2011, we recorded an income tax benefit of $53,000. Income tax is related to federal, state, and to a lesser extent, foreign tax obligations. Our effective tax rate may vary from period to period based on changes in estimated taxable income or loss, changes to federal, state or foreign tax laws, deductibility of certain costs and expenses, and as a result of acquisitions. For the six months ended June 30, 2012, our effective tax rate varied from the statutory tax rate primarily due to the book expense related to incentive stock options, which is non-deductable for tax purposes, partially offset by state research and development credits that reduced our tax benefit and by non-deductable transaction expenses we incurred that were treated as a discrete item and reduced our tax benefit.

During 2011, we had recorded a full valuation allowance against our net deferred tax assets, which allowance was released in the fourth quarter of 2011. Our income tax benefit in the six months ended June 30, 2011 consisted of a current income tax benefit of $211,000 and a deferred income tax expense $158,000. The current income tax benefit recorded related to our net loss for the period multiplied by our estimated annual effective tax rate for 2011. The deferred income tax expense related to the amortization for tax purposes of goodwill from the acquisition of Bantam Networks.

Liquidity and Capital Resources

During the first half of 2012 and 2011, we funded our operations with cash flows generated from operations. At June 30, 2012, our principal sources of liquidity were cash and cash equivalents and marketable securities of $81.1 million.

Net cash provided by operating activities was $16.1 million and $16.6 million for the six months ended June 30, 2012 and 2011, respectively. The slight decrease in cash provided by operations in 2012 was due primarily to an increase in cash used by working capital accounts and in increase in deferred tax assets partially offset by a lower net loss in the first half of 2012 as compared the first half of 2011 and an increases in the add-backs of non-cash expense items such as depreciation and amortization and stock-based compensation expense. Cash provided by operating activities has historically been affected by the amount of net income (loss), growth in prepaid subscriptions, changes in working capital accounts and the timing of rent payment and add-backs of non-cash expense items such as depreciation and amortization and the expense associated with stock-based awards as well as changes in deferred taxes.

Net cash used in investing activities was $48.7 million in the six months ended June 30, 2012 as compared to net cash used in investing activities of $26.7 million for the six months ended June 30, 2011. Net cash used in investing activities in the first six months of 2012 consisted primarily of cash paid to purchase SinglePlatform, CardStar and to acquire property and equipment partially offset by net cash provided by marketable securities transactions. In January 2012, we completed the acquisition of CardStar for $5.8 million. In June 2012, we completed the acquisition of SinglePlatform for a cash payment of $62.7 million (net of cash acquired). Net cash used in investing activities in the first half of 2011 consisted primarily of cash paid to purchase substantially all of the assets of Bantam Networks, LLC and to acquire property and equipment as well as net cash used by marketable securities transactions. In February 2011, we completed the acquisition of substantially all of the assets of Bantam Networks, LLC, excluding cash, for $15.0 million. Acquisition of property and equipment of $10.6 million and $8.8 million in the six month periods ended June 30, 2012 and 2011, respectively, consisted of the purchase of computer equipment for our operations and employees, furniture and leasehold improvements and the capitalization of certain software development costs. In 2011, we transitioned to a new third-party hosting facility in California and made capital expenditures in 2011 for equipment to be used in the new facility. We made additional capital expenditures during 2012 to increase capacity of our operational equipment. We increased the amount of space we occupied under our corporate headquarters lease in 2010 and acquired property and equipment to outfit the additional space in 2011. We also acquired property and equipment to accommodate growth in our sales and support office in Colorado in 2012. During the six months ended June 30, 2012 and 2011, we capitalized $3.2 million and $1.9 million, respectively, of costs associated with the development of internal use software.

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Net cash provided by financing activities was $4.3 million and $2.7 million for the six months ended June 30, 2012 and 2011, respectively. Net cash provided by financing activities in the first half of both 2012 and 2011 consisted of proceeds from stock issued pursuant to the exercise of stock options and to the employee stock purchase plan as well as the income tax benefit from the exercise of stock options in the first half of 2012 only.

As of December 31, 2011, we had federal and state net operating loss carry-forwards of $48.2 million and $2.5 million, respectively, which we intend to use to the extent available, to offset payments of future federal and state income tax liabilities. If unused, our net operating loss carry-forwards expire at various dates through 2031 for federal and 2016 for state income tax purposes.

Contractual Obligations

We lease our headquarters under an operating lease that is effective through September 2015 with one five-year extension option. We lease office space in Colorado for a sales and support office under an operating lease that expires in April 2019 with three three-year extension options. We also lease small amounts of general office space in Florida, New York, California and the United Kingdom under lease agreements that expire at various dates through 2017.

We have agreements with two affiliated vendors to provide specialized space and equipment and related services from which we host our software application. The agreements include payment commitments that expire at various dates through mid-2017.

As of June 30, 2012 we have a contingent consideration obligation to the former shareholders of SinglePlatform under which we are obligated to pay cash consideration of up to $30.0 million, which is contingent on the fulfillment by SinglePlatform of certain revenue targets within the period from July 1, 2012 to June 30, 2014, measured in six month intervals. Using a discounted cash flow method and a probability weighted estimate of future revenue, we recorded an estimated liability of $12.2 million (a level 3 fair value measurement) as of June 30, 2012. We estimate the undiscounted range of pay-out outcomes for the contingent consideration to be $0 to $21.1 million. The significant unobservable inputs used in the fair value measurement of contingent consideration are the probabilities of successful achievement of the targeted revenues and the discount rate. We expect to pay $13.2 million over the next two years based on our undiscounted probability weighted estimate of future revenue.

As of June 30, 2012, we had issued both cancellable and non-cancellable purchase orders and entered into contractual commitments with various vendors totaling $19.3 million. This amount relates primarily to marketing programs and other non-marketing related goods and services to be delivered over the next twelve months.

The following table summarizes our contractual obligations at June 30, 2012, and the effect such obligations are expected to have on our liquidity and cash flow in future periods.

	Payments Due In
	Total		Less Than 1 Year		1 - 3 Years		3 - 5 Years		More Than 5 Years
	(In thousands)
Office lease obligations	$	25,075	$	6,189	$	12,737	$	4,255	$	1,894
Hosting facility agreements		18,160		4,258		7,406		6,385		111
Contingent consideration associated with acquisition of SinglePlatform, Corp. (undiscounted)		13,184		6,455		6,729
Vendor commitments		19,257		19,257		—		—		—
Total	$	75,676	$	36,159	$	26,872	$	10,640	$	2,005

Our future capital requirements may vary materially from those now planned and will depend on many factors, including, but not limited to, development of new products, market acceptance of our products, the levels of advertising and promotion required to launch additional products and improve our competitive position in the marketplace, the expansion of our sales, support and marketing organizations, the establishment of additional offices in the United States and worldwide and the building of infrastructure necessary to support our anticipated growth, the response of competitors to our products and our relationships with suppliers and customers. Since the introduction of our on-demand email marketing product in 2000, we have experienced increases in our expenditures consistent with the growth in our operations and personnel, and we anticipate that our expenditures will continue to increase on an absolute dollar basis in the future.

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We believe that our current cash, cash equivalents and marketable securities and operating cash flows will be sufficient to meet our working capital and capital expenditure requirements for at least the next twelve months. Thereafter, we may need to raise additional funds through public or private financings or borrowings to fund our operations, develop or enhance products, to fund expansion, to respond to competitive pressures or to acquire complementary products, businesses or technologies. If required, additional financing may not be available on terms that are favorable to us, or at all. If we raise additional funds through the issuance of equity or convertible debt securities, the percentage ownership of our stockholders will be reduced and these securities might have rights, preferences and privileges senior to those of our current stockholders or we may be subject to covenants that restrict how we conduct our business. No assurance can be given that additional financing will be available or that, if available, such financing can be obtained on terms favorable to our stockholders and us.

During the last three years, inflation and changing prices have not had a material effect on our business. We are unable to predict whether inflation or changing prices will materially affect our business in the foreseeable future.

Off-Balance Sheet Arrangements

We do not engage in any off-balance sheet financing activities. We do not have any interest in entities referred to as variable interest entities, which include special purpose entities and other structured finance entities.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

Foreign Currency Exchange Risk. Significantly all of our revenue and expenses are denominated in U.S. dollars. Accordingly, our results of operations and cash flows are not subject to material fluctuations due to changes in foreign currency exchange rates. However, as we increase our operations in international markets we will become increasingly exposed to changes in currency exchange rates. The economic impact of currency exchange rate movements is often linked to variability in real growth, inflation, interest rates, governmental actions and other factors. These changes, if material, could cause us to adjust our financing and operating strategies.

Interest Rate Sensitivity. We had cash and cash equivalents and marketable securities of $81.1 million at June 30, 2012, which consisted of cash, government securities, corporate and agency bonds, certificates of deposit and money market instruments. Interest income is sensitive to changes in the general level of U.S. interest rates; however, due to the nature of these investments, we do not believe that we have any material exposure to changes in the fair value of our investment portfolio as a result of changes in interest rates.

Item 4. Controls and Procedures

(a) Evaluation of Disclosure Controls and Procedures.

Our management, with the participation of our chief executive officer and chief financial officer, evaluated the effectiveness of our disclosure controls and procedures as of June 30, 2012. The term “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended, or the Exchange Act, means controls and other procedures of a company that are designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms. Disclosure controls and procedures include, without limitation, controls and procedures designed to ensure that information required to be disclosed by a company in the reports that it files or submits under the Exchange Act is accumulated and communicated to the company’s management, including its principal executive and principal financial officers, as appropriate to allow timely decisions regarding required disclosure. Management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving their objectives and management necessarily applies its judgment in evaluating the cost-benefit relationship of possible controls and procedures. Based on the evaluation of our disclosure controls and procedures as of June 30, 2012, our chief executive officer and chief financial officer concluded that, as of such date, our disclosure controls and procedures were effective at the reasonable assurance level.

(b) Changes in Internal Control over Financial Reporting.

No change in our internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) occurred during the three months ended June 30, 2012 that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

From time to time, we may become involved in legal proceedings arising in the ordinary course of our business. We are not presently a party to any legal proceedings that, in our opinion, would have a material adverse effect on our business, results of operations or financial condition.

Item 1A. Risk Factors

Our business is subject to numerous risks. We caution you that the following important factors, among others, could cause our actual results to differ materially from those expressed in forward-looking statements made by us or on our behalf in filings with the SEC, press releases, communications with investors and oral statements. Any or all of our forward-looking statements in this Quarterly Report on Form 10-Q and in any other public statements we make may turn out to be wrong. They can be affected by inaccurate assumptions we might make or by known or unknown risks and uncertainties. Many factors mentioned in the discussion below will be important in determining future results. Consequently, no forward-looking statement can be guaranteed. Actual future results may vary materially from those anticipated in forward-looking statements. We undertake no obligation to update any forward-looking statements, whether as a result of new information, future events or otherwise. You are advised, however, to consult any further disclosure we make in our reports filed with the SEC.

RISKS RELATED TO OUR BUSINESS AND INDUSTRY

If we are unable to attract new customers and retain existing customers on a cost-effective basis, our business and results of operations will be affected adversely.

To succeed, we must continue to attract and retain a large number of customers on a cost-effective basis. We rely on a variety of methods to attract new customers, such as paying providers of online services, search engines, directories and other websites to provide content, advertising banners and other links that direct customers to our website, television and radio advertising and the inclusion of a link to our website in substantially all of our customers’ emails. In addition, we are committed to providing our customers with a high level of support. As a result, we believe many of our new customers are referred to us by existing customers. However, customers cancel their accounts for many reasons, including economic concerns, business failure or a perception that they do not use our product effectively, the service is not a good value and that they can manage their online marketing efforts without our products. In some cases, we terminate an account because the customer fails to comply with our standard terms and conditions. As our customer base continues to grow, even if our customer retention rates remain the same on a percentage basis, the absolute number of customers we lose each month will increase. We must continually add new customers to replace customers whose accounts are cancelled or terminated, which may involve significantly higher marketing expenditures than we currently anticipate. If we are unable to use any of our current marketing initiatives or the cost of such initiatives were to significantly increase or such initiatives or our efforts to satisfy our existing customers are not successful, we may not be able to attract new customers or retain existing customers on a cost-effective basis and, as a result, our business and results of operations would be affected adversely.

Our business is substantially dependent on the market for email marketing services for small organizations.

We derive, and expect to continue to derive, a substantial portion of our revenue from our email marketing product for small organizations, including small businesses, associations and non-profits. For the year ended December 31, 2011, our revenue from our email marketing product alone was approximately 88% of our total revenue. Widespread acceptance of email marketing among small organizations will continue to be critical to our future growth and success. There is no certainty regarding how the market for email marketing will continue to develop, or whether it will experience any significant contractions. Our ability to attract and retain customers will depend in part on our ability to make email marketing convenient, effective and affordable. If small organizations determine that email marketing does not sufficiently benefit them or utilize alternative or new electronic methods of communicating with their customers, existing customers may cancel their accounts and potential customers may decide not to adopt email marketing. If the market for email marketing services fails to continue to grow or grows more slowly than we currently anticipate, demand for our services may decline and our revenue would suffer.

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Our growth strategy requires us to expand our product offerings beyond email marketing and this expansion may not be successful.

We have traditionally focused our business on providing our email marketing product for small organizations, but in the last few years we have expanded our product offerings. In 2007, we introduced our survey product and our add-on email archive service that enables our customers to archive their past email campaigns. In 2009, we launched our event marketing product. Through our acquisition of Nutshell Mail, Inc., which we completed in May 2010, we now provide a tool for small organizations to monitor and engage with social media networks. In January 2012, we launched our Social Campaigns product which allows small businesses the ability to run multi-step, results-oriented campaigns on their social networks. Also, in January 2012, we announced the acquisition of CardStar, a leading developer of mobile applications that extend the use of loyalty cards and mobile coupons among consumers. In February 2012, we announced the introduction of our new SaveLocal product, which makes it quick and easy for our customers to create, run and manage local deals. In June 2012, we accounced the acquisition of SinglePlatform, a company that helps small business get discovered through web and mobile searches by providing a single place to update relevant business information. Our efforts to introduce new products beyond our email marketing product, including our event marketing and survey products, our social media marketing offerings, CardStar, SaveLocal and the SinglePlatform product, may not result in significant revenue growth, may not be complementary to our email marketing product, may not be timely, may divert management resources from our existing operations and require us to commit significant financial resources to an unproven business or product, which may harm our financial performance.

Current economic conditions may further negatively affect the small business sector, which may cause our customers to terminate existing accounts with us or cause potential customers to fail to purchase our products, resulting in a decrease in our revenue and impairing our ability to operate profitably.

Our products are designed specifically for small organizations, including small businesses, associations and non-profits. These organizations frequently have limited budgets and are often resource and time-constrained and, as a result, may be more likely to be significantly affected by economic downturns than their larger, more established counterparts. We believe that small organizations continue to experience some amount of economic hardship. As a result, small organizations may choose to spend the limited funds that they have on items other than our products and may experience higher failure rates. Moreover, if small organizations experience economic distress, they may be unwilling or unable to expend time and financial resources on marketing, which would negatively affect the overall demand for our products, increase customer attrition and could cause our revenue to decline. There can be no assurance, therefore, that current economic conditions or worsening economic conditions, or a recurring recession, will not have a significant adverse impact on our operating and financial results.

U.S. federal legislation and the laws of many foreign countries impose certain obligations on the senders of commercial emails, which could minimize the effectiveness of our products, particularly our email marketing product, and establish financial penalties for non-compliance, which could increase the costs of our business.

The Federal Controlling the Assault of Non-Solicited Pornography and Marketing Act of 2003, or the CAN-SPAM Act, establishes certain requirements for commercial email messages and specifies penalties for the transmission of commercial email messages that are intended to deceive the recipient as to source or content. The CAN-SPAM Act, among other things, obligates the sender of commercial emails to provide recipients with the ability to opt out of receiving future emails from the sender. In addition, some states have passed laws regulating commercial email practices that are significantly more punitive and difficult to comply with than the CAN-SPAM Act, particularly Utah and Michigan, which have enacted do-not-email registries listing minors who do not wish to receive unsolicited commercial email that markets certain covered content, such as adult or other harmful products. Some portions of these state laws may not be preempted by the CAN-SPAM Act. The ability of our customers’ constituents to opt out of receiving commercial emails may minimize the effectiveness of our products. Moreover, non-compliance with the CAN-SPAM Act carries significant financial penalties. If we were found to be in violation of the CAN-SPAM Act, applicable state laws not preempted by the CAN-SPAM Act, or foreign laws regulating the distribution of commercial email such as the laws of Canada and the United Kingdom, whether as a result of violations by our customers or if we were deemed to be directly subject to and in violation of these requirements, we could be required to pay penalties, which would adversely affect our financial performance and significantly harm our business, and our reputation would suffer. We also may be required to change one or more aspects of the way we operate our business, which could impair our ability to attract and retain customers or could increase our operating costs.

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If the security of our customers’ confidential information stored in our systems is breached or otherwise subjected to unauthorized access, our reputation may be severely harmed, we may be exposed to liability and we may lose the ability to offer our customers a credit card payment option.

Our system stores our customers’ proprietary email distribution lists, credit card information and other critical data. Any accidental or willful security breaches or other unauthorized access could expose us to liability for the loss of such information, adverse regulatory action by federal and state governments, time-consuming and expensive litigation and other possible liabilities as well as negative publicity, which could severely damage our reputation. If security measures are breached because of third-party action, employee error, malfeasance or otherwise, or if design flaws in our software are exposed and exploited, and, as a result, a third party obtains unauthorized access to any of our customers’ data, our relationships with our customers will be severely damaged, and we could incur significant liability. Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until they are launched against a target, we and our third-party hosting facilities may be unable to anticipate these techniques or to implement adequate preventative measures. In addition, as we continue to grow our customer base and our brand becomes more widely known and recognized, we may become a more inviting target for third parties seeking to compromise our security systems. Many states, including Massachusetts, have enacted laws requiring companies to notify individuals of data security breaches involving certain types of personal data. These mandatory disclosures regarding a security breach often lead to widespread negative publicity, which may cause our customers to lose confidence in the effectiveness of our data security measures. Any security breach, whether actual or perceived, would harm our reputation, and we could lose customers and fail to acquire new customers. In addition, if we fail to maintain our compliance with the data protection policy standards adopted by the major credit card issuers, we could lose our ability to offer our customers a credit card payment option. Any loss of our ability to offer our customers a credit card payment option would harm our reputation and make our products less attractive to many small organizations by negatively impacting our customer experience and significantly increasing our administrative costs related to customer payment processing.

Our existing general liability insurance may not cover any, or only a portion of any, potential claims related to security breaches to which we are exposed or may not be adequate to indemnify us for all or any portion of liabilities that may be imposed. Any imposition of liability that is not covered by insurance or is in excess of insurance coverage would increase our operating losses and reduce our net worth.

The market in which we participate is highly competitive and, if we do not compete effectively, our operating results could be harmed.

The market for our products is highly competitive and rapidly changing, and the barriers to entry are relatively low. With the introduction of new technologies and the influx of new entrants to the market, we expect competition to persist and intensify in the future, which could harm our ability to increase sales, limit customer attrition and maintain our prices.

Our principal email marketing competitors include providers of email marketing products for small to medium size businesses such as AWeber Systems, Inc., iContact Corporation, a subsidiary of Vocus, Inc., Protus, a subsidiary of j2 Global Communications, Inc. (Campaigner^®), The Rocket Science Group LLC (MailChimp™), Vertical Response, Inc. and Vistaprint N.V. These vendors typically charge a low monthly entry fee or a low fee per number of emails sent and, in some cases, they have a free offering. Competition could result in reduced sales, reduced margins or the failure of our email marketing product to achieve or maintain more widespread market acceptance, any of which could harm our business. In addition, there are a number of other vendors that are focused on providing email marketing products for larger organizations, including Alterian Inc., CheetahMail, Inc. (a subsidiary of Experian Group Limited), ExactTarget Inc., Responsys Inc., Silverpop Systems Inc. and StrongMail Systems, Inc. While we do not compete currently with vendors of email marketing products serving larger customers, we may face future competition from these providers if they determine that our target market presents an opportunity for them. Finally, in the future, our email marketing product may experience competition from Internet Service Providers, or ISPs, advertising and direct marketing agencies and other large established businesses, such as Microsoft Corporation or Google Inc., possessing large, existing customer bases, substantial financial resources and established distribution channels. If these companies decide to develop, market or resell competitive email marketing products, acquire one of our existing competitors or form a strategic alliance with one of our competitors, our ability to compete effectively could be significantly compromised and our operating results could be harmed. In addition, one or more of these entities could decide to offer a competitive email marketing product at no cost or low cost in order to generate revenue as part of a larger product offering.

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Our other products also face intense competition. Our event marketing product competes with offerings by Eventbrite, Inc., Evite, LLC (a wholly-owned, operating business of IAC/InterActiveCorp) and Regonline (a division of The Active Network, Inc.). Our Social Campaigns product competes with offerings by Offerpop Corporation, Pagemodo, a Webs Company, Vocus Social Media LLC doing business as North Social and Wildfire Interactive, Inc. Our survey product competes with similar offerings by Surveymonkey.com Corporation and Widgix, LLC doing business as SurveyGizmo. Our SaveLocal product competes with offerings by Groupon, Inc., LivingSocial, Inc., Amazon Local™ and Googleoffers™. Our SinglePlatform product completes with offerings by Yext, Inc.

Our current and potential competitors may have significantly more financial, technical, marketing and other resources than we do and may be able to devote greater resources to the development, promotion, sale and support of their products. Our current and potential competitors may have more extensive customer bases and broader customer relationships than we have. In addition, these companies may have longer operating histories and greater name recognition than we have and may be able to bundle email marketing, event marketing or survey products with other products that have already gained widespread market acceptance and offer them at no cost or low cost. These competitors may be better able to respond quickly to new technologies and to undertake more extensive marketing campaigns. If we are unable to compete with such companies, the demand for our products could substantially decline.

Any significant disruption in service on our website or in our computer systems, or in our customer support services, could result in a loss of customers.

The satisfactory performance, reliability and availability of our technology and our underlying network infrastructure are critical to our operations, level of customer service, reputation and ability to attract new customers and retain existing customers. In providing our services, we rely on third-party hosting facilities, bandwidth providers, ISPs and mobile networks. Our production system hardware and the disaster recovery operations for our production system hardware are co-located in third-party hosting facilities. These facilities do not guarantee that our customers’ access to our products will be uninterrupted, error-free or secure. Our operations also depend on the ability of our third-party hosting facilities to protect their and our systems against damage or interruption from natural disasters, power or telecommunications failures, air quality, temperature, humidity and other environmental concerns, computer viruses or other attempts to harm our systems, criminal acts and similar events. In the event that our third-party hosting arrangements are terminated, or there is a lapse of service or damage to these facilities, we could experience interruptions in our service as well as delays and additional expense in arranging new facilities. In addition, our customer support services, which are located at our headquarters in Waltham, Massachusetts and at our sales and support office in Loveland, Colorado, would experience interruptions as a result of any disruption of electrical, phone or any other similar facility support services. Any interruptions or delays in access to our products or customer support, whether as a result of third-party error, our own error, natural disasters, security breaches or malicious actions, such as denial-of-service or similar attacks, whether accidental or willful, could harm our relationships with customers and our reputation. Also, in the event of damage or interruption, our insurance policies may not adequately compensate us for any losses that we may incur. These factors could damage our brand and reputation, divert our employees’ attention, reduce our revenue, subject us to liability and cause customers to cancel their accounts, any of which could adversely affect our business, financial condition and results of operations.

Our production disaster recovery system is located at one of our third-party hosting facilities. Our corporate disaster recovery system is located at our headquarters in Waltham, Massachusetts. Neither system provides real time backup or has been tested under actual disaster conditions and neither system may have sufficient capacity to recover all data and services in the event of an outage. In the event of a disaster in which our production system hardware and the disaster recovery operations for our production system hardware are irreparably damaged or destroyed, we would experience interruptions in access to our products. Moreover, our headquarters and our production system hardware are located within several miles of each other. As a result, any regional disaster could affect these locations equally. Any or all of these events could cause our customers to lose access to our products, which will harm our business and results of operations.

If the delivery of our customers’ emails is limited or blocked, customers may cancel their accounts.

ISPs can block emails from reaching their users. The implementation of new or more restrictive policies by ISPs may make it more difficult to deliver our customers’ emails. We continually improve our own technology and work closely with ISPs to maintain our deliverability rates. If ISPs materially limit or halt the delivery of our customers’ emails, or if we fail to deliver our customers’ emails in a manner compatible with ISPs’ email handling or authentication technologies or other policies, then the fees we charge for our email marketing product may not be accepted by the market, and customers may cancel their accounts. This, in turn, could harm our business and financial performance.

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If we fail to promote and maintain our brand in a cost-effective manner, we may lose market share and our revenue may decrease.

We believe that developing and maintaining awareness of the Constant Contact brand in a cost-effective manner is critical to our goal of achieving widespread acceptance of our engagement marketing platform and attracting new customers. Furthermore, we believe that the importance of brand recognition will increase as competition in our industry increases. Successful promotion of our brand will depend largely on the effectiveness of our marketing efforts and the effectiveness and affordability of our products for our target customer demographic. Historically, our efforts to build our brand have involved significant expense, and it is likely that our future marketing efforts will require us to incur additional significant expenses. Such brand promotion activities may not yield increased revenue and, even if they do, any revenue increases may not offset the expenses we incur to promote our brand. If we fail to promote and maintain our brand successfully, or if we incur substantial expenses in an unsuccessful attempt to promote and maintain our brand, we may lose our existing customers to our competitors or be unable to attract new customers, which would cause our revenue to decrease.

We depend on search engines to attract a significant percentage of our customers, and if those search engines change their listings or our relationship with them deteriorates or terminates, we may be unable to attract new customers, which would adversely affect our business and results of operations.

Many of our customers located our website by clicking through on search results displayed by search engines such as Google^®, Yahoo^®! and Bing™. Search engines typically provide two types of search results, algorithmic and purchased listings. Algorithmic listings cannot be purchased, and instead are determined and displayed solely by a set of formulas designed by the search engine. Purchased listings can be purchased by advertisers in order to attract users to their websites. We rely on both algorithmic and purchased listings to attract a significant percentage of the customers we serve to our website. Search engines revise their algorithms from time to time in an attempt to optimize their search result listings. If search engines on which we rely for algorithmic listings modify their algorithms, this could result in fewer potential customers clicking through to our website, requiring us to resort to other costly resources to replace this traffic, which, in turn, could reduce our revenue and negatively impact our operating results, harming our business. If one or more search engines on which we rely for purchased listings modifies or terminates its relationship with us, our expenses could rise, or our revenue could decline and our business may suffer. The cost of purchased search listing advertising fluctuates and may increase as demand for these channels grows, and any such increases could negatively affect our financial results.

The success of our business depends on the continued growth and acceptance of email as a communications tool and the related expansion and reliability of the Internet infrastructure. If consumers do not continue to use email or alternative communications tools gain popularity, demand for our email marketing products may decline.

The future success of our business depends on the continued and widespread adoption of email as a primary means of communication. Security problems such as “viruses,” “worms” and other malicious programs or reliability issues arising from outages and damage to the Internet infrastructure could create the perception that email is not a safe and reliable means of communication, which would discourage businesses and consumers from using email. Use of email by businesses and consumers also depends on the ability of ISPs to prevent unsolicited bulk email, or “spam,” from overwhelming consumers’ inboxes. In recent years, ISPs have developed new technologies to filter unwanted messages before they reach users’ inboxes. In response, spammers have employed more sophisticated techniques to reach consumers’ inboxes. Although companies in the anti-spam industry have started to address the techniques used by spammers, if security problems become widespread or frequent or if ISPs cannot effectively control spam, the use of email as a means of communication may decline as consumers find alternative ways to communicate. In addition, if alternative communications tools gain widespread acceptance, the need for email may lessen. Any decrease in the use of email would reduce demand for our email marketing product and harm our business.

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Various private spam blacklists have in the past interfered with, and may in the future interfere with, the effectiveness of our products and our ability to conduct business.

We depend on email to market to and communicate with our customers, and our customers rely on email to communicate with their customers and members. Various private entities attempt to regulate the use of email for commercial solicitation. These entities often advocate standards of conduct or practice that significantly exceed current legal requirements and classify certain email solicitations that comply with current legal requirements as spam. Some of these entities maintain “blacklists” of companies and individuals, and the websites, ISPs and Internet protocol addresses associated with those entities or individuals that do not adhere to those standards of conduct or practices for commercial email solicitations that the blacklisting entity believes are appropriate. If a company’s Internet protocol addresses are listed by a blacklisting entity, emails sent from those addresses may be blocked if they are sent to any Internet domain or Internet address that subscribes to the blacklisting entity’s service or purchases its blacklist.

Some of our Internet protocol addresses currently are listed with one or more blacklisting entities and, in the future, our other Internet protocol addresses may also be listed with these and other blacklisting entities. There can be no guarantee that we will not continue to be blacklisted or that we will be able to successfully remove ourselves from those lists. Blacklisting of this type could interfere with our ability to market our products and services and communicate with our customers and could undermine the effectiveness of our customers’ marketing campaigns, all of which could have a material negative impact on our business and results of operations.

Our customers’ use of our products and website to transmit negative messages or website links to harmful applications in violation of our policies or otherwise could damage our reputation, and we may face liability for unauthorized, inaccurate or fraudulent information distributed via our products.

Our customers could use our products or website to transmit negative messages or website links to harmful applications, reproduce and distribute copyrighted and trademarked material without permission, or report inaccurate or fraudulent data or information. Any such use of our products could damage our reputation and we could face claims for damages, copyright or trademark infringement, defamation, negligence or fraud. Moreover, our customers’ promotion of their products and services through our products may not comply with federal, state and foreign laws. We cannot predict whether our role in facilitating these activities would expose us to liability under these laws. Even if claims asserted against us do not result in liability, we may incur substantial costs in investigating and defending such claims. If we are found liable for our customers’ activities, we could be required to pay fines or penalties, redesign business methods or otherwise expend resources to remedy any damages caused by such actions and to avoid future liability.

Our customers’ use of our SaveLocal product may negatively impact our reputation and could subject us to legal and regulatory risks, each of which could harm our business and results of operations.

Our brand and reputation may be harmed by our customers’ use of our SaveLocal product. Any shortcomings of one or more of our SaveLocal customers, particularly with respect to an issue affecting the quality of the deal offered or the products or services sold, may be attributed to us, thus damaging our reputation, brand value and potentially affecting our results of operations. In addition, negative publicity and customer sentiment generated as a result of fraudulent or deceptive conduct by our SaveLocal customers could damage our reputation, reduce our ability to attract new customers or retain our current customers, subject us to potential liability and diminish the value of our brand.

The deals offered by our SaveLocal customers may subject us to additional U.S. or international laws or regulations that could increase our costs or otherwise harm our business. The application of certain laws and regulations to SaveLocal deals and to our role in facilitating our customers’ offer of SaveLocal deals is uncertain. These include laws and regulations such as the Credit Card Accountability Responsibility and Disclosure Act of 2009, or the CARD Act, the laws of most states, which contain provisions governing product terms and conditions of gift cards, gift certificates, stored value or pre-paid cards or coupons and unclaimed and abandoned property laws. These laws may include provisions prohibiting or limiting the use of expiration dates on gift cards or the amount of fees charged in connection with gift cards or requiring specific disclosures on or in connection with gift cards and the imposition of certain fees. If we are required to alter our business practices as a result of any laws or regulations, our revenue could decrease, our costs could increase and our business could otherwise be harmed. In addition, the costs and expenses associated with defending any actions related to such additional laws and regulations and any payments of related penalties, judgments or settlements could adversely impact our financial results.

In addition, if any laws or regulations require that the face value of SaveLocal coupons have a minimum expiration period beyond the period desired by our SaveLocal customers for their promotional programs, or no expiration period, this may affect the willingness of our customers to use our SaveLocal product in jurisdictions where these laws apply.

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The success of our SinglePlatform offering is based, in part, on the quality of the content provided by our SinglePlatform customers.

Our SinglePlatform customers provide us with current information about their business that we, in turn, provide to our network of electronic publishers, such as Foursquare, YP.com and Urbanspoon. The success of the SinglePlatform offering depends, in part, on our ability to provide these publishers and their consumers with the information they seek, which in turn depends on the quantity and quality of the content provided by our SinglePlatform customers. For example, we may be unable to provide these publishers and their consumers with the information they seek if our customers do not contribute content that is helpful, reliable and up-to-date, or if they remove content they previously submitted. If our SinglePlatform product does not provide content that is helpful, reliable and up-to-date, our ability to maintain our current network of electronic publishers and sign up new publishers could be harmed. If we are unable to provide our electronic publishers and their consumers with the information they seek, or if they can find equivalent content on other services, they may stop or reduce their use of our product, which could negatively impact our ability to retain existing customers and obtain new customers and our business would be harmed.

Our business may be negatively impacted by seasonal trends.

Sales of our products are impacted by seasonality. Recently, the first calendar quarter has been our strongest quarter for customer growth because our prospective customers typically re-engage with their customers and members following the holiday season and, as a result, communicate more frequently with them during this time. Accordingly, we increase our sales and marketing activities at the end of the third quarter and during the fourth quarter. Our customer growth in the second and third quarters is typically slower as we move into the summer months, and in response, we moderate certain of our customer acquisition activities, which may magnify the seasonal trends. If these seasonality trends change materially, our financial and operating results for any given quarter may be negatively impacted and may differ materially from results in prior quarterly periods. In addition, our recent acquisition of SinglePlatform may impact our historical seasonality trends.

If we fail to enhance our existing products or develop new products, our products may become obsolete or less competitive and we could lose customers.

If we are unable to enhance our existing products or develop new products that keep pace with rapid technological developments and meet our customers’ needs, our business will be harmed. Creating and designing such enhancements and new products entail significant technical and business risks and require substantial expenditures and lead-time, and there is no guarantee that such enhancements and new products will be completed in a timely fashion, nor is there any guarantee that any new product offerings will gain acceptance among our customers or by the broader market. For example, our existing email marketing customers may not view any new product as complementary to our email product offerings and therefore decide not to purchase such product. If we cannot enhance our existing services or develop new products or if we are not successful in selling such enhancements and new products to our customers, we could lose customers or have difficulty attracting new customers, which would adversely impact our financial performance.

Our relationships with our partners may be terminated or may not continue to be beneficial in generating new customers, which could adversely affect our ability to increase our customer base.

We maintain a network of active partners, which refer customers to us through links on their websites and outbound promotion to their customers. If we are unable to maintain our contractual relationships with existing partners or establish new contractual relationships with potential partners, we may experience delays and increased costs in adding customers, which could have a material adverse effect on us. The number of customers we are able to add through these relationships is dependent on the marketing efforts of our partners over which we exercise very little control, and a significant decrease in the number of new customers generated through these relationships could adversely affect the size of our customer base and revenue.

Competition for employees in our industry is intense, and we may not be able to attract and retain the highly skilled employees whom we need to support our business.

Competition for highly skilled engineering and marketing personnel is intense and we continue to face difficulty identifying and hiring qualified personnel in certain areas of our business and in certain locations. We may not be able to hire and retain such personnel at compensation levels consistent with our existing compensation and salary structure. Many of the companies with which we compete for experienced employees have greater resources than we have and may be able to offer more attractive terms of employment. In particular, candidates making employment decisions, particularly in high-technology industries, often consider the value of any equity they may receive in connection with their employment. As a result, any significant volatility in the price of our stock may adversely affect our ability to attract or retain highly skilled engineering and marketing personnel.

In addition, we invest significant time and expense in training our employees, which increases their value to competitors who may seek to recruit them. If we fail to retain our employees, we could incur significant expenses in hiring and training their replacements and the quality of our services and our ability to serve our customers could diminish, resulting in a material adverse effect on our business.

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If we fail to retain our key personnel, we may not be able to achieve our anticipated level of growth and our business could suffer.

Our future depends, in part, on our ability to attract and retain key personnel. Our future also depends on the continued contributions of our executive officers and other key technical and marketing personnel, each of whom would be difficult to replace. In particular, Gail F. Goodman, our Chairman, President and Chief Executive Officer, is critical to the management of our business and operations and the development of our strategic direction. The loss of the services of Ms. Goodman or other executive officers or key personnel and the process to replace any of our key personnel would involve significant time and expense, may take longer than anticipated and may significantly delay or prevent the achievement of our business objectives.

We rely on third-party computer hardware and software that may be difficult to replace or that could cause errors or failures of our service and that requires us to closely monitor our usage to ensure that we remain in compliance with any applicable licensing requirements.

We rely on computer hardware purchased and software licensed from third parties in order to offer our products, including hardware and software from such large vendors as International Business Machines Corporation, Dell Computer Corporation, 3PAR Inc., a division of the Hewlett-Packard Company, Oracle Corporation, Juniper Networks, Inc., Cisco Systems, Inc., Ciena Corporation and EMC Corporation. This hardware and software may not continue to be available on commercially reasonable terms, or at all. If we lose the right to use any of this hardware or software or such hardware or software malfunctions, our customers could experience delays or be unable to access our services until we can obtain and integrate equivalent technology or repair the cause of the malfunctioning hardware or software. Any delays or failures associated with our services could upset our customers and harm our business. In addition, if we fail to remain in compliance with the licensing requirements related to any third-party computer hardware and software we use, we may be subject to unanticipated expenses, auditing costs, penalties and the loss of such hardware and software, all of which could have a material adverse effect on our financial condition and results of operations.

If we are unable to protect the confidentiality of our unpatented proprietary information, processes and know-how and trade secrets, the value of our technology and products could be adversely affected.

We rely heavily upon unpatented proprietary technology, processes and know-how and trade secrets. Although we try to protect this information in part by executing confidentiality agreements with our employees, consultants and third parties, such agreements may offer only limited protection and may be breached. Any unauthorized disclosure or dissemination of our proprietary technology, processes and know-how or our trade secrets, whether by breach of a confidentiality agreement or otherwise, may cause irreparable harm to our business, and we may not have adequate remedies for any such breach. In addition, our trade secrets may otherwise be independently developed by our competitors or other third parties. If we are unable to protect the confidentiality of our proprietary information, processes and know-how or our trade secrets are disclosed, the value of our technology and services could be adversely affected, which could negatively impact our business, financial condition and results of operations.

Our use of open source software could impose limitations on our ability to commercialize our products.

We incorporate open source software into our products. Although we monitor our use of open source software closely, the terms of many open source licenses to which we are subject have not been interpreted by United States or foreign courts, and there is a risk that such licenses could be construed in a manner that imposes unanticipated conditions or restrictions on our ability to commercialize our products. In such event, we could be required to seek licenses from third parties in order to continue offering our products, to re-engineer our products or to discontinue sales of our products, or to release our software code under the terms of an open source license, any of which could materially adversely affect our business. Given the nature of open source software, there is also a risk that third parties may assert copyright and other intellectual property infringement claims against us based on our use of certain open source software programs.

If a third party asserts that we are infringing its intellectual property, whether successful or not, it could subject us to costly and time-consuming litigation or require us to obtain expensive licenses, and our business may be adversely affected.

The software and Internet industries are characterized by the existence of a large number of patents, trademarks and copyrights and by frequent litigation based on allegations of infringement or other violations of intellectual property rights. Third parties, including so-called non-practicing entities, which are entities that have no operating business but exist purely as a collector of patents, may assert patent and other intellectual property infringement claims against us in the form of lawsuits, letters or other forms of communication. These claims, whether or not successful, could:

• divert management’s attention;

• result in costly and time-consuming litigation;

• require us to enter into royalty or licensing agreements, which may not be available on acceptable terms, or at all;

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• in the case of open source software-related claims, require us to release our software code under the terms of an open source license; or

• require us to redesign our software and services to avoid infringement.

As a result, any third-party intellectual property claims against us could increase our expenses and adversely affect our business. In addition, many of our agreements with our partners and others require us to indemnify them for third-party intellectual property infringement claims, which would increase the cost to us resulting from an adverse ruling on any such claim. Even if we have not infringed any third parties’ intellectual property rights, we cannot be sure our legal defenses will be successful, and even if we are successful in defending against such claims, our legal defense could require significant financial resources and management time. Finally, if a third party successfully asserts a claim that our products infringe its proprietary rights, royalty or licensing agreements might not be available on terms we find acceptable or at all and we may be required to pay significant monetary damages to such third party.

Our anticipated growth could strain our personnel resources and infrastructure, and if we are unable to implement appropriate controls and procedures to manage our anticipated growth, we may not be able to implement our business plan successfully.

We are currently experiencing a period of rapid growth in our headcount and operations, which has placed, and will continue to place, to the extent that we are able to sustain such growth, a significant strain on our management and our administrative, operational and financial reporting infrastructure. Our success will depend in part on the ability of our senior management to manage this expected growth effectively. To do so, we believe we will need to continue to hire, train and manage new employees as needed. If our new hires perform poorly, or if we are unsuccessful in hiring, training, managing and integrating these new employees, or if we are not successful in retaining our existing employees, our business may be harmed. To manage the expected growth of our operations and personnel, we will need to continue to improve our operational and financial controls and update our reporting procedures and systems. The expected addition of new employees and the capital investments that we anticipate will be necessary to manage our anticipated growth will increase our cost base, which will make it more difficult for us to offset any future revenue shortfalls by reducing expenses in the short term. If we fail to manage our anticipated growth successfully, we will be unable to execute our business plan successfully.

Providing our products to customers outside the United States exposes us to risks inherent in international business.

Customers in more than 180 countries and territories currently use our products. In 2011, we opened a marketing office in the United Kingdom and we expect to continue to expand our international operations in the future. Accordingly, we are subject to risks and challenges that we would otherwise not face if we conducted our business only in the United States. The risks and challenges associated with providing our products to customers outside the United States include:

• localization of our products, including translation into foreign languages and associated expenses;

• laws and business practices favoring local competitors;

• compliance with multiple, conflicting and changing governmental laws and regulations, including those relating to tax, email, privacy and data protection;

• foreign currency fluctuations;

• different pricing environments;

• difficulties in staffing and maintaining foreign operations; and

• regional economic and political conditions.

If we fail to meet these risks and challenges, we will be unable to execute our business plan and may be subject to fines and regulatory actions.

We have incurred net losses in the past and may incur net losses in the future.

We have incurred net losses in the past and may incur net losses in the future. We reported net income for 2011 and 2010, however, we experienced net losses in prior years and a net loss for the second quarter of 2012. While we expect to generate future profitability, we may experience net losses in future periods and there is no guarantee we will be profitable in the future. In addition, we expect our operating expenses to increase as we expand our operations. If our operating expenses exceed our expectations, our financial performance could be adversely affected. If our revenue does not grow to offset these increased expenses, we may not be profitable in any future period. In future periods, we may not have any revenue growth, or our revenue could decline.

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Failure to maintain effective internal control over financial reporting and disclosure controls and procedures would have a material adverse effect on our business.

The Sarbanes-Oxley Act of 2002 requires, among other things, that we maintain effective internal control over financial reporting and disclosure controls and procedures. In order to comply with Section 404 of the Sarbanes-Oxley Act’s requirements relating to internal control over financial reporting, we incur substantial accounting expense and expend significant management time on compliance-related issues. We expect to continue to incur such expenses and expend such time in the future. If in the future we are not able to comply with the requirements of Section 404 in a timely manner, or if we or our independent registered public accounting firm identify deficiencies in our internal control over financial reporting that are deemed to be material weaknesses, the market price of our stock would likely decline and we could be subject to sanctions or investigations by the NASDAQ Stock Market, the SEC or other regulatory authorities, which would require additional financial and management resources.

Our ability to use net operating loss carry-forwards in the United States may be limited.

As of December 31, 2011, we had net operating loss carry-forwards of $48.2 million for U.S. federal tax purposes and $2.5 million for state tax purposes. These loss carry-forwards expire at varying dates between 2012 and 2031. To the extent available, we intend to use these net operating loss carry-forwards to reduce the corporate income tax liability associated with our operations. Section 382 of the Internal Revenue Code of 1986, as amended, generally imposes an annual limitation on the amount of net operating loss carry-forwards that may be used to offset taxable income when a corporation has undergone significant changes in stock ownership. While we do not believe that our public stock offerings and prior private financings have resulted in ownership changes that would limit our ability to utilize net operating loss carry-forwards, any subsequent ownership changes could result in such a limitation. To the extent our use of net operating loss carry-forwards is significantly limited, our income could be subject to corporate income tax earlier than it would if we were able to use net operating loss carry-forwards, which could have a negative effect on our financial results.

Our quarterly results may fluctuate and if we fail to meet the expectations of analysts or investors, our stock price could decline substantially.

Our quarterly operating results may fluctuate, and if we fail to meet or exceed the expectations of securities analysts or investors, the trading price of our common stock could decline. Some of the important factors that could cause our revenue and operating results to fluctuate from quarter to quarter include:

• our ability to retain existing customers, attract new customers and satisfy our customers’ requirements;

• general economic conditions;

• changes in our pricing policies;

• our ability to expand our business;

• the effectiveness of our personnel;

• new product and service introductions;

• technical difficulties or interruptions in our services as a result of our actions or those of third parties;

• the timing of additional investments in our hardware and software systems;

• the seasonal trends in our business;

• regulatory compliance costs;

• costs associated with future acquisitions of technologies and businesses; and

• extraordinary expenses such as litigation or other dispute-related settlement payments.

Some of these factors are not within our control, and the occurrence of one or more of them may cause our operating results to vary widely. As such, we believe that quarter-to-quarter comparisons of our revenue and operating results may not be meaningful and should not be relied upon as an indication of future performance.

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We may need additional capital in the future, which may not be available to us on favorable terms, or at all, and may dilute the ownership of our existing stockholders.

We have historically relied on outside financing and cash from operations to fund our operations, capital expenditures and growth. We may require additional capital from equity or debt financing in the future to:

• fund our operations;

• respond to competitive pressures;

• take advantage of strategic opportunities, including more rapid expansion of our business or the acquisition of complementary products, technologies or businesses; and

• develop new products or enhancements to existing products.

We may not be able to secure timely additional financing on favorable terms, or at all. The terms of any additional financing may place limits on our financial and operating flexibility. If we raise additional funds through issuances of equity, convertible debt securities or other securities convertible into equity, our existing stockholders could suffer significant dilution, and any new securities we issue could have rights, preferences and privileges senior to those of our common stock. If we are unable to obtain adequate financing or financing on terms satisfactory to us, if and when we require it, our ability to grow or support our business and to respond to business challenges could be significantly limited.

We may engage in future acquisitions that could disrupt our business, dilute stockholder value and harm our business, operating results or financial condition.

We have completed four acquisitions in the past two years, including our most recent acquisition of SinglePlatform in June 2012. We have, from time to time, evaluated other acquisition opportunities and may pursue acquisition opportunities in the future. Acquisitions involve numerous risks, including:

• an inability to locate a suitable acquisition candidate or technology or acquire a desirable candidate or technology on favorable terms;

• difficulties in integrating personnel and operations from the acquired business or acquired technology with our existing technology and products and in retaining and motivating key personnel from the acquired business;

• disruptions in our ongoing operations and the diversion of our management’s attention from their day-to-day responsibilities associated with operating our business;

• increases in our expenses that adversely impact our business, operating results and financial condition;

• potential write-offs of acquired assets and increased amortization expense related to identifiable assets acquired; and

• potentially dilutive issuances of equity securities or the incurrence of debt.

In addition, any acquisitions we complete may not ultimately strengthen our competitive position or achieve our goals, or such an acquisition may be viewed negatively by our customers, stockholders or the financial markets.

RISKS RELATED TO THE OWNERSHIP OF OUR COMMON STOCK

The market price of our common stock has been and may continue to be volatile.

The trading price of our common stock has been and may continue to be highly volatile and could be subject to wide fluctuations in response to various factors. Some of the factors that may cause the market price of our common stock to fluctuate include:

• fluctuations in our quarterly financial results or the quarterly financial results of companies perceived to be similar to us;

• quarterly unique customer additions and retention rates;

• changes in estimates of our financial results or recommendations by securities analysts;

• changes in general economic, industry and market conditions;

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• failure of any of our products to achieve or maintain market acceptance;

• changes in market valuations of similar companies;

• success of competitive products;

• changes in our capital structure, such as future issuances of securities or the incurrence of debt;

• announcements by us or our competitors of significant products, contracts, acquisitions or strategic alliances;

• regulatory developments in the United States, foreign countries or both;

• litigation involving our company, our general industry or both;

• additions or departures of key personnel;

• investors’ general perception of us; and

• the total number of shares of our common stock that have been sold short.

In addition, if the market for technology stocks or the stock market in general experiences a loss of investor confidence, the trading price of our common stock could decline for reasons unrelated to our business, financial condition or results of operations. If any of the foregoing occurs, it could cause our stock price to fall and may expose us to class action lawsuits that, even if unsuccessful, could be costly to defend and a distraction to management.

If securities or industry analysts do not continue to publish research or publish inaccurate or unfavorable research about our business, our stock price and trading volume could decline.

The trading market for our common stock depends in part on the research and reports that securities or industry analysts publish about us or our business. We do not control these analysts. If one or more of the analysts who covers us downgrades our stock or publishes inaccurate or unfavorable research about our business, our stock price would likely decline. If one or more of these analysts ceases coverage of our company or fails to publish reports on us regularly, demand for our stock could decrease, which could cause our stock price and trading volume to decline.

Anti-takeover provisions in our charter documents and Delaware law could discourage, delay or prevent a change of control of our company and may affect the trading price of our common stock.

We are a Delaware corporation and the anti-takeover provisions of the Delaware General Corporation Law may discourage, delay or prevent a change of control by prohibiting us from engaging in a business combination with an interested stockholder for a period of three years after the person becomes an interested stockholder, even if a change of control would be beneficial to our existing stockholders. In addition, our restated certificate of incorporation and second amended and restated bylaws may discourage, delay or prevent a change in our management or control over us that stockholders may consider favorable. Among other things, our restated certificate of incorporation and second amended and restated bylaws:

• authorize the issuance of “blank check” preferred stock that could be issued by our board of directors to impede or delay a takeover attempt;

• establish a classified board of directors, as a result of which the successors to the directors whose terms have expired will be elected to serve from the time of election and qualification until the third annual meeting following their election;

• require that directors only be removed from office for cause and only upon a supermajority stockholder vote;

• provide that vacancies on our board of directors, including newly created directorships, may be filled only by a majority vote of directors then in office;

• limit who may call special meetings of stockholders;

• prohibit stockholder action by written consent, requiring all actions to be taken at a meeting of the stockholders; and

• require supermajority stockholder voting to effect certain amendments to our restated certificate of incorporation and second amended and restated bylaws.

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We do not currently intend to pay dividends on our common stock and, consequently, the ability to achieve a return on an investment in our common stock will depend on appreciation in the price of our common stock.

We do not expect to pay cash dividends on our common stock. Any future dividend payments are within the absolute discretion of our board of directors and will depend on, among other things, our results of operations, working capital requirements, capital expenditure requirements, financial condition, contractual restrictions, business opportunities, anticipated cash needs, provisions of applicable law and other factors that our board of directors may deem relevant. We may not generate sufficient cash from operations in the future to pay dividends on our common stock.

Item 6. Exhibits

The exhibits listed in the Exhibit Index immediately preceding the exhibits are filed (other than exhibit 32.1 and exhibit 32.2 and each of exhibits 101.INS, 101.SCH, 101.CAL, 101.LAB, 101.PRE and 101.DEF) as part of this Quarterly Report on Form 10-Q and such Exhibit Index is incorporated herein by reference.

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CONSTANT CONTACT, INC.
Date: August 1, 2012	By:	/s/    GAIL F. GOODMAN
		Gail F. Goodman
		President and Chief Executive Officer (Principal Executive Officer)
Date: August 1, 2012	By:	/s/    HARPREET S. GREWAL
		Harpreet S. Grewal
		Executive Vice President and Chief Financial Officer (Principal Financial and Accounting Officer)

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EXHIBIT INDEX

Listed and indexed below are all Exhibits filed as part of this report.

Exhibit No.	Description
2.1(1)^	Agreement and Plan of Merger, dated as of June 12, 2012, by and among Constant Contact, Inc., Match Acquisition Corporation, SinglePlatform, Corp. and Shareholder Representative Services LLC, a Colorado limited liability company, solely in its capacity as Stockholder Representative.
10.1(2)	First Amendment to Datacenter Lease dated as of May 11, 2012 by and between Digital 55 Middlesex, LLC and Constant Contact, Inc.
10.2(2)	55 Middlesex Turnpike Office Space Rider dated as of May 11, 2012 by and between Digital 55 Middlesex, LLC and Constant Contact, Inc.
10.3#	Lease and related Work Letter Agreement dated as of May 29, 2012 by and between Constant Contact, Inc. and Edward J. Conner.
10.4(1)	Form of Stock Option Agreement under Constant Contact, Inc. 2012 Inducement Award Plan.
10.5(1)	Form of Restricted Stock Unit Agreement under Constant Contact, Inc. 2012 Inducement Award Plan for Wiley Cerilli.
10.6(1)	Form of Restricted Stock Unit Agreement under Constant Contact, Inc. 2012 Inducement Award Plan for Key Employees.
10.7(3)	Constant Contact, Inc. 2012 Inducement Award Plan.
10.8#	Third Amendment to Lease dated as of April 1, 2012 by and between BP Reservoir Place LLC (as successor-in-interest to Boston Properties Limited Partnership) and Constant Contact, Inc.
31.1#	Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
31.2#	Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002.
32.1 *	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Executive Officer.
32.2 *	Certification pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, by Chief Financial Officer.
101.INS# +	XBRL Instance Document.
101.SCH# +	XBRL Taxonomy Extension Schema Document.
101.CAL# +	XBRL Taxonomy Extension Calculation Linkbase Document.
101.LAB# +	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE# +	XBRL Taxonomy Extension Presentation Linkbase Document.
101.DEF# +	XBRL Taxonomy Extension Definition Linkbase Document.

# Filed herewith

^ Schedules have been omitted pursuant to Item 601(b)(2) of Regulation S-K. Constant Contact agrees to furnish supplementally to the Securities and Exchange Commission a copy of any omitted schedule upon request.

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* This certification shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, or otherwise subject to the liability of that Section, nor shall it be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934.

+ Extensible Business Reporting Language (XBRL) information is furnished and deemed not filed or a part of a registration statement or prospectus for purposes of sections 11 or 12 of the Securities Act of 1933, as amended, is deemed not filed for purposes of section 18 of the Securities Exchange Act of 1934, as amended, and otherwise is not subject to liability under these sections.

(1) Incorporated by reference to the Constant Contact, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on June 13, 2012

(2) Incorporated by reference to the Constant Contact, Inc. Current Report on Form 8-K filed with the Securities and Exchange Commission on May 17, 2012

(3) Incorporated by reference to the Constant Contact, Inc. Registration Statement on Form S-8 filed with the Securities and Exchange Commission on June 13, 2012 (333-182083)

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EX-10.3

Exhibit 10.3

L E A S E

1. PARTIES:

1.1 Names. This lease (the “Lease”) is made and entered into on the date below written in San Francisco, California, by and between EDWARD J. CONNER, Landlord, and CONSTANT CONTACT, INC., a Delaware corporation, Tenant.

2. PREMISES:

2.1 Description. Landlord hereby leases to Tenant and Tenant hereby rents from Landlord the real property consisting of approximately 7,898 rentable square feet of space located on the first floor of 85 Second Street, San Francisco, California as identified on Exhibit A (the “Premises”). The term “Building” for purposes of this Lease shall include common areas and the structure at 85 Second Street, San Francisco, California.

3. TERM:

3.1 Period. The term of this Lease shall be for a period of five (5) years, commencing upon the earlier of Tenant commencing business on the Premises (provided in no event shall the construction of the initial Tenant Improvements or moving in of furniture be deemed to be “commencing business”) or November 1, 2012 (such earlier date, the “Commencement Date”).

3.2 Possession. Landlord will deliver possession of the Premises to Tenant on August 1, 2012, free of (i) all tenants having possessory rights; and (ii) debris and personal property other than wiring. If Landlord is unable to deliver possession of the Premises as of August 1, 2012 as a result of causes beyond its reasonable control, Landlord shall not be liable for any damage caused for failing to deliver possession, and this Lease shall not be void or voidable. The Commencement Date shall be delayed one day for each day that Landlord is late in delivering possession of the Premises to Tenant; provided that if Landlord has not delivered the Premises by November 1, 2012, then Tenant may terminate the Lease by delivering written notice thereof to Landlord no later than November 15, 2012. Tenant’s use of the Premises prior to the Commencement Date shall be subject to all of the terms and conditions of this Lease except that Tenant shall have no obligation to pay Base or Additional Rent and Tenant shall use the Premises solely for the construction of tenant improvements and the installation of furniture, fixtures and equipment.

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4. RENT:

4.1 Amount and Payment. Commencing on the Commencement Date, Tenant shall pay to Landlord as base rent (the “Base Rent”), in advance, without deduction, setoff, prior notice or demand, the following sum per month:

Month	Base Rent
1-12	$	29,617.50
13-24	$	30,275.66
25-36	$	30,933.83
37-48	$	31,592.00
49-60	$	32,250.16

Notwithstanding the foregoing, provided that Tenant is not then in default beyond any applicable cure period, Tenant shall not be required to pay the Base Rent owing in the first month of the Lease term. Base Rent for the first month such rent is owing (i.e., the second month) shall be paid concurrently with the execution and delivery of this Lease. Thereafter, Base Rent shall be paid on the first day of each calendar month during the lease term. If the date of commencement or expiration of the term of this Lease occurs on a day other than on the first day of a calendar month, Base Rent for the first and last month shall be prorated upon the number of lease days in that particular month. All rental shall be paid at Suite 250, 27 Maiden Lane, San Francisco or in such other place or to such other person as Landlord may from time to time designate in writing. All payments of any type due from Tenant to Landlord hereunder shall be characterized as rental due under this Lease.

4.2 Security Deposit. Receipt of $30,933.83 is hereby acknowledged as a security deposit for the performance by Tenant of the provisions of this Lease. If Tenant is in default beyond any applicable cure period, Landlord may use the security deposit, or any portion of it, to cure the default or compensate itself for all damage resulting from Tenant’s default. Tenant hereby waives Civil Code Section 1950.7. Tenant shall pay upon demand to Landlord a sum equal to the portion of the security deposit expended or applied by Landlord so as to maintain the security deposit in the sum initially deposited with the Landlord. If Tenant is not in default at the expiration or sooner termination of this Lease, Landlord shall return the security deposit without interest to Tenant after calculation and deduction of all sums due under this Lease within sixty (60) days after such expiration or termination. Landlord’s obligations with respect to the security deposit are those of a debtor and not a trustee and Landlord may commingle the security deposit with Landlord’s other funds.

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4.3 Late Charge; Interest. If Tenant fails to pay any rental due hereunder within 5 business days after notice that the same is due with respect to the first late payment in any calendar year or within 5 days of the date when it is due with respect to any other late payment, Tenant shall pay Landlord a late charge in an amount equal to seven percent (7%) of the amount not paid when due and interest on the past-due amount, from the date due until paid, at the rate of ten per cent (10%) per annum. Tenant shall pay the late charge and interest as Additional Rent with the next installment of Base Rent.

5. RENTAL ADJUSTMENT:

5.1 General. In addition to the Base Rent provided for in paragraph 4, Tenant shall pay to Landlord as additional rental the sums set forth in this paragraph 5 (the “Additional Rent”).

5.2 Adjustment for Operating Expenses.

(a) Adjustment. Tenant shall pay to Landlord as Additional Rent an amount equal to Tenant’s proportionate share of Operating Expenses for each calendar year (the “Comparison Year”) that are in excess of the Operating Expenses in the calendar year 2013 (the “Base Year”). If in the Base Year or any Comparison Year the average of the rentable square feet of the Building actually occupied by tenants is less than 95% of the total rentable square feet of the Building, Operating Expenses shall be adjusted to equal Landlord’s reasonable estimate of Operating Expenses had there been average occupancy of 95% of the total rentable square feet of the Building for the year. If in the Base Year or any Comparison Year Landlord is not furnishing a particular service or work (the cost of which, if furnished by Landlord, would be included in Operating Expenses) to a tenant (other than Tenant) that has undertaken to perform such service or work in lieu of receiving it from Landlord, Operating Expenses for that year shall be considered to be increased by an amount equal to the additional Operating Expenses that Landlord would reasonably have incurred during this period if Landlord had furnished such service or work to that tenant. Landlord’s reasonable estimate of such expenses shall be final and binding on Tenant.

(b) Operating Expenses. The term “Operating Expenses” as used herein shall include all actual direct costs of operation, maintenance and management of the Building, including common areas serving the Building, as determined by generally accepted accounting practices. By way of illustration but not

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limitation, Operating Expenses shall include the cost or charges for the following items: heat; air conditioning; light; water and sewer charges; power; waste disposal; janitorial services; window cleaning; materials and supplies; equipment and tools; security; maintaining elevators; service agreements on equipment and their maintenance and repairs; insurance premiums for the insurance carried by Landlord, in amounts reasonably determined by Landlord; licenses, permits and inspection fees; wages and salaries; employee benefits and payroll taxes; accounting, auditing and legal expenses; management fees not to exceed customary fees for such services for comparable buildings in San Francisco, California; maintenance of the Building and grounds; depreciation on personal property; the cost of contesting the validity or applicability of any governmental enactments which may affect operating expenses; cost of compliance with laws and governmental regulations; the cost of any capital improvements made to or capital assets acquired for the Building by Landlord that reduce any other operating expenses, are reasonably necessary for the health and safety of the occupants of the Building, or are made to the Building by Landlord after the Commencement Date that are required under any governmental law or regulation, such costs to be amortized over their useful life as reasonably determined by Landlord in accordance with generally accepted accounting principles, together with interest on the unamortized balance at the reference rate charged by the Bank of America, San Francisco main office, at the time such costs are incurred plus 2% per annum.

For the purposes of this Lease, Operating Expenses shall not include taxes covered under subparagraph 5.3 below, interest expenses, costs attributable to seeking and obtaining new tenants as well as retaining existing tenants, such as advertising costs, leasing commissions, architectural, engineering, attorneys’ fees, renovations and improvements, depreciation on the Building itself, the cost of capital expenditures except as provided above, costs attributable to enforcing leases against tenants, depreciation and amortization of debt, costs incurred due to violations by the Landlord of terms of leases in the Building, interest on mortgages and rent under any ground lease, repairs and other work to the extent that Landlord is reimbursed by insurance, fines or penalties due to violations by Landlord of government rules, costs for paintings and other objects of art, wages, salaries or other consideration paid to executive employees of Landlord above the grade of Building Manager, management fees in excess of three percent (3%) of the Building’s gross revenues, amounts paid to Landlord or to subsidiaries or affiliates of Landlord for goods and/or services in the Building to the extent the same exceeds the costs of such goods and/or services rendered by unaffiliated third parties on a competitive basis, removal of Hazardous Material from the

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Premises or property, costs arising from the gross negligence or willful misconduct of Landlord or its agents, employees, vendors, contractors or providers of materials or services or costs attributable to repairing items to the extent covered by warranties or insurance.

(c) Calculation. Tenant’s proportionate share shall be based upon a fraction, the numerator of which shall be the number of rentable square feet in the Premises and the denominator of which shall be the total number of rentable square feet of the Building. Landlord represents and warrants that the total number of rentable square feet in the Building is 114,268, and, accordingly, Tenant’s proportionate share of the Operating Expenses as of the Commencement Date shall be 6.91%.

5.3 Adjustment for Taxes. Tenant shall pay to Landlord an amount equal to its proportionate share (as determined pursuant to Section 5.2(c) above) of any increase in Direct Taxes paid or incurred by Landlord in any tax year above the Direct Taxes paid or incurred by Landlord during the Base Year. Landlord shall pass through the cost of increases in Direct Taxes payable in installments in a manner such that the payments are attributable to respective years in a consistent manner. The term “Direct Taxes” as used herein shall include all real property taxes on the Building, the land on which the Building is situated, and the various estates in the Building and the land, including, but not limited to, all taxes payable by Landlord by reason of its ownership of the Building and the leases (other than net income taxes) whether or not now customary or within the contemplation of the parties hereto, all real estate taxes or personal property taxes and other taxes, charges and assessments which are levied solely with respect to the Building and any improvements, fixtures and equipment and all other property of Landlord, real or personal, located in the Building used in connection with the operation of the Building and the land upon which they are situated, and shall also include any taxes which shall be in lieu of real estate or personal property taxes. Tenant shall not be required to pay any municipal, county, state or federal income or franchise taxes of Landlord, or any succession, inheritance or transfer taxes of Landlord. If at any time after execution of this Lease and during the term the laws concerning the methods of real property taxation prevailing at the Commencement Date are changed so that a tax or excise on rents or any other such tax, however described, is levied or assessed against Landlord as a direct substitution in whole or in part for any real property taxes, tenant shall pay before delinquency (but only to the extent that it can be ascertained that there has been a substitution and that as a result Tenant has been relieved from the payment of real property taxes it

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would otherwise have been obligated to pay) the substitute tax or excise on rents. “Direct Taxes” shall include the reasonable cost to Landlord of contesting the amount or validity or applicability of any of the above-mentioned taxes. Net recoveries through protest, appeals or other actions taken by Landlord in its discretion, after deduction of all reasonable costs and expenses, including attorneys and other fees, shall be deducted from Direct Taxes for the year of receipt. In no event shall taxes include any penalty or interest for the late payment by Landlord of taxes. Landlord shall provide Tenant with a receipted copy of the tax bill upon Tenant’s written request.

5.4 Payment. Within a reasonable time after the end of each calendar year, Landlord shall compute the amount of Additional Rent payable by Tenant, if any, for the prior year and deliver to Tenant a statement (the “Reconciliation Statement”) setting forth the calculation of Operating Expenses and Direct Taxes and Tenant’s proportionate share of increases in the same for the previous calendar year over the amount of Operating Expenses and Direct Taxes incurred by Landlord for the Base Year. If the amount previously paid by Tenant for such calendar year is less than the amount of Tenant’s proportionate share as set forth in the Reconciliation Statement, Tenant shall pay the amount of any deficiency at the time the next monthly Base Rent payment is due (or within 30 days if no additional Base Rent payments are due). If the amount previously paid by Tenant for such calendar year is greater than the amount of Tenant’s proportionate share as set forth in the Reconciliation Statement, the amount of any overpayment shall be offset against the next monthly Base Rent payment (or refunded to Tenant within thirty (30) days if no additional Base Rent payments are due). In addition, Tenant shall pay monthly with the Base Rent an amount equal to 1/12 of Landlord’s estimate of Tenant’s proportionate share of the increases in Operating Expenses and Direct Taxes to be paid by Tenant for the then current calendar year over the amount of Operating Expenses and Direct Taxes incurred by Landlord during the Base Year (an “Additional Rent Estimate”) if Landlord has delivered to Tenant an Additional Rent Estimate for such calendar year. Tenant shall pay to Landlord the aggregate sum of any underpayments of Tenant’s proportionate share of Operating Expenses and Direct Taxes for that portion of such calendar year prior to the delivery of the Additional Rent Estimate, based on the Additional Rent Estimate, at the time the next monthly Base Rent payment is due. If Landlord has not delivered to Tenant an Additional Rent Estimate for such calendar year, Tenant shall continue to pay the same monthly amount that Tenant paid for Operating Expenses and Direct Taxes during the preceding calendar year. Landlord’s failure to furnish the Reconciliation Statement in a timely manner for any calendar year shall not prejudice Landlord in enforcing its rights under this

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Section 5. The provisions of this Section 5 shall survive the expiration or earlier termination of the term of this Lease for a period of One (1) year.

5.5 Audit Rights. For a period of one hundred twenty (120) days after the delivery to Tenant of the Reconciliation Statement, Tenant shall have the right to audit Landlord’s books with respect to Operating Expenses and Direct Taxes incurred during the base year and the applicable calendar year, upon ten (10) business days’ prior written notice to Landlord (which notice may be given at any time within said 120 day period). Such audit shall be made at Landlord’s offices during normal business hours. During such inspection, Landlord will make such books and records and any reasonably appropriate supporting documentation available for Tenant’s review. Tenant shall not disclose audit results to any other person (Tenants’ employees and agents excluded). In no event shall any such audit or inspection be performed by a person or entity being compensated on a contingency fee basis or based upon a share of any refund obtained by Tenant. In the event that the audit and inspection reveals an error in the calculation of Operating Expenses or Direct Taxes, Tenant agrees to deliver to Landlord, within thirty (30) days after conclusion of each such audit and inspection, a true and complete copy of the results thereof. In the event that the audit and inspection reveals an error in the calculation of Operating Expenses or Direct Taxes, and Landlord does not dispute the results of such audit and inspection by giving Tenant written notice of Landlord’s dispute within ten (10) days after Landlord’s receipt of the results thereof, then adjustment will be made by appropriate payment or refund within fifteen (15) days after such audit and inspection results are delivered to Landlord. If Landlord timely disputes the results of any audit and inspection, Landlord and Tenant shall mutually designate a disinterested certified public accountant (the “CPA”) located in San Francisco, California, to conduct an audit of the Operating Expenses and Direct Taxes for the applicable calendar year, and the results of such audit shall be binding upon Landlord and Tenant and any underpayment or overpayment shall be made within fifteen (15) days after both parties have received a copy of the results of such audit. The cost of the CPA shall be paid one-half by Landlord and one-half by Tenant.

6. Construction on Premises:

6.1 Condition of Premises. Tenant acknowledges that it has thoroughly inspected the Premises and except as set forth herein accepts the Premises “as is.” Except as set forth herein, Landlord makes no warranty whatsoever with respect to the condition of the Premises or that any utility services provided to the Premises are in form or amount suitable for Tenant’s use.

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6.2 Construction. The construction obligations of the parties with respect to the initial Tenant Improvements are set forth in the work letter attached as Exhibit B (the “Work Letter”).

6.3 Cost of Construction. Except as provided in the Work Letter, all cost of construction shall be borne by Tenant. Construction costs shall include all direct and indirect costs of construction including, without limitation, permits, contractors’ fees, materials, architects’ fees, utilities’ fees and charges, any additional air conditioning capacity, all costs of complying with Code as it relates to the Premises, and all other costs associated with improving the Premises from their present state or making any other change or improvement to the Building or its services required by Tenant’s use or improvements.

7. USES:

The Premises shall be used solely for general office purposes (and uses incidental and ancillary thereto) and for no other use or purpose without the prior written consent of Landlord. Tenant shall not do or suffer anything to be done in or about the Premises, nor shall Tenant bring or allow anything to be brought into the Premises, which will in any way increase the rate of any fire insurance or other insurance upon the Building or its contents, cause a cancellation of said insurance or otherwise affect said insurance in any manner. Tenant also shall not do or suffer anything to be done in or about the Premises which will in any way obstruct or interfere with the rights of other occupants of the Building or injure or unreasonably annoy said occupants, nor shall Tenant use or suffer the Premises to be used for any immoral, unlawful or objectionable purposes. In no event shall Tenant cause or suffer to be caused any nuisance in or about the Premises, and no loudspeakers or similar devices shall be used without the prior written approval of Landlord. Tenant further agrees not to commit or suffer to be committed any waste in or upon the Premises. Tenant shall not bring, store, deposit or use any Hazardous Material (as defined herein) on the Premises, nor shall Tenant allow or permit its agents, employees, or contractors to bring, store, deposit or use any Hazardous Material on the Premises, except incidental quantities of household chemicals commonly used for office and janitorial purposes. “Hazardous Material” as used herein shall mean any hazardous, toxic or radioactive substance now or hereafter regulated by federal, state or local governmental or other authority, including, but not limited to, any “hazardous substance” as defined in Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act. The provisions of this paragraph are for the benefit of Landlord only and shall not

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be construed to be for the benefit of any other tenant or occupant of the Building. Landlord represents that to the best of his knowledge there are no Hazardous Materials in, on, about, under or emanating from the Premises or the property that would prohibit Tenant’s use of the Premises for commercial purposes as described herein. In the event that there are any such Hazardous Materials, Landlord shall at his expense be responsible for the remediation or handling thereof as required in accordance with applicable laws. Tenant shall have access to and the right to use the Premises at all times, twenty-four (24) hours per day and three hundred sixty-five (365) days per year during the term of this Lease, subject to Landlord’s rules and regulations, the Building security procedures and the other provisions of this Lease.

8. SERVICES AND UTILITIES:

8.1 Landlord’s Obligation to Furnish. Subject to the provisions elsewhere herein contained and to the rules and regulations of the Building, Landlord agrees to furnish the Premises with (i) water and electricity for customary office use; and (ii) HVAC Monday through Friday 8:00 a.m. through 6:00 p.m. (excepting the following holidays: New Year’s Day, Martin Luther King Day, President’s Day, Memorial Day, 4th of July, Labor Day, Thanksgiving, day-after Thanksgiving, and Christmas) in an amount reasonably required in Landlord’s judgment for the comfortable occupation of the Premises. The HVAC system for the Premises shall maintain indoor air temperatures between 68 and 75 degrees under normal weather conditions; provided, however, that Landlord shall be in breach of the foregoing only if the temperature in the Premises is not within the stipulated range for more than five (5) consecutive days and Landlord’s obligation to provide such HVAC is subject to Section 8.3 below. Landlord shall also provide daily janitorial service (five nights a week) during the times and in the manner that such services are, in Landlord’s judgment, customarily furnished in comparable office buildings in the area; provided that the scope of such services shall be reasonably consistent with the scope of services attached hereto as Exhibit C. Tenant shall be responsible for its telephone, internet and other telecommunication services.

8.2 Payment. In the event any Building services or utilities are used in excess of the above by reason of longer hours, more days, or use different than other general office tenants of the Building (with the parties acknowledging that a dedicated computer room, as opposed to an IT closet used by office tenants generally, is a different use), Tenant shall pay monthly for such upon presentation of invoice. The parties acknowledge that the after-hours HVAC charge as of the date of this Lease is $45 per hour. To the extent Tenant’s additional use is excessive and

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Landlord installs a meter to measure such use, then Tenant shall pay to Landlord the cost of any meters and their installation and maintenance, any additional cost incurred by Landlord in accounting for the resources consumed, and for the amount of the additional resources consumed at the rates charged by the local public utility or agency furnishing the same. Any sums payable under this paragraph shall be considered additional rent and may be added to any installment of rent thereafter becoming due, and Landlord shall have the same remedies for a default in payment of such sum as for a default in the payment of rent. For the avoidance of doubt, the parties confirm that Tenant shall not be required to pay for electricity to the Premises, except to the extent set forth in Section 5.2 above and this Section 8.2, it being the intention that electricity to the Premises is included in the definition of Operating Expenses.

8.3 Interruptions. Landlord shall use reasonable efforts to remedy any interruption in the furnishing of the services and utilities to be provided by Landlord. However, Landlord shall not be liable for any failure to provide or any reduction in any of said services or utilities if such failure or reduction is caused by the making of repairs or improvements to the Premises or to the Building, the installation of equipment, Acts of God or the elements, labor disturbances of any character, acts of terrorism or any other accidents or conditions whatsoever beyond the reasonable control of Landlord, or rationing or restrictions on the use of said services and utilities due to energy shortages or other causes, whether or not any of the above result from acts or omissions of Landlord. Furthermore, Landlord shall be entitled to cooperate voluntarily in a reasonable manner with the efforts of national, state or local governmental bodies or utilities suppliers in reducing energy or other resources consumption.

9. TAXES PAYABLE BY TENANT:

To the extent not included as Direct Taxes, Tenant shall pay before delinquency any and all taxes levied or assessed and which become payable by Landlord (or Tenant) after execution of and during the term of this Lease (excluding, however, state and federal personal or corporate income taxes measured by the income of Landlord from all sources, capital stock taxes, and estate and inheritance taxes), whether or not now customary or within the contemplation of the parties hereto, which are based upon, measured by or otherwise calculated with respect to: (a) the gross or net rental income of Landlord under this Lease, including, without limitation, any gross receipts tax levied by any taxing authority, or any other gross income tax or excise tax levied by any taxing authority with respect to the receipt of the rental payable hereunder; (b) the value of Tenant’s equipment,

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furniture, fixtures or other personal property located in the Premises; (c) the possession, lease, operation, management, maintenance, alteration, repair, use or occupancy by Tenant of the Premises or any portion thereof; (d) the value of any leasehold improvements, alterations or additions made in or to the Premises regardless of whether title to such improvements, alterations or additions shall be in Tenant or Landlord; or (e) this transaction or any document to which Tenant is a party creating or transferring an interest or an estate in the Premises.

10. COMPLIANCE WITH LAW:

Tenant shall not do or suffer anything to be done in or about the Premises which will in any way conflict with any law, statute, ordinance or other governmental rule, regulation or requirement now in force or which may hereafter be enacted or promulgated. At its sole cost and expense, Tenant shall promptly comply with all said governmental measures and also with the requirements of any board of fire underwriters or other similar body now or hereafter constituted to deal with the condition, use or occupancy of the Premises, excluding structural changes not related to or affected by Tenant’s alterations, additions or improvements. The judgment of any court of competent jurisdiction or the admission of Tenant in any judicial action, regardless of whether Landlord is a party thereto, that Tenant has violated any of said governmental measures or requirements shall be conclusive of that fact as between Landlord and Tenant. Notwithstanding the foregoing or any other provision of this Lease to the contrary (other than Additional Rent payable under Section 5), Tenant shall not be responsible for compliance with any such laws, regulations, or the like requiring (a) structural repairs or modifications; or (b) repairs or modifications to the utility or building service equipment (or the installation of new utility or building service equipment); unless such repairs, modifications, or installations shall (i) be due to Tenant’s particular manner of use of the Premises (as opposed to office use generally), including, without limitation, the installation of a computer room requiring supplemental cooling, or (ii) be due to the negligence or willful misconduct of Tenant or any agent, employee, or contractor of Tenant.

11. ALTERATIONS:

Other than the construction specified in paragraph 6.2 and non-structural alterations costing less than $5,000, Tenant shall not make or suffer to be made any alterations, additions or improvements to the Premises or any part thereof, including the attachment of any fixtures or equipment, without obtaining Landlord’s prior written consent, which consent shall not be

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unreasonably withheld. When applying for such consent, Tenant shall furnish complete plans and specifications for such alterations, additions or improvements. All alterations, additions, fixtures and improvements, whether temporary or permanent in character, made in or upon the Premises either by Landlord or Tenant, shall at once become part of the realty and belong to Landlord and, at the end of the term hereof, shall remain on the Premises without compensation of any kind to Tenant except as herein provided in this Lease. Movable furniture and equipment shall remain the property of Tenant. Notwithstanding any other provision contained in this Lease, Tenant agrees that it shall, upon Landlord’s written request, at its sole cost and expense, promptly remove any alterations, additions, fixtures, communication system or other cabling, or improvements designated by Landlord to be removed and repair any damage to the Premises resulting from such removal. Such removal shall be made prior to the expiration or termination of this Lease if Landlord gives Tenant such written request no less than thirty (30) days prior to the expiration or termination of this Lease, provided that if Tenant requests that Landlord make the determination as to whether or not Landlord will require removal of certain improvements at the time of Tenant’s installation of such improvements, then Landlord will make such determination at the time requested by Tenant. All work done by or for Tenant costing in excess of $5,000 per set of improvements shall be performed by a licensed general contractor who, if the cost of the work exceeds $10,000, shall provide a full payment and performance bond naming both Landlord and Tenant as insured. Tenant shall not be required to remove the initial Tenant Improvements installed pursuant to the Work Letter.

12. REPAIR:

By taking possession of the Premises, except as otherwise set forth herein, Tenant accepts the Premises as being in the condition in which Landlord is obligated to deliver them. Tenant shall at all times during the term of this Lease, at its sole cost and expense, keep the Premises in good and sanitary order, condition and repair, damage thereto by fire, earthquake, Act of God or the elements excepted, including, without limitation, all built in dishwashers, refrigerators, microwaves and other appliances. To the extent allowed by law, Tenant hereby waives all benefits of and rights under California Civil Code Sections 1932(1), 1941 and 1942 and under any similar law, statute, or ordinance now or hereafter in effect. Upon the expiration or sooner termination of this Lease, Tenant shall surrender the Premises to Landlord, together with all alterations, additions, fixtures, improvements and repairs which have been made thereto, in the same condition as delivered, ordinary wear and tear and damage by fire, earthquake, Act of God or the elements

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excepted. Except as otherwise set forth herein, Landlord has no obligation to alter, add to, improve, repair, remodel or paint the Premises. Tenant also acknowledges that Landlord has made no representations regarding the condition of the Premises or the Building except as otherwise set forth herein, provided below and, without limiting the generality of the foregoing, Tenant acknowledges that Landlord has made and is making no representation or warranty, either expressed or implied with respect to sound transfer for any reason. Landlord represents and warrants to the best of its knowledge that (i) the HVAC, electrical, plumbing, life-safety, and mechanical systems serving the Premises are operational and in good condition and repair (based on comparable buildings in the San Francisco downtown office market) as of the delivery of possession of the Premises to Tenant; (ii) the Premises are in compliance with all applicable laws as required and interpreted by the City and County of San Francisco as of the delivery of possession of the Premises to Tenant, including, without limitation, fire and life safety requirements, the Americans with Disabilities Act, Title 24, seismic, construction and building codes; and (iii) the Building’s foundation, floor slabs, roof, exterior walls, structural columns, and common areas are in good condition and repair as of the delivery of possession of the Premises to Tenant. Landlord shall cause to be maintained and repaired in good order and condition (based on comparable buildings in the San Francisco downtown office market) (i) the Building’s foundation, floor slabs, roof, exterior walls, and structural columns, (ii) the Building’s systems outside of the Premises (including, without limitation, the elevator, HVAC, electrical, plumbing, life-safety, and mechanical systems), and (iii) the common areas. Landlord shall be responsible at no cost to Tenant (after actual knowledge or notice of any violation thereof from any governmental authority) for causing the Premises to be in compliance with all applicable laws as required and interpreted by the City and County of San Francisco as of the delivery of possession of the Premises to Tenant.

13. LIENS:

Tenant shall not permit any mechanics’, materialmen’s or other liens to be filed against the real property of which the Premises form a part nor against the Tenant’s leasehold interest in the Premises, and, to the extent the same are filed, Tenant shall cause the same to be discharged or bonded over within five (5) business days after Tenant is notified of such filing. The Landlord shall have the right at all reasonable times to post and keep posted on the Premises any notices which it deems necessary for protection from such liens and Tenant shall give Landlord at least ten (10) days’ prior notice of the date of commencement of any construction on the Premises in order to permit the posting

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of such notices. If any such liens are filed, Landlord may, after such 5 business day period, without waiving its rights and remedies based on such breach by Tenant and without releasing Tenant from any obligations, cause such liens to be released by any means it deems proper, including payment in satisfaction of the claim giving rise to such lien. Tenant shall pay to Landlord at once, without notice or demand, any sum paid by Landlord to remove such liens together with Landlord’s costs and attorneys’ fees and interest at the rate of ten percent (10%) per annum from the date of payment.

14. INDEMNIFICATION:

To the fullest extent permitted by law, Tenant hereby assumes all risks and waives all claims against Landlord for any damage to any tangible or intangible property (including the resulting loss of use, economic losses and consequential or resulting damages of any kind from any cause) or any injury to or death of any person in or about the Premises or the Building arising at any time and from any cause whatsoever other than solely by reason of the gross negligence or willful act of Landlord, or its agents, or employees or contractors. Notwithstanding Landlord’s negligence or breach of this Lease, Landlord shall under no circumstances be liable for injury to Tenant’s business or for any loss of income or profit therefrom. Tenant shall indemnify, defend and hold Landlord harmless against all claims or liability for any injury or damage to any person or property whatsoever: (a) occurring in, on, or about the Premises or any part thereof; and (b) occurring in, on, or about any facilities (including without limitation to the generality of the term “facilities”, elevators, stairways, passageways or hallways) the use of which Tenant may have in conjunction with other tenants of the Building, when such injury or damage shall be caused in part or in whole by the act, neglect, fault of, or omission of any duty with respect to the same, by Tenant, its agents, servants, employees or invitees. Tenant further agrees to indemnify, defend and hold Landlord harmless against and from any and all claims: (a) by or on behalf of any person, firm or corporation, arising from the conduct or management of any work or thing whatsoever done by the Tenant in or about or from transactions of the Tenant concerning the Premises; (b) arising from any breach or default on the part of Tenant in the performance of any covenant or agreement on the part of the Tenant to be performed pursuant to the terms of this Lease, including, without limitation, compliance with the Building rules and regulations; or (c) arising from any act or negligence of the Tenant, or any of its agents, contractors, servants, employees or licensees. The foregoing indemnifications include all costs, attorney’s fees, expenses and liabilities incurred in connection with any such claim or action or proceeding brought thereon.

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Furthermore, in case any action or proceeding is brought against Landlord by reason of any such claims or liability, Tenant agrees to defend such action or proceeding at Tenant’s sole expense. The provisions of this paragraph shall survive the expiration or termination of this Lease with respect to any claims or liability arising prior to such expiration or termination.

15. INSURANCE:

Tenant shall purchase at its own expense and keep in force during the term of this Lease a policy of commercial general liability insurance against claims for bodily injury, personal and advertising injury and property damage arising out of or relating (directly or indirectly) to Tenant’s business operations, conduct or use or occupancy of the Premises or the Building. Such insurance shall be on an occurrence basis providing single limit coverage of not less than $2,000,000 per occurrence with an annual aggregate of not less than $2,000,000. Tenant may satisfy the foregoing requirement with the combination of a $1,000,000 primary policy and a $5,000,000 or more umbrella policy. The limits of said policy shall not limit the liability of Tenant nor relieve Tenant of any obligation hereunder. Said policy shall: (a) name by endorsement Landlord as an additional insured, with such endorsement to be on such form and with such modifications as Landlord may require; (b) be issued by an insurance company which is reasonably acceptable to Landlord and licensed to do business in the State of California; (c) have deductibles no larger than those typically carried by similarly situated tenants; and (d) provide that said insurance shall not be canceled unless ten (10) days’ prior written notice shall have been given to Landlord. Said policy or certificates thereof shall be delivered to Landlord by Tenant upon commencement of the term of this Lease and upon each renewal of said insurance. No more often than every three years, Landlord may require Tenant to reasonably increase the amount of such coverage if, in Landlord’s opinion, the amount of such coverage is no longer equal to the coverages carried by tenants in comparable office buildings in the San Francisco downtown office market.

Landlord shall maintain throughout the term of this Lease a policy of insurance upon the Building insuring against such risks and in such amounts as Landlord deems appropriate in his reasonable discretion. Landlord may, but shall not be required to, carry earthquake insurance on the Building.

16. SUBROGATION:

Landlord and Tenant hereby waive any right that each may have against the other on account of any loss or damage arising in any manner which is covered by policies of insurance for fire

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and extended coverage, theft, public liability, workmen’s compensation or other insurance now or hereafter existing during the term hereof. The parties each agree to use their reasonable best efforts to have their respective insurance companies waive any rights of subrogation that such companies may have against Landlord or Tenant, as the case may be.

17. ASSIGNMENT AND SUBLETTING:

Tenant shall not Transfer this Lease without the prior written consent of Landlord, which consent shall not be unreasonably withheld. A Transfer consists of any of the following: (i) any assignment, encumbrance, mortgage or other transfer, whether by operation of law or otherwise, of this Lease or any interest herein; (ii) any sublease of the Premises or any part thereof, or permitting any other person to occupy or use the Premises or any portion thereof; or (iii) any sale or other transfer, including by consolidation, merger or reorganization, of a majority of the capital stock, partnership interests or membership interests of Tenant (if Tenant is a corporation, partnership or limited liability company, respectively), at any time in the aggregate during the term of this Lease. Notwithstanding the foregoing or anything contained herein to the contrary, in no event shall the transfer of Tenant’s shares on a nationally recognized stock exchange be deemed to be a Transfer. Any person to whom any Transfer is made or sought to be made is a “Transferee.” Any Transfer by Tenant shall not result in Tenant being released or discharged from any liability under this Lease. As a condition to Landlord’s prior written consent as provided for in this paragraph, the Transferee shall agree in writing to comply with and be bound by all of the terms, covenants, conditions, provisions and agreements of this Lease, and Tenant shall deliver to Landlord, promptly after execution, an executed copy of each document evidencing the Transfer and an agreement of said compliance by each Transferee. Landlord’s consent to one Transfer shall not be deemed to be a consent to any subsequent Transfer and any Transfer which does not comply with the provisions of this paragraph 17 shall be void. Tenant shall pay all costs of Transfer, including without limitation, real estate commissions and Landlord’s reasonable attorneys fees expended in connection therewith, not to exceed $2,000 with respect to each such Transfer.

If Landlord consents to a Transfer, and as a condition thereto, Tenant shall pay Landlord fifty percent (50%) of any Transfer Premium, derived by Tenant from such Transfer. “Transfer Premium” shall mean: (i) for a lease assignment, all consideration paid or payable therefor, and (ii) for a sublease, all rent, additional rent or other consideration paid by such Transferee in excess of the base rent payable by Tenant under

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this Lease (on a monthly basis and on a per rentable square foot basis if less than all of the Premises is transferred). In any such computation, Tenant: (a) may subtract any reasonable direct out-of-pocket costs incurred in connection with such Transfer, such as advertising costs, brokerage commissions, attorneys’ fees and leasehold improvements, amortized on a straight line basis over the remaining term of this Lease (or the term of the sublease in the case of a sublease) and (b) shall include in the “Transfer Premium” any consideration for execution of the Transfer, including, without limitation, so-called “key money” or other bonus amount paid by Transferee to Tenant, and any payments in excess of fair market value for services rendered by Tenant to Transferee or in excess of fair market value for assets, fixtures, inventory, equipment or furniture transferred by Tenant to Transferee. Tenant shall pay the percentage of the Transfer Premium due Landlord within thirty (30) days after Tenant receives any Transfer Premium. As a condition to Transfer, the Transferee shall verify in writing to Landlord all consideration paid or given or to be paid or given for such Transfer. In addition, Landlord shall have the option, in the event of any proposed assignment of the Lease or subletting of more than twenty five percent (25%) of the Premises to terminate the Lease in its entirety as of the proposed effective date of the proposed assignment or subletting. Such option to terminate shall be exercised, if at all, by Landlord giving Tenant written notice thereof within fifteen (15) days following Landlord’s receipt of Lessee’s written request. Following any such termination by Landlord, Landlord may lease all or some portion of the Premises to the prospective assignee or subtenant proposed by Tenant without liability to Tenant. Landlord’s failure to exercise its termination right shall not be construed as Landlord’s consent to the proposed assignment or subletting.

Notwithstanding any provision in this Lease to the contrary, Landlord’s consent shall not be required for, and its excess rent sharing and recapture rights shall not apply to, but upon prior written notice to Landlord, (unless prior notice is prohibited by applicable laws, rules or regulations, in which event notice will be given to Landlord promptly following said transaction), any assignment of the Lease or sublease of the Premises by Tenant to any of the following (an “Approved Transferee”): (1) any corporation or other entity which controls, is controlled by, or is under common control with Tenant; (2) any corporation or other entity resulting from the merger or consolidation of Tenant; and (3) any corporation or other entity or person which acquires a controlling interest in the corporate stock of Tenant or acquires substantially all of the assets of Tenant, provided that (a) in the case of an assignment, said assignee assumes in full the obligations of Tenant under this Lease, and (b) in the case of a sublease, at Landlord’s request following said transaction, said

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subtenant will execute an agreement acceptable to Landlord, Tenant and subtenant, whereby subtenant agrees to (xx) be bound by the terms of this Lease and (yy) at Landlord’s request, attorn to Landlord in the event of a termination of the Lease by reason of a Tenant default (in which event the sublease will become a direct lease between Landlord and subtenant and Landlord will recognize subtenant’s rights under such sublease and not disturb subtenant’s possession of the Premises. For the purposes of this paragraph, the words “control”, “controls” and “controlled” shall mean the right and power (direct or indirect) to direct or cause the direction of the management policies of a person or entity (corporation or otherwise) through ownership or voting securities, by contract or otherwise. Tenant’s foregoing rights to assign this Lease or sublease the Premises without the consent of Landlord shall be subject to the following conditions: (i) Tenant shall notify Landlord of any such assignment or sublease at least ten (10) days prior thereto (unless prior notice is prohibited by applicable laws, rules or regulations, in which event notice will be given to Landlord promptly following said transaction); (ii) in the case of an assignment, the transferee or successor entity shall assume in writing Tenant’s obligations hereunder; (iii) Tenant shall remain liable for all obligations and liabilities of Tenant under this Lease; and (iv) in the case of an assignment, the transferee of successor entity shall have a tangible net worth which is at least equal to the greater to the net worth of Tenant as of the date of this Lease or the net worth of Tenant immediately prior to the date of the assignment. Tenant and the proposed assignee/sublessee shall provide such documentation as may be reasonably requested by Landlord to demonstrate to Landlord’s reasonable satisfaction that the conditions set forth above have been satisfied.

18. RULES AND REGULATIONS:

Tenant shall faithfully comply with the reasonable rules and regulations, together with all modifications and additions thereto applying to the Building and other tenants thereof adopted by Landlord from time to time in writing. Landlord shall not be responsible for the non-performance by any other tenant or occupant of the Building of any of said rules and regulations, but shall use commercially reasonable efforts to uniformly enforce the same. In the event of a conflict between such rules and regulations and this Lease, this Lease shall control. A copy of the current rules and regulations is attached hereto as Exhibit D. Landlord hereby approves of the window treatment described on Exhibit E.

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19. ENTRY BY LANDLORD:

Upon reasonable prior notice (not less than 24 hours), or in an emergency without notice, Landlord shall have the right to enter the Premises: (a) to inspect them, (b) to supply any service provided to Tenant hereunder, (c) to show the Premises to prospective purchasers, lenders or tenants (but such right with respect to tenants shall only be permitted during the last 9 months of the term), (d) to post notices of nonresponsibility, (e) to alter, improve or repair the Premises and any portion of the Building, and (f) to erect scaffolding and other necessary structures outside of the Premises, where required by the work to be performed, all without reduction of rent. In connection with any such entry, Landlord shall use commercially reasonable efforts not to unreasonably interfere with the conduct of Tenant’s business on the Premises. Tenant hereby waives any claims for damages for any injury to or interference with Tenant’s business or quiet enjoyment of the Premises or any other loss occasioned by such entry provided that Landlord shall use commercially reasonable efforts not to unreasonably interfere with the conduct of Tenant’s business on the Premises. Landlord shall at all times have a key to unlock all of the doors in and about the Premises, excluding Tenant’s vaults and safes, and Landlord shall have the right to use any means which Landlord deems proper to open said doors in any emergency, and any such entry to the Premises shall not under any circumstances be construed or deemed to be a forcible or unlawful entry into the Premises or a detainer of the Premises or an eviction of Tenant from any portion of the Premises.

20. INSOLVENCY OR BANKRUPTCY:

The appointment of a receiver to take possession of all or substantially all of the assets of Tenant, or any assignment by Tenant for the benefit of creditors, or any action taken or suffered by Tenant under any insolvency, bankruptcy, or reorganization act, shall at Landlord’s option constitute a breach of this Lease by Tenant if not released within 90 days. On the happening of any such event or at any time thereafter this Lease shall terminate five days after written notice of termination from Landlord to Tenant. In no event shall this Lease be assigned or assignable by operation of law or by voluntary or involuntary bankruptcy proceedings or otherwise and in no event shall this Lease or any rights or privileges hereunder be an asset of Tenant under any bankruptcy, insolvency, or reorganization proceedings. In the event that any provisions of this paragraph are not enforceable as a matter of law, Landlord shall retain its rights under paragraph 17 above.

21. DEFAULT:

The failure to perform or honor each covenant, condition and representation made under this Lease shall constitute a default

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hereunder by Tenant upon expiration of the appropriate grace period hereinafter provided. Tenant shall have a period of five (5) business days from the date of written notice from Landlord within which to cure any default in the payment of rental or adjustment thereto or any other sums hereunder. Tenant shall have a period of thirty (30) days, after written notice from Landlord within which to cure any other default under this Lease; provided, however, that with respect to defaults which cannot be reasonably cured within thirty (30) days, the default shall not be deemed to be uncured if Tenant commences to cure within thirty (30) days from Landlord’s notice and continues to prosecute diligently the curing thereof. Said written notices shall constitute those required under CCP § 1161 et seq. Acceptance of a payment which is less than the amount then due shall not be a waiver of Landlord’s rights to the balance of such rent, regardless of Landlord’s endorsement of any check so stating. Upon an uncured default of this Lease by Tenant, Landlord shall have the following rights and remedies in addition to any other rights or remedies available to Landlord at law or in equity:

(a) The rights and remedies provided by California Civil Code Section 1951.2, including but not limited to, recovery of the worth at the time of award of the amount by which the unpaid rent for the balance of the term after the time of award exceeds the amount of rental loss for the same period that the Tenant proves could be reasonably avoided, as computed pursuant to Section 1951.2(b);

(b) The rights and remedies provided by California Civil Code Section 1951.4 (Landlord may continue the lease in effect after Tenant’s breach and abandonment and recover rent as it becomes due, if Tenant has right to sublet or assign, subject only to reasonable limitations). Acts of maintenance or preservation, efforts to relet the Premises, or the appointment of a receiver upon Landlord’s initiative to protect its interest under this Lease shall not constitute a termination of Tenant’s right to possession. At the option of Landlord, rents received from any such subletting shall be applied first, to payment of any indebtedness other than rent due hereunder, from Tenant to Landlord; second, to the payment of any costs of such subletting and of such alterations and repairs; third, to payment of rent due and unpaid hereunder; and the residue, if any, shall be held by Landlord and applied in payment of future rent as the same becomes due hereunder. No taking possession of the Premises by Landlord shall be construed as an election on its part to terminate this Lease unless a written notice of such intention be given to Tenant. Notwithstanding any such subletting without termination, Landlord may at any time thereafter elect to terminate this Lease for such previous breach;

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(c) The right to terminate this Lease by giving notice to Tenant in accordance with applicable law;

(d) The right and power to enter the Premises and remove therefrom all persons and property, to store such property in a public warehouse or elsewhere at the cost of and for the account of Tenant, and to sell such property and apply the proceeds therefrom pursuant to applicable California law. ; and

(e) The right to have a receiver appointed for Tenant, upon application by Landlord, to take possession of the Premises and to apply any rental collected from the Premises.

(f) All sums due from Tenant to Landlord not paid when due shall bear interest at ten (10%) percent per annum.

Landlord shall be deemed to be in default of this Lease if Landlord fails to make any payments to Tenant required under this Lease and such failure continues for ten (10) days after written notice from Tenant to Landlord, or if Landlord shall be in default in the performance of any other of its covenants or agreements contained in this Lease and such default in performance continues for more than thirty (30) days after written notice thereof from Tenant to Landlord specifying the particulars of such default or breach of performance; provided, however, that if the default complained of, other than for the payment of monies, is of such a nature that the same cannot be rectified or cured within such thirty (30) day period, then such default shall be deemed to be rectified or cured if Landlord, within such thirty (30) day period, shall have commenced such cure and shall continue thereafter with diligence to cause such cure to be completed. Upon any default of this Lease by Landlord, Tenant shall be entitled to pursue any and all remedies available to Tenant at law or in equity.

22. LANDLORD’S RIGHT TO CURE DEFAULT:

All covenants and agreements to be kept or performed by Tenant under the terms of this Lease shall be performed by Tenant at Tenant’s sole cost and expense and without any reduction of rent. If Tenant shall be in default on its obligations under this Lease to pay any sum of money other than payment of rent or perform any other act hereunder, and if such default is not cured within the applicable grace period provided in paragraph 21 hereof, Landlord may, but shall not be obligated to, make such payment or perform any such act on Tenant’s part without waiving its right based upon default of Tenant and without releasing Tenant from any obligations hereunder. All sums so paid by Landlord and all incidental costs, together with interest thereon at the rate of ten percent (10%) per annum from the date of such

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payment or the incurrence of such cost by Landlord, whichever occurs first, shall be paid to Landlord on demand. In the event of nonpayment by Tenant, Landlord shall have, in addition to any other rights or remedies hereunder, the same rights and remedies as in the case of default.

23. DAMAGE BY FIRE OR CASUALTY:

23.1 Partial Damage – Insured. In the event the Premises or the Building are damaged by any casualty which is covered under fire and extended coverage insurance carried by Landlord, then Landlord shall restore such damage provided insurance proceeds are available to pay eighty percent (80%) or more of the cost of restoration and provided such restoration can be completed within sixty (60) days after the commencement of the work in the opinion of a registered architect or engineer appointed by Landlord. In such event this Lease shall continue in full force and effect, except that Tenant shall be entitled to proportionate reduction of rent while such restoration takes place, such proportionate reduction to be based upon the extent to which the restoration efforts interfere with Tenant’s business in the Premises.

23.2 Partial Damage – Uninsured. In the event the Premises or the Building are damaged by a risk not covered by Landlord’s insurance or the proceeds of available insurance are less than eighty (80%) of the cost of restoration, or if the restoration cannot be completed within sixty (60) days after the commencement of work in the opinion of the registered architect or engineer appointed by Landlord, then Landlord shall have the option either to (1) repair or restore such damage, this Lease continuing in full force and effect, but the rent to be proportionately abated as hereinabove provided, or (2) give notice to Tenant at any time within thirty (30) days after such damage terminating this Lease as of a date to be specified in such notice, which date shall be not less than thirty (30) nor more than sixty (60) days after giving such notice. In the event of the giving of such notice, this Lease shall expire and all interest of Tenant in the Premises shall terminate on such date so specified in such notice and the rent, reduced by any proportionate reduction based upon the extent, if any, to which said damage interfered with the use and occupancy of Tenant, shall be paid to the date of such termination; Landlord agrees to refund to the Tenant any rent theretofore paid in advance for any period of time subsequent to such date.

23.3 Total Destruction. In the event the Premises are totally destroyed or the Premises cannot be restored as required herein under applicable laws and regulations, notwithstanding the availability of insurance proceeds, this Lease shall be terminated effective the date of the damage.

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23.4 Damage Near End of the Term. Notwithstanding anything to the contrary contained in this Section 23, Landlord shall not have any obligation whatsoever to repair, reconstruct or restore the Premises when the damage resulting from any casualty covered under this Section 23 occurs during the last twelve (12) months of the term of this Lease or any extension thereof.

23.5 Landlord’s Obligations. The Landlord shall not be required to repair any injury or damage by fire or other cause or to make any restoration or replacement of any paneling, decorations, partitions, railings, floor coverings, office fixtures or any other improvements or property installed in the Premises by Tenant or at the direct or indirect expense of Tenant. Tenant shall be required to restore or replace same in the event of damage. Except for abatement of rent, if any, Tenant shall have no claim against Landlord for any damage suffered by reason of any such damage, destruction, repair or restoration; nor shall Tenant have the right to terminate this Lease as a result of any statutory provision now or hereafter in effect pertaining to the damage and destruction of the Premises or the Building, except as expressly provided herein.

23.6 Tenant Termination Right. Notwithstanding the foregoing, if the Premises are (a) materially damaged by fire or other casualty during the last twelve (12) months of the term and not restored within 60 days after the date of such fire or casualty, or (b) materially damaged by fire or other casualty and not restored within 180 days after the date of such fire or other casualty, then Tenant shall have the right, exercisable by notice to Landlord delivered within thirty (30) days after the date of such fire or other casualty (with respect to clause (a) above) or within 210 days after the date of such fire or other casualty (with respect to clause (b) above), to terminate this Lease, effective as of the date of delivery of such notice.

24. EMINENT DOMAIN:

If any part of the Premises shall be taken or appropriated under the power of eminent domain or conveyed in lieu thereof, either party shall have the right to terminate this Lease at its option. If any part of the Building shall be taken or appropriated under power of eminent domain or conveyed in lieu thereof, Landlord may terminate this Lease at its option. In either of such events, Landlord shall receive such portions of the condemnation award as the court shall allow. If a part of the Premises shall be so taken or appropriated or conveyed and neither party hereto shall elect to terminate this Lease and the Premises have been damaged as a consequence of such partial

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taking or appropriation or conveyance, the Landlord shall restore the Premises continuing under this Lease at the Landlord’s cost and expense; provided, however, that Landlord shall not be required to repair or restore any injury or damage to the property of Tenant or to make any repairs or restoration of any alterations, additions, fixtures or improvements installed on the Premises by or at the expense of Tenant. Thereafter, the rent to be paid under this Lease for the remainder of its term shall be proportionately reduced, such reduction to be based upon the extent to which the partial taking or appropriation or conveyance shall interfere with the business carried on by Tenant on the Premises. In the event of a taking, nothing contained herein shall prevent Tenant from making a claim for damages and expenses associated with the Tenant Improvements or its moving expenses.

25. SURRENDER OF PREMISES:

A voluntary surrender or other surrender of this Lease by Tenant or the mutual cancellation of this Lease shall not work a merger. Any surrender or mutual cancellation of this Lease shall operate as an automatic assignment to Landlord of any subleases or subtenancies.

26. HOLDING OVER:

Any holding over after the expiration of the term of this Lease with the written consent of Landlord shall be a tenancy from month to month upon the same terms, covenants and conditions herein, the monthly rental shall be determined by Landlord and contained in the written consent, subject to adjustment as provided in paragraph 5 herein. Landlord may thereafter terminate such tenancy on 5 business days written notice. Acceptance by Landlord of rent after such expiration shall not result in any other tenancy or any renewal of the term of this Lease, and the provisions of this paragraph are in addition to and do not affect Landlord’s right of re-entry or other rights provided under this Lease or by applicable law.

If Tenant shall retain possession of the Premises or any part thereof without Landlord’s written consent following the expiration or sooner termination of this Lease for any reason, then Tenant shall pay to Landlord for each day of such retention 150% of the amount of the daily rental for the last period prior to the date of such expiration or termination. Tenant shall also indemnify and hold Landlord harmless from any loss or liability resulting from delay by Tenant of more than thirty (30) days in surrendering the Premises, including, without limitation, any claims made by any succeeding tenant founded on such delay.

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27. SALE BY LANDLORD:

In the event that Landlord sells or conveys the Premises, Landlord shall be released from any liability arising thereafter based upon any of the terms, covenants or conditions, express or implied, which are contained in this Lease. In such event, Tenant agrees to look solely to Landlord’s successor in interest for any liability under this Lease arising after the date of such Transfer. If any security has been given by Tenant to secure the faithful performance of any of the covenants of this Lease, Landlord shall transfer or deliver said security, as such, to Landlord’s successor in interest and thereupon Landlord shall be discharged from any further liability with regard to said security. Except as set forth in this paragraph, this Lease shall not be affected by any sale or conveyance of the Premises by Landlord, and Tenant agrees to attorn in writing to Landlord’s successor in interest.

28. ESTOPPEL CERTIFICATE:

Within fifteen (15) days after notice from Landlord, Tenant shall execute and deliver to Landlord, in recordable form, a certificate stating that this Lease is unmodified and in full force and effect, or in full force and effect as modified, and stating the modifications. The certificate also shall state the amount of minimum monthly rent, the dates to which the rent has been paid in advance, the amount of any security deposit or prepaid rent, the fact that to the best of Tenant’s actual knowledge there are no current defaults under the Lease by either Landlord or Tenant except as specified in such statement, and such other matters reasonably requested by Landlord. Tenant acknowledges that any statement delivered pursuant to this paragraph may be relied upon by any mortgagee, beneficiary, purchaser or prospective purchaser of the Building or any interest therein. Failure to deliver the certificate within said fifteen (15) days shall be conclusive upon Tenant that this Lease is in full force and effect and has not been modified except as may be represented by Landlord.

29. SUBORDINATION AND ATTORNMENT:

This Lease is and shall be subject and subordinate at all times to all ground or underlying leases which now exist or may hereafter be executed or amended affecting the Building or the land upon which the Building is situated, or both, and to the lien of any mortgages or deeds of trust in any amount or amounts whatsoever which now exist or may hereafter be executed or amended on or against the land and Building or either of them, of which the Premises are a part, or on or against Landlord’s interest or estate therein, without the necessity of the

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execution and delivery of any further instruments on the part of Tenant to effectuate such subordination. Notwithstanding the foregoing, Tenant covenants and agrees to execute and deliver upon demand to Landlord such further instruments in recordable form evidencing such subordination of this Lease to such ground or underlying leases and to the lien of any such mortgages or deeds of trust as may be reasonably required by Landlord, including a statement from Tenant as to any claimed offsets of Tenant. As to any mortgages, deeds of trust or ground leases hereafter executed that affect Landlord’s estate or any interest of Landlord in the real property or any part thereof of which the Premises form a part or any renewals, modifications, replacements or extensions of existing mortgages, deeds of trust or ground leases, they shall not be effective to disturb the terms hereof or Tenant’s occupancy hereunder so long as Tenant is not in default under the terms and conditions of this Lease. Any holder of a mortgage or deed of trust may elect to have this Lease superior to the lien of its mortgage or deed of trust by giving written notice thereof to Tenant, whereupon this Lease shall be deemed prior to such mortgage or deed of trust notwithstanding the relative dates of the documentation or recordation thereof. Landlord shall use commercially reasonable efforts to obtain a non disturbance agreement for the benefit of Tenant from the current holder of the deed of trust on the Property.

Upon the written request of the Landlord or any mortgagee or beneficiary of Landlord, Tenant will in writing attorn to any such mortgagee or beneficiary. Said agreement of attornment shall provide, among other things, (a) that this Lease shall remain in full force and effect, (b) that Tenant shall pay rent to said mortgagee or beneficiary from the date of said attornment, (c) that mortgagee or beneficiary shall not be responsible to Tenant under this Lease except for obligations accruing subsequent to the date of such attornment (except for repair and maintenance obligations of a continuing nature and the payment in full of the tenant improvement allowance described in the Work Letter), and (d) that Tenant, in the event of foreclosure or deed in lieu thereof, will enter into a new lease with the lien holder acquiring title on the same terms and conditions as the existing Lease and for the balance of the term hereof.

The provisions of this Lease may require approval by financial institutions which make the loans herein contemplated. If any such institution should require as a condition of such financing any modification of the provisions of this Lease, Tenant will approve and execute any such modifications, provided no such modifications shall relate to the rent payable hereunder, the length of the term or materially change the rights or obligations of Landlord or Tenant to each other.

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30. WAIVER:

If Landlord waives the performance of any term, covenant or condition contained in this Lease, such waiver shall not be deemed to be a waiver of the term, covenant or condition itself or a waiver of any subsequent breach of the same or any other term, covenant or condition contained herein. Furthermore the acceptance of rent or late charge by Landlord shall not constitute a waiver of any preceding breach by Tenant of any term, covenant or condition of this Lease, regardless of Landlord’s knowledge of such preceding breach at the time Landlord accepted such rent or late charge. Failure by Landlord to enforce any of the terms, covenants or conditions of this Lease for any length of time shall not be deemed to waive or to decrease the right of Landlord to insist thereafter upon strict performance by Tenant. Waiver by Landlord of any term, covenant or condition contained in this Lease may only be made by a written document signed by Landlord.

31. LANDLORD’S DEFAULT:

If Tenant obtains a money judgment against Landlord resulting from any default or other claim arising under this Lease, such judgment shall be satisfied only out of the rents, profits and income received by Landlord with respect to its right, title and interest in the Building and the underlying real property. No other real, personal or mixed property of Landlord (or of any of the individuals who comprise Landlord) shall be subject to levy to satisfy any such judgment.

32. ATTORNEYS’ FEES:

In the event that any action or proceeding is brought to enforce any term, covenant or condition of this Lease on the part of Landlord or Tenant, the prevailing party in such litigation shall be entitled to reasonable attorneys’ fees and expert fees and costs to be fixed by the Judge presiding in such action or proceeding.

33. INTENTIONALLY OMITTED

34. NOTICES:

Notices (including any notice to be served on Tenant pursuant to Code of Civil Procedure Section 1162) will be deemed to have been delivered upon the sooner of personal delivery or forty-eight (48) hours after they have been deposited with a reputable overnight courier service (such as Federal Express), addressed to the Tenant at 1601 Trapelo Road, Waltham,

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Massachusetts 02451 Attention: Robert P. Nault Esq. with a copy to Wilmer Cutler Pickering Hale and Dorr LLP, 60 State Street, Boston, MA 02109 Attention: Paul Jakubowski, Esq. and to Landlord at 27 Maiden Lane, Suite 250, San Francisco, California 94108 and to either of them at such other places as they may from time to time designate by written notice. Either may request duplicate notices to themselves or third parties. Any deed of trust holders shall have a reasonable opportunity (not to exceed 60 days) after receipt of each such notice in which to cure all defaults on the part of Landlord. In the event it is necessary for said first deed of trust holders to enter upon the Premises in order to effect said cure, the right of entry shall be deemed to have been granted by this provision.

35. DEFINED TERMS AND HEADINGS:

The words “Landlord” and “Tenant” as used herein shall include the plural as well as the singular. Words used in masculine gender include the feminine and neuter, where applicable. If there is more than one Tenant, the obligations imposed under this Lease upon Tenant shall be joint and several. The headings and titles to the paragraphs of this Lease are used for convenience only and shall have no effect upon the construction or interpretation of the Lease. No party other than Landlord and Tenant and their successors and assigns shall be entitled to the benefits of this Lease: there are no third party beneficiaries to this Lease.

36. TIME AND APPLICABLE LAW:

Time is of the essence of this Lease and all of its provisions. This Lease shall in all respects be governed by the laws of the State of California.

37. SUCCESSORS AND ASSIGNS:

Subject to the provisions of paragraph 17 hereof, the terms, covenants and conditions contained herein shall be binding upon and inure to the benefit of the heirs, successors, executors, administrators and assigns of the parties hereto.

38. ENTIRE AGREEMENT:

This Lease, together with its exhibits, contains all the agreements of the parties hereto and supercedes any previous negotiations. There have been no representations made by the Landlord or understandings made between the parties other than those set forth in this Lease and its exhibits. This Lease may not be modified except by a written instrument duly executed by the parties hereto.

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39. SEVERABILITY:

If any provision of this Lease or the application thereof to any person or circumstance shall be invalid or unenforceable to any extent, the remainder of this Lease and the application of such provision to other persons or circumstances shall not be affected thereby and shall be enforced to the greatest extent permitted by law. If any payments or interest hereunder shall at any time be in violation of any California usury laws or otherwise in violation of law, they shall be reduced to an amount equal to the maximum permitted under California law.

40. QUIET ENJOYMENT:

Landlord agrees to and shall in the commencement of this Lease place Tenant in quiet possession of the Premises and shall secure it in the quiet possession thereof against all persons lawfully claiming the same during the term of this Lease.

41. LIGHT AND AIR:

Tenant covenants and agrees that no diminution of light, air or view by any structure which may hereafter be erected (whether or not by Landlord) shall entitle Tenant to any reduction of rent under this Lease, result in any liability of Landlord to Tenant, or in any other way affect this Lease or Tenant’s obligations hereunder.

42. OFFER:

Preparation of this Lease by Landlord or Landlord’s agent and submission of same to Tenant shall not be deemed an offer to lease. This Lease shall become binding upon Landlord and Tenant only when fully executed by Landlord and Tenant.

43. OPTION TO RENEW:

43.1. Option to Renew. Provided Tenant is not in default under the terms of this Lease beyond any applicable cure period either at the time of exercise of this option or at commencement of the option period, Tenant shall have an option to renew this Lease for one (1) additional period of five (5) years commencing upon the expiration of the initial term of this Lease. Said option shall be on the same terms, covenants and conditions contained herein except that the Base Rent shall be fixed in the manner set forth below. This option may be exercised only by written notice to Landlord delivered no earlier than November 1, 2016 and no later than January 1, 2017. The Base Rent during the option period shall be the fair market rental value of the

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Premises as of the first day of the option period. “Fair market rental value” shall be established in accordance with section 43.2 below. Notwithstanding the foregoing, the Base Rent shall not be less than the Base Rent payable immediately prior to the commencement of the option period. This option is personal to Constant Contact, Inc. and an Approved Transferee and shall be exercisable only by Constant Contact, Inc., or an Approved Transferee and not any other assignee, sublessee or other transferee of Tenant’s interest in this Lease and only if Constant Contact, Inc. or an Approved Transferee occupies the entire Premises as of the date it exercises this option.

43.2. Fair Market Rental Value. Fair market rental value means the rent a tenant would pay for a five year term for the Premises based on the prevailing rent being charged to tenants for comparable space in comparable buildings for the period coinciding with the option period, taking into account all relevant factors. Fair market rental value shall be determined in the following manner. At least ninety (90) days prior to the commencement of the option period, Landlord shall notify Tenant of its determination of fair market rental value. Tenant shall have thirty (30) days from the date of such notice to notify Landlord that it disagrees with such determination. In the event Tenant does not so timely notify Landlord, Tenant shall be deemed to have disagreed with Landlord’s determination. In the event Tenant disagrees with Landlord’s determination, Landlord and Tenant shall each specify within fifteen (15) days from Landlord’s receipt of such notice the name and address of a person to act as the appraiser on its behalf. The appraiser shall be a licensed real estate appraiser or licensed real estate broker with at least fifteen (15) years of appraisal or leasing experience with the San Francisco downtown office market. The two appraisers so appointed shall meet within thirty (30) days of their appointment to determine if they can agree upon the fair market rental value and, if so, the fair market rental value shall be as agreed. If the two appraisers so appointed cannot agree upon the fair market rental value, the two appraisers within forty five (45) days of their appointment shall appoint a third appraiser who shall be a competent and impartial person with qualifications similar to those required of the first two appraisers. If either party fails to appoint an appraiser, or the two appraisers fail to appoint a third, in either case, within ten (10) days after demand by either party, the necessary appraiser shall be appointed by the San Francisco Superior Court or, in its failure or refusal to act, the then Dean of the Graduate School of Business of the University of California at Berkeley.

If the two appraisers selected by Landlord and Tenant cannot reach agreement on the prevailing fair market rental

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value, the value shall be established by the three appraisers in accordance with the following procedure. The appraisers selected by Landlord and Tenant shall state in writing his or her determination of the prevailing fair market rental value and shall arrange for a simultaneous delivery of such determinations to the third appraiser. The role of the third appraiser shall be to select which of the two proposed determinations most closely approximates his determination of the fair market rental value. The third appraiser shall have no right to propose a middle ground or any modification of either of the two proposed determinations. The determination he chooses as most closely approximating his determination shall constitute the decision of the appraisers and be final and binding upon the parties. Each party shall pay the cost of its own appraiser and shall share the cost of the third appraiser, if any.

In the event the appraisers have not determined the fair market rental value as of the date for the rental adjustment, Tenant shall on an interim basis pay Landlord Base Rent based on the Landlord’s determination of fair market rental value. In the event the third appraiser’s determination is less than Landlord’s determination, Tenant shall be entitled to a credit against the next rental payment(s) payable by Tenant hereunder in the amount of such difference. Alternatively, if the third appraiser’s determination is more than Landlord’s determination, Tenant shall pay such difference with the next rental payment owing.

44. SIGNAGE:

Landlord shall include Tenant’s name in any Building-standard directory signage, in accordance with Landlord’s Building signage program. Subject to Landlord’s consent, which shall not be unreasonably withheld, conditioned or delayed, Tenant shall have the right, at its sole cost and expense, to install (i) signage at the entrance to the Premises; and (ii) window signage and graphics in the two windows at the corner of Second and Market Streets, which shall no larger than the display in such windows by the current tenant. The initial window display approved by Landlord is attached hereto as Exhibit F. Upon Lease termination, Tenant shall at its expense remove any signage or graphics installed by Tenant and restore the same to the condition existing prior to the installation of the same.

45. BICYCLE STORAGE SPACE:

Landlord shall provide Tenant with an area designated by Landlord in the basement of the Building (the “Bicycle Space”) for the purpose of placing a bicycle rack which can hold up to ten (10) bicycles. Tenant shall use the Bicycle Space exclusively

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for the temporary storage of bicycles. Tenant accepts the Bicycle Space in its “as is” condition with no security and agrees that Landlord shall have no responsibility for any theft of or damage to the bicycles. The provisions of this Lease, including without limitation paragraph 14 above, shall apply with respect to the Bicycle Space and Tenant’s use thereof. Landlord makes no representations with respect to the Bicycle Space or Tenant’s intended use thereof, including, without limitation, that applicable codes permit: (i) the use of the Bicycle Space for the storage of bicycles; or (ii) use the auto access ramp for bicycle ingress and egress to the Bicycle Space. Tenant assumes all risks with respect to the availability and nature of the ingress and egress to the Bicycle Space and shall comply with all applicable laws, rules, codes, ordinances or regulations regarding the use of the Bicycle Space and the ingress and egress thereto. Upon the request of Landlord, Tenant shall provide Landlord with such evidence as Landlord may reasonably request that Tenant’s insurance required in paragraph 15 covers any injury to persons or damage to property resulting from the ingress and egress to, and the use of, the Bicycle Space by Tenant or its employees or invitees. In the event that Landlord determines in its reasonable discretion that Tenant’s use of the automobile ramp is detrimental to the safety of persons using the automobile ramp or to the functionality of the Building, Landlord shall have the right at its expense to: (i) provide Tenant with other access to the Bicycle Space in lieu of the access via the automobile ramp, such as access by means of the freight elevator or a ramp constructed by Landlord; and/or (ii) relocate the Bicycle Space to a ground level covered shed on the north side of the Building.

46. BROKERS

Except for Cushman & Wakefield (“Landlord’s Broker”) and Richards Barry and Joyce & Partners, LLC and Studley Inc. (together, “Tenant’s Broker”), Landlord and Tenant each respectively represents to the other that it has dealt with no person, firm, real estate broker or finder in respect of leasing or renting space in the Building. Further, Landlord and Tenant each respectively agrees for the benefit of the other party that, if it has dealt with any other person, firm, real estate broker or finder in respect of leasing or renting space in the Building, it shall be solely responsible for the payment of any fee due to such other person, firm, broker or finder and it shall indemnify, protect and hold the other party free and harmless from and against any liability in respect thereto, including any of the other party’s reasonable attorneys’ fees incurred in connection therewith. Landlord shall pay to Landlord’s Broker a fee as set forth in a separate agreement between Landlord and Landlord’s Broker for services rendered by Landlord’s Broker in this transaction.

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease on the 29^th day of May, 2012.

LANDLORD:	/s/ Edward J. Conner
	EDWARD J. CONNER
TENANT:	CONSTANT CONTACT, INC.,
	a Delaware corporation
	By:	/s/ Robert P. Nault
	Its:	Vice President & General Counsel

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LIST OF EXHIBITS

Exhibit A	Premises (Intentionally omitted)
Exhibit B	Work Letter
Exhibit C	Janitorial Specifications (Intentionally omitted)
Exhibit D	Rules and Regulations (Intentionally omitted)
Exhibit E	Approved Window Treatment (Intentionally omitted)
Exhibit F	Approved Window Display (Intentionally omitted)

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Exhibit B

WORK LETTER AGREEMENT

This Work Letter Agreement (the “Agreement”) supplements the Lease dated May 29, 2012, executed concurrently herewith by and between EDWARD J. CONNER, Landlord, and CONSTANT CONTACT, INC., a Delaware corporation, Tenant.

A. General.

(a) The purpose of this Agreement is to set forth how the Tenant Improvements (as defined in Section 4 below) in the Premises are to be constructed, who will undertake the construction of the Tenant Improvements, who will pay for the construction of the Tenant Improvements, and the procedure for preparation and Landlord’s approval of the Final Plans (as defined in Section 2 below).

(b) Except as defined in this Agreement to the contrary, all terms used in this Agreement shall have the same meaning given them in the Lease. When work or services are to be provided by or on behalf of Landlord, the term “Landlord” shall include Landlord’s agents, contractors, employees and affiliates.

(c) The provisions of the Lease, except to the extent inconsistent or inapplicable to this Agreement, are incorporated into this Agreement.

(d) The Tenant Improvements shall be constructed by Tenant pursuant to this Agreement. Landlord shall provide the Tenant Improvement Allowance (as defined in Section 5(a) below).

(e) Tenant shall make all improvements to the Premises other than Landlord’s Work. All work done by or for Tenant on the Premises shall be in conformity with all applicable Laws. The term “Laws” as used in this Agreement shall mean all laws, statutes, codes, rules or regulations applicable to the Building. Tenant shall obtain at its expense all necessary permits for construction of the Tenant Improvements.

(f) The provisions of the Lease other than the payment of Base Rent and Additional Rent shall apply with respect to the period prior to the Commencement Date that Tenant has access to the Premises.

2. Preparation of Plans. Tenant shall arrange for the preparation of the plans and specifications for its proposed Tenant Improvements in accordance with this paragraph 2.

(a) Selection of Designer. Tenant shall retain an architect approved by Landlord (“Designer”) to design the

Tenant Improvements; such approval not to be unreasonably withheld, conditioned or delayed. Landlord hereby approves Visnick & Caulfield and NicholsBooth Architects as Designer.

(b) Preparation and Approval of Space Plan. Tenant shall contract with the Designer to prepare a space plan approved by Landlord (“Space Plan”), such approval not to be unreasonably withheld, conditioned or delayed.

(c) Preparation and Approval of Working Drawings.

(i) Tenant shall submit to Landlord drawings prepared by the Designer (“Working Drawings”) which shall be compatible with the design, construction and equipment of the Building, be capable of logical measurement and construction, contain all such information as may be required for the construction of the Tenant Improvements and contain all partition locations, plumbing locations, air conditioning system and duct work, special air conditioning requirements, reflected ceiling plans, office equipment locations, and special security systems.

(ii) Landlord shall approve the Working Drawings within five (5) business days after receipt of same or designate by notice given within such time period to Tenant the specific changes reasonably required to be made to the Working Drawings and shall return the Working Drawings to Tenant; provided that Landlord shall only be permitted to designate changes to the Working Drawings to the extent the Working Drawings are inconsistent with the Space Plan. In the event that Landlord fails to approve or disapprove the Working Drawings within such five (5) business day period, Tenant may deem the Working Drawings to be approved by Landlord. Tenant shall make the changes necessary and shall return the Working Drawings to Landlord, which Landlord shall approve or disapprove within five (5) business days after Landlord receives the revised Working Drawings. In the event that Landlord fails to approve or disapprove the Working Drawings within such five (5) business day period, Tenant may deem the Working Drawings to be approved by Landlord. This procedure shall be repeated until all of the Working Drawings are finally approved by Landlord and written approval has been delivered to and received by Tenant. The Working Drawings so approved are referred to as the “Final Plans”.

(iii) Tenant shall verify, in the field, the dimensions and conditions as shown on the relevant portions of the Base Building Plans; Landlord hereby agreeing to provide Tenant with the copies of said Base Building Plans in Landlord’s possession. Tenant shall be solely responsible for the same and Landlord shall have no responsibility in connection therewith.

(d) No Liability for Approval. Landlord’s review and approval of the Space Plan, Working Drawings, the Final Plans, or other documents (collectively, the “Construction Drawings”) shall be for its sole purpose and not constitute any representation or warranty by or on behalf of Landlord as to the adequacy, efficiency, suitability, fitness or desirability of any space layout or improvements or otherwise constitute assumption by Landlord of any responsibility for the accuracy or sufficiency thereof, or to be interpreted as a statement of compliance with code requirements. Accordingly, notwithstanding that any Construction Drawings are reviewed by Landlord or its space planner, architect, engineers and consultants, and notwithstanding any advice or assistance which may be rendered to Tenant by Landlord or Landlord’s space planner, architect, engineers, and consultants, Landlord shall have no liability whatsoever in connection therewith and shall not be responsible for any omissions or errors contained in the Construction Drawings. Landlord shall have the right to retain and use without charge a copy of the Construction Drawings,including, without limitation any CAD files relating thereto.

3. Contractor. Tenant shall select a contractor (“Contractor”) subject to the approval of Landlord, which approval shall not be unreasonably withheld or delayed. Tenant may have Landlord approve three (3) or more contractors prior to competitive bidding. Work involving sprinkler, plumbing, mechanical, electrical power, lighting or fire safety systems of the Building shall be performed only by subcontractors approved by Landlord, which approval shall not be unreasonably withheld, conditioned or delayed and all telecommunications and other special electrical equipment shall be coordinated through Landlord’s electrical subcontractor. All work shall be performed by union contractors and subcontractors. The construction contract shall provide for progress payments, and Tenant shall pay for the entire cost of the Tenant Improvements in excess of the Tenant Improvement Allowance (as defined in Section 5(b) below). Prior to commencement of construction of the Tenant Improvements, the Contractor shall obtain and deliver to Landlord a payment and performance bond with respect to the work to be performed in connection with the Tenant Improvements from a bonding company and in form reasonably acceptable to Landlord and in an amount equal to the estimated cost of the Tenant Improvements. Landlord shall pay the cost of such bond up to an amount equal to two percent (2%) of the construction cost and Tenant shall pay any excess.

4. Tenant Improvements. The term “Tenant Improvements” shall mean all improvements shown in the Final Plans. The Tenant Improvements shall be constructed in accordance with the Final Plans. No material changes shall be made to the Final Plans

without the prior approval of Landlord in accordance with paragraph 6 below. Tenant and Tenant’s contractors shall abide by all reasonable safety rules and regulations of Landlord and all work and deliveries shall be scheduled in a manner so as to avoid any material interference with the use by other tenants of the Building. Subject to the terms and provisions of the Lease, all Tenant’s materials, work, installations and decorations of any nature brought upon or installed in the Premises before the Commencement Date shall be at Tenant’s risk, and neither Landlord nor any party acting on Landlord’s behalf shall be responsible for any damage thereto or loss or destruction thereof except to the extent arising from the gross negligence or willful misconduct of Landlord or any party acting on Landlord’s behalf. All Tenant Improvements, except unattached movable business and trade fixtures, furniture and equipment shall become the property of Landlord and shall remain upon and be surrendered with the Premises. Except as provided in paragraph 5 below, all cost of construction shall be borne by Tenant.

5. Tenant Improvement Allowance.

(a) Amount. Landlord will pay to Tenant an amount equal to One Hundred Fifty Seven Thousand Nine Hundred Sixty Dollars ($157,960) (“Tenant Improvement Allowance”) expendable for the costs of the construction and design of the Tenant Improvements, including, without limitation, any amount paid to Tenant’s Contractor, project coordinator, construction consultant or similar consultant, Designer or other professional and any out of pocket amounts paid for obtaining permits (collectively, the “Tenant Improvement Costs”). No portion of the Tenant Improvement Allowance may be used for the following: (i) furnishings and/or trade fixtures that are removable by Tenant upon the expiration of the term of the Lease; (ii) special signage; or (iii) telephone, internet or other telecommunication cabling, all of which Tenant shall remove prior to the expiration of the term of the Lease. Any portion of the Tenant Improvement Allowance which Tenant has not requested from Landlord prior to March 31, 2013 (provided that for each day beyond August 1, 2012 that Landlord fails to deliver the Premises to Tenant in accordance with the requirements of Section 3.2 of the Lease, such March 31, 2013 date shall be extended for one day) that Landlord disburse pursuant to Section 2(b) shall revert to Landlord and shall not be payable to or on behalf of Tenant.

(b) Disbursement. Prior to commencement of construction, Tenant shall submit an estimate of the cost of all of the Tenant Improvements, including a copy of the contractor’s bid. Landlord shall pay to Tenant the Tenant Improvement Allowance in installments equal to its pro rata share of the amount of the contractor’s invoice as construction progresses and after Landlord’s inspection and verification that the work to be paid for has been completed substantially in accordance with the

Final Plans. Landlord’s inspection shall be undertaken by the Building architect, Huntsman and Associates, at Landlord’s expense and shall be undertaken with a frequency such that Landlord can disburse timely the Tenant Improvement Allowance. Landlord’s pro rata share shall be a fraction, the numerator of which is the amount of the Tenant Improvement Allowance and the denominator of which is the total cost of the Tenant Improvements. Tenant shall provide evidence satisfactory to Landlord prior to or concurrently with Landlord’s disbursement that (i) Tenant is contemporaneously paying its share of the invoice; and Tenant has obtained with respect to the portion of the work for which payment is requested appropriate mechanic’s lien releases from the contractor and all subcontractors being paid more than $10,000; provided, however, Tenant shall have the right to reasonably contest the accuracy or legitimacy of said bills, invoices and statements by refusing to make payment when in good faith it determines that payment is not due in whole or in part. In the event that Tenant does dispute or contest such bills, it shall, promptly upon the written request of Landlord, record at Tenant’s sole cost and expense a Mechanic’s Lien Release Bond to free the premises from the applicable mechanic’s lien to the extent filed. The Tenant Improvement Allowance shall be disbursed by Landlord every four (4) weeks pursuant to requests for disbursement by Tenant. In the event that there remain undisbursed portions of the Tenant Improvement Allowance after Tenant’s delivery to Landlord of the final contractor invoice, Landlord shall disburse to Tenant within ten (10) days of Tenant’s request such remaining undisbursed portion of the Tenant Improvement Allowance to the extent such disbursement does not exceed the aggregate of Tenant’s pro rata share of the costs of the Tenant Improvements. Tenant may, at any time following the execution of this Agreement, submit to Landlord no more frequently than monthly an invoice(s) for the design costs of the Tenant Improvements (the “Design Costs”). Landlord shall pay from the Tenant Improvement Allowance the amount of such Design Costs and any such payments shall reduce the amount of the Tenant Improvement Allowance available to pay the costs of construction.

6. Change Orders. In the event that Tenant requests any changes to the Final Plans, Landlord shall not unreasonably withhold its consent to any such changes, and shall grant its consent to such changes within five (5) business days after Landlord’s receipt of same or designate by notice given within such time period to Tenant the specific changes disapproved. In the event that Landlord fails to approve or disapprove any such change within such five (5) business day period, Tenant may deem any such change to be approved by Landlord.

7. No Fee to Landlord. Landlord shall receive no fee for supervision, administration, profit, overhead or general conditions in connection with the Tenant Improvements.

8. Default and Remedies. Failure by Tenant to perform any obligations on Tenant’s part to be performed in accordance with the provisions of this Agreement shall constitute an event of default under this Agreement and under the Lease following the expiration of applicable notice and cure periods as provided in the Lease.

9. Compliance with Laws. Tenant acknowledges that the Building is an historical building and that consequently laws may be applied to the Building differently than a non-historical building. Tenant assumes all risks of increased design or construction costs, or increased costs relating to obtaining permits and approvals, as a result thereof.

IN WITNESS WHEREOF, the parties have entered into this Agreement as of the date first written above.

LANDLORD:	/s/ Edward J. Conner
	EDWARD J. CONNER
TENANT:	CONSTANT CONTACT, INC.,
	a Delaware corporation
	By:	/s/ Robert P. Nault
	Its:	Vice President & General Counsel

EX-10.8

Exhibit 10.8

THIRD AMENDMENT TO LEASE

THIRD AMENDMENT TO LEASE dated as of this 1^st day of April, 2012, by and between BP RESERVOIR PLACE LLC, a Delaware limited liability company (successor-in-interest to Boston Properties Limited Partnership) (“Landlord”) and Constant Contact, Inc., a Delaware corporation (“Tenant”).

RECITALS

By Lease dated May 29, 2009 (as amended by the instruments described below, the “Lease”), Landlord did lease to Tenant and Tenant did hire and lease from Landlord certain premises containing 85,583 square feet of rentable floor area (the “Rentable Floor Area of the Initial Premises”) on the third floor of the building (the “Building”) known as and numbered Reservoir Place Main, 1601 Trapelo Road, Waltham, Massachusetts (referred to herein as the “Initial Premises”).

By First Amendment to Lease dated as of May 3, 2010 (the “First Amendment”), Landlord and Tenant acknowledged those Premises Components (as that term is defined in the Lease) which had previously been delivered to Tenant, acknowledged certain Premises Components which were scheduled to be delivered to Tenant and amended the Lease with regard to the process for adding Premises Components to the Premises.

By Second Amendment to Lease dated as of September 13, 2010 (the “Second Amendment”), Landlord did lease to Tenant and Tenant did hire and lease from Landlord an additional 4,371 square feet of rentable floor area (the “Rentable Floor Area of the Second Amendment Additional Premises”) on the second floor of the Building (the “Second Amendment Additional Premises”). The Initial Premises, the Premises Components leased to Tenant as of the date hereof and the Second Amendment Additional Premises are hereinafter referred to collectively as the “Existing Premises.”

Landlord and Tenant have agreed to increase the size of the Premises by adding thereto an additional 1,805 square feet of rentable floor area (the “Rentable Floor Area of the Third Amendment Additional Premises”) located on the second floor of the Building, which space is shown on Exhibit A attached hereto and made a part hereof (the “Third Amendment Additional Premises”) upon all of the same terms and conditions contained in the Lease except as otherwise provided in this Third Amendment to Lease (the “Third Amendment”).

Landlord and Tenant are entering into this instrument to set forth said leasing of the Third Amendment Additional Premises and to amend the Lease.

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NOW THEREFORE, in consideration of One Dollar ($1.00) and other good and valuable consideration in hand this date paid by each of the parties to the other, the receipt and sufficiency of which are hereby severally acknowledged, and in further consideration of the mutual promises herein contained, Landlord and Tenant hereby agree to and with each other as follows:

1. Effective as of April 1, 2012 (the “Third Amendment Additional Premises Commencement Date”), the Third Amendment Additional Premises shall constitute a part of the “Premises” demised to Tenant under the Lease, so that the “Premises” (as defined in Section 1.2 of the Lease), shall include the Third Amendment Additional Premises.

2. The following definitions are added to Section 1.2 of the Lease immediately after the definition of “Commencement Date”:

THIRD AMENDMENT ADDITIONAL PREMISES COMMENCEMENT DATE: April 1, 2012

3. The Term of the Lease for the Existing Premises and the Third Amendment Additional Premises shall be coterminous and the extension option set forth in Section 3.2 of the Lease shall apply collectively to the Existing Premises and the Third Amendment Additional Premises.

4. (A) Annual Fixed Rent for the Existing Premises shall continue to be payable as set forth in the Lease as amended.

(B) Commencing on the Third Amendment Additional Premises Commencement Date, Annual Fixed Rent for the Third Amendment Additional Premises shall be payable at the annual rate of $58,662.50 (being the product of (i) $32.50 and (ii) the Rentable Floor Area of the Third Amendment Additional Premises (being 1,805 square feet)).

5. For the purposes of computing Tenant’s payments for the Tax Excess pursuant to Section 6.3 of the Lease, Tenant’s payments for the Operating Cost Excess pursuant to Section 7.6 of the Lease and Tenant’s payments for electricity (as determined pursuant to Sections 5.2 of the Lease), for the portion of the Term on and after the Third Amendment Additional Premises Commencement Date the Rentable Floor Area of the Third Amendment Additional Premises (being 1,805 square feet) shall be included in the “Rentable Floor Area of the Premises.” Further, the Third Amendment Additional Premises shall be deemed a Premises Component for the purposes of the calculation of such payments.

6. For the purposes of computing Tenant’s payments for the Tax Excess pursuant to Section 6.3 of the Lease for the Third Amendment Additional Premises commencing on the Third Amendment Additional Premises Commencement Date, the definition of “Base Taxes” contained in Section 6.2 of the Lease shall be supplemented by adding the following thereto:

BASE TAXES: With respect to the Third Amendment Additional Premises, Landlord’s Tax Expenses (as defined in Section 6.2 of the Lease) for fiscal tax year 2012, being the period from July 1, 2011 through June 30, 2012.

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Such definition shall remain unchanged for such purposes with respect to the Existing Premises.

7. For the purposes of computing Tenant’s payments for the Operating Cost Excess pursuant to Section 7.6 of the Lease for the Third Amendment Additional Premises commencing on the Third Amendment Additional Premises Commencement Date, the definition of “Base Operating Expenses” contained in Section 7.5 of the Lease shall be supplemented by adding the following thereto:

BASE OPERATING EXPENSES: With respect to the Third Amendment Additional Premises, Landlord’s Operating Expenses (as defined in Section 7.5 of the Lease) for calendar year 2012, being the period from January 1, 2012 through December 31, 2012.

Such definition shall remain unchanged for such purposes with respect to the Existing Premises.

8. (A) Tenant shall accept the Third Amendment Additional Premises in their as-is condition without any obligation on the Landlord’s part to perform any additions, alterations, improvements, demolition or other work therein or pertaining thereto, except to the extent contemplated by Exhibit B attached hereto.

(B) Landlord shall provide to Tenant a special allowance equal to the product of (i) $12.50 and (ii) the Rentable Floor Area of the Third Amendment Additional Premises (the “Third Amendment Allowance”). The Third Amendment Allowance shall be used and applied by Landlord solely on account of the cost of work performed in the Third Amendment Additional Premises as agreed to by Landlord and Tenant (“Landlord’s Work”) and in accordance with the terms and provisions of Exhibit B attached hereto.

In no event shall Landlord’s obligations to pay or reimburse Tenant for any of the costs of Landlord’s Work exceed the total Third Amendment Allowance, it being understood and agreed that Tenant shall be fully responsible for any costs of Landlord’s Work in excess of the Third Amendment Allowance (“Tenant Plan Excess Costs”). To the extent, if any, that there are Tenant Plan Excess Costs, Tenant shall pay Landlord, as Additional Rent, within ten (10) business days after billing therefor, from time to time during the performance of the Landlord’s Work, in the proportion that the Tenant Plan Excess Costs bears to the overall cost of the Landlord’s Work. In the event that the costs of Landlord’s Work are less than the Third Amendment Allowance, Tenant shall not be entitled to any payment or credit nor shall there be any application of the same toward Annual Fixed Rent or Additional Rent owed by Tenant under the Lease. Tenant acknowledges that any portion of the Third Amendment Allowance which has not been utilized on or before December 31, 2012 shall be forfeited by Tenant.

Page 3

Notwithstanding the foregoing, Landlord shall be under no obligation to apply any portion of the Third Amendment Allowance for any purposes other than as provided in this Section 8. In addition, in the event that (i) Tenant is in default under the Lease or (ii) there are any liens which are not bonded to the reasonable satisfaction of Landlord against Tenant’s interest in the Lease or against the Building or the Site arising out of any work performed by Tenant or any litigation in which Tenant is a party, then, from and after the date of such event (“Event”), Landlord shall have no further obligation to fund any portion of the Third Amendment Allowance and Tenant shall be obligated to pay, as Additional Rent, all costs of Landlord’s Work in excess of that portion of the Third Amendment Allowance funded by Landlord through the date of the Event. Further, the Third Amendment Allowance shall only be applied towards the cost of leasehold improvements and in no event shall Landlord be required to make application of any portion of the Third Amendment Allowance towards Tenant’s personal property, trade fixtures or moving expenses or on account of any supervisory fees, overhead, management fees or other payments to Tenant, or any partner or affiliate of Tenant. Landlord shall be entitled to deduct from the Third Amendment Allowance a construction management fee equal to four percent (4%) of the hard construction costs (but not design or other soft costs) of Landlord’s Work.

(C) The provisions of Section 1.4 of Exhibit C to the Lease shall apply to the Landlord’s Work in the Third Amendment Premises as if such Landlord’s Work was the Landlord’s Work described in said Exhibit C.

9. Effective as of the Third Amendment Additional Premises Commencement Date, the definition of “Number of Parking Privileges” contained in Section 1.2 of the Lease shall be supplemented with the following:

With respect to the Third Amendment Additional Premises, privileges for six (6) automobiles, two (2) of which are located in the garage below the Building and four (4) of which are located on the outdoor surface lot, subject to and in accordance with Article X of the Lease.

10. Notwithstanding anything contained in the Lease to the contrary, it is understood and agreed that the 604 square foot portion of the 10,609 square foot Premises Component of the Must Take Premises located on the second (2^nd) floor of the Building shown on Exhibit C attached hereto shall be deemed to be an individual Premises Component of Must Take Premises (i.e. separate from the remainder of the Premises Component of Must Take Premises of which it was originally a part under Exhibit B-2 of the Lease). Accordingly, the last line item of Exhibit B-2 shall be deleted in its entirety and the following substituted therefor:

Floor	Floor Square Footage		Anticipated Availability Date	Commencement Date	Base Rental Rate	Base Operating Expense Calendar Year	Base Tax Fiscal Year
2		10,005	January 1, 2012	April 1, 2012	Commencement Date – September 30, 2015: $32.50 per RSF per annum	2010	2011
2		604	August 1, 2012	As determined pursuant to Exhibit C	Commencement Date – September 30, 2015: $32.50 per RSF per annum	2011	2012

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11. (A) Tenant warrants and represents that Tenant has not dealt with any broker in connection with the consummation of the Lease and this Third Amendment other than McCall & Almy, Inc. and Richards Barry Joyce & Partners, respectively (the “Brokers”); and in the event any claim is made against Landlord relative to dealings by Tenant with brokers other than the Brokers, Tenant shall defend the claim against Landlord with counsel of Tenant’s selection first approved by Landlord (which approval will not be unreasonably withheld) and save harmless and indemnify Landlord on account of loss, cost or damage which may arise by reason of such claim.

(B) Landlord warrants and represents that Landlord has not dealt with any broker in connection with the consummation of the Lease and this Third Amendment other than the Brokers; and in the event any claim is made against Tenant relative to dealings by Landlord with brokers other than the Brokers, Landlord shall defend the claim against Tenant with counsel of Landlord’s selection and save harmless and indemnify Tenant on account of loss, cost or damage which may arise by reason of such claim. Landlord shall be solely responsible for the payment of any commissions due to the Brokers on account of the transaction contemplated by this Third Amendment pursuant to separate agreement with said Brokers.

12. Except as otherwise expressly provided herein, all capitalized terms used herein without definition shall have the same meanings as are set forth in the Lease.

13. Except as herein amended the Lease shall remain unchanged and in full force and effect. All references to the “Lease” shall be deemed to be references to the Lease as previously amended and as herein amended.

Page 5

EXECUTED as a sealed instrument as of the date and year first above written.

		LANDLORD:
WITNESS:		BP RESERVOIR PLACE LLC
N/A		By:	Boston Properties Limited Partnership,
			its sole manager
				By:	Boston Properties, Inc.,
					its general partner
					By:	/s/ David C. Provost
					Name:	David C. Provost
					Title:	Senior Vice President
		TENANT:
ATTEST:		CONSTANT CONTACT, INC.
By:	/s/ Robert P. Nault	By:		/s/ Gail F. Goodman
Name:	Robert P. Nault	Name:		Gail F. Goodman
Title:	Secretary	Title:		Chief Executive Officer
				Hereto Duly Authorized
		By:		/s/ Harpreet Grewal
		Name:		Harpreet Grewal
		Title:		Chief Financial Officer
				Hereto Duly Authorized

Page 6

EXHIBIT A

THIRD AMENDMENT ADDITIONAL PREMISES

[see attached]

EXHIBIT B

Construction Management Services

Landlord agrees to provide Tenant with the construction management services described herein in connection with the performance of the Landlord’s Work (the “Project”).

Landlord shall designate Michael Bowers (the “Landlord Representative”) who will be empowered to act as Landlord’s authorized representative for the Project and to respond to Tenant’s questions and requests. Landlord may replace its Landlord Representative upon written notice to Tenant.

Tenant shall designate John Kucinski (the “Tenant Representative”) who will be empowered to act as Tenant’s authorized representative for the Project and to respond to Landlord’s questions and requests. Tenant may replace its Tenant Representative upon written notice to Landlord.

The Contractor for the Project shall be J. Calnan Associates. The Architect for the Project shall be Visnick & Caulfield.

Preconstruction Phase

Landlord will:

1. Advise Tenant as to whether any aspect of the work should be modified.

2. Develop a comprehensive budget for the Tenant that includes a detailed series of accounts for all projected Project expenses.

3. Develop a comprehensive Project Schedule, which coordinates all the elements of the architectural team, the Contractor and Tenant activities. Permitting activities and responsibilities shall be included in the Project Schedule.

4. Participate in cost reduction and value engineering processes, in conjunction with Tenant, the Architect and design team.

Construction Phase

Landlord will:

1. Provide administrative, management and related services as required to coordinate work of the entire team. Landlord will concentrate its efforts in the coordination of the Contractor, subcontractor (s) and all other consultants contracted to perform services on the Project in order to complete the project in accordance with Tenant’s objectives for cost, time and quality.

2. Develop and implement control systems for monitoring the Project’s progress with respect to cost, schedule and quality for providing early warning of impending problems. Prepare contingency plans for corrective action(s), and with Tenant’s approval, implement such plans for corrective action as required.

3. Schedule and conduct regular construction and progress meetings to discuss such matters as procedures, progress problems, and scheduling. The Contractor shall prepare meeting minutes for weekly construction progress meetings.

4. Monitor the activities of the Contractor, subcontractor(s) and consultants on processing of shop drawings, project data and samples, and delivery of products requiring long lead time procurement.

5. Expedite and participate in Tenant’s review of project submittals when the Architect requests such review.

6. Endeavor to obtain satisfactory performance from the Contractor and each Subcontractor. Take corrective action when the requirements of the contract are not being fulfilled.

7. Provide regular monitoring of all Project costs, showing actual costs for activities in progress and estimates for unaccomplished tasks. Identify variances between actual costs of labor and materials and other work requiring accounting records, such as preliminary change order requests.

8. Advise Tenant of necessary or desirable changes to the Project, assist in negotiation of the Contractor’s proposals for these changes, submit recommendations of the Architect and Tenant, and, if accepted, prepare or cause the Contractor to prepare change orders for the Architect’s approval and Tenant’s authorization. Establish and implement a change order system to monitor and report job cost events, including approved change orders, pending change orders and anticipated change orders. Establish a time line for the change order process that does not interfere with the progress of the work.

9. Develop and implement procedures for prompt review and processing of applications for payment from the Contractor for progress and final payments. Provide review and certification in connection with the Contractor’s monthly application for payment.

10. Review the activities and responsibilities of the Contractor in order to assist in maintaining schedules, controlling costs, assuring quality, minimizing disruption, monitoring compliance with the various contract requirements.

11. Keep Tenant advised on an on-going basis of all significant Project developments, including conditions and circumstances that may cause delay in the Project Schedule or that otherwise may be inconsistent with the Project requirements or Tenant’s expectations. In these cases, provide Tenant with a proposed contingency to avoid or mitigate possible or actual delays or negative consequences.

12. Monitor the proper record keeping of all types by the Contractor, including progress prints, manuals, samples, cut sheets, handbooks, etc. related to the quality and nature of the construction in progress. Insure that the same are being maintained on the job site for the use of the Architect and Tenant.

13. Develop, in conjunction with the Architect, a punch list of those items remaining to be completed at the time of Substantial Completion.

14. Once the Contractor makes notice of final completion, verify, in conjunction with the Architect, whether the Project is in fact complete.

15. At the conclusion of the Project, within sixty (60) days after a Certificate of Substantial Completion and an Occupancy Permit are issued by the appropriate authorities, coordinate the transfer to Tenant of all as-built drawings, warranties, O&M manuals and all other construction related documents and all materials necessary for occupancy and full operation of the facility. Coordinate any training to be provided by the Contractor to Tenant’s employees.

EXHIBIT C

FLOOR PLAN OF 604 SQUARE FOOT

PORTION OF MUST TAKE PREMISES

[see attached]

EX-31.1

Exhibit 31.1

CERTIFICATION OF CHIEF EXECUTIVE OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Gail F. Goodman, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Constant Contact, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2012	/s/ Gail F. Goodman
	Gail F. Goodman
	President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION OF CHIEF FINANCIAL OFFICER PURSUANT TO

SECURITIES EXCHANGE ACT RULES 13a-14(a) AND 15d-14(a), AS ADOPTED PURSUANT

TO SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Harpreet S. Grewal, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Constant Contact, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal controls over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)), for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date: August 1, 2012	/s/ Harpreet S. Grewal
	Harpreet S. Grewal
	Executive Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF THE CHIEF EXECUTIVE OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the quarterly period ending June 30, 2012 of Constant Contact, Inc. (the “Company”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Gail F. Goodman, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated August 1, 2012	/s/ Gail F. Goodman
	Gail F. Goodman
	President and Chief Executive Officer

EX-32.2

Exhibit 32.2

CERTIFICATION OF THE CHIEF FINANCIAL OFFICER PURSUANT TO

18 U.S.C. SECTION 1350, AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report on Form 10-Q for the quarterly period ending June 30,2012 of Constant Contact, Inc. (the “Company”), as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Harpreet S. Grewal, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, to my knowledge, that:

(1) The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: August 1, 2012	/s/ Harpreet S. Grewal
	Harpreet S. Grewal
	Executive Vice President and Chief Financial Officer

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Goodwill and Acquired Intangible Assets (Details 2) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Future estimated amortization expense for assets placed in service
Remainder of 2012	$ 1,216		$ 1,216
2013	1,953		1,953
2014	1,596		1,596
2015	983		983
2016	320		320
2017	106		106
Total	7,974		7,974		3,046
Goodwill and Acquired Intangible Assets (Textual) [Abstract]
Carrying amount of Goodwill	95,505		95,505		18,935
Amortization expense for intangible assets	292	81	456	161
Amortization of developed technology	$ 1,800		$ 1,800

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Commitments and Contingencies (Details Textual) (USD $) In Thousands, unless otherwise specified	6 Months Ended			6 Months Ended			3 Months Ended		6 Months Ended			3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jul. 30, 2012	Dec. 31, 2011	Jun. 30, 2012 Headquarters Office [Member] Option	Jun. 30, 2012 Sales and Support Office [Member] Option	Jun. 30, 2012 General Office [Member]	Jun. 30, 2012 Office Leases [Member]	Jun. 30, 2011 Office Leases [Member]	Jun. 30, 2012 Office Leases [Member]	Jun. 30, 2011 Office Leases [Member]	Dec. 31, 2011 Office Leases [Member]	Jun. 30, 2012 Hosting Facilities [Member]	Jun. 30, 2011 Hosting Facilities [Member]	Jun. 30, 2012 Hosting Facilities [Member] Vendor	Jun. 30, 2011 Hosting Facilities [Member]	Jun. 30, 2012 Prepaid Expenses and Other Current Assets [Member] Office Leases [Member]	Dec. 31, 2011 Prepaid Expenses and Other Current Assets [Member] Office Leases [Member]	Jun. 30, 2012 Other Assets [Member] Office Leases [Member]	Dec. 31, 2011 Other Assets [Member] Office Leases [Member]	Jun. 30, 2012 Accrued Expenses [Member] Office Leases [Member]	Dec. 31, 2011 Accrued Expenses [Member] Office Leases [Member]	Jun. 30, 2012 Other Long Term Liabilities [Member] Office Leases [Member]	Dec. 31, 2011 Other Long Term Liabilities [Member] Office Leases [Member]	Jun. 30, 2012 Other Long Term Liabilities [Member] Hosting Facilities [Member]
Commitments and Contingencies (Textual) [Abstract]
Time period for extension option				5 years	3 years
Number of extension option				1	3
Expiration of lease agreement	Various dates through mid 2017					Various dates through 2017
Prepaid rent							$ 1,042		$ 1,042		$ 1,192	$ 983		$ 983		$ 416	$ 429	$ 626	$ 763
Accrued rent balance							2,172		2,172		2,292
Accrued rent balance included in accrued expenses																				269	264
Accrued rent balance included in other long-term liabilities	2,013		2,052																			1,903	2,028	110
Operating Leases, Rent Expense							1,652	1,523	3,165	3,000
Number of vendors provide for related services.														2
Rent expenses under hosting agreements												994	884	1,900	1,741
Commitments and Contingencies (Additional Textual) [Abstract]
Expiration of lease agreement	Various dates through mid 2017					Various dates through 2017
Amount of contractual commitments with various vendors	19,257
Letter of credit for the benefit of the landlord	750		750
Cash balance to secure the letter of credit	750		750
Maximum consideration for SinglePlatform		30,000
Contingent consideration		12,152
Accrued expenses		6,267
Other long-term liabilities		$ 5,885

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Acquisitions (Details 3) (USD $) In Thousands, unless otherwise specified	Jul. 30, 2012	Jun. 12, 2012 SinglePlatform Corp [Member]
Purchase consideration
Total cash paid, net of cash acquired		$ 62,737
Cash acquired		311
Fair value of contingent consideration	(12,152)	12,152
Total purchase price consideration		75,200
Assets acquired and liabilities assumed:
Cash		311
Accounts receivable		48
Prepaid expenses and other current assets		60
Property and equipment		14
Identifiable intangible assets		4,760
Other assets		91
Net deferred tax assets		72
Goodwill		71,997
Total assets acquired		77,353
Accounts payable, accrued expenses and other current liabilities		(1,543)
Deferred revenue		(610)
Total liabilities assumed		(2,153)
Total allocation of purchase price consideration		$ 75,200

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Summary of Significant Accounting Policies (Details 2) (USD $) In Thousands, unless otherwise specified		6 Months Ended		6 Months Ended
	Jul. 30, 2012	Jun. 30, 2012 Level 3 [Member]	Dec. 31, 2011 Level 3 [Member]	Jun. 30, 2012 Discounted Cash Flow [Member] Level 3 [Member]
Quantitative information associated with the fair value measurement of the Company's Level 3 inputs
Contingent consideration	$ 12,152	$ 12,152
Valuation Technique				Income approach— discounted cash flow
Revenue earn-out-probability of low case (scenario) for total revenue		7.50%
Revenue earn-out-probability of base case (scenario) for total revenue.		30.00%
Revenue earn-out-probability of target case (scenario) for total revenue.		62.50%
Discount rate for revenue earn-out		5.30%

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Income Taxes (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Income Taxes (Additional Textual) [Abstract]
Income tax (expense) benefit	$ (118)	$ (133)	$ 443	$ 53
Current income tax expense(benefit)		54		211
Net deferred tax assets	15,084		15,084		13,827
Unrecognized tax benefits
Accrued interest and tax penalties
Bantam Networks [Member]
Income Taxes (Textual) [Abstract]
Deferred income tax expense		$ 79		$ 158

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Goodwill and Acquired Intangible Assets (Details) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012
Change in the carrying amount of goodwill
Goodwill beginning balance	$ 18,935
Goodwill related to the acquisition	4,573
Goodwill ending balance	95,505
SinglePlatform Corp [Member]
Change in the carrying amount of goodwill
Goodwill related to the acquisition	$ 71,997

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401(k) Savings Plan (Details Textual) (USD $) In Thousands, unless otherwise specified	6 Months Ended		12 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2012	Dec. 31, 2011
Savings Plan (Additional Textual) [Abstract]
Maximum percentage of employee compensation for hundred percent contribution as Employer contribution			3.00%	3.00%
Maximum Percentage of employee compensation for fifty percent contribution as Employer contribution			5.00%	5.00%
Contribution by employer to 401 (k) Savings Plan	$ 1,197	$ 955
Minimum percentage of employee compensation at specified percentage of employee contribution			3.00%	3.00%
Employee contributions up to 3% [Member]
401(k) Savings Plan (Textual) [Abstract]
Employer Matching Contribution, Percent			100.00%	100.00%
Employee contributions between 3% and 5% [Member]
401(k) Savings Plan (Textual) [Abstract]
Employer Matching Contribution, Percent			50.00%	50.00%

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Acquisitions

6 Months Ended

Jun. 30, 2012

Acquisitions [Abstract]

Acquisitions

3. Acquisitions

Bantam Networks

On February 15, 2011, the Company acquired substantially all of the assets, excluding cash, of Bantam Networks, LLC (“Bantam Networks”) for a cash purchase price of $15,000. Bantam Networks was a contact management and social customer relationship management (“CRM”) software provider. The Company purchased the assets of Bantam Networks in order to expand the CRM functionality of its products.

The Company allocated the purchase price as follows:

Developed technology	$	1,800
Goodwill		13,200
Total assets acquired	$	15,000

The developed technology was valued using the cost to replace method. The estimated economic life of the developed technology is three years and amortization will commence once the software is ready for its intended use.

Goodwill was recognized for the excess purchase price over the fair value of the assets acquired. Goodwill is primarily attributable to Bantam Networks’ knowledge of CRM and expertise in working with contact management software. Goodwill from the Bantam Networks acquisition is included within the Company’s one reporting unit and is included in the Company’s enterprise-level annual review for impairment. Goodwill resulting from the acquisition of Bantam Networks is deductible for tax purposes.

The following table presents the pro forma results of the historical condensed consolidated statements of operations of the Company and Bantam Networks for the three month period ended June 30, 2011, giving effect to the merger as if it occurred on January 1, 2010:

	Six months ended June 30,
	2011
Pro forma revenue	$	102,542
Pro forma net loss	$	(696	)

The pro forma net loss presented primarily includes adjustments for revenue, amortization, interest income and income taxes. This pro forma information does not purport to indicate the results that would have actually been obtained had the acquisition been completed on the assumed date, or which may be realized in the future.

CardStar

On January 13, 2012, the Company acquired by merger all of the outstanding capital stock of CardStar, Inc. (“CardStar”) for a cash purchase price of $5,750. CardStar is a leading developer of mobile applications that extend the use of loyalty cards and mobile coupons among consumers. The Company purchased CardStar in order to accelerate its entrance into the mobile marketing and loyalty space.

The Company allocated the purchase price as follows:

Developed technology	$	624
Net deferred tax assets		553
Goodwill		4,573
Total assets acquired	$	5,750

The developed technology was valued using the cost to replace method and has an estimated economic life of three years.

Goodwill was recognized for the excess purchase price over the fair value of the assets acquired. Goodwill is primarily attributable to CardStar’s knowledge of mobile applications and coupons and loyalty cards. Goodwill from the CardStar acquisition is included within the Company’s one reporting unit and will be included in the Company’s enterprise-level annual review for impairment. Goodwill resulting from the acquisition of CardStar is not deductible for tax purposes.

Single Platform

On June 12, 2012, the Company acquired by merger all of the outstanding capital stock of SinglePlatform. SinglePlatform provides small businesses a single place to update their business information and delivers that information across its publishing network. The Company purchased SinglePlatform in order to expand its product offerings and allow its customers to engage their customers earlier in the customer lifecycle. The total preliminary purchase price of $75,200 consisted of a cash payment of $63,048, subject to certain adjustments, and $12,152 representing the fair value of contingent consideration of up to $30,000 payable upon achievement of certain revenue targets over the next two years. The cash payment may be adjusted for certain working capital adjustments which are identified by the Company within 90 days of the acquisition date. These adjustments, if any, will affect the final amount of the purchase price and the allocation of that purchase price to the working capital accounts. The Company expects to finalize the purchase price and allocations in the period ending September 30, 2012. The former shareholders of SinglePlatform are eligible to receive consideration of up to $30,000, which is contingent on the fulfillment of certain revenue targets within the period from July 1, 2012 to June 30, 2014, measured in six month intervals. If such conditions are achieved, the consideration is payable in cash. Using a discounted cash flow method and a probability weighted estimate of future revenue, the Company recorded an estimated liability of $12,152 as of the acquisition date. The estimated undiscounted range of outcomes for the contingent consideration is $0 to $21,095. The Company will continue to assess the probability that the revenue targets will be met and at what level, and any subsequent changes in the estimated fair value of the liability will be reflected in earnings until the liability is fully settled. There was no change to the acquisition date amount recognized or any changes in the range of outcomes or assumptions used to develop the fair value as of June 30, 2012.

The following table summarizes the preliminary purchase price for SinglePlatform and the preliminary allocation of the purchase price:

Purchase consideration:
Total cash paid, net of cash acquired	$	62,737
Cash acquired		311
Fair value of contingent consideration		12,152
Total purchase price consideration	$	75,200
Assets acquired and liabilities assumed:
Cash	$	311
Accounts receivable		48
Prepaid expenses and other current assets		60
Property and equipment		14
Identifiable intangible assets		4,760
Other assets		91
Net deferred tax assets		72
Goodwill		71,997
Total assets acquired		77,353
Accounts payable, accrued expenses and other current liabilities		(1,543	)
Deferred revenue		(610	)
Total liabilities assumed		(2,153	)
Total allocation of purchase price consideration	$	75,200

The following table presents the estimated fair values and useful lives of identifiable intangible assets acquired:

	Amount		Weighted Average Useful Life
			(in years)
Developed technology	$	850		3
Customer relationships		2,630		3.75
Publisher relationships		710		5
Trade name		570		5
Total identifiable intangible assets	$	4,760		3.95

The developed technology and the customer and publisher relationships were valued using the cost to replace method. The trade name was valued using the relief from royalty method.

Goodwill was recognized for the excess purchase price over the fair value of the net assets acquired. Goodwill is primarily attributable to the workforce of the acquired business (which is not eligible for separate recognition as an identifiable intangible asset) and the expected synergistic benefits of being able to market SinglePlatform’s product to the Company’s customer base and being able to market the Company’s products to SinglePlatform’s customer base. Goodwill from the SinglePlatform acquisition is included within the Company’s one reporting unit and will be included in the Company’s enterprise-level annual review for impairment. Goodwill resulting from the acquisition of SinglePlatform is not deductible for tax purposes.

The following table presents the pro forma results of the historical condensed consolidated statements of operations of the Company and SinglePlatform for the three and six month periods ended June 30, 2012 and 2011, giving effect to the merger as if it occurred on January 1, 2011:

	Three months ended June 30,					Six months ended June 30,
	2012			2011		2012			2011
Pro forma revenue	$	62,326			52,620	$	122,474		$	102,714
Pro forma net loss (income)	$	(1,048	)		757		(1,826	)	$	(1,588	)

The pro forma net loss (income) presented primarily includes adjustments for amortization, elimination of transaction costs, interest income and income taxes. This pro forma information does not purport to indicate the results that would have actually been obtained had the acquisition been completed on the assumed date, or which may be realized in the future.

Transactions costs related to the acquisitions were $574 and $722 for the three and six months ended June 30, 2012, respectively, and $63 and $264 for the three and six months ended June 30, 2011, respectively, which the Company recorded as general and administrative expense. The operating expenses of the acquired entities have been included in the consolidated financial statements beginning on their respective acquisition dates but have not been disclosed as the Company does not account for the results of the acquired entities separate from its own results. The operations of CardStar prior to the acquisition were not material to the consolidated results of the Company.

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Accrued Expenses and Other Long Term Liabilities (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Accrued expenses:
Payroll and payroll related	$ 4,755	$ 3,148
Licensed software and maintenance	1,197	1,197
Marketing programs	1,123	2,079
Contingent consideration liability associated with acquisition current of SinglePlatform, Corp	6,267
Other accrued expenses	4,397	4,091
Total accrued expenses	$ 17,739	$ 10,515

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Summary of Significant Accounting Policies (Details Textual) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Dec. 31, 2011
Summary of Significant Accounting Policies (Textual) [Abstract]
Maturity period for marketable securities classified as available-for-sale			1 year
Marketable securities investments maturity period of treasury notes and agency bonds with a fair value			2 years
Transfers in and out of Level 1, Level 2, and Level 3	$ 0	$ 0	$ 0	$ 0
Minimum percentage of probability of realizing the benefit upon ultimate settlement			50.00%
Revised marketable securities with a fair value from Level 1 measurements to Level 2 measurements					58,437
Time period in which the revenues are expected to be achieved			6 months
Software and Website Development Cost [Member]
Finite-Lived Intangible Assets [Line Items]
Estimated economic life of the developed technology related to acquisition of SinglePlatform			3 years
Corporate and Agency Bonds [Member]
Schedule of Available-for-sale Securities [Line Items]
Fair value of agency bonds classified as available-for-sale securities	$ 10,207		$ 10,207

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Summary of Significant Accounting Policies (Details 5) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Common stock equivalents excluded from the computation of diluted net income loss per share
Total options and warrants exercisable into common stock, restricted stock units issuable in common stock and restricted stock	5,487	1,477	5,374	3,836
Options to purchase common stock [Member]
Common stock equivalents excluded from the computation of diluted net income loss per share
Total options and warrants exercisable into common stock, restricted stock units issuable in common stock and restricted stock	5,098	1,477	5,023	3,630
Warrants to purchase common stock [Member]
Common stock equivalents excluded from the computation of diluted net income loss per share
Total options and warrants exercisable into common stock, restricted stock units issuable in common stock and restricted stock	1		1	1
Unvested restricted stock and restricted stock units [Member]
Common stock equivalents excluded from the computation of diluted net income loss per share
Total options and warrants exercisable into common stock, restricted stock units issuable in common stock and restricted stock	388		350	205

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Accrued Expenses and Other Long Term Liabilities (Details 1) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Other long-term liabilities:
Accrued rent	$ 2,013	$ 2,052
Contingent consideration liability associated with acquisition of SinglePlatform, Corp	5,885
Total other long-term liabilities	$ 7,898	$ 2,052

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Acquisitions (Details) (Bantam Networks [Member], USD $) In Thousands, unless otherwise specified	Feb. 15, 2011
Bantam Networks [Member]
Allocation of the purchase price
Developed technology	$ 1,800
Goodwill	13,200
Total assets acquired	$ 15,000

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Acquisitions (Details 1) (Bantam Networks [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2011
Bantam Networks [Member]
Pro forma results of the historical condensed consolidated statements of operations
Pro forma revenue	$ 102,542
Pro forma net loss (income)	$ (696)

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Summary of Significant Accounting Policies

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Summary of Significant Accounting Policies

2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include those of the Company and its subsidiaries, after elimination of all intercompany accounts and transactions. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

The condensed consolidated balance sheet at December 31, 2011 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of June 30, 2012 and for the three and six months ended June 30, 2012 and 2011 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2011 included in the Company’s Annual Report on Form 10-K, File Number 001-33707, on file with the SEC.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position as of June 30, 2012 and consolidated results of operations for the three and six months ended June 30, 2012 and 2011 and consolidated cash flows for the six months ended June 30, 2012 and 2011 have been made. The condensed consolidated results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the results of operations and cash flows that may be expected for the year ending December 31, 2012.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates these estimates, judgments and assumptions, including those related to revenue recognition, stock-based compensation, goodwill and acquired intangible assets, capitalization of software and website development costs, contingent consideration liability and income taxes. The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from these estimates.

Revenue Recognition

The Company provides access to its products primarily through subscription arrangements whereby the customer is charged a fee for access for a defined term. Subscription arrangements include access to use the Company’s software via the Internet and support services, such as telephone, email and chat support. When there is evidence of an arrangement, the fee is fixed or determinable and collectability is deemed reasonably assured, the Company recognizes revenue on a daily basis over the subscription period as the services are delivered. Delivery is considered to have commenced at the time the customer has paid for the products and has access to the account via a log-in and password. The Company also generates revenue from its SaveLocal product by charging a fee to its customers based on the number of deals sold by its customers. The Company recognizes revenue from the fee charged when there is evidence of an arrangement, the fee is fixed or determinable and collectability is deemed reasonably assured. The Company also offers ancillary services to its customers related to its products such as custom services and training. Custom services and training revenue is accounted for separate from subscription revenue as those services have value on a standalone basis, do not involve a significant degree of risk or unique acceptance criteria and as the fair value of the Company’s subscription services is evidenced by their availability on a standalone basis. Custom services and training revenue is recognized as the services are performed.

Goodwill and Acquired Intangible Assets

The Company records goodwill when consideration paid in a business acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company performs its annual assessment for impairment of goodwill on November 30^th and has determined that there is a single reporting unit for the purpose of conducting this annual goodwill impairment assessment. For purposes of assessing potential impairment, the Company annually estimates the fair value of the reporting unit (based on the Company’s market capitalization) and compares this amount to the carrying value of the reporting unit (as reflected by the Company’s total stockholders’ equity). If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge would be required.

Effective January 1, 2012, the Company adopted new guidance that simplifies the goodwill impairment test. The amendment permits the Company to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in goodwill accounting standard. Adoption of the new guidance did not have an effect on the Company’s consolidated financial statements.

Intangible assets are recorded at their estimated fair values at the date of acquisition. The Company amortizes acquired intangible assets over their estimated useful lives based on the pattern of consumption of the economic benefits or, if that pattern cannot be readily determined, on a straight-line basis.

Capitalization of Software and Web Site Development Costs

Research and development costs are expensed as incurred and primarily include salaries, fees to consultants and other related costs. Relative to development costs of its on-demand products and website, the Company capitalizes certain direct costs to develop functionality as well as certain upgrades and enhancements that are probable to result in additional functionality. The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized as part of property and equipment until the software is substantially complete and ready for its intended use. Capitalized software is amortized over a three-year period in the expense category to which the software relates.

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss), as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. The Company’s only elements of other comprehensive income (loss) are unrealized gains and losses on available-for-sale securities and translation adjustments.

Effective January 1, 2012, the Company adopted new guidance applicable to comprehensive income. Under this guidance the Company has two options for presenting comprehensive income. The Company can present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. As the new guidance relates only to how comprehensive income is disclosed and does not change the items that must be reported as comprehensive income, adoption of the new guidance did not have an effect on the Company’s consolidated financial statements.

In December 2011, the Financial Accounting Standards Board indefinitely deferred the requirement to present reclassification adjustments of other comprehensive income by line item on the face of the income statement.

Marketable Securities

The Company’s marketable securities are classified as available-for-sale and are carried at fair value with the unrealized gains and losses reported as a component of accumulated other comprehensive income in stockholders’ equity. Realized gains and losses and declines in value judged to be other than temporary are included as a component of interest income and other income (expense), net based on the specific identification method.

At June 30, 2012, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Treasury Notes	$	23,194	$	25	$	—		$	23,219
Corporate and Agency Bonds		35,563		6		(3	)		35,566
Certificates of Deposit		1,000		—		—			1,000
Total	$	59,757	$	31	$	(3	)	$	59,785

At June 30, 2012, marketable securities consisted of investments that mature within one year with the exception of treasury notes with a fair value of $10,207, which have maturities within two years.

At December 31, 2011, marketable securities by security type consisted of:

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Treasury Notes	$	32,037	$	49	$	—		$	32,086
Corporate and Agency Bonds		55,428		13		(1	)		55,440
Certificates of Deposit		1,000		—		(1	)		999
Commercial Paper		1,998		—		—			1,998
Total	$	90,463	$	62	$	(2	)	$	90,523

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, are used to measure fair value:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs are developed based on the best information available, which might include the Company’s own data.

Effective January 1, 2012, the Company adopted new guidance applicable to fair value measurements. This accounting guidance clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. Adoption of the new guidance did not have an effect on the Company’s consolidated financial statements.

During the three and six months ended June 30, 2012 and 2011, there were no transfers between Level 1, Level 2 and Level 3.

The following tables present the Company’s fair value hierarchy for its assets and liabilities which are measured at fair value on a recurring basis as of June 30, 2012 and December 31, 2011:

	Fair Value Measurements at June 30, 2012 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market instruments	$	4,158	$	—	$	—	$	4,158
U.S. Treasury notes		23,219		—		—		23,219
Corporate and Agency bonds		—		35,566		—		35,566
Certificates of deposit		—		1,000		—		1,000
Commercial paper		—		—		—		—
Total Financial Assets	$	27,377	$	36,566	$	—	$	63,943
Financial Liabilities:
Contingent consideration liability associated with acquisition of SinglePlatform, Corp.	$	—	$	—	$	12,152	$	12,152
Total Financial Liabilities	$	—	$	—	$	12,152	$	12,152
	Fair Value Measurements at December 31, 2011 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market instruments	$	12,778	$	—	$	—	$	12,778
U.S. Treasury notes		32,086		—		—		32,086
Corporate and Agency bonds		—		55,440		—		55,440
Certificates of deposit		—		999		—		999
Commercial paper		—		1,998		—		1,998
Total	$	44,864	$	58,437	$	—	$	103,301

The Company has revised its classification of certain marketable securities with a fair value of $58,437 as of December 31, 2011, from Level 1 measurements to Level 2 measurements to reflect the inputs used to price these securities as described above. The Company has concluded that this misclassification is immaterial to the Company’s financial statements for all prior periods presented.

Contingent consideration is measured at fair value and is based on significant inputs not observable in the market, which represents a Level 3 measurement within the fair value hierarchy. The valuation of contingent consideration uses assumptions and estimates to forecast a range of outcomes for the contingent consideration. The Company will assess these assumptions and estimates on a quarterly basis as additional data impacting the assumptions is obtained. Changes in the fair value of contingent consideration related to updated assumptions and estimates will be recognized within the consolidated statements of operations.

The following table provides quantitative information associated with the fair value measurement of the Company’s Level 3 inputs:

Liability	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
Contingent consideration	$	12,152	Income approach— discounted cash flow	Revenue earn-out—probability of low case (scenario) for total revenue.		7.5	%
				Revenue earn-out—probability of base case (scenario) for total revenue.		30	%
				Revenue earn-out—probability of target case (scenario) for total revenue.		62.5	%
				Discount rate for revenue earn-out		5.3	%

The significant unobservable inputs used in the fair value measurement of contingent consideration are the probabilities of successful achievement of the targeted revenues, the six month periods in which the revenues are expected to be achieved and the discount rate. Increases or decreases in any of the probabilities of success would result in a higher or lower fair value measurement, respectively. Increases or decreases in the actual achievement of milestones in the relevant period as compared to the estimated achievement would result in a higher or lower fair value measurement, respectively.

Changes in the fair value of Level 3 contingent consideration liability associated with acquisition were as follows:

	Contingent Consideration
Balance at December 31, 2011	$	—
Acquisition of SinglePlatform, Corp.		12,152
Balance at June 30, 2012	$	12,152

Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of unrestricted common shares outstanding for the period.

Diluted net income (loss) per share is computed by dividing net income (loss) by the sum of the weighted average number of unrestricted common shares outstanding during the period and the weighted average number of potential common shares from the assumed exercise of stock options and the vesting of shares of restricted common stock and restricted stock units using the “treasury stock” method when the effect is not anti-dilutive.

The following is a summary of the shares used in computing diluted net income (loss) per share:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Weighted average shares used in calculating basic net income (loss) per share		30,380		29,497		30,275		29,404
Stock options		—		1,230		—		—
Warrants		—		1		—		—
Unvested restricted stock and restricted stock units		—		42		—		—
Shares used in computing diluted net income (loss) per share		30,380		30,770		30,275		29,404

The following common stock equivalents were excluded from the computation of diluted net income (loss) per share because they had an anti-dilutive impact either because the proceeds under the treasury stock method were in excess of the average fair market value for the period or because the Company had a net loss in the period:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
			(In thousands)
Options to purchase common stock		5,098		1,477		5,023		3,630
Warrants to purchase common stock		1		—		1		1
Unvested restricted stock and restricted stock units		388		—		350		205
Total options and warrants exercisable into common stock, restricted stock units issuable in common stock and restricted stock		5,487		1,477		5,374		3,836

Accounting for Stock-Based Compensation

The Company values all stock-based compensation, including grants of stock options, restricted stock and restricted stock units, at fair value on the date of grant, and expenses the fair value over the applicable service period. The straight-line method is applied to all grants with service conditions, while the graded vesting method is applied to all grants with both service and performance conditions.

Income Taxes

Income taxes are provided for tax effects of transactions reported in the financial statements and consist of income taxes currently due plus deferred income taxes related to timing differences between the basis of certain assets and liabilities for financial statement and income tax reporting purposes. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation allowance is provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.

Segment Data

The Company manages its operations as a single segment for purposes of assessing performance and making operating decisions. Revenue is generated predominately in the U.S. and all significant assets are held in the U.S.

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Acquisitions (Details 2) (CardStar [Member], USD $) In Thousands, unless otherwise specified	Jan. 13, 2012
CardStar [Member]
Allocation of the purchase price
Developed technology	$ 624
Net deferred tax assets	553
Goodwill	4,573
Total assets acquired	$ 5,750

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Stock-Based Awards (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Stock-based compensation expense
Stock-based compensation expense	$ 3,776	$ 3,242	$ 7,075	$ 5,851
Cost of revenue [Member]
Stock-based compensation expense
Stock-based compensation expense	450	422	829	733
Research and development [Member]
Stock-based compensation expense
Stock-based compensation expense	851	866	1,823	1,529
Sales and marketing [Member]
Stock-based compensation expense
Stock-based compensation expense	996	824	1,671	1,456
General and administrative [Member]
Stock-based compensation expense
Stock-based compensation expense	$ 1,479	$ 1,130	$ 2,752	$ 2,133

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Condensed Consolidated Balance Sheets (Unaudited) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Current assets
Cash and cash equivalents	$ 21,316	$ 49,589
Marketable securities	59,785	90,523
Accounts receivable, net of allowance for doubtful accounts	110	58
Prepaid expenses and other current assets	8,942	8,891
Total current assets	90,153	149,061
Property and equipment, net	36,851	34,263
Restricted cash	750	750
Goodwill	95,505	18,935
Acquired intangible assets, net	7,974	3,046
Deferred taxes	14,228	12,960
Other assets	2,860	2,363
Total assets	248,321	221,378
Current liabilities
Accounts payable	9,049	8,906
Accrued expenses	17,739	10,515
Deferred revenue	31,467	28,983
Total current liabilities	58,255	48,404
Other long-term liabilities	7,898	2,052
Total liabilities	66,153	50,456
Commitments and contingencies (Note 8)
Stockholders' equity
Preferred stock; $0.01 par value; 5,000,000 shares authorized; no shares issued or outstanding at June 30, 2012 and December 31, 2011
Common stock; $0.01 par value; 100,000,000 shares authorized at June 30, 2012 and December 31, 2011; 30,490,569 and 30,110,895 shares issued and outstanding at June 30, 2012 and December 31, 2011, respectively	305	301
Additional paid-in capital	201,568	190,039
Accumulated other comprehensive income	18	61
Accumulated deficit	(19,723)	(19,479)
Total stockholders' equity	182,168	170,922
Total liabilities and stockholders' equity	$ 248,321	$ 221,378

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Commitments and Contingencies (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012
Office Leases [Member]
Future minimum Lease Payments
Remainder of 2012	$ 3,042
2013	6,324
2014	6,361
2015	5,204
2016	1,587
Thereafter	2,557
Total	25,075
Hosting Facilities [Member]
Future minimum Lease Payments
Remainder of 2012	2,341
2013	3,841
2014	3,624
2015	3,734
2016	3,845
Thereafter	775
Total	$ 18,160

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Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011
Cash flows from operating activities
Net loss	$ (244)	$ (569)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	8,969	7,032
Amortization of premium on investments	296	331
Stock-based compensation expense	7,075	5,851
Recovery of bad debts	(3)
Gain on sales of marketable securities		(12)
Deferred income taxes	(644)	158
Taxes paid related to net share settlement of restricted stock units	(326)
Changes in operating assets and liabilities, net of effects from acquisition:
Accounts receivable	(1)	(3)
Prepaid expenses and other current assets	(2)	(1,328)
Other assets	(406)	(1,032)
Accounts payable	95	1,851
Accrued expenses	(537)	1,674
Deferred revenue	1,874	2,812
Other long-term liabilities	(39)	(119)
Net cash provided by operating activities	16,107	16,646
Cash flows from investing activities
Purchase of marketable securities	(28,357)	(88,209)
Proceeds from maturities of marketable securities	31,167	19,144
Proceeds from sales of marketable securities	27,600	66,224
Acquisition of businesses, net of cash acquired	(68,487)	(15,000)
Acquisition of property and equipment, including costs capitalized for development of internal use software	(10,644)	(8,829)
Net cash used in investing activities	(48,721)	(26,670)
Cash flows from financing activities
Proceeds from issuance of common stock pursuant to the exercise of stock options	3,657	2,309
Income tax benefit from the exercise of stock options	148
Proceeds from issuance of common stock pursuant to employee stock purchase plan	536	435
Net cash provided by financing activities	4,341	2,744
Net decrease in cash and cash equivalents	(28,273)	(7,280)
Cash and cash equivalents, beginning of period	49,589	32,892
Cash and cash equivalents, end of period	21,316	25,612
Supplemental disclosure of noncash investing activities:
Capitalization of stock-based compensation	443	271
Fair value of contingent consideration in connection with acquisition included in accrued expenses and other long-term liabilities	$ 12,152

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Acquisitions (Details 5) (SinglePlatform Corp [Member], USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
SinglePlatform Corp [Member]
Pro forma results of the historical condensed consolidated statements of operations
Pro forma revenue	$ 62,326	$ 52,620	$ 122,474	$ 102,714
Pro forma net loss (income)	$ (1,048)	$ 757	$ (1,826)	$ (1,588)

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Commitments and Contingencies (Tables)

6 Months Ended

Jun. 30, 2012

Office Leases [Member]

Operating Leased Assets [Line Items]

Future minimum lease payments under leases and agreements

Remainder of 2012	$	3,042
2013		6,324
2014		6,361
2015		5,204
2016		1,587
Thereafter		2,557
Total	$	25,075

Hosting Facilities [Member]

Operating Leased Assets [Line Items]

Future minimum lease payments under leases and agreements

Remainder of 2012	$	2,341
2013		3,841
2014		3,624
2015		3,734
2016		3,845
Thereafter		775
Total	$	18,160

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Acquisitions (Details Textual) (USD $) In Thousands, unless otherwise specified	1 Months Ended	3 Months Ended		6 Months Ended			1 Months Ended
	Jun. 30, 2012	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011	Jul. 30, 2012	Feb. 28, 2011 Bantam Networks [Member]	Feb. 15, 2011 Bantam Networks [Member]	Jan. 13, 2012 CardStar [Member]	Jul. 30, 2012 SinglePlatform Corp [Member]	Jun. 30, 2012 SinglePlatform Corp [Member]	Jun. 12, 2012 SinglePlatform Corp [Member]
Acquisitions (Textual) [Abstract]
Total purchase price included in acquisition of SinglePlatform												$ 75,200
Total cash paid, net of cash acquired								15,000	5,750			62,737
Fair value of contingent consideration payable						12,152						(12,152)
Amount payable upon achievement of certain revenue targets											30,000
Number of days for identification by the company for certain working capital adjustments				90 days
Additional consideration related to acquisition												30,000
Estimated economic life of the developed technology related to acquisition of SinglePlatform							3 years
The estimated undiscounted range of outcomes for the contingent consideration, Low										0
The estimated undiscounted range of outcomes for the contingent consideration, High										21,095
Period of future revenue targets	2 years
Intervals period to be measured revenue target	6 months
Acquisitions (Additional Textual) [Abstract]
Transactions costs related to the acquisitions		$ 574	$ 63	$ 722	$ 264

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Summary of Significant Accounting Policies (Details 1) (USD $) In Thousands, unless otherwise specified	Jul. 30, 2012	Jun. 30, 2012 Recurring [Member]	Dec. 31, 2011 Recurring [Member]	Jun. 30, 2012 Level 1 [Member] Recurring [Member]	Dec. 31, 2011 Level 1 [Member] Recurring [Member]	Jun. 30, 2012 Level 2 [Member] Recurring [Member]	Dec. 31, 2011 Level 2 [Member] Recurring [Member]	Jun. 30, 2012 Level 3 [Member]	Dec. 31, 2011 Level 3 [Member]	Jun. 30, 2012 Level 3 [Member] Recurring [Member]	Dec. 31, 2011 Level 3 [Member] Recurring [Member]	Jun. 30, 2012 Money market instruments [Member] Recurring [Member]	Dec. 31, 2011 Money market instruments [Member] Recurring [Member]	Jun. 30, 2012 Money market instruments [Member] Level 1 [Member] Recurring [Member]	Dec. 31, 2011 Money market instruments [Member] Level 1 [Member] Recurring [Member]	Jun. 30, 2012 Money market instruments [Member] Level 3 [Member] Recurring [Member]	Dec. 31, 2011 Money market instruments [Member] Level 3 [Member] Recurring [Member]	Jun. 30, 2012 U.S. Treasury Notes [Member] Recurring [Member]	Dec. 31, 2011 U.S. Treasury Notes [Member] Recurring [Member]	Jun. 30, 2012 U.S. Treasury Notes [Member] Level 1 [Member] Recurring [Member]	Dec. 31, 2011 U.S. Treasury Notes [Member] Level 1 [Member] Recurring [Member]	Jun. 30, 2012 U.S. Treasury Notes [Member] Level 3 [Member] Recurring [Member]	Dec. 31, 2011 U.S. Treasury Notes [Member] Level 3 [Member] Recurring [Member]	Jun. 30, 2012 Corporate and Agency Bonds [Member] Recurring [Member]	Dec. 31, 2011 Corporate and Agency Bonds [Member] Recurring [Member]	Jun. 30, 2012 Corporate and Agency Bonds [Member] Level 2 [Member] Recurring [Member]	Dec. 31, 2011 Corporate and Agency Bonds [Member] Level 2 [Member] Recurring [Member]	Jun. 30, 2012 Corporate and Agency Bonds [Member] Level 3 [Member] Recurring [Member]	Dec. 31, 2011 Corporate and Agency Bonds [Member] Level 3 [Member] Recurring [Member]	Jun. 30, 2012 Certificates of Deposit [Member] Recurring [Member]	Dec. 31, 2011 Certificates of Deposit [Member] Recurring [Member]	Jun. 30, 2012 Certificates of Deposit [Member] Level 2 [Member] Recurring [Member]	Dec. 31, 2011 Certificates of Deposit [Member] Level 2 [Member] Recurring [Member]	Jun. 30, 2012 Certificates of Deposit [Member] Level 3 [Member] Recurring [Member]	Dec. 31, 2011 Certificates of Deposit [Member] Level 3 [Member] Recurring [Member]	Jun. 30, 2012 Commercial Paper [Member] Recurring [Member]	Dec. 31, 2011 Commercial Paper [Member] Recurring [Member]	Jun. 30, 2012 Commercial Paper [Member] Level 1 [Member] Recurring [Member]	Jun. 30, 2012 Commercial Paper [Member] Level 2 [Member] Recurring [Member]	Dec. 31, 2011 Commercial Paper [Member] Level 2 [Member] Recurring [Member]	Jun. 30, 2012 Commercial Paper [Member] Level 3 [Member] Recurring [Member]	Dec. 31, 2011 Commercial Paper [Member] Level 3 [Member] Recurring [Member]
Financial Assets
Cash and cash equivalents fair value disclosure												$ 4,158	$ 12,778	$ 4,158	$ 12,778
Available for sale securities fair value disclosure																		23,219	32,086	23,219	32,086			35,566	55,440	35,566	55,440			1,000	999	1,000	999				1,998			1,998
Total		63,943	103,301	27,377	44,864	36,566	58,437
Financial Liabilities
Fair value of contingent consideration payable	$ 12,152	$ 12,152						$ 12,152		$ 12,152

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Nature of the Business

6 Months Ended

Jun. 30, 2012

Nature of the Business [Abstract]

Nature of the Business

1. Nature of the Business

Constant Contact, Inc. (the “Company”) was incorporated as a Massachusetts corporation on August 25, 1995. The Company reincorporated in the State of Delaware in 2000. The Company provides on-demand email marketing, social media marketing, event marketing, local deals and online survey products to small organizations, including small businesses, associations and non-profits. The Company’s email marketing product allows customers to create, send and track email marketing campaigns. The Company’s Social Campaigns ^™ product allows customers to create, publish, promote and run campaigns on Facebook ^®. The Company’s event marketing product enables customers to promote and manage events, track event registrations and collect online payments. The Company’s online survey product enables customers to create and send surveys and analyze the responses. The Company’s SaveLocal^TM product makes it quick and easy for customers to create, run and manage local deals. Social media marketing features in all of the Company’s products allow customers to easily manage and optimize their presence across multiple social media networks. These products are designed for small organizations and are marketed directly by the Company and through a wide variety of partners. In June 2012, the Company acquired SinglePlatform, Corp. (“SinglePlatform”), a company that helps small businesses get discovered through web and mobile searches by providing a single place to update relevant business information.

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Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) (USD $)	Jun. 30, 2012	Dec. 31, 2011
Condensed Consolidated Balance Sheets [Abstract]
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued
Preferred stock, shares outstanding
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	30,490,569	30,110,895
Common stock, shares outstanding	30,490,569	30,110,895

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Summary of Significant Accounting Policies (Tables)

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Marketable securities

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Treasury Notes	$	23,194	$	25	$	—		$	23,219
Corporate and Agency Bonds		35,563		6		(3	)		35,566
Certificates of Deposit		1,000		—		—			1,000
Total	$	59,757	$	31	$	(3	)	$	59,785

	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Treasury Notes	$	32,037	$	49	$	—		$	32,086
Corporate and Agency Bonds		55,428		13		(1	)		55,440
Certificates of Deposit		1,000		—		(1	)		999
Commercial Paper		1,998		—		—			1,998
Total	$	90,463	$	62	$	(2	)	$	90,523

Fair value measurement of cash equivalents and marketable securities and liabilities on recurring basis

	Fair Value Measurements at June 30, 2012 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market instruments	$	4,158	$	—	$	—	$	4,158
U.S. Treasury notes		23,219		—		—		23,219
Corporate and Agency bonds		—		35,566		—		35,566
Certificates of deposit		—		1,000		—		1,000
Commercial paper		—		—		—		—
Total Financial Assets	$	27,377	$	36,566	$	—	$	63,943
Financial Liabilities:
Contingent consideration liability associated with acquisition of SinglePlatform, Corp.	$	—	$	—	$	12,152	$	12,152
Total Financial Liabilities	$	—	$	—	$	12,152	$	12,152
	Fair Value Measurements at December 31, 2011 Using
	Level 1		Level 2		Level 3		Total
Financial Assets:
Money market instruments	$	12,778	$	—	$	—	$	12,778
U.S. Treasury notes		32,086		—		—		32,086
Corporate and Agency bonds		—		55,440		—		55,440
Certificates of deposit		—		999		—		999
Commercial paper		—		1,998		—		1,998
Total	$	44,864	$	58,437	$	—	$	103,301

Quantitative information associated with the fair value measurement of the Company's Level 3 inputs

Liability	Fair Value		Valuation Technique	Unobservable Inputs	Weighted Average
Contingent consideration	$	12,152	Income approach— discounted cash flow	Revenue earn-out—probability of low case (scenario) for total revenue.		7.5	%
				Revenue earn-out—probability of base case (scenario) for total revenue.		30	%
				Revenue earn-out—probability of target case (scenario) for total revenue.		62.5	%
				Discount rate for revenue earn-out		5.3	%

Changes in the fair value of Level 3 contingent consideration liability

	Contingent Consideration
Balance at December 31, 2011	$	—
Acquisition of SinglePlatform, Corp.		12,152
Balance at June 30, 2012	$	12,152

Shares used in computing diluted net income (loss) per share

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
	(In thousands)
Weighted average shares used in calculating basic net income (loss) per share		30,380		29,497		30,275		29,404
Stock options		—		1,230		—		—
Warrants		—		1		—		—
Unvested restricted stock and restricted stock units		—		42		—		—
Shares used in computing diluted net income (loss) per share		30,380		30,770		30,275		29,404

Common stock equivalents excluded from the computation of diluted net income loss per share

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
			(In thousands)
Options to purchase common stock		5,098		1,477		5,023		3,630
Warrants to purchase common stock		1		—		1		1
Unvested restricted stock and restricted stock units		388		—		350		205
Total options and warrants exercisable into common stock, restricted stock units issuable in common stock and restricted stock		5,487		1,477		5,374		3,836

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Document and Entity Information	6 Months Ended
	Jun. 30, 2012	Jul. 30, 2012
Document and Entity Information [Abstract]
Entity Registrant Name	Constant Contact, Inc.
Entity Central Index Key	0001405277
Document Type	10-Q
Document Period End Date	Jun. 30, 2012
Amendment Flag	false
Document Fiscal Year Focus	2012
Document Fiscal Period Focus	Q2
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		30,497,232

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Acquisitions (Tables)

6 Months Ended

Jun. 30, 2012

Bantam Networks [Member]

Business Acquisition [Line Items]

Allocation of the purchase price

Developed technology	$	1,800
Goodwill		13,200
Total assets acquired	$	15,000

Pro forma results of the historical condensed consolidated statements of operations

	Six months ended June 30,
	2011
Pro forma revenue	$	102,542
Pro forma net loss	$	(696	)

CardStar [Member]

Business Acquisition [Line Items]

Allocation of the purchase price

Developed technology	$	624
Net deferred tax assets		553
Goodwill		4,573
Total assets acquired	$	5,750

SinglePlatform Corp [Member]

Business Acquisition [Line Items]

Allocation of the purchase price

Purchase consideration:
Total cash paid, net of cash acquired	$	62,737
Cash acquired		311
Fair value of contingent consideration		12,152
Total purchase price consideration	$	75,200
Assets acquired and liabilities assumed:
Cash	$	311
Accounts receivable		48
Prepaid expenses and other current assets		60
Property and equipment		14
Identifiable intangible assets		4,760
Other assets		91
Net deferred tax assets		72
Goodwill		71,997
Total assets acquired		77,353
Accounts payable, accrued expenses and other current liabilities		(1,543	)
Deferred revenue		(610	)
Total liabilities assumed		(2,153	)
Total allocation of purchase price consideration	$	75,200

Pro forma results of the historical condensed consolidated statements of operations

	Three months ended June 30,					Six months ended June 30,
	2012			2011		2012			2011
Pro forma revenue	$	62,326			52,620	$	122,474		$	102,714
Pro forma net loss (income)	$	(1,048	)		757		(1,826	)	$	(1,588	)

Estimated fair values and useful lives of identifiable intangible assets acquired

	Amount		Weighted Average Useful Life
			(in years)
Developed technology	$	850		3
Customer relationships		2,630		3.75
Publisher relationships		710		5
Trade name		570		5
Total identifiable intangible assets	$	4,760		3.95

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Condensed Consolidated Statements of Operations (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidated Statements of Operations [Abstract]
Revenue	$ 62,072	$ 52,527	$ 122,010	$ 102,542
Cost of revenue	18,434	15,233	36,033	29,916
Gross profit	43,638	37,294	85,977	72,626
Operating expenses
Research and development	9,804	7,549	19,275	14,987
Sales and marketing	25,836	22,515	51,554	46,749
General and administrative	8,404	5,918	15,968	11,696
Total operating expenses	44,044	35,982	86,797	73,432
(Loss) income from operations	(406)	1,312	(820)	(806)
Interest income and other income (expense), net	62	95	133	184
(Loss) income before income taxes	(344)	1,407	(687)	(622)
Income tax (expense) benefit	(118)	(133)	443	53
Net (loss) income	$ (462)	$ 1,274	$ (244)	$ (569)
Net (loss) income per share:
Basic	$ (0.02)	$ 0.04	$ (0.01)	$ (0.02)
Diluted	$ (0.02)	$ 0.04	$ (0.01)	$ (0.02)
Weighted average shares outstanding used in computing per share amounts:
Basic	30,380	29,497	30,275	29,404
Diluted	30,380	30,770	30,275	29,404

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Income Taxes

6 Months Ended

Jun. 30, 2012

Income Taxes [Abstract]

Income Taxes

6. Income Taxes

For the three and six months ended June 30, 2012, the Company recorded an income tax expense of $118 and an income tax benefit of $443, respectively. For the three and six months ended June 30, 2011, the Company recorded an income tax expense of $133 and an income tax benefit of $53, respectively. Income tax is related to federal, state, and to a lesser extent, foreign tax obligations. The Company’s effective tax rate may vary from period to period based on changes in estimated taxable income or loss, changes to federal, state or foreign tax laws, deductibility of certain costs and expenses, and as a result of acquisitions. For the three and six months ended June 30, 2012, the Company’s effective tax rate varied from the statutory tax rate primarily due to the book expense related to incentive stock options, which is non-deductable for tax purposes, offset by state research and development credits that reduced the Company’s tax benefit and by non-deductable transaction expenses incurred by the Company that were treated as a discrete item and reduced the Company’s tax benefit.

During 2011 the Company had recorded a full valuation allowance against its net deferred tax assets which was released in the fourth quarter of 2011. For the three and six months ended June 30, 2011, the Company’s income tax benefit consisted of a current income tax expense of $54 and a current income tax benefit of $211, respectively, and a deferred income tax expense of $79 and $158, respectively. The current income tax expense/benefit recorded related to the Company’s net income/loss for the period multiplied by its estimated annual effective tax rate for 2011. The deferred income tax expense related to the amortization for tax purposes of goodwill from the acquisition of Bantam Networks.

The Company had net deferred tax assets of $13,827 at December 31, 2011, which increased to $15,084 at June 30, 2012, primarily as a result of the income tax benefit recorded for the six months ended June 30, 2012 and the net deferred tax assets relating to Cardstar net operating loss carryforwards recorded at the time of the Cardstar acquisition.

The Company has not recorded any amounts for unrecognized tax benefits as of June 30, 2012 or December 31, 2011. As of June 30, 2012 and December 31, 2011, the Company had no accrued interest or tax penalties recorded.

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Stock-Based Awards

6 Months Ended

Jun. 30, 2012

Stock-Based Awards [Abstract]

Stock-Based Awards

5. Stock-Based Awards

Stock Incentive Plan

The Company’s 2011 Stock Incentive Plan (the “2011 Plan”) permits the Company to make grants of incentive stock options, non-statutory stock options, restricted stock, restricted stock units, stock appreciation rights and other stock-based awards with a maximum term of seven years. These awards may be granted to the Company’s employees, officers, directors, consultants, and advisors. The Company reserved 4,200,000 shares of its common stock for issuance under the 2011 Plan. Additionally, per the terms of the 2011 Plan, shares of common stock previously reserved for issuance under the 2007 Stock Incentive Plan as well as shares reserved for outstanding awards under the 1999 Stock Option/Stock Issuance Plan for which the awards are cancelled, forfeited, repurchased or otherwise result in common stock not being issued will be added to the number of shares available for issuance under the 2011 Plan. Awards that are granted with a per share or per unit purchase price less than 100% of fair market value as of the date of grant (e.g., restricted stock and restricted stock unit awards) shall count towards the total number of shares reserved for issuance under the 2011 Plan on a two-for-one basis. As of June 30, 2012, 2,809,657 shares of common stock were available for issuance under the 2011 Plan.

Inducement Award Plan

In June 2012, the Compensation Committee of the Board of Directors adopted the Constant Contact, Inc. 2012 Inducement Award Plan (the “2012 Inducement Plan”). The 2012 Inducement Plan provides for the grant of nonstatutory stock options and restricted stock unit awards as an inducement to an individual’s entering into employment with Constant Contact or in connection with an acquisition. The Company may issue up to an aggregate of 257,780 shares of common stock pursuant to the 2012 Inducement Plan, subject to adjustment in the event of stock splits and other similar events. Shares issued under the 2012 Inducement Plan may consist in whole or in part of authorized but unissued shares or may be issued shares that the Company has reacquired (provided that open market purchases of shares using the proceeds from the exercise of awards do not increase the number of shares available for future grants). Options granted under the 2012 Inducement Plan must be granted at an exercise price that is not less than 100% of the fair market value of the common stock on the date of grant and may not be granted for a term in excess of seven years.

If an award granted under the 2012 Inducement Plan expires or is terminated, surrendered or canceled without having been fully exercised or is forfeited in whole or in part (including as the result of shares of common stock subject to such award being repurchased by the Company) or otherwise results in any common stock not being issued, the unused common stock covered by such award will become available for issuance pursuant to a new award under the 2012 Inducement Plan. As of June 30, 2012, there were no shares of common stock available for issuance under the 2012 Inducement Plan.

Stock Purchase Plan

The Company’s 2007 Employee Stock Purchase Plan, as amended (the “Purchase Plan”), became effective upon the completion of the Company’s initial public offering. Six-month offering periods begin on January 1 and July 1 of each year, during which employees may elect to purchase shares of the Company’s common stock according to the terms of the offering. The per share purchase price for offerings is equal to 85% of the closing market price of the Company’s common stock on the last day of the offering period. The first offering period of 2012 began on January 1, 2012 and was completed on June 30, 2012. The second offering period of 2012 began on July 1, 2012 and will be completed on December 31, 2012. As of June 30, 2012, 153,383 shares of common stock were available for issuance to participating employees under the Purchase Plan.

Stock-Based Compensation Expense

The Company applies the fair value recognition provisions for all stock-based awards granted or modified in accordance with authoritative guidance. Under this guidance the Company records compensation costs over the requisite service period of the award based on the grant-date fair value. The straight-line method is applied to all grants with service conditions, while the graded vesting method is applied to all grants with both service and performance conditions.

The Company recognized stock-based compensation expense on all awards in the following expense categories:

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Cost of revenue	$	450	$	422	$	829	$	733
Research and development		851		866		1,823		1,529
Sales and marketing		996		824		1,671		1,456
General and administrative		1,479		1,130		2,752		2,133
	$	3,776	$	3,242	$	7,075	$	5,851

The Company capitalized $219 and $164 of stock-based compensation related to the development of internal use software for the three months ended June 30, 2012 and 2011, respectively, and $443 and $271 of stock-based compensation related to the development of internal use software for the six months ended June 30, 2012 and 2011, respectively.

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Summary of Significant Accounting Policies (Details) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2012	Dec. 31, 2011
Marketable securities
Amortized Cost	$ 59,757	$ 90,463
Gross Unrealized Gains	31	62
Gross Unrealized Losses	(3)	(2)
Estimated Fair Value	59,785	90,523
U.S. Treasury Notes [Member]
Marketable securities
Amortized Cost	23,194	32,037
Gross Unrealized Gains	25	49
Estimated Fair Value	23,219	32,086
Corporate and Agency Bonds [Member]
Marketable securities
Amortized Cost	35,563	55,428
Gross Unrealized Gains	6	13
Gross Unrealized Losses	(3)	(1)
Estimated Fair Value	35,566	55,440
Certificates of Deposit [Member]
Marketable securities
Amortized Cost	1,000	1,000
Gross Unrealized Losses		(1)
Estimated Fair Value	1,000	999
Commercial Paper [Member]
Marketable securities
Amortized Cost		1,998
Estimated Fair Value		$ 1,998

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Goodwill and Acquired Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2012

Goodwill and Acquired Intangible Assets [Abstract]

Change in the carrying amount of goodwill

Balance as of December 31, 2011	$	18,935
Goodwill related to the acquisition of CardStar, Inc.		4,573
Goodwill related to the acquisition of SinglePlatform, Corp.		71,997
Balance as of June 30, 2012	$	95,505

Intangible assets

			June 30, 2012						December 31, 2011
	Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology		3 years	$	4,357		797	$	3,560		2,883	$	513	$	2,370
Customer relationships		3.75 years		3,315		160		3,155		685		9		676
Publisher relationships		5 years		710		12		698		—		—		—
Trade name		5 years		570		9		561		—		—		—
			$	8,952	$	978	$	7,974	$	3,568	$	522	$	3,046

Future estimated amortization expense for assets placed in service

Remainder of 2012	$	1,216
2013		1,953
2014		1,596
2015		983
2016		320
2017		106
Total	$	6,174

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401(k) Savings Plan

6 Months Ended

Jun. 30, 2012

401(k) Savings Plan [Abstract]

401(k) Savings Plan

9. 401(k) Savings Plan

The Company has a defined contribution savings plan under Section 401(k) of the Internal Revenue Code. This plan covers substantially all employees who meet minimum age and service requirements and allows participants to defer a portion of their annual compensation on a pre-tax basis. Company contributions to the plan may be made at the discretion of the Board of Directors. The Company elected to make matching contributions for the plan years ending December 31, 2012 and 2011 at a rate of 100% of each employee’s contribution up to a maximum matching contribution of 3% of the employee’s compensation and at a rate of 50% of each employee’s contribution in excess of 3% up to a maximum of 5% of the employee’s compensation.

Through June 30, 2012 and 2011, the Company made matching contributions of $1,197 and $955 for the plan years ended December 31, 2012 and 2011, respectively.

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Accrued Expenses and Other Long Term Liabilities

6 Months Ended

Jun. 30, 2012

Accrued Expenses and Other Long-Term Liabilities [Abstract]

Accrued Expenses and Other Long-Term Liabilities

7. Accrued Expenses and Other Long-Term Liabilities

The following table presents the components of selected balance sheet items as of June 30, 2012 and December 31, 2011:

	June 30, 2012		December 31, 2011
Accrued expenses:
Payroll and payroll related	$	4,755	$	3,148
Licensed software and maintenance		1,197		1,197
Marketing programs		1,123		2,079
Contingent consideration liability associated with acquisition of SinglePlatform, Corp.		6,267		—
Other accrued expenses		4,397		4,091
Total accrued expenses	$	17,739	$	10,515
Other long-term liabilities:
Accrued rent	$	2,013	$	2,052
Contingent consideration liability associated with acquisition of SinglePlatform, Corp.		5,885		—
Total other long-term liabilities	$	7,898	$	2,052

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2012

Commitments and Contingencies [Abstract]

Commitments and Contingencies

8. Commitments and Contingencies

Office Leases

In May 2009, the Company entered into a lease for its headquarters space in Waltham, Massachusetts (the “Lease”). The Lease, effective through September 30, 2015 with one five-year extension option, includes space under a lease that existed at that time as well as additional space that has been made available to the Company at various points during the term of the Lease. The Lease also includes payment escalations and rent holidays. Under the Lease, the landlord is responsible for making certain improvements to the leased space at an agreed upon cost to the landlord. If the landlord and the Company mutually agree to make improvements that cost in excess of the agreed upon landlord cost, the landlord bills that excess cost to the Company as additional rent. This additional rent is included in the net calculation of lease incentives, so that rent expense per square foot is recognized on a straight-line basis over the remaining term of occupancy. The Company has amended the Lease twice to add a small amount of additional space. All other terms and conditions of these amendments, inclusive of the landlord’s obligations to make certain improvements, are consistent with the Lease.

The Company leases a sales and support office in Colorado under a lease agreement effective through April 2019 with three three-year extension options. The agreement contains certain lease incentives and payment escalations. The Company also leases small amounts of general office space in Florida, New York, California and the United Kingdom under lease agreements that expire at various dates through 2017.

Lease incentives, payment escalations and rent holidays specified in the lease agreements are accrued or deferred as appropriate such that rent expense per square foot is recognized on a straight-line basis over the terms of occupancy.

At June 30, 2012, the Company had both prepaid rent and accrued rent balances related to its office leases. The prepaid rent balance was $1,042 at June 30, 2012, of which $416 was included in prepaid expenses and other current assets and $626 was included in other assets. The accrued rent balance was $2,172 at June 30, 2012, of which $269 was included in accrued expenses and $1,903 was included in other long-term liabilities. At December 31, 2011, the Company had both prepaid rent and accrued rent balances related to its office leases. The prepaid rent balance was $1,192 at December 31, 2011, of which $429 was included in prepaid expenses and other current assets and $763 was included in other assets. The accrued rent balance was $2,292 at December 31, 2011, of which $264 was included in accrued expenses and $2,028 was included in other long-term liabilities.

Total rent expense under office leases was $1,652 and $3,165 for the three and six months ended June 30, 2012, respectively, and $1,523 and $3,000 for the three and six months ended June 30, 2011, respectively.

As of June 30, 2012, future minimum lease payments under noncancelable office leases are as follows:

Remainder of 2012	$	3,042
2013		6,324
2014		6,361
2015		5,204
2016		1,587
Thereafter		2,557
Total	$	25,075

Third-Party Hosting Agreements

The Company has agreements with two affiliated vendors to provide specialized space and equipment and related services from which the Company hosts its software applications.

Payment escalations and rent holidays specified in these agreements are accrued or deferred as appropriate such that rent expense per square foot is recognized on a straight-line basis over the terms of occupancy. At June 30, 2012, the Company had prepaid rent of $983, which was included in other assets and accrued rent of $110 which was included in other long-term liabilities.

Total rent expense under hosting agreements was $994 and $1,900 for the three and six months ended June 30, 2012, respectively, and $884 and $1,741 for the three and six months ended June 30, 2011, respectively.

The agreements include payment commitments that expire at various dates through mid-2017. As of June 30, 2012, future minimum payments under the agreements are as follows:

Remainder of 2012	$	2,341
2013		3,841
2014		3,624
2015		3,734
2016		3,845
Thereafter		775
Total	$	18,160

Vendor Commitments

As of June 30, 2012, the Company had issued both cancellable and non-cancellable purchase orders to various vendors and entered into contractual commitments with various vendors totaling $19,257 related primarily to marketing programs and other non-marketing goods and services to be delivered over the next twelve months.

Letters of Credit and Restricted Cash

As of June 30, 2012 and December 31, 2011, the Company maintained a letter of credit totaling $750 for the benefit of the landlord of the Company’s corporate headquarters lease. The landlord can draw against the letter of credit in the event of default by the Company. The Company was required to maintain a cash balance of at least $750 as of June 30, 2012 and December 31, 2011, respectively, to secure the letter of credit. This amount was classified as restricted cash in the balance sheet at June 30, 2012 and December 31, 2011.

Contingent Consideration

The former shareholders of SinglePlatform are eligible to receive consideration of up to $30,000, which is contingent on the fulfillment of certain revenue targets within the period from July 1, 2012 to June 30, 2014, measured in six month intervals. If such conditions are achieved, the consideration is payable in cash. As of June 30, 2012, the Company had accrued $12,152, representing the fair value of the contingent consideration liability, of which $6,267 was included in accrued expenses and $5,885 was included in other long-term liabilities.

Indemnification Obligations

The Company enters into standard indemnification agreements with the Company’s channel partners and certain other third parties in the ordinary course of business. Pursuant to these agreements, the Company indemnifies and agrees to reimburse the indemnified party for losses incurred by the indemnified party in connection with certain intellectual property infringement and other claims by any third party with respect to the Company’s business and technology. Based on historical information and information known as of June 30, 2012, the Company does not expect it will incur any significant liabilities under these indemnification agreements.

Legal Matters

From time to time, the Company may become involved in legal proceedings arising in the ordinary course of its business. The Company is not presently a party to any legal proceedings that, in its opinion, would have a material adverse effect on the Company’s business, results of operations or financial condition.

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Summary of Significant Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2012

Summary of Significant Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements include those of the Company and its subsidiaries, after elimination of all intercompany accounts and transactions. The accompanying consolidated financial statements have been prepared in conformity with accounting principles generally accepted in the United States of America (“GAAP”).

The condensed consolidated balance sheet at December 31, 2011 was derived from audited financial statements, but does not include all disclosures required by GAAP. The accompanying unaudited condensed consolidated financial statements as of June 30, 2012 and for the three and six months ended June 30, 2012 and 2011 have been prepared by the Company, pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”) for interim financial statements. Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to such rules and regulations. However, the Company believes that the disclosures are adequate to make the information presented not misleading. These condensed consolidated financial statements should be read in conjunction with the Company’s audited consolidated financial statements and the notes thereto for the year ended December 31, 2011 included in the Company’s Annual Report on Form 10-K, File Number 001-33707, on file with the SEC.

In the opinion of management, all adjustments, consisting only of normal recurring adjustments necessary for a fair statement of the Company’s consolidated financial position as of June 30, 2012 and consolidated results of operations for the three and six months ended June 30, 2012 and 2011 and consolidated cash flows for the six months ended June 30, 2012 and 2011 have been made. The condensed consolidated results of operations for the three and six months ended June 30, 2012 are not necessarily indicative of the results of operations and cash flows that may be expected for the year ending December 31, 2012.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. On an ongoing basis, management evaluates these estimates, judgments and assumptions, including those related to revenue recognition, stock-based compensation, goodwill and acquired intangible assets, capitalization of software and website development costs, contingent consideration liability and income taxes. The Company bases these estimates on historical and anticipated results and trends and on various other assumptions that the Company believes are reasonable under the circumstances, including assumptions as to future events. These estimates form the basis for making judgments about the carrying values of assets and liabilities and recorded revenue and expenses that are not readily apparent from other sources. Actual results could differ from these estimates.

Revenue Recognition

Revenue Recognition

The Company provides access to its products primarily through subscription arrangements whereby the customer is charged a fee for access for a defined term. Subscription arrangements include access to use the Company’s software via the Internet and support services, such as telephone, email and chat support. When there is evidence of an arrangement, the fee is fixed or determinable and collectability is deemed reasonably assured, the Company recognizes revenue on a daily basis over the subscription period as the services are delivered. Delivery is considered to have commenced at the time the customer has paid for the products and has access to the account via a log-in and password. The Company also generates revenue from its SaveLocal product by charging a fee to its customers based on the number of deals sold by its customers. The Company recognizes revenue from the fee charged when there is evidence of an arrangement, the fee is fixed or determinable and collectability is deemed reasonably assured. The Company also offers ancillary services to its customers related to its products such as custom services and training. Custom services and training revenue is accounted for separate from subscription revenue as those services have value on a standalone basis, do not involve a significant degree of risk or unique acceptance criteria and as the fair value of the Company’s subscription services is evidenced by their availability on a standalone basis. Custom services and training revenue is recognized as the services are performed.

Goodwill and Acquired Intangible Assets

Goodwill and Acquired Intangible Assets

The Company records goodwill when consideration paid in a business acquisition exceeds the fair value of the net tangible assets and the identified intangible assets acquired. Goodwill is not amortized, but rather is tested for impairment annually or more frequently if facts and circumstances warrant a review. The Company performs its annual assessment for impairment of goodwill on November 30^th and has determined that there is a single reporting unit for the purpose of conducting this annual goodwill impairment assessment. For purposes of assessing potential impairment, the Company annually estimates the fair value of the reporting unit (based on the Company’s market capitalization) and compares this amount to the carrying value of the reporting unit (as reflected by the Company’s total stockholders’ equity). If the Company determines that the carrying value of the reporting unit exceeds its fair value, an impairment charge would be required.

Effective January 1, 2012, the Company adopted new guidance that simplifies the goodwill impairment test. The amendment permits the Company to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount as a basis for determining whether it is necessary to perform the two-step goodwill impairment test described in goodwill accounting standard. Adoption of the new guidance did not have an effect on the Company’s consolidated financial statements.

Intangible assets are recorded at their estimated fair values at the date of acquisition. The Company amortizes acquired intangible assets over their estimated useful lives based on the pattern of consumption of the economic benefits or, if that pattern cannot be readily determined, on a straight-line basis.

Capitalization of Software and Web Site Development Costs

Capitalization of Software and Web Site Development Costs

Research and development costs are expensed as incurred and primarily include salaries, fees to consultants and other related costs. Relative to development costs of its on-demand products and website, the Company capitalizes certain direct costs to develop functionality as well as certain upgrades and enhancements that are probable to result in additional functionality. The costs incurred in the preliminary stages of development are expensed as incurred. Once an application has reached the development stage, internal and external costs, if direct and incremental, are capitalized as part of property and equipment until the software is substantially complete and ready for its intended use. Capitalized software is amortized over a three-year period in the expense category to which the software relates.

Comprehensive Income (Loss)

Comprehensive Income (Loss)

Comprehensive income (loss) includes net income (loss), as well as other changes in stockholders’ equity that result from transactions and economic events other than those with stockholders. The Company’s only elements of other comprehensive income (loss) are unrealized gains and losses on available-for-sale securities and translation adjustments.

Effective January 1, 2012, the Company adopted new guidance applicable to comprehensive income. Under this guidance the Company has two options for presenting comprehensive income. The Company can present the total of comprehensive income, the components of net income, and the components of other comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. This guidance eliminates the option to present the components of other comprehensive income as part of the statement of changes in stockholders’ equity. As the new guidance relates only to how comprehensive income is disclosed and does not change the items that must be reported as comprehensive income, adoption of the new guidance did not have an effect on the Company’s consolidated financial statements.

In December 2011, the Financial Accounting Standards Board indefinitely deferred the requirement to present reclassification adjustments of other comprehensive income by line item on the face of the income statement.

Marketable Securities

Marketable Securities

The Company’s marketable securities are classified as available-for-sale and are carried at fair value with the unrealized gains and losses reported as a component of accumulated other comprehensive income in stockholders’ equity. Realized gains and losses and declines in value judged to be other than temporary are included as a component of interest income and other income (expense), net based on the specific identification method.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

Certain assets and liabilities are carried at fair value under GAAP. Fair value is defined as the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. Valuation techniques used to measure fair value must maximize the use of observable inputs and minimize the use of unobservable inputs. A fair value hierarchy based on three levels of inputs, of which the first two are considered observable and the last is considered unobservable, are used to measure fair value:

• Level 1 — Quoted prices in active markets for identical assets or liabilities.

• Level 2 — Inputs other than Level 1 that are observable, either directly or indirectly, such as quoted prices for similar assets or liabilities; quoted prices in markets that are not active; or other inputs that are observable or can be corroborated by observable market data for substantially the full term of the assets or liabilities.

• Level 3 — Unobservable inputs that are supported by little or no market activity and that are significant to the fair value of the assets or liabilities. Unobservable inputs are developed based on the best information available, which might include the Company’s own data.

Effective January 1, 2012, the Company adopted new guidance applicable to fair value measurements. This accounting guidance clarifies the application of certain existing fair value measurement guidance and expands the disclosures for fair value measurements that are estimated using significant unobservable (Level 3) inputs. Adoption of the new guidance did not have an effect on the Company’s consolidated financial statements.

During the three and six months ended June 30, 2012 and 2011, there were no transfers between Level 1, Level 2 and Level 3.

Net Income (Loss) Per Share

Net Income (Loss) Per Share

Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of unrestricted common shares outstanding for the period.

Diluted net income (loss) per share is computed by dividing net income (loss) by the sum of the weighted average number of unrestricted common shares outstanding during the period and the weighted average number of potential common shares from the assumed exercise of stock options and the vesting of shares of restricted common stock and restricted stock units using the “treasury stock” method when the effect is not anti-dilutive.

Accounting for Stock-Based Compensation

Accounting for Stock-Based Compensation

The Company values all stock-based compensation, including grants of stock options, restricted stock and restricted stock units, at fair value on the date of grant, and expenses the fair value over the applicable service period. The straight-line method is applied to all grants with service conditions, while the graded vesting method is applied to all grants with both service and performance conditions.

Income Taxes

Income Taxes

Income taxes are provided for tax effects of transactions reported in the financial statements and consist of income taxes currently due plus deferred income taxes related to timing differences between the basis of certain assets and liabilities for financial statement and income tax reporting purposes. Deferred taxes are determined based on the difference between the financial statement and tax basis of assets and liabilities using enacted tax rates in effect in the years in which the differences are expected to reverse. A valuation allowance is provided if, based upon the weight of available evidence, it is more likely than not that some or all of the deferred tax assets will not be realized.

The Company accounts for uncertainty in income taxes recognized in the financial statements by applying a two-step process to determine the amount of tax benefit to be recognized. First, the tax position must be evaluated to determine the likelihood that it will be sustained upon external examination. If the tax position is deemed “more-likely-than-not” to be sustained, the tax position is then assessed to determine the amount of benefit to recognize in the financial statements. The amount of the benefit that may be recognized is the largest amount that has a greater than 50% likelihood of being realized upon ultimate settlement.

Segment Data

Segment Data

The Company manages its operations as a single segment for purposes of assessing performance and making operating decisions. Revenue is generated predominately in the U.S. and all significant assets are held in the U.S.

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Acquisitions (Details 4) (SinglePlatform Corp [Member], USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Jun. 12, 2012
Estimated fair values and useful lives of identifiable intangible assets acquired
Total identifiable intangible assets		$ 4,760
Total identifiable intangible assets, Weighted Average Useful Life	3 years 11 months 12 days
Developed technology [Member]
Estimated fair values and useful lives of identifiable intangible assets acquired
Total identifiable intangible assets		850
Total identifiable intangible assets, Weighted Average Useful Life	3 years
Customer relationships [Member]
Estimated fair values and useful lives of identifiable intangible assets acquired
Total identifiable intangible assets		2,630
Total identifiable intangible assets, Weighted Average Useful Life	3 years 9 months
Publisher relationships [Member]
Estimated fair values and useful lives of identifiable intangible assets acquired
Total identifiable intangible assets		710
Total identifiable intangible assets, Weighted Average Useful Life	5 years
Trade name [Member]
Estimated fair values and useful lives of identifiable intangible assets acquired
Total identifiable intangible assets		$ 570
Total identifiable intangible assets, Weighted Average Useful Life	5 years

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Accrued Expenses and Other Long Term Liabilities (Tables)

6 Months Ended

Jun. 30, 2012

Accrued Expenses and Other Long-Term Liabilities [Abstract]

Components of accrued expenses and other long-term liabilities

	June 30, 2012		December 31, 2011
Accrued expenses:
Payroll and payroll related	$	4,755	$	3,148
Licensed software and maintenance		1,197		1,197
Marketing programs		1,123		2,079
Contingent consideration liability associated with acquisition of SinglePlatform, Corp.		6,267		—
Other accrued expenses		4,397		4,091
Total accrued expenses	$	17,739	$	10,515
Other long-term liabilities:
Accrued rent	$	2,013	$	2,052
Contingent consideration liability associated with acquisition of SinglePlatform, Corp.		5,885		—
Total other long-term liabilities	$	7,898	$	2,052

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Summary of Significant Accounting Policies (Details 3) (USD $) In Thousands, unless otherwise specified		6 Months Ended
	Jul. 30, 2012	Jun. 30, 2012 Level 3 [Member]
Changes in the fair value of Level 3 contingent consideration liability associated with acquisition
Business Acquisition, Contingent Consideration, at Fair Value, Beginning Balance	$ 12,152
Acquisition of SinglePlatform, Corp.		12,152
Business Acquisition, Contingent Consideration, at Fair Value, Ending Balance	$ 12,152	$ 12,152

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Stock-Based Awards (Details Textual) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Stock Based Awards (Additional Textual) [Abstract]
Capitalized stock-based compensation expense related to the development of internal use software	$ 219	$ 164	$ 443	$ 271
2011 Stock Incentive Plan [Member]
Stock Based Awards (Additional Textual) [Abstract]
Common stock shares reserved for issuance	4,200,000		4,200,000
Maximum term of incentive stock options, non-statutory stock options, restricted stock, restricted stock units and other stock-based awards			7 years
Maximum percentage of fair market value of per unit purchase price			100.00%
Shares of common stock available for issuance	2,809,657		2,809,657
2007 Employee Stock Purchase Plan [Member]
Stock Based Awards (Additional Textual) [Abstract]
Shares of common stock available for issuance	153,383		153,383
Employee purchase plan period			6 months
Percentage of closing market price of common stock equals to per share purchase price for offerings			85.00%
Inducement Award Plan [Member]
Stock Based Awards (Additional Textual) [Abstract]
Shares of common stock pursuant to 2012 inducement plan	257,780		257,780
Percentage of fair market value of common stock on date of grant			100.00%
Shares of common stock available for issuance	0		0
2012 Inducement Plan [Member]
Stock Based Awards (Additional Textual) [Abstract]
Maximum term of incentive stock options, non-statutory stock options, restricted stock, restricted stock units and other stock-based awards			7 years

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Condensed Consolidated Statements of Comprehensive Income (Loss) (Unaudited) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Condensed Consolidated Statement of Comprehensive Income (Loss) [Abstract]
Net (loss) income	$ (462)	$ 1,274	$ (244)	$ (569)
Other comprehensive income (loss):
Net unrealized gains (losses) on marketable securities, net of tax	(23)	47	(43)	47
Reclassification adjustment for realized gains on available-for-sale securities included in net income (loss)		(12)		(12)
Total other comprehensive (loss) income	(23)	35	(43)	35
Comprehensive (loss) income	$ (485)	$ 1,309	$ (287)	$ (534)

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Goodwill and Acquired Intangible Assets

6 Months Ended

Jun. 30, 2012

Goodwill and Acquired Intangible Assets [Abstract]

Goodwill and Acquired Intangible Assets

4. Goodwill and Acquired Intangible Assets

The carrying amount of goodwill was $18,935 as of December 31, 2011. The change in the carrying amount of goodwill for the six months ended June 30, 2012 was as follows:

Balance as of December 31, 2011	$	18,935
Goodwill related to the acquisition of CardStar, Inc.		4,573
Goodwill related to the acquisition of SinglePlatform, Corp.		71,997
Balance as of June 30, 2012	$	95,505

Goodwill is not amortized, but instead is reviewed for impairment at least annually in the fourth quarter or more frequently when events and circumstances occur indicating that the recorded goodwill may be impaired.

Intangible assets consist of the following:

			June 30, 2012						December 31, 2011
	Estimated Useful Life		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount		Gross Carrying Amount		Accumulated Amortization		Net Carrying Amount
Developed technology		3 years	$	4,357		797	$	3,560		2,883	$	513	$	2,370
Customer relationships		3.75 years		3,315		160		3,155		685		9		676
Publisher relationships		5 years		710		12		698		—		—		—
Trade name		5 years		570		9		561		—		—		—
			$	8,952	$	978	$	7,974	$	3,568	$	522	$	3,046

The Company amortizes the intangible assets over the estimated useful lives noted above. For the developed technology and publisher relationship assets, as the pattern of consumption of the economic benefits of the intangible assets cannot be reliably determined, the Company amortizes these acquired intangible assets over their estimated useful lives on a straight-line basis. The Company also amortizes the trade name asset over its estimated useful life on a straight-line basis as the straight-line basis is not materially different than the pattern of consumption of economic benefit basis. Customer relationships are amortized over their useful life based on the pattern of consumption of economic benefit of the asset. Amortization commences once the asset has been placed in service.

Amortization expense for intangible assets was $292 and $81 for the three months ended June 30, 2012 and 2011, respectively. Amortization expense for intangible assets was $456 and $161 for the six months ended June 30, 2012 and 2011, respectively. Amortization of developed technology and publisher relationships is recorded within cost of revenue and the amortization of customer relationships and trade name is recorded within sales and marketing expense. Future estimated amortization expense for assets placed in service as of June 30, 2012 is as follows:

Remainder of 2012	$	1,216
2013		1,953
2014		1,596
2015		983
2016		320
2017		106
Total	$	6,174

Amortization of developed technology totaling $1,800 as of June 30, 2012 has not yet commenced as the software is not yet ready for its intended use.

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Summary of Significant Accounting Policies (Details 4) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2012	Jun. 30, 2011	Jun. 30, 2012	Jun. 30, 2011
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Weighted average shares used in calculating basic net income (loss) per share	30,380	29,497	30,275	29,404
Unvested restricted stock and restricted stock units		42
Shares used in computing diluted net income (loss) per share	30,380	30,770	30,275	29,404
Stock Option [Member]
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Stock option and Warrants		1,230
Warrants to purchase common stock [Member]
Weighted Average Number of Shares Outstanding Reconciliation [Abstract]
Stock option and Warrants		1

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Goodwill and Acquired Intangible Assets (Details 1) (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2012	Dec. 31, 2011
Intangible assets
Gross Carrying Amount	$ 8,952	$ 3,568
Accumulated Amortization	978	522
Net Carrying Amount	7,974	3,046
Developed technology [Member]
Intangible assets
Estimated Useful Life	3 years
Gross Carrying Amount	4,357	2,883
Accumulated Amortization	797	513
Net Carrying Amount	3,560	2,370
Customer relationships [Member]
Intangible assets
Estimated Useful Life	3 years 9 months
Gross Carrying Amount	3,315	685
Accumulated Amortization	160	9
Net Carrying Amount	3,155	676
Publisher relationships [Member]
Intangible assets
Estimated Useful Life	5 years
Gross Carrying Amount	710
Accumulated Amortization	12
Net Carrying Amount	698
Trade name [Member]
Intangible assets
Estimated Useful Life	5 years
Gross Carrying Amount	570
Accumulated Amortization	9
Net Carrying Amount	$ 561

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Stock-Based Awards (Tables)

6 Months Ended

Jun. 30, 2012

Stock-Based Awards [Abstract]

Stock based compensation expense

	Three months ended June 30,				Six months ended June 30,
	2012		2011		2012		2011
Cost of revenue	$	450	$	422	$	829	$	733
Research and development		851		866		1,823		1,529
Sales and marketing		996		824		1,671		1,456
General and administrative		1,479		1,130		2,752		2,133
	$	3,776	$	3,242	$	7,075	$	5,851