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Delaware		6531		77-0463987
(State or other jurisdiction of		(Primary Standard Industrial		(I.R.S. Employer
incorporation or organization)		Classification Code Number)		Identification No.)
		LoopNet, Inc.
		185 Berry Street, Suite 4000
		San Francisco, CA 94107
		(415) 243-4200
(Address, including zip code and telephone number, including area code, of Registrant’s principal executive offices)

Lawrence C. Weeks, Esq. Heller Ehrman LLP 333 South Hope Street Los Angeles, California 90071 Telephone: (213) 689-0200 Facsimile: (213) 614-1868		Karen A. Dempsey, Esq. Sheryl L.R. Miller, Esq. David B. Sikes, Esq. Heller Ehrman LLP 333 Bush Street San Francisco, California 94104 Telephone: (415) 772-6000 Facsimile: (415) 772-6268		Justin L. Bastian, Esq. Morrison & Foerster LLP 755 Page Mill Road Palo Alto, California 94304-1018 Telephone: (650) 813-5600 Facsimile: (650) 494-0792

Proposed Maximum

Proposed Maximum

Amount to Be

Offering Price Per

Aggregate Offering

Amount of

Title of Securities to be Registered

Registered(1)

Share(2)

Price

Registration Fee

Common Stock, $0.001 par value per share

6,900,000

$13.00

$89,700,000

$9,598(3)

(1)	Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933, as amended.
(2)	Includes shares which the underwriters have the option to purchase to cover overallotment, if any.
(3)	Previously paid.

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and it is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

Underwriting

Proceeds to

Discounts and

Proceeds to

Selling

Price to Public

Commissions

LoopNet

Stockholders

Per share

$

$

$

$

Total

$

$

$

$

Pacific Crest Securities	Pacific Growth Equities, LLC

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		Page
Prospectus Summary			1
Risk Factors			7
Cautionary Notice Regarding Forward-Looking Statements			20
Use of Proceeds			21
Dividend Policy			21
Capitalization			22
Dilution			23
Selected Consolidated Financial Data			24
Management’s Discussion and Analysis of Financial Condition and Results of Operations			26
Business			43
Management			53
Certain Relationships and Related Transactions			62
Principal and Selling Stockholders			65
Description of Capital Stock			75
Shares Eligible for Future Sale			78
Underwriting			81
Notice to Canadian Residents			84
Legal Matters			85
Experts			85
Where You Can Find Additional Information			85
Index to Consolidated Financial Statements			F-1
EXHIBIT 1.1
EXHIBIT 3.1
Exhibit 10.3
EXHIBIT 23.1

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	Our business is largely based on a subscription model, and accordingly, any failure to increase the number of our customers or retain existing customers could cause our revenues to decline.

	We rely on our marketing efforts to generate new registered members. If our marketing efforts are ineffective, we could fail to attract new registered members, which could reduce the attractiveness of our marketplace to current and potential customers and lead to a reduction in our revenues.

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

	In light of our limited operating history and evolving business model, we may not be able to sustain our revenue growth, and our future financial performance may be difficult to assess.

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	If we are unable to obtain or retain listings from commercial real estate brokers, agents, and property owners, our marketplace could be less attractive to current or potential customers, which could result in a reduction in our revenues.

	Our operating results and revenues are subject to fluctuations that may cause our stock price to decline, and our quarterly financial results may be subject to seasonality, each of which could cause our stock price to decline.

	•	rates of member adoption and retention;
	•	changes in our marketing or other corporate strategies;
	•	our introduction of new products and services or changes to existing products and services;
	•	the amount and timing of our operating expenses and capital expenditures;
	•	the amount and timing of non-cash stock-based charges;
	•	costs related to acquisitions of businesses or technologies; and
	•	other factors outside of our control.

	Our revenues, expenses and operating results could be affected by general economic conditions or by changes in commercial real estate markets, which are cyclical.

	•	periods of economic slowdown or recession globally, in the United States or locally;
	•	inflation;

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	•	flows of capital into or out of real estate investment in the United States or various regions of the United States;
	•	rates of unemployment;
	•	interest rates;
	•	wage and salary levels; or
	•	concerns about any of the foregoing.

	•	economic slowdown or recession;
	•	changes in levels of rent or appreciation of asset values;
	•	changing interest rates;
	•	tax and accounting policies;
	•	the availability and cost of capital;
	•	costs of construction;
	•	increased unemployment;
	•	lower consumer confidence;
	•	lower wage and salary levels;
	•	war, terrorist attacks or natural disasters; or
	•	the public perception that any of these conditions may occur.

	We could face liability for information on our website.

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	If we are unable to convince commercial real estate brokers and other commercial real estate professionals that our services and products are superior to traditional methods of listing, searching, and marketing commercial real estate, they could choose not to use our marketplace, which could reduce our revenues or increase our expenses..

	We may be unable to effectively manage our growth.

	If we are unable to introduce new or upgraded services or products that our customers recognize as valuable, we may fail to attract new customers or retain existing customers. Our efforts to develop new and upgraded products and services could require us to incur significant costs.

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

	If we fail to protect confidential information against security breaches, or if our members or potential members are reluctant to use our marketplace because of privacy concerns, we might face additional costs, and activity in our marketplace could decline.

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	Our services may infringe the intellectual property rights of others and we may be subject to claims of intellectual property rights infringement.

	If we are unable to enforce or defend our ownership and use of intellectual property, our business, competitive position and operating results could be harmed.

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	If we are not able to successfully identify or integrate future acquisitions, our management’s attention could be diverted, and efforts to integrate future acquisitions could consume significant resources.

	•	difficulties in integrating the operations, technologies, and products of the acquired companies;
	•	diversion of management’s attention from normal daily operations of the business;
	•	inability to maintain the key business relationships and the reputations of acquired businesses;
	•	entry into markets in which we have limited or no prior experience and in which competitors have stronger market positions;
	•	dependence on unfamiliar affiliates and partners;
	•	insufficient revenues to offset increased expenses associated with acquisitions;
	•	reduction or replacement of the sales of existing services by sales of products or services from acquired lines of business;
	•	responsibility for the liabilities of acquired businesses;
	•	inability to maintain our internal standards, controls, procedures and policies; and
	•	potential loss of key employees of the acquired companies.

	Unless we develop, maintain and protect our brand identity, our business may not grow and our financial results may suffer.

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	If we are unable to effectively implement enhanced systems and internal controls, we may incur increased general and administrative costs, which could reduce our profitability, and investor confidence in us may decrease, which could cause our stock price to decline.

	Changes in or interpretations of accounting rules and regulations, such as expensing of stock options, could result in unfavorable accounting charges or require us to change our compensation policies.

	If our operating results do not meet the expectations of investors or equity research analysts, our market price may decline and we may be subject to class action litigation.

	If our website or our other services experience system failures, our customers may be dissatisfied and our operations could be impaired.

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	Our internal network infrastructure could be disrupted or penetrated, which could materially impact our ability to provide our services and our customers’ confidence in our services.

	We may be subject to regulation of our advertising and customer solicitation or other newly-adopted laws and regulations.

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	Our common stock could trade at prices below the initial public offering price.

	Our stock price may be volatile and you may be unable to sell your shares at or above the offering price.

	Our principal stockholders, executive officers and directors own a significant percentage of our stock and will continue to have significant control of our management and affairs after the offering, and they can take actions that may be against your best interests.

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	Our stock price could decline due to the large number of outstanding shares of our common stock eligible for future sale.

	•	no shares will be eligible for sale immediately upon completion of this offering;
	•	27,958,599 shares will be eligible for sale upon the expiration of lock-up agreements, subject in some cases to volume and other restrictions of Rule 144 and Rule 701 under the Securities Act; and
	•	1,138,488 shares will be eligible for sale upon the exercise of vested options after the expiration of the lock-up agreements.

	Because our initial public offering price is substantially higher than the pro forma net tangible book value per share of our outstanding common stock, new investors will incur immediate and substantial dilution.

	Our management has broad discretion in the use of the net proceeds from this offering and may not use the net proceeds effectively.

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	Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock.

	•	providing for a classified board of directors with staggered, three-year terms;
	•	not providing for cumulative voting in the election of directors;
	•	authorizing the board to issue, without stockholder approval, preferred stock rights senior to those of common stock;
	•	prohibiting stockholder action by written consent;
	•	limiting the persons who may call special meetings of stockholders; and
	•	requiring advance notification of stockholder nominations and proposals.

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	•	on an actual basis;
	•	on a pro forma basis reflecting the conversion of all outstanding shares of our Series A, Series B and Series C preferred stock on a one-for-one basis into an aggregate of 22,545,528 shares of our common stock effective immediately prior to the completion of this offering, for a total of 31,281,340 shares of common stock; and
	•	on a pro forma as adjusted basis reflecting the conversion described above and the receipt by us of the net proceeds from the sale of 4,000,000 shares of common stock in this offering at an assumed initial public offering price of $12.00 per share, after deducting the estimated underwriting discounts and commissions and estimated offering expenses payable by us. The 4,000,000 shares that we are selling in this offering include 3,470,717 newly issued shares and 529,283 issued and outstanding shares which are being sold by LoopNet Holdings LLC on behalf of LoopNet, Inc.

				As of March 31, 2006
												Pro Forma
				Actual				Pro Forma				As Adjusted
				(in thousands, except share data)
Redeemable convertible preferred stock, $.001 par value, 32,795,752 shares authorized: 22,545,528 shares issued and outstanding at March 31, 2006; no shares issued and outstanding, pro forma and pro forma adjusted.				$	39,964			$	—			$	—
Stockholders’ equity (deficit):
	Common stock, $.001 par value, 100,000,000 shares authorized; 8,735,812 shares issued and outstanding at March 31, 2006 31,281,340 shares issued and outstanding, pro forma; 34,752,057 shares issued and outstanding, pro forma as adjusted				9				31				35
	Additional paid in capital				11,792				51,734				93,870
	Other comprehensive income				(35	)			(35	)			(35	)
	Accumulated deficit				(19,606	)			(19,606	)			(19,606	)
		Total stockholders’ equity (deficit)			(7,840	)			32,124				74,264
		Total capitalization		$	32,124			$	32,124				74,264

	•	an aggregate of 2,848,304 shares of common stock issuable upon the exercise of warrants for preferred stock which will become exercisable for common stock after this offering, at an exercise price of $0.308 per share;
	•	an aggregate of 3,237,676 shares of common stock subject to outstanding options as of March 31, 2006, with a weighted average exercise price of $1.42 per share; and
	•	7,000,000 shares of common stock reserved for future grant under our 2006 Equity Incentive Plan, which will become effective upon completion of this offering.

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Assumed initial public offering price per share							$	12.00
	Pro forma net tangible book value per share as of March 31, 2006		$	0.72
	Increase per share attributable to new investors			1.14
Pro forma as adjusted net tangible book value per share after this offering								1.86
Dilution per share to new investors							$	10.14

			Shares Purchased								Total Consideration								Average
																			Price Per
			Number				Percent				Amount				Percent				Share
Existing stockholders				30,752,057	(1)			88	%		$	29,483,000				38	%		$	0.96
New investors				4,000,000	(2)			12	%			48,000,000				62	%			12.00
	Total			34,752,057				100.0	%		$	77,483,000				100.0	%			2.23

	(1)	Does not include 529,283 shares being sold by LoopNet Holdings LLC on behalf of LoopNet, Inc.
	(2)	Includes 529,283 shares being sold by LoopNet Holdings LLC on behalf of LoopNet, Inc.

	•	2,848,304 shares of common stock issuable upon the exercise of warrants for preferred stock which will become exercisable for common stock after this offering, at an exercise price of $0.308 per share;
	•	an aggregate of 3,237,676 shares of common stock subject to outstanding options as of March 31, 2006, with a weighted average exercise price of $1.42 per share; and
	•	7,000,000 shares of common stock reserved for future grant under our 2006 Equity Incentive Plan, which will become effective upon completion of this offering.

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																							Three Months Ended
			Year Ended December 31,																				March 31,
			2001				2002				2003				2004				2005				2005				2006
			(in thousands, except per share data)																				(unaudited)
Consolidated Statements of Operations Data:
Revenues			$	3,979			$	7,019			$	10,480			$	17,036			$	30,977			$	6,213			$	10,226
Cost of revenues(1)				1,600				1,254				1,984				2,562				3,825				872				1,228
Gross profit				2,379				5,765				8,496				14,474				27,152				5,341				8,998
Operating expenses(1):
	Sales and marketing			5,205				1,743				1,704				3,193				6,252				1,196				1,949
	Technology and product development			3,879				3,574				2,289				2,686				3,746				1,086				960
	General and administrative			5,386				3,278				3,180				4,889				5,955				1,194				1,478
Total operating expenses				14,470				8,595				7,173				10,768				15,953				3,476				4,387
Income (loss) from operations				(12,091	)			(2,830	)			1,323				3,706				11,199				1,865				4,611
Interest income, net				29				2				21				98				487				59				255
Other income (expense), net				(204	)			232				261				34				7				—				(2	)
Income (loss) from continuing operations				(12,266	)			(2,596	)			1,605				3,838				11,693				1,924				4,864
Discontinued operations:
	Loss from discontinued operations			(539	)			(223	)			—				—				—				—				—
	Gain on sale of assets, net			—				630				287				—				—				—				—
Income (loss) from discontinued operations				(539	)			407				287				—				—				—				—
Income (loss) before taxes				(12,805	)			(2,189	)			1,892				3,838				11,693				1,924				4,864
Income tax expense (benefit)				—				—				188				118				(7,243	)			61				1,899
Net income (loss)			$	(12,805	)		$	(2,189	)		$	1,704			$	3,720			$	18,936			$	1,863			$	2,965
(1) Stock-based compensation is allocated as follows:
Cost of revenues			$	—			$	—			$	—			$	1			$	18			$	2			$	8
Sales and marketing				1,559				—				—				251				146				31				51
Technology and product development				—				—				—				236				350				268				23
General and administrative				—				—				—				1,188				150				74				32
	Total		$	1,559			$	—			$	—			$	1,676			$	664			$	375			$	114

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																								Three Months Ended
				Year Ended December 31,																				March 31,
				2001				2002				2003				2004				2005				2005				2006
				(in thousands, except per share data)																				(unaudited)
Basic net income (loss) per share
	Income (loss) from continuing operations			$	(3.50	)		$	(0.73	)		$	—			$	0.06			$	0.58			$	0.05			$	0.08
	Income (loss) from discontinued operations				(0.16	)			0.12				—				—				—				—				—
		Basic net income (loss) per share		$	(3.66	)		$	(0.61	)		$	—			$	0.06			$	0.58			$	0.05			$	0.08
Diluted net income (loss) per share
	Income (loss) from continuing operations			$	(3.50	)		$	(0.73	)		$	—			$	0.04			$	0.54			$	0.03			$	0.06
	Income (loss) from discontinued operations				(0.16	)			0.12				—				—				—				—				—
		Diluted net income (loss) per share		$	(3.66	)		$	(0.61	)		$	—			$	0.04			$	0.54			$	0.03			$	0.06
Pro forma basic net income per share																				$	0.65			$	0.07			$	0.10

		As of December 31,																				As of March 31,
		2001				2002				2003				2004				2005				2006
																						(unaudited)
		(in thousands)
Consolidated Balance Sheet Data:
Cash, cash equivalents and short-term investments		$	5,349			$	2,461			$	5,174			$	8,724			$	21,865			$	27,468
Working capital			2,974				999				2,915				5,099				16,939				21,250
Total assets			7,219				3,840				6,034				12,971				35,177				40,031
Total liabilities			3,439				2,242				2,727				4,255				6,604				7,907
Redeemable convertible preferred stock			39,712				39,712				39,712				39,712				39,962				39,964
Total stockholders’ deficit			(35,932	)			(38,114	)			(36,405	)			(30,996	)			(11,389	)			(7,840	)

																						Three Months
		Year Ended December 31,																				Ended March 31,
		2001				2002				2003				2004				2005				2005				2006
		(in thousands)																				(unaudited)
Consolidated Statement of Cash Flows Data:
Cash flow provided by (used in) operating activities		$	(9,661	)		$	(2,528	)		$	2,944			$	6,921			$	14,490			$	2,607			$	6,290
Depreciation and amortization			919				785				377				278				505				104				149
Capital expenditures			32				110				243				500				719				53				207

																						Three Months Ended
		Year Ended December 31,																				March 31,
		2001				2002				2003				2004				2005				2005				2006
		(in thousands, except operating data)																				(unaudited)
Other Operating Data (unaudited):
LoopNet registered members at end of period			269,779				327,436				450,876				703,111				1,116,589				800,712				1,265,308
LoopNet premium members at end of period			5,797				13,692				21,203				35,482				57,461				42,142				64,806

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	•	LoopNet premium membership fees;
	•	BizBuySell BrokerWorks membership fees and paid listings;
	•	LoopLink product license fees; and
	•	advertising on, and lead generation from, our marketplaces.

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	•	the increased adoption of our premium membership services by the commercial real estate industry; and
	•	our acquisition of BizBuySell in October, 2004, and the increased adoption of our services by the operating business for sale industry.

	Revenue Recognition

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	Income Taxes

	Website Development Costs

	Stock-Based Compensation

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	•	comparable company revenue and earnings before interest, taxes, depreciation and amortization (EBITDA) multiples;
	•	our historical and projected revenues, EBITDA and cash flow; and
	•	comparable company sale transactions.

	•	these stock options were generally subject to vesting over a four-year period;
	•	there has been no public market for the shares issuable upon exercise of these options;
	•	all of the shares were subject to a right of first refusal held by us; and
	•	a $49.5 million preferred stock liquidation preference, to be paid in the event of a sale of LoopNet, prior to any payments to the common stock.

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															Three Months
			Year Ended December 31,												Ended March 31,
			2003				2004				2005				2005				2006
															(unaudited)
Revenues				100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Cost of revenues				18.9				15.0				12.3				14.0				12.0
Gross profit				81.1				85.0				87.7				86.0				88.0
Operating expenses:
	Sales and marketing			16.3				18.7				20.2				19.2				19.0
	Technology and product development			21.8				15.8				12.1				17.5				9.4
	General and administrative			30.3				28.7				19.2				19.2				14.5
Total operating expenses				68.4				63.2				51.5				55.9				42.9
Income from operations				12.7				21.8				36.2				30.1				45.1
Interest income, net				0.2				0.5				1.6				0.9				2.5
Other income, net				2.5				0.2				—				0.0				0.0
Income from continuing operations				15.4				22.5				37.8				31.0				47.6
Gain on sale of assets, net				2.7				—				—				0.0				0.0
Income before taxes				18.1				22.5				37.8				31.0				47.6
Income tax expense (benefit)				1.8				0.7				(23.3	)			1.0				18.6
Net income				16.3	%			21.8	%			61.1	%			30.0	%			29.0	%

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	Comparison of Three Months Ended March 31, 2006 and 2005

	Revenues

		Three Months Ended March 31,
														Percent
		2005				2006				Increase				Change
		(dollars in thousands)
Revenues		$	6,213			$	10,226			$	4,013				64.6	%
Premium members at March 31			42,141				64,806				22,665				53.8	%

	Cost of Revenues

		Three Months Ended March 31,
														Percent
		2005				2006				Increase				Change
		(dollars in thousands)
Cost of revenues		$	872			$	1,228			$	356				40.8	%
Percentage of revenues			14.0	%			12.0	%

	Sales and Marketing

		Three Months Ended March 31,
														Percent
		2005				2006				Increase				Change
		(dollars in thousands)
Sales and marketing		$	1,196			$	1,949			$	753				63.0	%
Percentage of revenues			19.2	%			19.0	%

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	Technology and Product Development

		Three Months Ended March 31,
														Percent
		2005				2006				Decrease				Change
		(dollars in thousands)
Technology and product development		$	1,086			$	960			$	(126	)			(11.6	)%
Percentage of revenues			17.5	%			9.4	%

	General and Administrative

		Three Months Ended March 31,
														Percent
		2005				2006				Increase				Change
		(dollars in thousands)
General and administrative		$	1,194			$	1,478			$	284				23.8	%
Percentage of revenues			19.2	%			14.5	%

	Stock-Based Compensation

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			Three Months Ended March 31,
											Increase/				Percent
			2005				2006				(Decrease)				Change
			(dollars in thousands)
Cost of revenues			$	2			$	8			$	6				300.0	%
Sales and marketing				31				51				20				64.5	%
Technology and product development				268				23				(245	)			(91.4	)%
General and administrative				74				32				(42	)			(56.8	)%
	Total		$	375			$	114			$	(261	)			(69.6	)%

	Interest Income

	Income Taxes

	Comparison of Years Ended December 31, 2005 and 2004

	Revenues

		Year Ended December 31,
														Percent
		2004				2005				Increase				Change
		(dollars in thousands)
Revenues		$	17,036			$	30,977			$	13,941				81.8	%
Premium members at year-end			35,482				57,461				21,979				61.9	%

	Cost of Revenues

		Year Ended December 31,
														Percent
		2004				2005				Increase				Change
		(dollars in thousands)
Cost of revenues		$	2,562			$	3,825			$	1,263				49.3	%
Percentage of revenues			15.0	%			12.3	%

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	Sales and Marketing

		Year Ended December 31,
														Percent
		2004				2005				Increase				Change
		(dollars in thousands)
Sales and marketing		$	3,193			$	6,252			$	3,059				95.8	%
Percentage of revenues			18.7	%			20.2	%

	Technology and Product Development

		Year Ended December 31,
														Percent
		2004				2005				Increase				Change
		(dollars in thousands)
Technology and product development		$	2,686			$	3,746			$	1,060				39.5	%
Percentage of revenues			15.8	%			12.1	%

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	General and Administrative

		Year Ended December 31,
														Percent
		2004				2005				Increase				Change
		(dollars in thousands)
General and administrative		$	4,889			$	5,955			$	1,066				21.8	%
Percentage of revenues			28.7	%			19.2	%

	Stock-Based Compensation

			Year Ended December 31,
											Increase/				Percent
			2004				2005				(Decrease)				Change
			(dollars in thousands)
Cost of revenues			$	1			$	18			$	17				1700.0	%
Sales and marketing				251				146				(105	)			(41.8	)%
Technology and product development				236				350				114				48.3	%
General and administrative				1,188				150				(1,038	)			(87.4	)%
	Total		$	1,676			$	664			$	(1,012	)			(60.4	)%

	Interest Income

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	Income Taxes

	Comparison of Years Ended December 31, 2004 and 2003

	Revenues

		Year Ended December 31,
														Percent
		2003				2004				Increase				Change
		(dollars in thousands)
Revenues		$	10,480			$	17,036			$	6,556				62.6	%
Premium members at year-end			21,203				35,482				14,279				67.3	%

	Cost of Revenues

		Year Ended December 31,
														Percent
		2003				2004				Increase				Change
		(dollars in thousands)
Cost of revenues		$	1,984			$	2,562			$	578				29.1	%
Percentage of revenues			18.9	%			15.0	%

	Sales and Marketing

		Year Ended December 31,
														Percent
		2003				2004				Increase				Change
		(dollars in thousands)
Sales and marketing		$	1,704			$	3,193			$	1,489				87.4	%
Percentage of revenues			16.3	%			18.7	%

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	Technology and Product Development

		Year Ended December 31,
														Percent
		2003				2004				Increase				Change
		(dollars in thousands)
Technology and product development		$	2,289			$	2,686			$	397				17.3	%
Percentage of revenues			21.8	%			15.8	%

	General and Administrative

		Year Ended December 31,
														Percent
		2003				2004				Increase				Change
		(dollars in thousands)
General and administrative		$	3,180			$	4,889			$	1,709				53.7	%
Percentage of revenues			30.3	%			28.7	%

	Stock-Based Compensation

											Increase/
			Year End				ed0Decemb				er c31,se)
			(dollars in thousands)
Cost of revenues			$	—			$	1			$	1
Sales and marketing				—				251				251
Technology and product development				—				236				236
General and administrative				—				1,188				1,188
	Total		$	—			$	1,676			$	1,676

	Interest Income

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	Income Taxes

	Quarterly Consolidated Statements of Income Data

			Quarter Ended
			Mar. 31,				June 30,				Sept. 30,				Dec. 31,				Mar. 31,				June 30,				Sept. 30,				Dec. 31,				Mar. 31,
			2004				2004				2004				2004				2005				2005				2005				2005				2006
			(in thousands)
Revenues			$	3,392			$	3,877			$	4,417			$	5,350			$	6,213			$	7,261			$	8,379				$9,124			$	10,226
Cost of revenues(1)				568				626				655				713				872				902				975				1,077				1,228
Gross profit				2,824				3,251				3,762				4,637				5,341				6,359				7,404				8,047				8,998
Operating expenses(1):
	Sales and marketing			574				661				677				1,281				1,196				1,445				1,561				2,050				1,949
	Technology and product development			578				600				604				904				1,086				909				852				899				960
	General and administrative			838				851				925				2,275				1,194				1,323				1,582				1,855				1,478
Total operating expenses				1,990				2,112				2,206				4,460				3,476				3,677				3,995				4,804				4,387
Income from operations				834				1,139				1,556				177				1,865				2,682				3,409				3,243				4,611
Interest income				17				17				30				34				59				87				137				204				255
Other income, net				3				26				3				2				—				7				—				—				(2	)
Income before taxes				854				1,182				1,589				213				1,924				2,776				3,546				3,447				4,864
Income tax expense (benefit)				17				24				32				45				61				77				97				(7,478	)			1,899
Net income			$	837			$	1,158			$	1,557			$	168			$	1,863			$	2,699			$	3,449			$	10,925			$	2,965

(1)	Includes stock-based compensation as follows:

			Quarter Ended
			Mar. 31,				June 30,				Sept. 30,				Dec. 31,				Mar. 31,				June 30,				Sept. 30,				Dec. 31,				Mar. 31,
			2004				2004				2004				2004				2005				2005				2005				2005				2006
Cost of revenues			$	0			$	0			$	0			$	1			$	2			$	5			$	6			$	6			$	8
Sales and marketing				0				0				0				251				31				36				39				40				51
Technology and product development				0				0				0				236				268				35				26				21				23
General and administrative				0				0				0				1,188				74				25				25				25				32
	Total		$	0			$	0			$	0			$	1,676			$	375			$	101			$	96			$	92			$	114

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			Quarter Ended
			Mar. 31,				June 30,				Sept. 30,				Dec. 31,				Mar. 31,				June 30,				Sept. 30,				Dec. 31,				Mar. 31,
			2004				2004				2004				2004				2005				2005				2005				2005				2006
Revenues				100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%			100.0	%
Cost of revenues				16.7				16.2				14.8				13.3				14.0				12.4				11.6				11.8				12.0
Gross profit				83.3				83.8				85.2				86.7				86.0				87.6				88.4				88.2				88.0
Operating expenses:
	Sales and marketing			16.9				17.0				15.3				24.0				19.2				20.0				18.6				22.5				19.0
	Technology and product development			17.0				15.5				13.7				16.9				17.5				12.5				10.2				9.9				9.4
	General and administrative			24.8				21.9				21.0				42.5				19.2				18.2				18.9				20.3				14.5
Total operating expenses				58.7				54.4				50.0				83.4				55.9				50.7				47.7				52.7				42.9
Income from operations				24.6				29.4				35.2				3.3				30.1				36.9				40.7				35.5				45.1
Interest income				0.5				0.4				0.7				0.6				0.9				1.2				1.6				2.2				2.5
Other income, net				0.1				0.7				0.1				0.1				—				0.1				—				—				0.0
Income before taxes				25.2				30.5				36.0				4.0				31.0				38.2				42.3				37.7				47.6
Income tax expense (benefit)				0.5				0.6				0.7				0.9				1.0				1.1				1.2				(82.0	)			18.6
Net income				24.7	%			29.9	%			35.3	%			3.1	%			30.0	%			37.1	%			41.1	%			119.7	%			29.0	%

														Three Months Ended
		Year Ended December 31,												March 31,
Cash flow data:		2003				2004				2005				2005				2006
														(unaudited)
		(in thousands)
Cash provided by operating activities		$	2,944			$	6,921			$	14,490			$	2,607			$	6,290
Cash provided by (used in) investing activities			196				(6,415	)			(1,719	)			(53	)			(207	)
Cash provided by (used in) financing activities			(427	)			18				296				12				(507	)

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	Operating Activities

	Investing Activities

	Financing Activities

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		Payments Due by Period
		2006				2007				2008				2009				2010				2011				Total
		(in thousands)
Operating lease obligations		$	945			$	978			$	660			$	467			$	476			$	198			$	3,724

	Advertising and Media Contracts

	Future Capital Requirements

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				Basic				Premium
Listing Benefits				Membership				Membership
	Detailed Property Listings				ü				ü
		MyLoopNet — Listing Management Center			ü				ü
		Enhanced Listing Exposure							ü
		ProspectList — Lead Generation							ü
		Marketing Exposure Statistics							ü
		Controlled Access Marketing							ü
Searching Benefits
	Listings Search Engine				ü				ü
		MyLoopNet — Searching Management Center			ü				ü
		Enhanced Listings Access							ü
		PropertyAlert — Email Alerts of New Listings			Weekly				Daily
		Reporting and Map-Based Presentations							ü
		MapSearch							Beta

	•	Property listing. Our property listing service allows customers to quickly and easily submit listings on properties available for sale or for lease, enabling them to reach a large audience of commercial real estate transaction participants. All listings submitted to the LoopNet online marketplace are processed through a listing quality assessment mechanism. Members can submit an unlimited number of listings and include detailed property listing information, including building description, financial and tenant information, photographs and key property characteristics. Our service automatically compiles this information into a professional-quality online brochure.

	-	MyLoopNet. Members can use MyLoopNet to manage various features of their LoopNet membership, including managing their listings and tracking the exposure their property profiles have received.
	-	Enhanced Listing Exposure. Property listings submitted by basic members can only be viewed by premium members. Property listings submitted by premium members are available for viewing by all registered members and have premium placement on search results.
	-	ProspectList. Premium members have exclusive access to ProspectList, a reverse lookup search function that enables property listers to market listings to specific agents, buyers and tenants who have posted their property purchase or lease criteria on LoopNet and requested that they be contacted with property listings that match those criteria.
	-	Marketing Exposure Statistics. Premium members have access in MyLoopNet to various statistics on the number of exposures being generated for their listings on LoopNet.
	-	Controlled Access Marketing. Premium members can use Controlled Access Marketing to password-protect their listings. For example, a premium member might choose to limit access to a property listing such that searchers can only access the listing details after agreeing to a confidentiality agreement with the listing agent.

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	•	Property searching. We developed our property search engine specifically for the commercial real estate market. Members use our proprietary search engine to identify properties available for sale or for lease on our online marketplace that meet their criteria. Members can search for properties based on a broad scope of commercial real estate specifications, including property type and sub-type, location, building and lot size, and price range. Members can also search using map-based geographic searching combined with various property listing attributes, including a keyword search capability.

	-	MyLoopNet. Members can use MyLoopNet to manage various features of their LoopNet membership, including saving links to multiple property profiles and detailed search parameters for future use. Members can also use MyLoopNet to specify the criteria for PropertyAlert emails.
	-	Enhanced Listings Access. Basic members are able to view summary details of their search results but can only view property profiles submitted by premium members. Premium members have full access to all property listings and profiles.
	-	PropertyAlert. Members can use PropertyAlert to receive email alerts with new property listings that meet their selection criteria. Premium members receive email alerts daily, while basic members receive email alerts weekly.
	-	Reporting and Map-Based Presentations. Premium members can automatically generate professional-quality reports and maps of properties they have selected to use for presentations to clients and interested parties.
	-	MapSearch. Currently, premium members have exclusive access to MapSearch, an interactive and dynamic aerial and satellite image map interface for property searches. We plan to make our MapSearch feature available to all registered members in the second quarter of 2006.

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Name		Age				Position
Richard J. Boyle, Jr.			40			President, Chief Executive Officer and Chairman of the Board of Directors
Brent Stumme			44			Chief Financial Officer and Senior Vice President, Finance and Administration
Thomas Byrne			39			Chief Marketing Officer and Senior Vice President, Marketing and Sales
Jason Greenman			38			Chief Product Officer and Senior Vice President, Business and Product Development
Wayne Warthen			42			Chief Technology Officer and Senior Vice President, Information Technology
Jeffrey D. Brody (1)			46			Director
Noel J. Fenton (2)			67			Director
William A. Millichap (2)			62			Director
Thomas E. Unterman (1)			61			Director

(1)	Member of the audit committee.
(2)	Member of the compensation committee.
(3)	Member of the nominating committee.

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	•	Class 1 will consist of Mr. Brody and Mr. Unterman, whose terms will expire at our annual stockholders meeting to be held in 2007;
	•	Class 2 will consist of Mr. Fenton and Mr. Millichap, whose terms will expire at our annual stockholders meeting to be held in 2008;
	•	Class 3 will consist of Mr. Boyle, whose term will expire at our annual stockholders meeting to be held in 2009.

	Audit Committee

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	Compensation Committee

	Nominating Committee

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										Long-Term
										Compensation
		Annual Compensation								Awards
										Restricted Stock
Name and Principal Position		Salary				Bonus				Awards(1)
Richard J. Boyle, Jr., President Chief Executive Officer and Chairman of the Board of Directors		$	250,000			$	112,500			$	44,450
Brent Stumme Chief Financial Officer and Senior Vice President, Finance and Administration			200,000				70,000				51,924
Thomas Byrne Chief Marketing Officer and Senior Vice President, Marketing and Sales			200,000				80,000				56,300
Jason Greenman Chief Product Officer and Senior Vice President, Business and Product Development			200,000				50,000				125,315
Wayne Warthen Chief Technology Officer and Senior Vice President, Information Technology			190,000				47,500				32,874

(1)

In January 2005, the named executive officers received restricted stock awards, subject to vesting over a four year period, as follows: Mr. Boyle 70,000 shares, Mr. Stumme 81,770 shares, Mr. Byrne 88,662 shares, Mr. Greenman 197,346 shares and Mr. Warthen 51,770 shares. The amounts shown in the table above represent the reassessed fair market value of the restricted stock on the date of purchase, less the amount paid by each named executive officer for the shares. As of December 31, 2005, the aggregate value of such awards was $278,250, $325,035, $325,431, $784,450 and $205,786 for each of Messrs. Boyle, Stumme, Byrne, Greenman and Warthen, respectively.

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		Number of
		Shares Acquired
Name		on Exercise				Value Realized ($)
Jason Greenman			372,142				—	(1)

(1)	There was no value realized upon the exercise of these options as the exercise price was equal to the assumed per share fair market value of our common stock at the time of exercise, as determined by our board of directors.

	Employee and Benefit Plans

	2001 Stock Option Plan

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	•	determine the terms of the options granted, including whether the options will be incentive stock options or nonqualified stock options, the exercise price of options, the terms and purchase price of restricted stock, the recipients of such awards and the number of shares subject to each award;
	•	determine the dates upon which options will be granted; and
	•	interpret the plan and the obligations of participants under the plan.

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	2006 Equity Incentive Plan

	•	1,800,000 shares;
	•	4% of the number of our outstanding shares as of the last day of the proceeding fiscal year; or
	•	a number of shares set by our board of directors.

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	401(k) Plan

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	•	any breach of their duty of loyalty to the corporation or its stockholders;
	•	acts or omissions not in good faith or which involve intentional misconduct or a knowing violation of law;
	•	unlawful payments of dividends or unlawful stock repurchases or redemptions; or
	•	any transaction from which the director derived an improper personal benefit.

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	•	each person, or group of affiliated persons, who is known by us to own beneficially 5% or more of our common stock;
	•	each of our directors;
	•	each of our named executive officers;
	•	each selling stockholder; and
	•	all directors and executive officers as a group.

		Shares Beneficially												Shares Beneficially
		Owned Prior to												Owned After
		the Offering								Number of				the Offering
										Shares
Name of Beneficial Owner		Number				Percent				Offered				Number				Percent
5% Stockholders:
LoopNet Holdings LLC (1)			8,749,990				28.0%				1,420,533				7,329,457				21.1%
PropertyFirst LLC (2)			8,750,002				28.0%				1,028,810				7,721,192				22.2%
Brentwood Associates IX, L.P. (3)			3,925,808				12.5%				0				3,925,808				11.3%
Rustic Canyon Ventures, L.P. (4)			3,230,505				10.1%				0				3,230,505				9.1%
Trinity Ventures (5)			3,173,411				10.0%				0				3,173,411				9.0%
STF III, L.P. (6)			2,781,311				8.7%				0				2,781,311				7.9%
Oak Investment Partners (7)			2,275,773				7.2%				0				2,275,773				6.5%
Dennis DeAndre (8)			1,566,314				5.0%				500,000				1,066,314				3.1%

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		Shares Beneficially												Shares Beneficially
		Owned Prior to												Owned After
		the Offering								Number of				the Offering
										Shares
Name of Beneficial Owner		Number				Percent				Offered				Number				Percent
Directors and Executive Officers:
Richard J. Boyle, Jr. (9)			1,778,050				5.7%				—	(43)			1,778,050				5.1%
Brent Stumme (10)			623,103				2.0%				—	(44)			623,103				1.8%
Wayne Warthen (11)			586,970				1.9%				—	(45)			586,970				1.7%
Jason Greenman (12)			569,490				1.8%				—				569,490				1.6%
Thomas Byrne (13)			619,568				2.0%				—	(46)			619,568				1.8%
Jeffrey D. Brody (14)			3,980,963				12.7%				—				3,980,963				11.5%
Noel J. Fenton (15)			3,173,411				10.0%				—				3,173,411				9.0%
William A. Millichap (16)			1,157,883				3.7%				—				1,157,883				3.3%
Thomas E. Unterman (17)			3,230,505				10.1%				—				3,230,505				9.1%
All directors and executive officers as a group (nine persons)			15,719,943				47.9%				—				15,719,943				43.3%
Other Selling Stockholders:
Jeffrey B. Citrin (18)			60,233				*				9,862				50,371				*
Morgan Stanley Dean Witter Equity Funding, Inc. (19)			198,938				*				23,391				175,547				*
J.P. Morgan Partners (BHCA), L.P. (20)			198,938				*				23,391				175,547				*
Sagecrest Living Trust (21)			64,494				*				5,055				59,439				*
John L. Stanfill and Betty C. Stanfill, Trustees of the John L. Stanfill and Betty C. Stanfill Revocable Trust Dated 1/16/98 (22)			1,026,196				3.3%				447,985				578,211				1.7%

											Number of
											Shares
Name of Beneficial Owner											Offered
Persons Selling Through LoopNet Holdings LLC:
Access Technology Partners Brokers Fund, L.P. (23)												1,327
Access Technology Partners, L.P. (24)												66,350
Attractor Offshore Ltd. (in liquidation) (25)												11,275
Todd David Bakar												916
Dennis DeAndre												500,000
Frank Drazka												602
EOP Operating Limited Partnership (26)												22,914
Joni Fazo												1,200
Lisa Gallaway												600
Robert R. Gallaway												1,350
John C. Gough												24,010
Hambrecht & Quist California (27)												4,800
Hambrecht & Quist Employee Venture Fund L.P., II (28)												4,147
Hambrecht & Quist Employee Venture Fund, 2000 LP (29)												654
Bruce B. Keene												90,000
Jonathan Leeb												10,000
LoopNet, Inc. (30)												529,283
McLaughlin Ventures (31)												7,000
Narragansett Bay Children’s Trust (32)												90,000
National Association of Realtors (33)												49,904
Thomas Palke												4,201
	Total											1,420,533

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											Number of
											Shares
Name of Beneficial Owner											Offered
Persons Selling Through PropertyFirst LLC:
Gregory Adamson												66
Amcito Partners L.P. (34)												59,150
Joseph F. Azrack												15,620
Douglas J. and Ellen M. Bowen as Tenants in Common												1,050
Kimberly J. Caccavo												4,000
Jeffrey B. Citrin												6,096
Elizabeth Divine												1,586
DTH Holding LLC (35)												4,201
Steven K. Fowlkes												1,016
Stephen J. Furnary												8,402
Halpert Family Trust dated February 24, 1998, Lewis and Patricia, TTEES												8,402
Kent & Judy A. Hooper												688
Timothy A. Kilgo												153
Peter R. Kisich												1,200
Peter B. Kupferberg												2,032
Michael H. Lowe												1,110
MBI-PF, LLC (36)												4,201
Rosina L. Motta												198
Phillip Pi												952
Stephen A. Roth												61,251
Edward M. Rotter												1,050
RREEF Internet Partners (37)												25,206
Thomas G. Sanchez												60,000
Ryan Son												182
John L. Stanfill and Betty C. Stanfill, trustees of the John L. Stanfill and Betty C. Stanfill Revocable Trust Dated 1/16/98												423,648
SunAmerica Investments, Inc. (38)												210,052
Surfboard & Co. (39)												58,814
Two Bear Living Trust (40)												508
USA Cycling Development Foundation (41)												47,411
Frederick J. Warren												16,364
WES Holdings LLC (42)												4,201
	Total											1,028,810

(1)

As described in “Certain Relationships and Related Transactions,” the Managers of LoopNet Holdings LLC hold the dispositive powers relating to the shares of LoopNet owned by LoopNet Holdings LLC, and the Managers together with the members of LoopNet Holdings LLC share various voting power relating to these shares. As described in “Certain Relationships and Related Transactions,” the members of LoopNet Holdings LLC are entitled to direct LoopNet Holdings LLC to participate in this offering with respect to the number of shares of LoopNet owned by this entity and allocated to such member through its percentage ownership of LoopNet Holdings LLC on an as converted basis. The 1,420,533 shares being sold by LoopNet Holdings LLC includes the 500,000 shares being sold by Dennis DeAndre also included in the table. The table set forth under the heading “Persons Selling Through LoopNet Holdings LLC” lists forth the members that have directed LoopNet Holdings LLC to participate in the offering.

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(2)	As described in “Certain Relationships and Related Transactions,” the Management Board of PropertyFirst LLC holds the dispositive powers relating to the shares of LoopNet owned by PropertyFirst LLC, and the Management Board together with the members of PropertyFirst LLC share various voting power relating to these shares. As described in “Certain Relationships and Related Transactions,” the members of PropertyFirst LLC are entitled to direct PropertyFirst LLC to participate in this offering with respect to the number of shares of LoopNet owned by this entity and allocated to such member through its percentage ownership of PropertyFirst LLC on an as converted basis. The 1,028,810 shares being sold by PropertyFirst LLC includes (i) 6,096 being sold by Jeffrey B. Citrin and 423,648 being sold by John L. Stanfill and Betty C. Stanfill, Trustees of the John L. Stanfill and Betty C. Stanfill Revocable Trust Dated 1/16/98, also included in the table. The table set forth under the heading “Persons Selling Through PropertyFirst LLC” lists forth the members that have directed PropertyFirst LLC to participate in the offering.
(3)	Includes 1,423,492 shares held by PropertyFirst LLC and 63,292 shares held by LoopNet Holdings LLC through which Brentwood Associates IX, L.P. holds the majority of the voting powers through the operating agreements of PropertyFirst LLC and LoopNet Holdings LLC. Jeffrey D. Brody is a managing member of Brentwood IX Ventures LLC, the general partner of Brentwood Associates IX, L.P. In such capacity, Mr. Brody shares voting control and dispositive power with respect to the shares held by Brentwood Associates IX, L.P. Mr. Brody disclaims beneficial ownership of the shares owned by this fund, except to the extent of his proportionate pecuniary interest therein. The address for Brentwood Associates IX, L.P. is 11150 Santa Monica Blvd., Suite 1200, Los Angeles, California 90025.
(4)	Includes (i) 1,096,359 shares held by PropertyFirst LLC through which Rustic Canyon Ventures, L.P. holds the majority of the voting powers through the operating agreement of PropertyFirst LLC and (ii) a warrant to purchase 711,382 shares. Tom Unterman, Mark Menell, Renee Labran, Michael Kim, Michael Song, Jon Staenberg, John Babcock and Lee Bailey collectively serve as members (the ‘Members’) of Rustic Canyon Partners, LLC, the general partner of Rustic Canyon Ventures, L.P. The Members share voting control and dispositive power over the shares and may be deemed to beneficially own the shares but disclaim beneficial ownership, except to the extent of their proportionate pecuniary interest therein. The address for Rustic Canyon Ventures, L.P. is 2425 Olympic Blvd., Suite 6050W, Santa Monica, CA 90404.
(5)	Includes (i) 156,063 shares held by PropertyFirst LLC and 1,125,522 shares held by LoopNet Holdings LLC through which Trinity Ventures VI, L.P. holds the majority of the voting powers through the operating agreements of PropertyFirst LLC and LoopNet Holdings LLC, (ii) 4,826 shares held by PropertyFirst LLC and 57,734 shares held by LoopNet Holdings LLC through which Trinity VI Side-by-Side Fund, L.P. holds the majority of the voting powers through the operating agreements of PropertyFirst LLC and LoopNet Holdings LLC, (iii) 1,182,926 shares and a warrant to purchase 591,462 shares held by Trinity Ventures VI, L.P. and (iv) 36,586 shares and a warrant to purchase 18,292 shares held by Trinity VI Side-by-Side Fund, L.P. Noel J. Fenton, Lawrence K. Orr, James G. Shennan, Jr., Fred Wang, Tod H. Francis and Augustus O. Tai collectively serve as managing members (the ‘Managing Members’) of Trinity TVL VI, LLC, the General Partner of Trinity Ventures VI, L.P. and Trinity VI Side-by-Side Fund, L.P. The Managing Members have shared voting control and dispositive power over all of the shares held by Trinity Ventures VI, L.P. and Trinity VI Side-by-Side Fund, L.P. Each Managing Member disclaims beneficial ownership of the shares held by Trinity Ventures VI, L.P. and Trinity VI Side-by-Side Fund, L.P., except to the extent of each such Managing Member’s pecuniary interest therein. The address for Trinity Ventures is 3000 Sand Hill Road, Building 4, Suite 160, Menlo Park, CA 94025.
(6)	Includes (i) 1,204,419 shares held by LoopNet Holdings LLC through which STF III, L.P. holds the majority of the voting powers through the operating agreement of LoopNet Holdings LLC and (ii) a warrant to purchase 525,630 shares. Nancy D. Burrus, Guy H. Conger and David E. Gold collectively serve as managing General Partners (the ‘Managing General Partners’) of STF Special Venture III, LLC, the managing General Partner of STF III, L. P. The Managing General Partners have shared voting control and dispositive power over all of the shares held by STF III, L.P. Each Managing General Partner disclaims beneficial ownership of the shares held by STF III, L.P., except to the extent of each

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	such Managing General Partner’s pecuniary interest therein. The address for STF III, L.P. is c/o Suez Ventures, 1690 Woodside Road, Suite 103, Redwood City, CA 94061.
(7)	Includes (i) 796,924 shares held by PropertyFirst, LLC through which Oak Investment Partners VIII, L.P. (“Oak VIII”) holds the majority of the voting powers through the operating agreement of PropertyFirst LLC, (ii) 15,435 shares held by PropertyFirst LLC through which Oak VIII Affiliates Fund, L.P. (“Oak VIII Affiliates”) holds the majority of the voting powers through the operating agreement of PropertyFirst LLC, (iii) 957,074 shares and a warrant to purchase 478,536 shares owned by Oak VIII and (iv) 18,536 shares and a warrant to purchase 9,268 shares owned by Oak VIII Affiliates. Oak VIII is managed by its general partner, Oak Associates VIII, LLC (‘Oak Associates VIII’). Ann H. Lamont, Gerald R. Gallagher, Bandel L. Carano, Edward F. Glassmeyer, and Fredric W. Harman collectively serve as Managing Members (the ‘Oak Associates VIII Managing Members’) of Oak Associates VIII. The Oak Associates VIII Managing Members have shared voting control and dispositive power over all of the shares held by Oak Associates VIII. Each Oak Associates VIII Managing Member disclaims beneficial ownership of the shares held by Oak VIII, except to the extent of each such managing member’s pecuniary interest herein. Oak VIII Affiliates is managed by its general partner, Oak VIII Affiliates, LLC. Ann H. Lamont, Gerald R. Gallagher, Bandel L. Carano, Edward F. Glassmeyer, and Fredric W. Harman collectively serve as Managing Members (the ‘Oak VIII Affiliates Managing Members’) of Oak VIII Affiliates, LLC. The Oak VIII Affiliates Managing Members have shared voting control and dispositive power over all of the shares held by Oak VIII Affiliates, LLC. Each Oak VIII Affiliates Managing Member disclaims beneficial ownership of the shares held by Oak VIII Affiliates, except to the extent of each such managing member’s pecuniary interest herein. The address for Oak VII and Oak Associates VIII is One Gorham Island, Westport CT, 06880.
(8)	Includes (i) 76,666 shares held by PropertyFirst LLC and 1,311,726 shares held by LoopNet Holdings LLC through which Mr. DeAndre holds the majority of the voting powers through the operating agreements of PropertyFirst LLC and LoopNet Holdings LLC and (ii) 13,240 shares of restricted stock subject to repurchase. The 500,000 shares being sold by Mr. DeAndre constitute a portion of the shares being sold by LoopNet Holdings LLC.
(9)	Includes (i) 181,070 shares of restricted stock subject to repurchase and (ii) 1,433,510 shares held by the Boyle Family Trust dated April 13, 2006, of which Mr. Boyle and Catherine M. Boyle are trustees.

(10)	Includes (i) 61,333 shares held by PropertyFirst LLC through which Mr. Stumme holds the majority of the voting powers through the operating agreement of PropertyFirst LLC, (ii) 138,844 shares of restricted stock subject to repurchase and (iii) 363,124 shares owned by the Stumme Family Trust of which Mr. Stumme is a trustee.
(11)	Includes (i) 55,200 shares held by PropertyFirst LLC through which the Wayne B. Warthen and Monica L. Warthen Trust dated September 18, 1998, of which Mr. Warthen is a trustee, holds the majority of the voting powers through the operating agreement of PropertyFirst LLC and (ii) 102,274 shares of restricted stock subject to repurchase.
(12)	Includes 102,432 shares of restricted stock subject to repurchase.
(13)	Includes 129,190 shares of restricted stock subject to repurchase.
(14)	Includes (i) 1,423,492 shares held by PropertyFirst LLC and 63,292 shares held by LoopNet Holdings LLC through which Brentwood Associates IX, L.P. holds the majority of the voting powers through the operating agreements of PropertyFirst LLC and LoopNet Holdings LLC, (ii) 55,155 shares held by PropertyFirst LLC through which Brentwood Affiliates Fund II, L.P. holds the majority of the voting powers through the operating agreement of PropertyFirst LLC, and (iii) 2,439,024 shares owned by Brentwood Associates IX, L.P. Mr. Brody, one of our directors, is a managing member of Brentwood IX Ventures LLC, the general partner of Brentwood Associates IX. In such capacity, Mr. Brody shares voting control and investment power with respect to the shares held by Brentwood Associates IX. Mr. Brody disclaims beneficial ownership of the shares owned by this fund, except to the extent of his proportionate pecuniary interest therein. The address for this entity is 11150 Santa Monica Blvd., Suite 1200, Los Angeles, California 90025.

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(15)	Includes (i) 156,063 shares held by PropertyFirst LLC and 1,125,522 shares held by LoopNet Holdings LLC through which Trinity Ventures VI, L.P. holds the majority of the voting powers through the operating agreements of PropertyFirst LLC and LoopNet Holdings LLC, (ii) 4,826 shares held by PropertyFirst LLC and 57,734 shares held by LoopNet Holdings LLC through which Trinity VI Side-by-Side Fund, L.P. holds the majority of the voting powers through the operating agreements of PropertyFirst LLC and LoopNet Holdings LLC, (iii) 1,182,926 shares and a warrant to purchase 591,462 shares held by Trinity Ventures VI, L.P. and (iv) 36,586 shares and a warrant to purchase 18,292 shares held by Trinity VI Side-by-Side Fund, L.P. Mr. Fenton is a general partner of Trinity Ventures. He shares voting control and dispositive power over these shares and disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. Mr. Fenton’s business address is c/o Trinity Ventures, 3000 Sand Hill Road, Building 4, Suite 160, Menlo Park, CA 94025.
(16)	Includes (i) 426,177 shares held by LoopNet Holdings LLC through which Marcus & Millichap holds the majority of the voting powers through the operating agreement of LoopNet Holdings LLC and (ii) 487,804 shares and a warrant to purchase 243,902 shares owned by Marcus & Millichap. Mr. Millichap is Chairman of Marcus & Millichap. He shares voting control and dispositive power over these shares and disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. Mr. Millichap’s business address is c/o Marcus & Millichap, 2626 Hanover Street, Palo Alto, CA 94304.
(17)	Includes (i) 1,096,359 shares held by PropertyFirst LLC through which Rustic Canyon Ventures, L.P. holds the majority of the voting powers through the operating agreement of PropertyFirst LLC and (ii) 1,422,764 shares and a warrant to purchase 711,382 shares owned by Rustic Canyon Ventures, L.P. Mr. Unterman is the managing partner of Rustic Canyon Ventures, L.P. He shares voting control and dispositive power over these shares and disclaims beneficial ownership of these shares except to the extent of his pecuniary interest therein. Mr. Unterman’s business address is c/o Rustic Canyon Ventures, L.P., 2425 Olympic Blvd., Suite 6050W, Santa Monica, CA 90404.
(18)	Includes (i) 12,185 shares held by PropertyFirst LLC through which Mr. Citrin holds the majority of the voting powers through the operating agreement of PropertyFirst LLC and (ii) a warrant to purchase 16,016 shares. 6,096 of the 9,862 shares being sold by Mr. Citrin constitute a portion of the shares being sold by PropertyFirst LLC.
(19)	Stephen R. Munger and James M. Willmott are the natural persons that hold the voting control and dispositive power with respect to these shares.
(20)	The general partner of J.P. Morgan Partners (BHCA), L.P. (“JPMP BHCA”) is JPMP Master Fund Manager, L.P. (“JPMP MFM”). The general partner of JPMP MFM is JPMP Capital Corp. (“JPMP Capital”), a wholly owned subsidiary of JPMorgan Chase & Co., a publicly traded Delaware corporation that is listed on the New York Stock Exchange. Each of JPMP MFM and JPMP Capital may be deemed, pursuant to Rule 13d-3 under the Exchange Act, to beneficially own the shares held by JPMP BHCA. Jeffrey C. Walker is the President of JPMP Capital and, by virtue of his position and responsibilities with JPMP Capital Corp., holds voting control and dispositive power over the shares held by JPMP BHCA. Mr. Walker disclaims beneficial ownership of the shares held by JPMP BHCA except to the extent of his proportionate pecuniary interest therein.
(21)	Frederick Warren is the natural person that holds the voting control and dispositive power with respect to these shares.
(22)	Includes (i) 819,212 shares held by PropertyFirst LLC through which the trust holds the majority of the voting powers through the operating agreement of PropertyFirst LLC and (ii) a warrant to purchase 10,748 shares. 423,648 of the 447,985 shares being sold by the trust constitute a portion of the shares being sold by PropertyFirst LLC.
(23)	Represents shares owned of record by LoopNet Holdings LLC, for which Access Technology Partners Brokers Fund, L.P. has directed LoopNet Holdings LLC to sell such shares on its behalf pursuant to its operating agreement. LoopNet Holdings LLC holds the investment power with respect to these shares. The general partner of Access Technology Partners Brokers Fund, L.P. (“Access Brokers Fund”) is

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	H&Q Venture Management, L.L.C. (“HQVM”), a wholly owned subsidiary of JPMorgan Chase & Co., a publicly traded Delaware corporation that is listed on the New York Stock Exchange. HQVM may be deemed, pursuant to Rule 13d-3 under the Exchange Act, to beneficially own the shares held by Access Brokers Fund. Thomas Szymoniak is the Chief Financial Officer of HQVM and, by virtue of his position and responsibilities with HQVM, holds voting control and dispositive power over the shares held by Access Brokers Fund. Mr. Szymoniak disclaims beneficial ownership of the shares held by Access Brokers Fund except to the extent of his proportionate pecuniary interest therein. See “Certain Relationships and Related Transactions”.
(24)	Represents shares owned of record by LoopNet Holdings LLC, for which Access Technology Partners, L.P. has directed LoopNet Holdings LLC to sell such shares on its behalf pursuant to the operating agreement of LoopNet Holdings LLC. LoopNet Holdings LLC holds the investment power with respect to these shares. The general partner of Access Technology Partners, L.P. is Access Technology Management, LLC, whose managing member is H&Q Venture Management, L.L.C. (“HQVM”), a wholly owned subsidiary of JPMorgan Chase & Co., a publicly traded Delaware corporation that is listed on the New York Stock Exchange. HQVM may be deemed, pursuant to Rule 13d-3 under the Exchange Act, to beneficially own the shares held by Access Technology Partners, L.P. Thomas Szymoniak is the Chief Financial Officer of HQVM and, by virtue of his position and responsibilities with HQVM, holds voting control and dispositive power over the shares held by Access Technology Partners, L.P. Mr. Szymoniak disclaims beneficial ownership of the shares held by Access Technology Partners, L.P. except to the extent of his proportionate pecuniary interest therein. See “Certain Relationships and Related Transactions”.
(25)	Represents shares owned of record by LoopNet Holdings LLC, for which Attractor Offshore Ltd. has directed LoopNet Holdings LLC to sell such shares on its behalf pursuant to the operating agreement of LoopNet Holdings LLC. LoopNet Holdings LLC holds the investment power with respect to these shares. John J. Greenwood is the natural person that holds the voting control dispositive power with respect to these shares that are not held by LoopNet Holdings LLC. See “Certain Relationships and Related Transactions”.
(26)	Represents shares owned of record by LoopNet Holdings LLC, for which EOP Operating Limited Partnership, a Delaware limited partnership (“EOPLP”) has directed LoopNet Holdings LLC to sell such shares on its behalf pursuant to the operating agreement of LoopNet Holdings LLC. LoopNet Holdings LLC holds the investment power with respect to these shares. Equity Office Properties Trust, a publicly traded Maryland real estate investment trust (“EOPT”), is the general partner of EOPLP. Marsha C. Williams, Executive Vice President and Chief Financial Officer of EOPT, is the only individual with dispositive power with respect to these shares. The following individuals have voting control with respect to these shares: Richard C. Kincaid, President and Chief Executive Officer of EOPT; Peyton H. Owen, Executive Vice President and Chief Operating Officer of EOPT; Jeffrey L. Johnson, Executive Vice President and Chief Investment Officer of EOPT; and, in certain circumstances, Matthew T. Gworek, Shobi S. Kahn and J. Michael Lynch, each a Senior Vice President — Investments of EOPT. The named natural persons have the indicated voting control or dispositive power of the shares held by EOPLP only in their capacity as officers, and therefore agents, of EOPT or its affiliates and not in any personal capacity; such persons have no personal interest in the shares. See “Certain Relationships and Related Transactions”.
(27)	Represents shares owned of record by LoopNet Holdings LLC, for which Hambrecht & Quist California (“H&Q California”) has directed LoopNet Holdings LLC to sell such shares on its behalf pursuant to the operating agreement of LoopNet Holdings LLC. LoopNet Holdings LLC holds the investment power with respect to these shares. “H&Q California” is a wholly owned subsidiary of JPMorgan Chase & Co., a publicly traded Delaware corporation that is listed on the New York Stock Exchange. Thomas Szymoniak is the Attorney-In-Fact of H&Q California and as such holds voting control and dispositive power over the shares held by H&Q California. Mr. Szymoniak disclaims beneficial ownership of the shares held by H&Q California except to the extent of his proportionate pecuniary interest therein. See “Certain Relationships and Related Transactions”.

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(28)	Represents shares owned of record by LoopNet Holdings LLC, for which Hambrecht & Quist Employee Venture Fund L.P., II (“H&Q Employee Fund II”) has directed LoopNet Holdings LLC to sell such shares on its behalf pursuant to the operating agreement of LoopNet Holdings LLC. LoopNet Holdings LLC holds the investment power with respect to these shares. The general partner of H&Q Employee Fund II is H&Q Venture Management, L.L.C. (“HQVM”), a wholly owned subsidiary of JPMorgan Chase & Co., a publicly traded Delaware corporation that is listed on the New York Stock Exchange. HQVM may be deemed, pursuant to Rule 13d-3 under the Exchange Act, to beneficially own the shares held by H&Q Employee Fund II. Thomas Szymoniak is the Chief Financial Officer of HQVM and, by virtue of his position and responsibilities with HQVM, holds voting control and dispositive power over the shares held by H&Q Employee Fund II. Mr. Szymoniak disclaims beneficial ownership of the shares held by H&Q Employee Fund II except to the extent of his proportionate pecuniary interest therein. See “Certain Relationships and Related Transactions”.
(29)	Represents shares owned of record by LoopNet Holdings LLC, for which Hambrecht & Quist Employee Venture Fund, 2000 LP (“H&Q Employee Fund 2000”) directed LoopNet Holdings LLC to sell such shares on its behalf pursuant to the operating agreement of LoopNet Holdings LLC. LoopNet Holdings LLC holds the investment power with respect to these shares. The general partner of H&Q Employee Fund 2000 is H&Q Venture Management, L.L.C. (“HQVM”), a wholly owned subsidiary of JPMorgan Chase & Co., a publicly traded Delaware corporation that is listed on the New York Stock Exchange. HQVM may be deemed, pursuant to Rule 13d-3 under the Exchange Act, to beneficially own the shares held by H&Q Employee Fund 2000. Thomas Szymoniak is the Chief Financial Officer of HQVM and, by virtue of his position and responsibilities with HQVM, holds voting control and dispositive power over the shares held by H&Q Employee Fund 2000. Mr. Szymoniak disclaims beneficial ownership of the shares held by H&Q Employee Fund 2000 except to the extent of his proportionate pecuniary interest therein. See “Certain Relationships and Related Transactions.”
(30)	Represents shares owned of record by LoopNet Holdings LLC, for which LoopNet, Inc. has directed LoopNet Holdings LLC to sell such shares on its behalf pursuant to the operating agreement of LoopNet Holdings LLC. LoopNet Holdings LLC holds the investment power with respect to these shares. LoopNet, Inc. repurchased these shares from another LoopNet Holdings LLC member in 2003. Richard J. Boyle, Jr. is the natural person that holds the voting control and dispositive power with respect to these shares that are not held by LoopNet Holdings LLC. See “Certain Relationships and Related Transactions.” These 529,283 shares, together with 3,470,717 newly issued shares, comprise the 4,000,000 shares to be offered by LoopNet, Inc. in this offering.
(31)	Represents shares owned of record by LoopNet Holdings LLC, for which McLaughlin Ventures has directed LoopNet Holdings LLC to sell such shares on its behalf pursuant to the operating agreement of LoopNet Holdings LLC. LoopNet Holdings LLC holds the investment power with respect to these shares. Mark A. McLaughlin and Tracy A. McLaughlin are the natural persons that hold the voting control and dispositive power with respect to these shares that are not held by LoopNet Holdings LLC. See “Certain Relationships and Related Transactions”.
(32)	Represents shares owned of record by LoopNet Holdings LLC, for which the Trustees of the Narragansett Bay Children’s Trust have directed LoopNet Holdings LLC to sell such shares on its behalf pursuant to the operating agreement of LoopNet Holdings LLC. LoopNet Holdings LLC holds the investment power with respect to such shares. Donna Keene Hazard, Charles M. Hazard, Jr. and Asa E. Phillips are the natural persons that hold the voting control and dispositive power with respect to these shares that are not held by LoopNet Holdings LLC. See “Certain Relationships and Related Transactions.”
(33)	Represents shares owned of record by LoopNet Holdings LLC, for which National Association of Realtors has directed LoopNet Holdings LLC to sell such shares on its behalf pursuant to the operating agreement of LoopNet Holdings LLC. LoopNet Holdings LLC holds the investment power with respect to these shares. Dale Stinton and Bruce Wolf are the natural persons that hold the voting control and dispositive power with respect to these shares that are not held by LoopNet Holdings LLC. See “Certain Relationships and Related Transactions”.

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(34)	Represents shares owned of record by PropertyFirst, LLC, for which Amcito Partners L.P. has directed PropertyFirst, LLC to sell such shares on its behalf pursuant to the operating agreement of Property First, LLC. PropertyFirst, LLC holds the investment power with respect to these shares. Richard E. Carlson, Jeffrey S. Becker, John A. Ciccarone, W. Scott Campbell, Gregory S. Little and Jacqueline P. Little are the natural persons that hold the voting control and dispositive power with respect to these shares that are not held by PropertyFirst, LLC. See “Certain Relationships and Related Transactions”.
(35)	Represents shares owned of record by PropertyFirst, LLC, for which DTH Holding LLC has directed PropertyFirst, LLC to sell such shares on its behalf pursuant to the operating agreement of Property First, LLC. PropertyFirst, LLC holds the investment power with respect to these shares. David Hamamoto is the natural person that holds the voting control and dispositive power with respect to these shares that are not held by PropertyFirst, LLC. See “Certain Relationships and Related Transactions”.
(36)	Represents shares owned of record by PropertyFirst, LLC, for which MBI-PF, LLC has directed PropertyFirst, LLC to sell such shares on its behalf pursuant to the operating agreement of Property First, LLC. PropertyFirst, LLC holds the investment power with respect to these shares. Adam Borak, Martin Lamb, Peggy Lamb, Abe Anhang, Jon Gordon, Charles Humber, Steven Kauff, Gregory Peck, Neil Cohen and Lee Parks are the natural persons that hold the voting control and dispositive power with respect to these shares that are not held by PropertyFirst, LLC. See “Certain Relationships and Related Transactions”.
(37)	Represents shares owned of record by PropertyFirst, LLC, for which RREEF Internet Partners has directed PropertyFirst, LLC to sell such shares on its behalf pursuant to the operating agreement of Property First, LLC. PropertyFirst, LLC holds the investment power with respect to these shares. Stephen M. Steppe is the natural person that holds the voting control and dispositive power with respect to these shares that are not held by PropertyFirst, LLC. See “Certain Relationships and Related Transactions”.
(38)	Represents shares owned of record by PropertyFirst, LLC, for which SunAmerica Investments, Inc. directed PropertyFirst, LLC to sell such shares on its behalf pursuant to the operating agreement of Property First, LLC. PropertyFirst, LLC holds the investment power with respect to these shares. SunAmerica Investments, Inc. is an indirect wholly owned subsidiary of American International Group, Inc., a publicly traded Delaware corporation that is listed on the New York Stock Exchange.
(39)	Represents shares owned of record by PropertyFirst, LLC, for which Surfboard & Co. has directed PropertyFirst, LLC to sell such shares on its behalf pursuant to the operating agreement of Property First, LLC. PropertyFirst, LLC holds the investment power with respect to these shares. Barbara J. Stocking and Judy M. Alexander are the natural persons that hold the voting control and dispositive power with respect to these shares that are not held by PropertyFirst, LLC. See “Certain Relationships and Related Transactions”.
(40)	Represents shares owned of record by PropertyFirst, LLC, for which Two Bear Living Trust has directed PropertyFirst, LLC to sell such shares on its behalf pursuant to the operating agreement of Property First, LLC. PropertyFirst, LLC holds the investment power with respect to these shares. Frederick J. Warren is the natural person that holds the voting control and dispositive power with respect to these shares that are not held by PropertyFirst, LLC. See “Certain Relationships and Related Transactions”.
(41)	Represents shares owned of record by PropertyFirst, LLC, for which USA Cycling Development Foundation has directed PropertyFirst, LLC to sell such shares on its behalf pursuant to the operating agreement of Property First, LLC. PropertyFirst, LLC holds the investment power with respect to these shares. Lance Armstrong, Matt Barger, Skip Battle, Mark Bissell, Michael Brooks, John Bucksbaum, Tench Coxe, Robert L. Emery, Jeffery C. Garvey, Peter Grauer, Mick Hellman, Thomas L. Kempner, Jr., Terry Lee, Ed McCall, Michael Patterson, Rich Silverstein, Herb Thomas, Thomas W. Weisel, Ward Woods and David B. Williams are the natural persons that hold the voting control and dispositive power with respect to these shares that are not held by PropertyFirst, LLC. See “Certain Relationships and Related Transactions”.
(42)	Represents shares owned of record by PropertyFirst, LLC, for which WES Holdings LLC has directed PropertyFirst, LLC to sell such shares on its behalf pursuant to the operating agreement of Property

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	First, LLC. PropertyFirst, LLC holds the investment power with respect to these shares. W. Edward Scheetz is the natural person that holds the voting control and dispositive power with respect to these shares that are not held by PropertyFirst, LLC. See “Certain Relationships and Related Transactions”.
(43)	Mr. Boyle has indicated interest in selling a limited number of shares in the event of exercise of the overallotment option by the underwriters.
(44)	Mr. Stumme has indicated interest in selling a limited number of shares in the event of exercise of the overallotment option by the underwriters.
(45)	Mr. Warthen has indicated interest in selling a limited number of shares in the event of exercise of the overallotment option by the underwriters.
(46)	Mr. Byrne has indicated interest in selling a limited number of shares in the event of exercise of the overallotment option by the underwriters.

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	•	acquisition of us by means of a tender offer;
	•	acquisition of us by means of a proxy contest or otherwise; or
	•	removal of our incumbent officers and directors.

	•	Undesignated Preferred Stock. The ability to authorize undesignated preferred stock makes it possible for our board of directors to issue one or more series of preferred stock with voting or other rights or preferences that could impede the success of any attempt to change control of LoopNet. These and other provisions may have the effect of deferring hostile takeovers or delaying changes in control or management of our company.
	•	Stockholder Meetings. Our charter documents provide that a special meeting of stockholders may be called only by resolution adopted by the board of directors.
	•	Requirements for Advance Notification of Stockholder Nominations and Proposals. Our bylaws establish advance notice procedures with respect to stockholder proposals and the nomination of candidates for election as directors, other than nominations made by or at the direction of the board of directors or a committee of the board of directors.

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	•	Elimination of Stockholder Action by Written Consent. Our amended and restated certificate of incorporation eliminates the right of stockholders to act by written consent without a meeting.
	•	Election and Removal of Directors. Our restated Certificate of Incorporation will provide for the division of our board of directors into three classes, as nearly equal in number as possible, with the directors in each class serving for three-year terms, and one class being elected each year by our stockholders. In addition, our directors will be removable only for cause and, subject to certain exceptions, any vacancies of the board of directors shall be filled only by the affirmative vote of a majority of the directors then in office. Because this system of election, appointing, removing and replacing directors generally makes it more difficult for stockholders to replace a majority of the board of directors, it may discourage a third party from making a tender offer or otherwise attempting to gain control of us and may maintain the incumbency of the board of directors.

	•	prior to the date of the transaction, the board of directors of the corporation approved either the business combination or the transaction which resulted in the stockholder becoming an interested stockholder;
	•	upon consummation of the transaction which resulted in the stockholder becoming an interested stockholder, the interested stockholder owned at least 85% of the voting stock of the corporation outstanding at the time the transaction commenced, excluding for purposes of determining the number of shares outstanding those shares owned by persons who are directors and also officers and by employee stock plans in which employee participants do not have the right to determine confidentially whether shares held subject to the plan will be tendered in a tender or exchange offer; or
	•	on or subsequent to the date of the transaction, the business combination is approved by the board of directors and authorized at an annual or special meeting of stockholders, and not by written consent, by the affirmative vote of at least two-thirds of the outstanding voting stock which is not owned by the interested stockholder.

	•	any merger or consolidation involving the corporation and the interested stockholder;
	•	any sale, transfer, pledge or other disposition of 10% or more of our assets involving the interested stockholder;
	•	in general, any transaction that results in the issuance or transfer by us of any of our stock to the interested stockholder; or
	•	the receipt by the interested stockholder of the benefit of any loans, advances, guarantees, pledges or other financial benefits provided by or through the corporation.

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	•	Beginning on the effective date of this offering, only the shares sold in this offering will be immediately available for sale in the public market.

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	•	Beginning 180 days after the effective date of this offering, the anticipated expiration date for the lock-up and market stand-off agreements, assuming no extension of the expiration date, approximately 27,968,257 shares will be eligible for sale pursuant to Rules 144, 144(k) and 701.
	•	An additional 2,296,470 shares will become eligible for sale pursuant to Rule 144 on various dates after the anticipated expiration date of the lockup and market standoff agreements. Shares eligible to be sold by affiliates pursuant to Rule 144 are subject to volume restrictions as described below.

	•	one percent of our then outstanding shares of common stock (approximately 347,520 shares immediately after this offering); or
	•	the average weekly trading volume of our common stock on the Nasdaq National Market during the four calendar weeks preceding the date on which notice of the sale is filed with the Securities and Exchange Commission.

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			Number
Underwriter			of Shares
Credit Suisse Securities (USA) LLC
Thomas Weisel Partners LLC
Pacific Crest Securities Inc.
Pacific Growth Equities, LLC
	Total			6,000,000

Per Share

Total

Without

With

Without

With

Over-allotment

Over-allotment

Over-allotment

Over-allotment

Underwriting Discounts and Commissions paid by us

$

$

$

$

Expenses payable by us

$

$

$

$

Underwriting Discounts and

Commissions paid by the selling stockholders

$

$

$

$

81

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	•	prevailing market conditions;
	•	the history of and prospects for our industry;
	•	an assessment of our management;
	•	our present operations;
	•	our historical results of operations;
	•	the trend of our revenues and earnings; and
	•	our earnings prospects.

	•	Stabilizing transactions permit bids to purchase the underlying security so long as the stabilizing bids do not exceed a specified maximum.

82

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	•	Over-allotment involves sales by the underwriters of shares in excess of the number of shares the underwriters are obligated to purchase, which creates a syndicate short position. The short position may be either a covered short position or a naked short position. In a covered short position, the number of shares over-allotted by the underwriters is not greater than the number of shares that they may purchase in the over-allotment option. In a naked short position, the number of shares involved is greater than the number of shares in the over-allotment option. The underwriters may close out any covered short position by either exercising their over-allotment option or purchasing shares in the open market.
	•	Syndicate covering transactions involve purchases of the common stock in the open market after the distribution has been completed in order to cover syndicate short positions. In determining the source of shares to close out the short position, the underwriters will consider, among other things, the price of shares available for purchase in the open market as compared to the price at which they may purchase shares through the over-allotment option. If the underwriters sell more shares than could be covered by the over-allotment option, a naked short position, the position can only be closed out by buying shares in the open market. A naked short position is more likely to be created if the underwriters are concerned that there could be downward pressure on the price of the shares in the open market after pricing that could adversely affect investors who purchase in the offering.
	•	Penalty bids permit the representatives to reclaim a selling concession from a syndicate member when the common stock originally sold by the syndicate member is purchased in a stabilizing or syndicate covering transaction to cover syndicate short positions.

83

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	•	the purchaser is entitled under applicable provincial securities laws to purchase the common stock without the benefit of a prospectus qualified under those securities laws,
	•	where required by law, that the purchaser is purchasing as principal and not as agent, and
	•	the purchaser has reviewed the text above under Resale Restrictions.

84

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85

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		Page
Report of Independent Registered Public Accounting Firm			F-2
Consolidated Balance Sheets			F-3
Consolidated Statements of Income			F-4
Consolidated Statements of Stockholders’ Deficit			F-5
Consolidated Statements of Cash Flows			F-6
Notes to Consolidated Financial Statements			F-7

F-1

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Table of Contents

	/s/ Ernst & Young LLP

F-2

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Table of Contents

			December 31,								March 31,
			2004				2005				2006
											(unaudited)
ASSETS
Current assets:
	Cash and cash equivalents		$	5,698			$	18,765			$	24,341
	Short-term investments			3,026				3,100				3,127
	Accounts receivable, net of allowance of $33, $27 and $39, respectively			373				529				595
	Prepaid expenses and other current assets			257				325				270
	Deferred income taxes			—				824				824
Total current assets				9,354				23,543				29,157
Property and equipment, net				487				843				930
Goodwill				1,417				2,417				2,417
Intangibles, net				1,542				1,418				1,391
Deferred income taxes				—				6,798				5,002
Deposits and other noncurrent assets				171				158				1,134
Total assets			$	12,971			$	35,177			$	40,031
LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
	Accounts payable		$	59			$	65			$	113
	Accrued compensation and benefits			981				1,284				1,006
	Accrued liabilities			595				599				1,131
	Deferred revenue			2,532				4,640				5,589
	Income taxes payable			88				16				68
Total current liabilities				4,255				6,604				7,907
Commitments and contingencies (see Note 9)
Redeemable convertible preferred stock, $.001 par value, 32,795,752 shares authorized: 21,728,528, 22,541,528 and 22,545,528 shares issued and outstanding at December 31, 2004 and 2005 and March 31, 2006, respectively; $45,011,384 aggregate liquidation preference				39,712				39,962				39,964
Stockholders’ deficit:
	Common stock, $.001 par value, 100,000,000 shares authorized; 7,197,286, 8,514,538 and 8,735,812 shares issued and outstanding at December 31, 2004 and 2005 and March 31, 2006, respectively			7				9				9
	Additional paid in capital			11,374				12,482				11,792
	Deferred stock-based compensation			(512	)			(827	)			—
	Stockholder notes receivable			(352	)			(453	)			—
	Other comprehensive income			(6	)			(29	)			(35	)
	Accumulated deficit			(41,507	)			(22,571	)			(19,606	)
Total stockholders’ deficit				(30,996	)			(11,389	)			(7,840	)
Total liabilities and stockholders’ deficit			$	12,971			$	35,177			$	40,031

F-3

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															Three Months
			Year Ended December 31,												Ended March 31,
			2003				2004				2005				2005				2006
															(unaudited)
Revenues			$	10,480			$	17,036			$	30,977			$	6,213			$	10,226
Cost of revenues				1,984				2,562				3,825				872				1,228
Gross profit				8,496				14,474				27,152				5,341				8,998
Operating expenses:
	Sales and marketing			1,704				3,193				6,252				1,196				1,949
	Technology and product development			2,289				2,686				3,746				1,086				960
	General and administrative			3,180				4,889				5,955				1,194				1,478
Total operating expenses				7,173				10,768				15,953				3,476				4,387
Income from operations				1,323				3,706				11,199				1,865				4,611
Interest income, net				21				98				487				59				255
Other income (expense), net				261				34				7				—				(2	)
Income from continuing operations				1,605				3,838				11,693				1,924				4,864
Discontinued operations:
	Gain on sale of assets, net			287				—				—				—				—
Income from discontinued operations				287				—				—				—				—
Income before taxes				1,892				3,838				11,693				1,924				4,864
Income tax expense (benefit)				188				118				(7,243	)			61				1,899
Net income			$	1,704			$	3,720			$	18,936			$	1,863			$	2,965
Basic net income per share
	Income from continuing operations		$	—			$	0.06			$	0.58			$	0.05			$	0.08
	Income from discontinued operations			—				—				—				—				—
Basic net income per share			$	—			$	0.06			$	0.58			$	0.05			$	0.08
Diluted net income per share
	Income from continuing operations		$	—			$	0.04			$	0.54			$	0.03			$	0.06
	Income from discontinued operations			—				—				—				—				—
Diluted net income per share:			$	—			$	0.04			$	0.54			$	0.03			$	0.06
Number of shares used in per share calculations:
	Basic			3,623				3,767				7,259				6,761				7,939
	Diluted			3,623				5,757				35,091				9,851				10,678

F-4

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																											Accumulated
			Common Stock								Additional				Deferred				Stockholders’								Other				Total
											Paid-in				stock-based				Notes				Accumulated				Comprehensive				Stockholders’
			Shares				Amount				Capital				compensation				Receivable				Deficit				Income (Loss)				Deficit
Balance at December 31, 2002				3,582			$	2			$	8,830				—			$	(15	)		$	(46,931	)		$	—			$	(38,114	)
	Exercise of stock options			54				—				5				—				—				—				—				5
	Net income			—				—				—				—				—				1,704				—				1,704
Balance at December 31, 2003				3,636				2				8,835				—				(15	)			(45,227	)			—				(36,405	)
	Exercise of stock options			2,819				1				281				—				—				—				—				282
	Issuance of restricted stock			742				—				74				—				—				—				—				74
	Stockholders’ notes receivable			—				—				—				—				(337	)			—				—				(337	)
	Unrealized loss on marketable securities			—				—				—				—				—				—				(6	)			(6	)
	Stock-based compensation on revalued stock options			—				—				1,673				—				—				—				—				1,673
	Deferred stock-based compensation related to options and restricted stock granted to employees			—				—				515				(515	)			—				—				—				—
	Amortization of deferred stock-based compensation, net of forfeitures for terminated employees			—				—				—				3				—				—				—				3
	Net income			—				—				—				—				—				3,720				—				3,720
Balance at December 31, 2004				7,197				3				11,378				(512	)			(352	)			(41,507	)			(6	)			(30,996	)
	Exercise of stock options			828				—				82				—				—				—				—				82
	Issuance of restricted stock			490				—				49				—				—				—				—				49
	Stockholders’ notes receivable			—				—				—				—				(86	)			—				—				(86	)
	Interest on stockholders’ notes receivable			—				—				—				—				(15	)			—				—				(15	)
	Unrealized loss on marketable securities			—				—				—				—				—				—				(23	)			(23	)
	Stock-based compensation on revalued stock options			—				—				236				—				—				—				—				236
	Deferred stock-based compensation related to options granted to employees			—				—				743				(743	)			—				—				—				—
	Amortization of deferred stock-based compensation net of forfeitures for terminated employees															428				—				—				—				428
	Net income			—				—				—				—				—				18,936				—				18,936
Balance at December 31, 2005				8,515			$	3			$	12,488			$	(827	)		$	(453	)		$	(22,571	)		$	(29	)		$	(11,389	)
	Exercise of stock options			221				1				22				—				—				—				—				23
	Interest on shareholders’ notes receivable			—				—				—				—				(3	)			—				—				(3	)
	Collection of stockholders’ note receivable			—				—				—				—				456				—				—				456
	Unrealized loss on marketable securities			—				—				—				—				—				—				(6	)			(6	)
	SFAS 123R adoption			—				—				(827	)			827				—				—				—				—
	Stock-based compensation expense			—				—				114				—				—				—				—				114
	Net income			—				—				—				—				—				2,965				—				2,965
Balance at March 31, 2006 (unaudited)				8,736			$	4			$	11,797			$	—			$	—			$	(19,606	)		$	(35	)		$	(7,840	)

F-5

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Table of Contents

																	Three Months
					Year Ended December 31,												Ended March 31,
					2003				2004				2005				2005				2006
																	(unaudited)
Cash flows from operating activities
	Net income				$	1,704			$	3,720			$	18,936			$	1,863			$	2,965
	Adjustments to reconcile net income to net cash provided by operating activities:
		Depreciation and amortization				377				278				505				104				149
		Stock-based compensation				—				1,676				664				375				114
		Net loss on disposal of assets				62				2				—				—				3
		Net gain on sale of business				(287	)			—				—				—				—
		Deferred income tax (benefit)				—				—				(7,622	)			—				1,796
		Changes in operating assets and liabilities, net of effects from sale of business:
			Accounts receivable			30				(132	)			(157	)			(3	)			(65	)
			Prepaid expenses and other assets			141				(152	)			(184	)			(31	)			26
			Income taxes payable			188				(100	)			(72	)			(27	)			52
			Accounts payable			(21	)			45				6				(55	)			47
			Accrued expenses and other current liabilities			(79	)			213				4				162				531
			Accrued compensation and benefits			385				305				301				(443	)			(277	)
			Deferred revenue			444				1,066				2,109				662				949
	Net cash provided by operating activities					2,944				6,921				14,490				2,607				6,290
Cash flows from investing activities
	Purchase of property and equipment					(243	)			(500	)			(719	)			(53	)			(207	)
	Proceeds from sale of assets					12				—				—				—				—
	Purchase of short-term investments					—				(3,000	)			—				—				—
	Net proceeds from the sale of business					427				35				—				—				—
	Acquisitions, net of acquired cash					—				(2,950	)			(1,000	)			—				—
	Net cash provided by (used in) investing activities					196				(6,415	)			(1,719	)			(53	)			(207	)
Cash flows from financing activities
	Repayment of note payable					(139	)			—				—				—				—
	Net payments on equipment financing					(293	)			—				—				—				—
	Net proceeds from exercise of preferred stock warrants					—				—				250				—				1
	Net proceeds from exercise of stock options					5				18				46				12				23
	Net proceeds from payment of note receivable on options exercised and restricted stock purchased					—				—				—				—				456
	Deferred initial public offering costs					—				—				—				—				(987	)
	Net cash provided by (used in) financing activities					(427	)			18				296				12				(507	)
	Net increase in cash and cash equivalents					2,713				524				13,067				2,566				5,576
	Cash and cash equivalents at beginning of year					2,461				5,174				5,698				5,698				18,765
	Cash and cash equivalents at end of year				$	5,174			$	5,698			$	18,765			$	8,264			$	24,341
	Supplemental disclosures of cash flow information:
	Cash paid during the period for income taxes				$	8			$	299			$	449			$	89			$	51
	Cash paid during the period for interest				$	11			$	—			$	—			$	—			$	—

F-6

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	Organization and Basis of Presentation

	Use of Estimates

	Cash and Cash Equivalents

	Short-term Investments

F-7

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Table of Contents

	Concentration of Risk

	Fair Value of Financial Instruments

	Accounts Receivable

	Property and Equipment

	Website Development Costs

	Long-Lived Assets Including Goodwill and other Intangible Assets

F-8

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Table of Contents

		Estimated useful life
Broker Relationships			8.3 years
Advertising Relationships			1.5 years
Technology			3 years
Domain name			Indefinite

	Income Taxes

	Business Segment

	Revenue Recognition

F-9

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Table of Contents

	Cost of Revenues

	Sales and Marketing

	Technology and Product Development

	General and Administrative

	Comprehensive Income

	Stock-Based Compensation

F-10

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Table of Contents

	Earnings Per Share

F-11

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Table of Contents

															Three Months
			Year Ended December 31,												Ended March 31,
			2003				2004				2005				2005				2006
															(unaudited)
Weighted-average common shares outstanding used to compute basic net income per share				3,623				3,767				7,259				6,761				7,939
Add dilutive common equivalents:
	Stock options			—				1,988				2,094				2,109				2,025
	Unvested restricted stock(1)			—				2				933				981				713
	Redeemable convertible preferred stock			—				—				21,827				—				—
	Redeemable convertible preferred warrants			—				—				2,979				—				—
Shares used to compute diluted net income per share				3,623				5,757				35,092				9,851				10,677

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

														Three Months Ended
		Year Ended December 31,												March 31,
		2003				2004				2005				2005				2006
														(unaudited)
Stock options			4,930				—				24				—				—
Warrants			3,666				3,666				—				2,163				2,636
Redeemable convertible preferred stock			21,729				21,729				—				21,729				22,543

F-12

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Table of Contents

														Three Months Ended
		Year Ended December 31,												March 31,
		2003				2004				2005				2005				2006
														(unaudited)
Calculation of basic net income per share — two-class method:
Net income		$	1,704			$	3,720			$	18,936			$	1,863			$	2,965
Assumed preferred stock dividends			1,704				2,159				2,159				540				540
Net income, net of assumed stock dividends		$	—			$	1,561			$	16,777				1,323				2,425
Percent of net income allocable to common stockholders(1)			14%				15%				25%				24%				26%
Net income allocable to common stockholders			—				234				4,194				318				631
Weighted average common shares outstanding			3,623				3,767				7,259				6,761				7,939
Basic net income per share — two-class method		$	—			$	0.06			$	0.58			$	0.05			$	0.08
Calculation of diluted net income per share:
Net income		$	—			$	234			$	18,936			$	318			$	631
Weighted average diluted shares outstanding			3,623				5,757				35,092				9,851				10,677
Diluted net income per share		$	—			$	0.04			$	0.54			$	0.03			$	0.06

(1)	Calculation of percent of net income allocable to common stockholders:

														Three Months Ended
		Year Ended December 31,												March 31,
		2003				2004				2005				2005				2006
Weighted average common shares outstanding			3,673				3,767				7,259				6,761				7,939
Weighted average redeemable convertible preferred shares outstanding			21,729				21,729				21,827				21,729				22,543
Weighted average common shares and preferred shares outstanding			25,352				25,496				29,086				28,490				30,482
Percent of net income allocable to common stockholders			14	%			15	%			25	%			24	%			26	%

F-13

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Table of Contents

Customer relationships		$	610
Technology			98
Domain name			850
Goodwill			2,417
		$	3,975

		Year Ended
		December 31, 2004
		(unaudited)
Revenue		$	18,189
Net income		$	4,249
Net income per share — basic		$	0.09
Net income per share — diluted		$	0.07

F-14

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		As of December 31,								March 31,
		2004				2005				2006
										(unaudited)
Computer equipment and purchased software		$	4,310			$	4,619			$	4,785
Office equipment and furniture (includes leasehold improvements)			217				419				452
			4,527				5,038				5,237
Less accumulated depreciation and amortization			(4,040	)			(4,195	)			(4,307	)
		$	487			$	843			$	930

		As of December 31,								March 31,
		2004				2005				2006
										(unaudited)
Cost:
Customer relationships		$	610			$	610			$	610
Technology			98				98				98
Domain name			850				850				850
Total cost			1,558				1,558				1,558
Accumulated amortization:
Customer relationships			(16	)			(99	)			(118	)
Technology			—				(41	)			(49	)
Domain name			—				—				—
Total accumulated amortization			(16	)			(140	)			(167	)
Total		$	1,542			$	1,418			$	1,391

F-15

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Table of Contents

				Year Ended December 31,
				2003				2004				2005
Current:
	Federal			$	43			$	125			$	287
	State				145				(7	)			92
		Total		$	188			$	118			$	379
Deferred:
	Federal			$	—			$	—			$	(6,207	)
	State				—				—				(1,415	)
		Total		$	—			$	—			$	(7,622	)
Income tax expense (benefit)				$	188			$	118			$	(7,243	)

		Year Ended December 31,
		2003				2004				2005
Statutory federal tax rate			34.0%				34.0%				34.0%
State tax rate, net of federal benefit			0.0%				0.0%				(7.5)%
Change in valuation allowance			(34.0)%				(34.0)%				(88.4)%
Effective tax rate			0.0%				0.0%				(61.9)%

			As of December 31,
			2004				2005
Deferred tax assets:
	Net operating loss carryforwards		$	20,030			$	14,830
	Property and equipment			279				52
	Tax credits			2,383				2,900
	Deferred income			1,008				1,847
	Valuation allowance			(23,700	)			(12,007	)
Total deferred tax assets			$	—			$	7,622

F-16

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		As of December 31,
										March 31,
		2004				2005				2006
										(unaudited)
Deposits and other noncurrent assets		$	171			$	158			$	147
Deferred initial public offering costs			—				—				987
		$	171			$	158			$	1,134

		Shares								Shares
		as of December 31,								as of March 31,
		2004				2005				2006
										(unaudited)
Series A convertible preferred stock			14,000,000				14,000,000				14,000,000
Series B nonvoting convertible preferred stock			397,876				397,876				397,876
Series C convertible preferred stock			7,330,642				8,143,650				8,147,650
Series E nonvoting convertible preferred stock			2				2				2
Series F nonvoting convertible preferred stock			8				—				—
			21,728,528				22,541,528				22,545,528

F-17

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Table of Contents

	Voting

	Dividends

	Liquidation

F-18

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Table of Contents

	Conversion

F-19

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Table of Contents

		Options Outstanding								Options Exercisable
						Weighted								Weighted
						Average								Average
		Number of				Exercise				Number of				Exercise
		Options				Price				Options				Price
Balance at December 31, 2002			4,834,012			$	0.10				2,549,600			$	0.10
Granted			938,218			$	0.10
Exercised			(54,142	)		$	0.10
Cancelled			(201,524	)		$	0.10
Balance at December 31, 2003			5,516,564			$	0.10				3,765,292			$	0.10
Granted			1,096,448			$	0.10
Exercised			(2,818,714	)		$	0.10
Cancelled			(909,834	)		$	0.10
Balance at December 31, 2004			2,884,464			$	0.10				1,675,286			$	0.10
Granted			921,684			$	1.31
Exercised			(827,702	)		$	0.10
Cancelled			(294,668	)		$	0.17
Balance at December 31, 2005			2,683,778			$	0.51				1,214,352			$	0.11
Granted			816,376			$	4.08
Exercised			(221,274	)		$	0.11
Cancelled			(41,204	)		$	1.97
Balance at March 31, 2006 (unaudited)			3,237,676			$	1.42				1,138,488			$	0.14

		Options Outstanding												Options Exercisable
						Weighted
						average				Weighted								Weighted
						remaining				Average								Average
		Number of				contractual				Exercise				Number of				Exercise
Exercise prices		Options				life (years)				Price				Options				Price
$0.10			2,022,978				7.27			$	0.10				1,205,600			$	0.10
0.23			78,800				9.21				0.23				0				0.23
0.50			61,000				9.30				0.50				0				0.50
1.10			140,600				9.45				1.10				1,808				1.10
1.48			115,800				9.61				1.48				500				1.48
1.68			98,600				9.70				1.68				6,058				1.68
3.65			138,000				9.83				3.65				386				3.65
4.08			28,000				9.93				4.08				0				4.08
			2,683,778				7.84			$	0.51				1,214,352			$	0.11

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		Options Outstanding												Options Exercisable
						Weighted
						average				Weighted								Weighted
						remaining				Average								Average
		Number of				contractual				Exercise				Number of				Exercise
Exercise prices		Options				life (years)				Price				Options				Price
$0.10			1,800,274				7.13			$	0.10				1,102,186			$	0.10
0.23			78,800				8.96				0.23				12,454				0.23
0.50			57,950				9.05				0.50				6,354				0.50
1.10			140,600				9.21				1.10				2,580				1.10
1.48			91,400				9.36				1.48				874				1.48
1.68			98,600				9.46				1.68				9,320				1.68
3.65			125,800				9.59				3.65				1,160				3.65
4.08			844,252				9.80				4.08				3,560				4.08
			3,237,676				8.23			$	1.42				1,138,488			$	0.14

		Quarter Ended																				Quarter Ended
																		Year Ended																				Year Ended
		Mar. 31,				June 30,				Sept. 30,				Dec. 31,				Dec. 31,				Mar. 31,				June 30,				Sept. 30,				Dec. 31,				Dec. 31,
		2004				2004				2004				2004				2004				2005				2005				2005				2005				2005
Options and restricted stock granted to employees			437,994				166,800				151,600				919,886				1,676,280				799,800				201,600				214,400				166,000				1,381,800
Weighted average exercise price		$	0.10			$	0.10			$	0.10			$	0.10							$	0.12			$	0.92			$	1.54			$	3.72
Weighted average reassessed value of underlying stock		$	0.07			$	0.07			$	0.17			$	0.65							$	0.74			$	1.81			$	1.88			$	3.00
Weighted average deferred stock-based compensation per option and restricted stock			—				—			$	0.07			$	0.55							$	0.62			$	0.89			$	0.31				—
Deferred stock-based compensation related to options and restricted stock			—				—			$	10,612			$	503,891			$	514,503			$	497,629			$	179,725			$	65,461				—			$	742,815

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		Year Ended December 31,
		2003				2004				2005
Net income, as reported		$	1,704			$	3,720			$	18,936
Add: Stock-based employee compensation expense included in net income available to stockholders, net of related tax effects			—				1,676				664
Deduct: Total stock-based employee compensation expense determined under fair value based method for all awards, net of related tax effects			(4	)			(1,730	)			(650	)
Pro forma net income		$	1,700			$	3,666			$	18,950
Earnings per share
Basic — as reported		$	—			$	0.06			$	0.58
Diluted — as reported		$	—			$	0.04			$	0.54
Basic — pro forma		$	—			$	0.06			$	0.58
Diluted — pro forma		$	—			$	0.04			$	0.54

														Three Months Ended
		Year Ended December 31,												March 31,
		2003				2004				2005				2005				2006
														(unaudited)
Risk-free interest rate			2.97	%			3.43	%			4.05	%			3.88	%			4.55	%
Expected volatility			0	%			0	%			0	%			0	%			53	%
Expected life			4 years				4 years				4 years				4 years				6.1 years
Dividend yield			0	%			0	%			0	%			0	%			0	%

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															Three Months Ended
			Year Ended December 31,												March 31,
			2003				2004				2005				2005				2006
															(unaudited)
Cost of revenues			$	—			$	1			$	18			$	2			$	8
Sales and marketing				—				251				146				31				51
Technology and product development				—				236				350				268				23
General and administrative				—				1,188				150				74				32
	Total		$	—			$	1,676			$	664			$	375			$	114

	Notes Receivable from Stockholders

(10)	Commitments and Contingencies

	Leases

2006		$	945
2007			978
2008			660
2009			467
2010			476
Thereafter			198
		$	3,724

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	Litigation

(11)	401(k) Plan

(12)	Subsequent Event (unaudited)

F-24

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Pacific Crest Securities	Pacific Growth Equities, LLC

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Item 13.	Other Expenses of Issuance and Distribution.

			Amount to be
			Paid
Securities and Exchange Commission registration fee			$	9,598
NASD filing fee				9,125
Nasdaq National Market listing fee				100,000
Blue sky fees and expenses				12,500
Printing and engraving expenses				175,000
Legal fees and expenses				1,000,000
Accounting fees and expenses				740,000
Directors’ and officers’ insurance				400,000
Transfer Agent and Registrar fees				5,000
Miscellaneous expenses				48,777
	Total		$	2,500,000

*	To be completed by amendment.

(1)

Since January 2003, the registrant has issued to officers and employees, in consideration for services to be rendered in the context of promotions or services previously rendered, options to purchase 7,355,168 shares of common stock with an aggregate exercise price of $5,091,040.40, has issued to a non-profit organization, without consideration, options to purchase 24,400 shares of common stock with an aggregate exercise price of $2,440.00, and has issued 3,946,142 shares of common stock for an aggregate purchase price of $396,327.10 upon exercise of such options, the details of such exercises are as follows:

	•	On August 31, 2003, the registrant issued 20,842 shares of common stock for an aggregate purchase price of $2,084.20 upon exercise of such options.
	•	On April 15, 2004, the registrant issued 174,740 shares of common stock for an aggregate purchase price of $17,474.00 upon exercise of such options.

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	•	On April 28, 2004, the registrant issued 8,642 shares of common stock for an aggregate purchase price of $864.20 upon exercise of such options.
	•	On December 31, 2004, the registrant issued 2,635,332 shares of common stock for an aggregate purchase price of $263,533.20 upon exercise of such options.
	•	On January 31, 2005, the registrant issued 372,142 shares of common stock for an aggregate purchase price of $37,214.20 upon exercise of such options.
	•	On March 28, 2005, the registrant issued 28,212 shares of common stock for an aggregate purchase price of $2,821.20 upon exercise of such options.
	•	On March 29, 2005, the registrant issued 93,332 shares of common stock for an aggregate purchase price of $9,333.20 upon exercise of such options.
	•	On March 30, 2005, the registrant issued 6,000 shares of common stock for an aggregate purchase price of $600.00 upon exercise of such options.
	•	On April 21, 2005, the registrant issued 6,890 shares of common stock for an aggregate purchase price of $689.00 upon exercise of such options.
	•	On April 26, 2005, the registrant issued 834 shares of common stock for an aggregate purchase price of $83.40 upon exercise of such options.
	•	On April 27, 2005, the registrant issued 24,400 shares of common stock for an aggregate purchase price of $2,440.00 upon exercise of such options.
	•	On April 29, 2005, the registrant issued 14,106 shares of common stock for an aggregate purchase price of $1,410.60 upon exercise of such options.
	•	On May 24, 2005, the registrant issued 5,590 shares of common stock for an aggregate purchase price of $559.00 upon exercise of such options.
	•	On June 2, 2005, the registrant issued 834 shares of common stock for an aggregate purchase price of $83.40 upon exercise of such options.
	•	On June 3, 2005, the registrant issued 10,844 shares of common stock for an aggregate purchase price of $1,084.40 upon exercise of such options.
	•	On June 27, 2005, the registrant issued 14,454 shares of common stock for an aggregate purchase price of $1,445.40 upon exercise of such options.
	•	On July 1, 2005, the registrant issued 5,618 shares of common stock for an aggregate purchase price of $561.80 upon exercise of such options.
	•	On July 15, 2005, the registrant issued 61,000 shares of common stock for an aggregate purchase price of $6,100.00 upon exercise of such options.
	•	On July 22, 2005, the registrant issued 834 shares of common stock for an aggregate purchase price of $83.40 upon exercise of such options.
	•	On July 25, 2005, the registrant issued 24,520 shares of common stock for an aggregate purchase price of $2,452.00 upon exercise of such options.
	•	On August 1, 2005, the registrant issued 1,034 shares of common stock for an aggregate purchase price of $103.40 upon exercise of such options.
	•	On August 9, 2005, the registrant issued 13,470 shares of common stock for an aggregate purchase price of $1,347.00 upon exercise of such options.
	•	On August 23, 2005, the registrant issued 834 shares of common stock for an aggregate purchase price of $83.40 upon exercise of such options.
	•	On September 2, 2005, the registrant issued 1,034 shares of common stock for an aggregate purchase price of $103.40 upon exercise of such options.
	•	On September 23, 2005, the registrant issued 832 shares of common stock for an aggregate purchase price of $83.20 upon exercise of such options.

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	•	On September 29, 2005, the registrant issued 5,844 shares of common stock for an aggregate purchase price of $584.40 upon exercise of such options.
	•	On October 6, 2005, the registrant issued 1,120 shares of common stock for an aggregate purchase price of $112.00 upon exercise of such options.
	•	On October 18, 2005, the registrant issued 22,710 shares of common stock for an aggregate purchase price of $2,271.00 upon exercise of such options.
	•	On October 25, 2005, the registrant issued 834 shares of common stock for an aggregate purchase price of $83.40 upon exercise of such options.
	•	On October 27, 2005, the registrant issued 31,698 shares of common stock for an aggregate purchase price of $3,169.80 upon exercise of such options.
	•	On November 4, 2005, the registrant issued 1,142 shares of common stock for an aggregate purchase price of $114.20 upon exercise of such options.
	•	On November 9, 2005, the registrant issued 1,118 shares of common stock for an aggregate purchase price of $111.80 upon exercise of such options.
	•	On November 14, 2005, the registrant issued 23,750 shares of common stock for an aggregate purchase price of $2,375.00 upon exercise of such options.
	•	On November 29, 2005, the registrant issued 834 shares of common stock for an aggregate purchase price of $83.40 upon exercise of such options.
	•	On December 2, 2005, the registrant issued 41,000 shares of common stock for an aggregate purchase price of $4,100.00 upon exercise of such options.
	•	On December 7, 2005, the registrant issued 1,120 shares of common stock for an aggregate purchase price of $112.00 upon exercise of such options.
	•	On December 22, 2005, the registrant issued 5,358 shares of common stock for an aggregate purchase price of $535.80 upon exercise of such options.
	•	On December 27, 2005, the registrant issued 1,110 shares of common stock for an aggregate purchase price of $111.00 upon exercise of such options.
	•	On December 28, 2005, the registrant issued 1,470 shares of common stock for an aggregate purchase price of $147.00 upon exercise of such options.
	•	On December 29, 2005, the registrant issued 1,780 shares of common stock for an aggregate purchase price of $178.00 upon exercise of such options.
	•	On January 1, 2006, the registrant issued 11,112 shares of common stock for an aggregate purchase price of $1,111.20 upon exercise of such options.
	•	On January 4, 2006, the registrant issued 100,000 shares of common stock for an aggregate purchase price of $10,000.00 upon exercise of such options.
	•	On January 19, 2006, the registrant issued 16,654 shares of common stock for an aggregate purchase price of $1,665.40 upon exercise of such options.
	•	On February 10, 2006, the registrant issued 1,982 shares of common stock for an aggregate purchase price of $198.20 upon exercise of such options.
	•	On February 27, 2006, the registrant issued 20,508 shares of common stock for an aggregate purchase price of $2,050.80 upon exercise of such options.
	•	On March 13, 2006, the registrant issued 24,438 shares of common stock for an aggregate purchase price of $2,443.80 upon exercise of such options.
	•	On March 24, 2006, the registrant issued 19,006 shares of common stock for an aggregate purchase price of $1,900.60 upon exercise of such options.
	•	On March 24, 2006, the registrant issued 124 shares of common stock for an aggregate purchase price of $505.30 upon exercise of such options.

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	•	On March 30, 2006, the registrant issued 3,050 shares of common stock for an aggregate purchase price of $1,525.00 upon exercise of such options.
	•	On April 4, 2006, the registrant issued 4,478 shares of common stock for an aggregate purchase price of $447.80 upon exercise of such options.
	•	On April 11, 2006, the registrant issued 25,000 shares of common stock for an aggregate purchase price of $2,500.00 upon exercise of such options.
	•	On April 26, 2006, the registrant issued 304 shares of common stock for an aggregate purchase price of $30.40 upon exercise of such options.
	•	On April 27, 2006, the registrant issued 18,170 shares of common stock for an aggregate purchase price of $1,817.00 upon exercise of such options.
	•	On May 10, 2006, the registrant issued 3,558 shares of common stock for an aggregate purchase price of $355.80 upon exercise of such options.
	•	On May 25, 2006, the registrant issued 6,100 shares of common stock for an aggregate purchase price of $610.00 upon exercise of such options.

(2)	Since January 2003, the registrant issued restricted common stock to its executive officers as follows:

	•	In December 2004, the registrant issued 741,546 shares of restricted common stock with an aggregate value of $74,155 to five executive officers, paid for by promissory notes which have since been repaid.
	•	In January 2005, the registrant issued 126,036 shares of restricted common stock with an aggregate value of $12,604 to an executive officer, paid for by promissory notes which have since been repaid.
	•	In February 2005, the registrant issued 363,512 shares of restricted common stock with an aggregate value of $36,351 to five executive officers paid for by promissory notes which have since been repaid.

(3)	Since January 2003, the registrant issued shares of our capital stock to the following investors:

	•	In November 2005, the registrant issued to an accredited investor upon exercise of a warrant 813,008 shares of Series C Preferred Stock for an aggregate purchase price of $249,999.96.
	•	In March 2006, the registrant issued to an accredited investor upon exercise of a warrant 4,000 shares of Series C Preferred Stock for an aggregate purchase price of $1,230.
	•	In April 2006, the registrant issued to three accredited investors upon exercises of warrants 966,032 shares of Series C Preferred Stock for an aggregate purchase price of $297,054.84.
	•	In May 2006, the registrant issued to two accredited investors upon exercise of warrants 489,030 shares of Series C Preferred Stock for an aggregate purchase price of $150,376.72.

(4)	On March 22, 2006, the registrant issued 24,400 shares of common stock to a nonprofit organization for an aggregate purchase price of $2,440.00 upon exercise of such options.

Exhibit
Number				Description of Document
	1	.1		Form of Underwriting Agreement
	3	.1		Articles of Incorporation currently in effect

II-4

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Exhibit
Number				Description of Document
	3	.2**		Bylaws currently in effect
	3	.3**		Form of Amended and Restated Certificate of Incorporation (to be effective at closing)
	3	.4**		Form of Amended and Restated Bylaws (to be effective at closing)
	4	.1**		Specimen Common Stock Certificate
	4	.2**		Amended and Restated Investor Rights Agreement by and among LoopNet, Inc. and certain holders of preferred stock, dated as of November 30, 2001
	5	.1**		Opinion of Heller Ehrman LLP
	10	.1**		LoopNet, Inc. 2001 Stock Option and Purchase Plan
	10	.2**		Form of Option Agreement under 2001 Stock Option and Purchase Plan
	10	.3		LoopNet, Inc. 2006 Equity Incentive Plan
	10	.4**		Form of Option Agreement and Form of Restricted Stock Unit Agreement under LoopNet, Inc. Equity Incentive Plan
	10	.5**		Form of Indemnification Agreement
	10	.6**		Lease, dated January 14, 2005, between S&F Huntington Millennium LLC and LoopNet, Inc.
	10	.7**		Office Lease, dated January 8, 2003, between PWREF/MCC-China Basin L.L.C. and LoopNet, Inc.
	10	.8**		First Amendment to Office Lease, dated August 16, 2005 between Stockbridge/MCC-China Basin L.L.C. and LoopNet, Inc.
	10	.9**		Form of Series C Stock Purchase Warrant
	10	.10**		Summary of LoopNet Cash Bonus Plan
	10	.11**		Director Compensation Policy
	23	.1		Consent of Ernst & Young LLP, independent registered public accounting firm
	23	.2**		Consent of Heller Ehrman LLP (included in Exhibit 5.1)
	24	.1**		Power of Attorney

**	Previously filed.

(1) For purposes of determining any liability under the Securities Act, the information omitted from the form of prospectus filed as part of this Registration Statement in reliance upon Rule 430A and contained in a form of prospectus filed by the registrant pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be deemed to be part of this Registration Statement as of the time it was declared effective.

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	(2) For the purpose of determining any liability under the Securities Act, each post-effective amendment that contains a form of prospectus shall be deemed to be a new registration statement relating to the securities offered therein, and the offering of such securities at that time shall be deemed to be the initial bona fide offering thereof.

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	LOOPNET, INC.

	By:	/s/ Richard J. Boyle, Jr.

	Richard J. Boyle, Jr.
	President, Chief Executive Officer and Chairman of the Board of Directors

Signature				Title		Date
/s/ Richard J. Boyle Jr.   Richard J. Boyle Jr.				President, Chief Executive Officer and Chairman of the Board of Directors (Principal Executive Officer)		June 5, 2006
/s/ Brent Stumme   Brent Stumme				Chief Financial Officer and Senior Vice President, Finance & Administration (Principal Financial and Accounting Officer)		June 5, 2006
*   Jeffrey D. Brody				Director		June 5, 2006
*   Noel J. Fenton				Director		June 5, 2006
*   William A. Millichap				Director		June 5, 2006
*   Thomas E. Unterman				Director		June 5, 2006
*By:/s/ Richard J. Boyle, Jr.   Richard J. Boyle, Jr. Attorney-In-Fact

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Exhibit
Number				Description of Document
	1	.1		Form of Underwriting Agreement
	3	.1		Articles of Incorporation currently in effect
	3	.2**		Bylaws currently in effect
	3	.3**		Form of Amended and Restated Certificate of Incorporation (to be effective at closing)
	3	.4**		Form of Amended and Restated Bylaws (to be effective at closing)
	4	.1**		Specimen Common Stock Certificate
	4	.2**		Amended and Restated Investor Rights Agreement by and among LoopNet, Inc. and certain holders of preferred stock, dated as of November 30, 2001
	5	.1**		Opinion of Heller Ehrman LLP
	10	.1**		LoopNet, Inc. 2001 Stock Option and Purchase Plan
	10	.2**		Form of Option Agreement under 2001 Stock Option and Purchase Plan
	10	.3		LoopNet, Inc. 2006 Equity Incentive Plan
	10	.4**		Form of Option Agreement and Form of Restricted Stock Unit Agreement under LoopNet, Inc. Equity Incentive Plan
	10	.5**		Form of Indemnification Agreement
	10	.6**		Lease, dated January 14, 2005, between S&F Huntington Millennium LLC and LoopNet, Inc.
	10	.7**		Office Lease, dated January 8, 2003, between PWREF/MCC-China Basin L.L.C. and LoopNet, Inc.
	10	.8**		First Amendment to Office Lease, dated August 16, 2005 between Stockbridge/MCC-China Basin L.L.C. and LoopNet, Inc.
	10	.9**		Form of Series C Stock Purchase Warrant
	10	.10**		Summary of LoopNet Cash Bonus Plan
	10	.11**		Director Compensation Policy
	23	.1		Consent of Ernst & Young LLP, independent registered public accounting firm
	23	.2**		Consent of Heller Ehrman LLP (included in Exhibit 5.1)
	24	.1**		Power of Attorney

**	Previously filed.