Securities registered pursuant to Section 12(g) of the Act:
Series A Junior Participating Preferred Stock Purchase Rights

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ý No o

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act. Yes o No ý

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

Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. ý

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files): Yes ý No o

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

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

As of June 30, 2010, which was the last business day of the registrant's most recently completed second fiscal quarter, the approximate aggregate market value of voting stock held by non-affiliates of the registrant was $850,460,460 (based upon the closing price for shares of the registrant's Common Stock as reported by the NASDAQ Global Select Market as of that date). As of February 18, 2011, there were 81,047,841 shares of the registrant's Common Stock outstanding.

Portions of the definitive Proxy Statement for the 2011 Annual Meeting of the Stockholders (the "Proxy Statement"), to be filed within 120 days of the end of the fiscal year ended December 31, 2010, are incorporated by reference in Part III hereof.

This annual report on Form 10-K ("Report"), including information incorporated herein by reference, contains "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These statements relate to expectations concerning matters that are not historical facts. Words such as "projects," "believes," "anticipates," "will," "estimate," "plans," "expects," "intends," and similar words and expressions are intended to identify forward-looking statements. Although we believe that such forward-looking statements are reasonable, we cannot assure you that such expectations will prove to be correct. Important language regarding factors which could cause actual results to differ materially from such expectations are disclosed in this Report, including without limitation under the caption "Risk Factors" beginning on page 9 of this Report and in the other documents we file, from time to time, with the Securities and Exchange Commission, including our annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K. All forward-looking statements attributable to ValueClick, Inc. are expressly qualified in their entirety by such language. We undertake no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

ValueClick is one of the world's largest and most comprehensive online marketing services companies. We sell targeted and measurable online advertising campaigns and programs for advertisers and advertising agency customers, generating qualified customer leads, online sales and increased brand recognition on their behalf with large numbers of online consumers.

Our customers are primarily direct marketers, brand advertisers and the advertising agencies that service these groups. The proposition we offer our customers includes: one of the industry's broadest online marketing services portfolios—including performance-based campaigns and programs where marketers only pay for advertising when it generates a customer lead or product sale; our ability to target campaigns to reach the online consumers our customers are most interested in; and the scale at which we can deliver results for online advertising campaigns. Additionally, our networks of online publishers provide advertisers with a cost-effective and complementary source of online consumers relative to online portals and other large website publishers. Through this approach we have become an industry leader in generating qualified customer leads and online sales for advertisers.

We generate the audiences for our advertisers' campaigns primarily through networks of third-party websites, other online publisher partners and search engines. We aggregate our publisher partners' online advertising inventory into networks, optimize these networks for specific marketing goals, and deliver the campaigns across the appropriate networks' advertising inventory. We are one of the industry's largest online network providers, with: industry expertise and proprietary technology platforms for online advertising inventory aggregation; campaign targeting and optimization, delivery, measurement, and reporting; and, payment settlement and delivery services. We also own and operate a number of websites in the areas of comparison shopping, coupons and deals, financial services, and other verticals.

Our publisher partners enjoy efficient and effective monetization of their online advertising inventory through representation by our direct sales teams in major U.S. and European media markets, participation in large-scale advertiser and advertising agency campaigns they may not have access to on their own, enhanced monetization through our proprietary campaign optimization and targeting technology, and settlement services to facilitate payments to publishers for the online inventory utilized by the advertisers. As we do not primarily compete directly with our publisher partners for online consumers, we act as a trusted partner in helping online publishers monetize their online audience and advertising inventory.

We believe that the effectiveness of our online marketing services is dependent on the quality of our networks and our publisher partner relationships. As such, we have established stringent quality standards that include publisher rejection from our networks due to inappropriate content, illegal activity and fraudulent clicking activity, among other criteria. We enforce these quality standards using a combination of manual and automated auditing processes that continually monitor and review both website content and adherence to advertiser campaign specifications.

We derive our revenue from four business segments. These business segments are presented on a worldwide basis and include Affiliate Marketing, Media, Owned & Operated Websites, and Technology, which are described in more detail below. For information regarding the operating performance and total assets of these segments, see Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations," and Note 18 to the December 31, 2010 consolidated financial statements included herein.

Our Affiliate Marketing segment services, outlined below, are offered through our wholly-owned subsidiary Commission Junction. Through the combination of: a large-scale pay-for-performance model built on our proprietary technology platforms; marketing expertise; and a large, quality advertising network, our Affiliate Marketing business enables advertisers to develop their own fully-commissioned online sales force comprised of third-party affiliate publishers. We believe we are the largest provider of affiliate marketing services.

In affiliate marketing, a publisher joins an advertiser's affiliate marketing program and agrees to distribute the advertiser's offers in exchange for commissions on leads or sales generated. The publisher places the advertiser's display ads or text links on their website, in email campaigns, or in search listings, and receives a commission from the advertiser only when a visitor takes an agreed-upon action, such as filling out a form or making a purchase on the advertiser's website.

Our Affiliate Marketing services are offered on a hosted basis to enable marketers to execute their own affiliate marketing programs without the expense of building and maintaining their own in-house technical infrastructure and resources.

To facilitate our advertiser customers' recruitment of affiliate publishers, we manage CJ Marketplace, an advertising network dedicated to our affiliate marketing business. Advertisers upload their offers onto CJ Marketplace, making them available for placement by affiliates. Affiliates apply to join the advertiser's program, and upon acceptance, select and place the advertiser's offers on their websites, in email campaigns, or in search listings. These links are served and tracked by Commission Junction. When a visitor clicks on one of the affiliate's links and then makes an online purchase or completes an agreed-upon action on the advertiser's website, that transaction is tracked and recorded by Commission Junction.

CJ Marketplace provides an open environment whereby affiliates can quickly view payment and conversion statistics to assess the effectiveness of every advertiser relationship and advertisement, and advertisers can quickly gauge the quality and potential of every affiliate relationship in the marketplace, allowing them to maximize the performance and scale of their online advertising campaigns.

Affiliate Marketing revenues are principally driven by variable compensation that is based on either a percentage of commissions paid to affiliates or on a percentage of transaction revenue generated from the programs managed with our affiliate marketing platforms.

In addition to the transaction-related revenue streams, we also receive monthly service fees from our advertiser customers who elect to utilize our Program Management service offerings. With these services, we assume full responsibility for all aspects of managing the advertiser's program including planning, affiliate recruitment, program review and management, and program administration.

ValueClick's Media segment provides a comprehensive suite of online marketing services and tailored programs that help marketers create and increase awareness for their products and brands, attract visitors and generate leads and sales through the Internet. We have aggregated thousands of online publishers to provide marketers with access to one of the largest and most reputable display advertising networks in the industry. We partner with third-party website publishers and apply our proprietary technology platform and industry expertise to deliver our customers' display ad campaigns to the appropriate pages of our publisher partners' websites.

With a single buy, marketers can reach targeted online users on a large scale, using a variety of online display ad units across our entire network of publishers, any of 20 standard channels of online content within the network, customized content channels, or a select number of websites where we are authorized to sell inventory on a single-site basis. Audiences can be further targeted based on the demographic and psychographic composition of sites within the network and technical information such as geographic location, browser type, connection speed, ISP or top-level domain (.com, .edu, etc.). In addition, our behavioral targeting capabilities allow marketers to retarget users who have recently visited their sites or to display highly relevant ads based on anonymous profiles we develop based on consumers' recent online behavior such as web browsing and interaction with ads across our network.

With 10,000 active online publisher sites in the U.S. and 15,000 worldwide, our display advertising network reached 168 million unique visitors, or 79% of the U.S. internet audience in December 2010, according to data published by comScore, Inc.

We deliver a variety of display ad units to the Web pages of our online display advertising network publisher partners and track them to evaluate success against the goals of the advertising programs. With traditional banner ads, interstitials, text links, and other online ad units, our technology maximizes the impact of marketing campaigns by identifying the most effective placement for each type of campaign. We also execute a wide variety of rich media applications, including in-stream and in-banner video ads, providing even greater visual and auditory impact for a marketer's online display advertising campaigns.

We offer multiple pricing models designed around maximizing our customers' return on investment. Our display advertising placements are offered on several pricing models including: cost-per-thousand-impression ("CPM"), whereby our customers pay based on the number of times the target audience is exposed to the advertisement; cost-per-click ("CPC"), whereby payment is triggered only when an interested individual clicks on our customer's advertisement; and cost-per-action ("CPA"), whereby payment is triggered only when a specific, pre-defined action is performed by an online consumer.

The benefits that our customers enjoy in display and other Web advertising include, but are not limited to: flexible pricing models; the ability to target and reach significant numbers of online consumers in a way that complements media buys on portals and other large websites; and the ability to improve online advertising performance while the campaigns are still running by optimizing at site, placement and creative levels, based on both response to ads and the resulting conversions.

Publishers in our display advertising network enjoy efficient and effective monetization of their online advertising inventory, including: representation by our direct sales teams in major U.S. and European media markets; participation in large-scale advertiser and advertising agency campaigns they may not be able to access on their own; enhanced monetization through our campaign optimization technology; and, settlement services to facilitate payments to publishers for the inventory utilized by the advertisers. Through our proprietary publisher interface, publishers can control their participation in campaigns as well as their minimum acceptable level of revenue on an effective-CPM basis.

Our Media segment previously included our promotional lead generation marketing and e-commerce businesses. We divested our promotional lead generation marketing business in February 2010 and our e-commerce business in October 2008. These divestitures are discussed more fully in Note 5 to our consolidated financial statements contained in this annual report.

Our Owned & Operated Websites segment services are offered through a number of transaction-focused branded websites including Pricerunner, Smarter.com, Couponmountain.com, and Investopedia.com. In 2009, we also launched a limited number of content websites in key online verticals such as healthcare, finance, travel, home and garden, education and business services.

The Pricerunner comparison shopping destination websites operate in the United Kingdom, Sweden, Germany, France, Denmark, and Austria. The Smarter.com and Couponmountain.com websites operate primarily in the United States and, to a lesser extent, Japan and China. The Pricerunner and Smarter.com websites enable consumers to research and compare products from among thousands of online and/or offline merchants using our proprietary technologies. We gather product and merchant data and organize it into comprehensive catalogs on our destination websites, along with relevant consumer and professional reviews. The Couponmountain.com website allows consumers to locate coupons and deals related to products and services that may be of interest to them. The Investopedia.com website provides information on a broad range of financial and investment topics, including a proprietary dictionary of financial terms, and our other vertical content websites offer consumers information and reference material across a variety of topics. Our services in these areas are free for consumers, and we generate revenue in one of three ways: on a CPC basis for traffic delivered to the customers' websites from listings on our websites; on a CPA basis when a consumer completes a purchase or other specific event; and on a CPM basis for display advertising shown on our websites.

In addition to our destination websites, Search123, which operates primarily in Europe, is ValueClick's self-service paid search offering that generates its traffic primarily through syndication relationships with content websites. Search syndication revenues are driven primarily on a CPC basis.

Our Technology segment provides advertisers, advertising agencies, and other companies with the tools they need to effectively manage their online marketing programs. Our technology products and services are offered through our wholly-owned subsidiary Mediaplex, Inc. Mediaplex is an application services provider ("ASP") offering technology infrastructure tools and consultative services that enable marketers to implement and manage their own online display advertising, search engine marketing ("SEM") and email campaigns. Our Mediaplex products are based on our proprietary MOJO® technology platform, which has the ability, among other attributes, to automatically configure advertisements in response to real-time information from an advertiser's enterprise data system and to provide ongoing campaign optimization and analytics. Mediaplex's products are priced primarily on a CPM or email-delivered basis.

Our Technology segment also included our Mediaplex Systems subsidiary prior to October 2008. We divested the operations of this subsidiary in October 2008. Please refer to Note 5 to our consolidated financial statements contained in this annual report on Form 10-K for further information about this divestiture.

We currently conduct international operations through wholly-owned subsidiaries throughout Europe, and in Canada, China, and Japan.

In August 1999, we commenced operations in the European market with ValueClick Europe Ltd., a wholly-owned subsidiary of ValueClick, Inc., based in the United Kingdom. Since then we have expanded in Europe and Asia by opening wholly-owned subsidiaries in Paris, France; Munich, Germany; Madrid, Spain; Dublin, Ireland; and Hong Kong, China. In August 2004, we acquired

Pricerunner AB, a leading provider of online comparison shopping services in Europe, based in Sweden. In July 2007, we acquired MeziMedia, which has operations in the United States, China, Japan and Korea. In August 2010, we acquired Investopedia, which has operations in Canada. Employees in our international subsidiaries totaled 407 as of December 31, 2010. For additional information regarding our international operations, see Note 18 to our consolidated financial statements contained in this annual report on Form 10-K.

Our proprietary applications are constructed from established, readily available technologies. Some of the basic components that our products are built on come from leading software and hardware providers such as Oracle, Sun, Dell, EMC, NetApp, and Cisco while some components are constructed from leading Open Source initiatives such as Apache Web Server, MySQL, Java, Perl, PHP, and Linux. By striking the proper balance between using commercially available software and Open Source software, our technology expenditures are directed toward enhancing and maintaining our technology platforms while minimizing our technology costs.

We build high-performance, availability and reliability into our product offerings. We safeguard against the potential for service interruptions by engineering fail-safe controls into our critical software components. ValueClick delivers its solutions from a variety of geographic locations within the United States, Europe and China. ValueClick applications are monitored 24 hours a day, 365 days a year by specialized monitoring systems, which engage engineers as necessary.

We market our products and services primarily through direct marketing, print advertising and online advertising throughout the year. We also market them through the ValueClick properties' websites, trade show participation and other media events. In addition, we actively pursue public relations programs to promote our brands, products and services to potential network publishers and advertiser customers, as well as to industry analysts.

We sell our products and services to a variety of advertisers, advertising agencies and traffic distribution partners. Our Media and Affiliate Marketing segment revenues are generated from thousands of customers, and there are no significant customer concentrations in these segments. Our Owned & Operated Websites and Technology segments each have a significant customer that comprises a large portion of each segment's respective revenues. A loss of, or reduction of revenue from, these significant customers could have a significant negative impact on the revenue of these segments.

We face intense competition in the Internet advertising market. We expect that this competition will continue to intensify in the future as a result of industry consolidation, the continuing maturation of the industry and low barriers to entry. We compete with a diverse and large pool of advertising, media and Internet companies.

Additional competitive factors include, but are not limited to, our: reputation, knowledge of the advertising market, financial controls, geographical coverage, relationships with customers, technological capability, and quality and breadth of products and services. For additional information regarding our competitors, see "If we fail to compete effectively against other Internet advertising companies, we could lose customers or advertising inventory and our revenue and results of operations could decline" in the Item 1A Risk Factors discussion in this annual report on Form 10-K.

We believe that our business is subject to seasonal fluctuations with the calendar fourth quarter generally being our strongest. Expenditures by advertisers and advertising agencies vary in cycles and tend to reflect the overall economic conditions, as well as budgeting and buying patterns.

We currently rely on a combination of copyright, trademark and trade secret laws and restrictions on disclosure to protect our intellectual property rights. Our success depends on the protection of the proprietary aspects of our technology as well as our ability to operate without infringing on the proprietary rights of others. We also enter into proprietary information and confidentiality agreements with our employees, consultants and commercial partners and control access to, and distribution of, our software documentation and other proprietary information. We have registered the trademark "ValueClick" in the United States, European Union, Australia, Canada, China, Japan and New Zealand. We currently have one pending U.S. patent application. In addition, we have been granted ten U.S. patents. We do not know if our current patent application or any future patent application will result in a patent being issued within the scope of the claims we seek, if at all, or whether any patents we may have or may receive will be challenged or invalidated. Although patents are only one component of the protection of intellectual property rights, if our patent applications are denied, it may result in increased competition and the development of products substantially similar to our own. In addition, it is difficult to monitor unauthorized use of technology, particularly in foreign countries where the laws may not protect our proprietary rights as fully as in the United States, and our competitors may independently develop technology similar to our own. We will continue to assess appropriate occasions for seeking patent and other intellectual property protections for those aspects of our technology that we believe constitute innovations providing significant competitive advantages.

We commenced operations as ValueClick, LLC, a California limited liability company, on May 1, 1998. Prior to the formation of ValueClick, LLC, the ValueClick Internet advertising business began in July 1997 as a line of business within Web-Ignite Corporation, a company wholly owned by the founding member of ValueClick, LLC. The reorganization and formation of ValueClick, LLC was affected by the transfer of the Internet advertising business of Web-Ignite to ValueClick, LLC. On December 31, 1998, ValueClick, LLC reorganized as ValueClick, Inc., a Delaware corporation. On March 30, 2000, we completed our initial public offering of common stock. Our common stock is publicly traded and is reported on the NASDAQ Global Select Market under the symbol "VCLK." We have acquired 15 companies since our inception, the most recent of which was Investopedia.com in August 2010.

Investopedia.com. On August 3, 2010, the Company completed the acquisition of Investopedia.com ("Investopedia"), a leading financial information and investing education website. Under the terms of the agreement, the Company acquired the assets and assumed certain liabilities of Investopedia for an aggregate purchase price of $41.7 million. Investopedia provides consumers with a library of financial terms, articles, tutorials, and investing education tools.

We may collect personally identifiable information on a permitted basis. We store this personally identifiable data securely and do not use the data without the permission of the Web user. In addition, we use anonymous and non-personally identifiable information, in accordance with our privacy policies, for purposes that include, without limitation, tailoring advertisements and website content to a Web user's interests. We use "cookies," along with other technologies, as set forth in our privacy policies, for purposes that include, without limitation, improving the experience Web users have when they see Web advertisements, advertising campaign reporting, and website reporting.

Please refer to the section entitled "Government Enforcement Actions, Changes in Government Regulation and Industry Standards, Including, But Not Limited To Spyware, Privacy and Email Matters, Could Decrease Demand For Our Products and Services and Increase Our Costs of Doing Business" in Item 1A "Risk Factors" of this annual report on Form 10-K for further details about our compliance with privacy regulations.

As of December 31, 2010, we had 655 employees in the U.S. and 407 employees in our international locations. None of these employees are covered by collective bargaining agreements. Management believes that our relations with our employees are good.

See Part III, Item 10 "Directors and Executive Officers of the Registrant" of this annual report on Form 10-K for information about executive officers of the registrant.

Our primary Internet address is www.valueclick.com. We make our Securities and Exchange Commission ("SEC") periodic reports (Forms 10-Q and Forms 10-K) and current reports (Forms 8-K), and amendments to these reports, available free of charge through our website as soon as reasonably practicable after they are filed electronically with the SEC. We may from time to time provide important disclosures to investors by posting them in the investor relations section of our website, as allowed by SEC rules.

Materials we file with the SEC may be read and copied at the SEC's Public Reference Room at 100 F Street, N.E., Washington, D.C. 20549. Information on the operation of the Public Reference Room may be obtained by calling the SEC at 1-800-SEC-0330. The SEC also maintains an Internet website at www.sec.gov that contains reports, proxy and information statements, and other information regarding our Company that we file electronically with the SEC.

We have adopted a Code of Ethics and Business Conduct (the "Code") for our principal executive, financial and accounting, and other officers, and our directors, employees, agents, and consultants. The Code is publicly available on our website at www.valueclick.com under the heading "About Us." Among other things, the Code addresses such issues as conflicts of interest, corporate opportunities,

confidentiality, fair dealing, protection and proper use of Company assets, compliance with applicable laws (including insider trading laws), and reporting of illegal or unethical behavior.

Within the Code, ValueClick has established an accounting ethics complaint procedure for all of its employees, directors, agents and consultants. The complaint procedure is for any of these persons who may have concerns regarding accounting, internal accounting controls and auditing matters. We treat all complaints confidentially and with the utmost professionalism. If an employee desires, he or she may submit any concerns or complaints on an anonymous basis, and his or her concerns or complaints will be addressed in the same manner as any other complaints. We do not, and will not, condone any retaliation of any kind against an employee who comes forward with an ethical concern or complaint.

You should carefully consider the following risks before you decide to buy shares of our common stock. The risks and uncertainties described below are not the only ones facing us. Additional risks and uncertainties, including those risks set forth in "Management's Discussion and Analysis of Financial Condition and Results of Operations" below, may also adversely impact and impair our business. If any of the following risks actually occur, our business, results of operations or financial condition would likely suffer. In such case, the trading price of our common stock could decline, and you may lose all or part of the money you paid to buy our stock.

This annual report on Form 10-K contains forward-looking statements based on the current expectations, assumptions, estimates, and projections about us and our industry. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward-looking statements as a result of certain factors, as more fully described in this section and elsewhere in this annual report on Form 10-K. We undertake no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

We face risks that could prevent us from achieving our current profitability levels in future periods. These risks include, but are not limited to, our ability to:

If we are unsuccessful in addressing these or other risks and uncertainties, our business, results of operations and financial condition could be materially and adversely affected.

Our business models may not continue to be effective in the future for a number of reasons, including the following: click and conversion rates have always been low and may decline as the number of advertisements and ad formats on the Web increases; Web users can install "filter" software programs which allow them to prevent advertisements from appearing on their computer screens or in their email boxes; Internet advertisements are, by their nature, limited in content relative to other media; companies may be reluctant or slow to adopt online advertising that replaces, limits or competes with their existing direct marketing efforts; companies may prefer other forms of Internet advertising

we do not offer, including certain forms of search engine placements and social media; regulatory actions may negatively impact certain business practices that we currently rely on to generate a portion of our revenue and profitability; and, perceived lead quality. If the number of companies who purchase online advertising from us does not grow, we may experience difficulty in attracting publishers, and our revenue could decline.

OUR REVENUE COULD DECLINE IF WE FAIL TO EFFECTIVELY MANAGE OUR EXISTING ADVERTISING SPACE AND OUR GROWTH COULD BE IMPEDED IF WE FAIL TO ACQUIRE NEW ADVERTISING SPACE.

Our success depends in part on our ability to effectively manage our existing advertising space as well as successfully access advertising space available on ad exchanges and through ad network optimization service providers. The Web publishers that list their unsold advertising space with us are not bound by long-term contracts that ensure us a consistent supply of advertising space, which we refer to as inventory. In addition, Web publishers can change the amount of inventory they make available to us at any time. If a Web publisher decides not to make advertising space from its websites available to us, we may not be able to replace this advertising space with advertising space from other Web publishers that have comparable traffic patterns and user demographics quickly enough to fulfill our advertisers' requests. This would result in lost revenue.

We expect that our advertiser customers' requirements will become more sophisticated as the Web continues to mature as an advertising medium. If we fail to manage our existing advertising space effectively to meet our advertiser customers' changing requirements, our revenue could decline. Our growth depends, in part, on our ability to expand our advertising inventory within our networks and to have access to new sources of advertising inventory such as ad exchanges. To attract new customers, we must maintain a consistent supply of attractive advertising space. Our success relies in part on expanding our advertising inventory by selectively adding new Web publishers to our networks that offer attractive demographics, innovative and quality content and growing Web user traffic and email volume. Our ability to attract new Web publishers to our networks and to retain Web publishers currently in our networks will depend on various factors, some of which are beyond our control. These factors include, but are not limited to: our ability to introduce new and innovative products and services, our ability to efficiently manage our existing advertising inventory, our pricing policies, and the cost-efficiency to Web publishers and email list owners of outsourcing their advertising sales. In addition, the number of competing intermediaries that purchase advertising inventory from Web publishers continues to increase. We cannot assure you that the size of our advertising inventory will increase or remain constant in the future.

OUR OWNED & OPERATED WEBSITES SEGMENT REVENUE IS SUBJECT TO CUSTOMER CONCENTRATION RISKS. THE LOSS OF ONE OR MORE OF THE MAJOR CUSTOMERS IN OUR OWNED & OPERATED WEBSITES SEGMENT COULD SIGNIFICANTLY AND NEGATIVELY IMPACT THE REVENUE AND PROFITABILITY LEVELS OF THIS SEGMENT.

Our Owned & Operated Websites business generates revenue through a combination of: sponsored search listings placed on our destination websites, merchant relationships, affiliate marketing networks and display advertising on our destination websites. The majority of the revenue in our Owned & Operated Websites segment is generated via sponsored search listings from major search engines. Factors that could cause these relationships to cease or become significantly reduced in scale include, but are not limited to: the non-renewal of our distribution agreement with one or more of the major search engines; the determination by one or more of the major search engines that consumer traffic received from us does not meet their quality standards (in other words, the traffic is not converting at appropriate rates); and changes in the competitive environment, such as industry consolidation. If our relationships with one or more of the major search engines were to cease or become significantly

reduced in scale, our revenue and profitability levels could be significantly and negatively impacted. In the fourth quarter of 2009, our largest customer in our Owned & Operated Websites segment made changes that negatively impacted the amount of traffic that we could monetize with them. This change had a significant negative impact on the revenue levels of this segment beginning in the fourth quarter of 2009.

CHANGES IN HOW WE GENERATE ONLINE CONSUMER TRAFFIC FOR OUR DESTINATION WEBSITES COULD NEGATIVELY IMPACT OUR ABILITY TO MAINTAIN OR GROW THE REVENUE AND PROFITABILITY LEVELS OF OUR OWNED & OPERATED WEBSITES SEGMENT.

We generate online consumer traffic for our destination websites using various methods, including: search engine marketing (SEM), search engine optimization (SEO), organic traffic, email campaigns, and distribution agreements with other website publishers, The current revenue and profitability levels of our Owned & Operated Websites segment are dependent upon our continued ability to use a combination of these methods to generate online consumer traffic to our websites in a cost-efficient manner. Our SEM and SEO techniques have been developed to work with the existing search algorithms utilized by the major search engines. The major search engines frequently modify their search algorithms. Future changes in these search algorithms could change the mix of the methods we use to generate online consumer traffic for our destination websites and could negatively impact our ability to generate such traffic in a cost-efficient manner, which could result in a significant reduction to the revenue and profitability of our Owned & Operated Websites segment. There can be no assurances that we will be able to maintain the current mix of online consumer traffic sources for our destination websites or that we will be able to modify our SEM and SEO techniques to address any future search algorithm changes made by the major search engines.

WE MAY FACE INTELLECTUAL PROPERTY ACTIONS THAT ARE COSTLY OR COULD HINDER OR PREVENT OUR ABILITY TO DELIVER OUR PRODUCTS AND SERVICES.

We may be subject to legal actions alleging intellectual property infringement (including patent infringement), unfair competition or similar claims against us. Companies may apply for or be awarded patents or have other intellectual property rights covering aspects of our technologies or businesses. Defending ourselves against intellectual property infringement or similar claims is expensive and diverts management's attention.

IF THE TECHNOLOGY THAT WE CURRENTLY USE TO TARGET THE DELIVERY OF ONLINE ADVERTISEMENTS AND TO PREVENT FRAUD ON OUR NETWORKS IS RESTRICTED OR BECOMES SUBJECT TO REGULATION, OUR EXPENSES COULD INCREASE AND WE COULD LOSE CUSTOMERS OR ADVERTISING INVENTORY.

Websites typically place small files of non-personalized (or "anonymous") information, commonly known as cookies, on an Internet user's hard drive. Cookies generally collect information about users on a non-personalized basis to enable websites to provide users with a more customized experience. Cookie information is passed to the website through an Internet user's browser software. We currently use cookies, along with other technologies, as set forth in our privacy policies, for purposes that include, without limitation, improving the experience Web users have when they see Web advertisements, advertising campaign reporting, website reporting and to monitor and prevent fraudulent activity on our networks. Most currently available Internet browsers allow Internet users to modify their browser settings to prevent cookies from being stored on their hard drive, and some users currently do so. Internet users can also delete cookies from their hard drives at any time. Some Internet commentators and privacy advocates have suggested limiting or eliminating the use of cookies, and legislation has been introduced in some jurisdictions to regulate the use of cookie technology. The

effectiveness of our technology could be limited by any reduction or limitation in the use of cookies. If the use or effectiveness of cookies were limited, we expect that we would need to switch to other technologies to gather demographic and behavioral information. While such technologies currently exist, they may be less effective than cookies. We also expect that we would need to develop or acquire other technology to monitor and prevent fraudulent activity on our networks. Replacement of cookies could require reengineering time and resources, might not be completed in time to avoid losing customers or advertising inventory, and might not be commercially feasible. Our use of cookie technology or any other technologies designed to collect Internet usage information may subject us to litigation or investigations in the future. Any litigation or government action against us could be costly and time consuming, could require us to change our business practices and could divert management's attention.

IF WE FAIL TO COMPETE EFFECTIVELY AGAINST OTHER INTERNET ADVERTISING COMPANIES, WE COULD LOSE CUSTOMERS OR ADVERTISING INVENTORY AND OUR REVENUE AND RESULTS OF OPERATIONS COULD DECLINE.

The Internet advertising markets are characterized by rapidly changing technologies, evolving industry standards, frequent new product and service introductions, and changing customer demands. The introduction of new products and services embodying new technologies and the emergence of new industry standards and practices could render our existing products and services obsolete and unmarketable or require unanticipated technology or other investments. Our failure to adapt successfully to these changes could harm our business, results of operations and financial condition.

The market for Internet advertising and related products and services is highly competitive. We expect this competition to continue to increase, in part because there are no significant barriers to entry to our industry. Increased competition may result in price reductions for advertising space, reduced margins and loss of market share. Our principal competitors include other companies that provide advertisers with performance-based Internet advertising solutions and companies that offer pay-per-click search services. We compete in the performance-based marketing segment with CPL and CPA performance-based companies, and with other large Internet display advertising networks. In addition, we compete in the online comparison shopping market with focused comparison shopping websites, and with search engines and portals such as Yahoo!, Google and MSN, and with online retailers such as Amazon.com and eBay. Large websites with brand recognition, such as Yahoo!, Google, AOL and MSN, have direct sales personnel and substantial proprietary online advertising inventory that may provide competitive advantages compared to our networks, and they have a significant impact on pricing for online advertising overall. These companies have longer operating histories, greater name recognition and have greater financial, technical, sales, and marketing resources than we have. Further, Google, Yahoo! and Microsoft have made acquisitions to put them in direct competition with a number of our offerings.

Competition for advertising placements among current and future suppliers of Internet navigational and informational services, high-traffic websites and Internet service providers ("ISPs"), as well as competition with other media for advertising placements, could result in significant price competition, declining margins and reductions in advertising revenue. In addition, as we continue our efforts to expand the scope of our Web services, we may compete with a greater number of Web publishers and other media companies across an increasing range of different Web services, including in vertical markets where competitors may have advantages in expertise, brand recognition and other areas. If existing or future competitors develop or offer products or services that provide significant performance, price, creative or other advantages over those offered by us, our business, results of operations and financial condition could be negatively affected. We also compete with traditional advertising media, such as direct mail, television, radio, cable, and print, for a share of advertisers' total advertising budgets. Many current and potential competitors enjoy competitive advantages over us, such

as longer operating histories, greater name recognition, larger customer bases, greater access to advertising space on high-traffic websites, and significantly greater financial, technical, sales, and marketing resources. As a result, we may not be able to compete successfully. If we fail to compete successfully, we could lose customers or advertising inventory and our revenue and results of operations could decline.

Our success depends in part on the retention of personnel critical to our combined business operations due to, for example, unique technical skills, management expertise or key business relationships. We may be unable to retain existing management, finance, engineering, sales, customer support, and operations personnel that are critical to the success of the Company, which may result in disruption of operations, loss of key business relationships, information, expertise or know-how, unanticipated additional recruitment and training costs, and diminished anticipated benefits of acquisitions, including loss of revenue and profitability.

Our future success is substantially dependent on the continued service of our key senior management. Our employment agreements with our key personnel are short-term and on an at-will basis. We do not have key-person insurance on any of our employees. The loss of the services of any member of our senior management team, or of any other key employees, could divert management's time and attention, increase our expenses and adversely affect our ability to conduct our business efficiently. Our future success also depends on our continuing ability to attract, retain and motivate highly skilled employees. We may be unable to retain our key employees or attract, retain and motivate other highly qualified employees in the future. We have experienced difficulty from time to time in attracting or retaining the personnel necessary to support the growth of our business, and may experience similar difficulties in the future.

DELAWARE LAW AND OUR STOCKHOLDER RIGHTS PLAN CONTAIN ANTI-TAKEOVER PROVISIONS THAT COULD DETER TAKEOVER ATTEMPTS THAT COULD BE BENEFICIAL TO OUR STOCKHOLDERS.

Provisions of Delaware law could make it more difficult for a third-party to acquire us, even if doing so would be beneficial to our stockholders. Section 203 of the Delaware General Corporation Law may make the acquisition of our company and the removal of incumbent officers and directors more difficult by prohibiting stockholders holding 15% or more of our outstanding voting stock from acquiring us, without our board of directors' consent, for at least three years from the date they first hold 15% or more of the voting stock. In addition, our Stockholder Rights Plan has significant anti-takeover effects by causing substantial dilution to a person or group that attempts to acquire us on terms not approved by our board of directors.

SYSTEM FAILURES COULD SIGNIFICANTLY DISRUPT OUR OPERATIONS, WHICH COULD CAUSE US TO LOSE CUSTOMERS OR ADVERTISING INVENTORY.

Our success depends on the continuing and uninterrupted performance of our systems. Sustained or repeated system failures that interrupt our ability to provide services to customers, including failures affecting our ability to deliver advertisements quickly and accurately and to process visitors' responses to advertisements, would reduce significantly the attractiveness of our solutions to advertisers and Web publishers. Our business, results of operations and financial condition could also be materially and adversely affected by any systems damage or failure that impacts data integrity or interrupts or delays our operations. Our computer systems are vulnerable to damage from a variety of sources, including telecommunications failures, power outages, malicious or accidental human acts, and natural disasters. We lease data center space in various locations in northern and southern California; Virginia; Stockholm, Sweden; and Shanghai, China. Therefore, any of the above factors affecting any of these

areas could substantially harm our business. Moreover, despite network security measures, our servers are potentially vulnerable to physical or electronic break-ins, computer viruses and similar disruptive problems in part because we cannot control the maintenance and operation of our third-party data centers. Despite the precautions taken, unanticipated problems affecting our systems could cause interruptions in the delivery of our solutions in the future and our ability to provide a record of past transactions. Our data centers and systems incorporate varying degrees of redundancy. All data centers and systems may not automatically switch over to their redundant counterpart. Our insurance policies may not adequately compensate us for any losses that may occur due to any failures in our systems.

IT MAY BE DIFFICULT TO PREDICT OUR FINANCIAL PERFORMANCE BECAUSE OUR QUARTERLY OPERATING RESULTS MAY FLUCTUATE.

Our revenue and operating results may vary significantly from quarter to quarter due to a variety of factors, many of which are beyond our control. You should not rely on period-to-period comparisons of our results of operations as an indication of our future performance. Our results of operations have fallen below the expectations of market analysts and our own forecasts in the past and may also do so in some future periods. If this happens, the market price of our common stock may fall significantly. The factors that may affect our quarterly operating results include, but are not limited to, the following:

Expenditures by advertisers also tend to be cyclical, reflecting overall economic conditions as well as budgeting and buying patterns. Any decline in the economic prospects of advertisers or the economy generally may alter advertisers' current or prospective spending priorities, or may increase the time it takes us to close sales with advertisers, and could materially and adversely affect our business, results of operations, cash flows, and financial condition.

OUR EXPANDING INTERNATIONAL OPERATIONS SUBJECT US TO ADDITIONAL RISKS AND UNCERTAINTIES AND WE MAY NOT BE SUCCESSFUL WITH OUR STRATEGY TO CONTINUE TO EXPAND SUCH OPERATIONS.

We initiated operations, through wholly-owned subsidiaries or divisions, in the United Kingdom in 1999, France and Germany in 2000, Sweden in 2004, Japan and China in 2007, Spain and Ireland in 2008, and Korea, South Africa and Canada in 2010. Our international expansion and the integration of international operations present unique challenges and risks to our company, and require management attention. Compliance with complex foreign and U.S. laws and regulations that apply to our international operations increases our cost of doing business in international jurisdictions and could interfere with our ability to offer our products and services to one or more countries or expose us or our employees to fines and penalties. These laws and regulations include, but are not limited to, content requirements, tax laws, data privacy and filtering requirements, U.S. laws such as the Foreign Corrupt Practices Act, and local laws prohibiting corrupt payments to governmental officials, such as the U.K. Bribery Act. Violations of these laws and regulations could result in monetary damages, criminal sanctions against us, our officers, or our employees, and prohibitions on the conduct of our business. Our continued international expansion also subjects us to additional foreign currency exchange rate risks and will require additional management attention and resources. We cannot assure you that we will be successful in our international expansion. Our international operations and expansion subject us to other inherent risks, including, but not limited to:

Our failure to address these risks adequately could materially and adversely affect our business, revenue, results of operations, cash flows and financial condition.

WE MAY NOT BE ABLE TO PROTECT OUR INTELLECTUAL PROPERTY FROM UNAUTHORIZED USE, WHICH COULD DIMINISH THE VALUE OF OUR PRODUCTS AND SERVICES, WEAKEN OUR COMPETITIVE POSITION AND REDUCE OUR REVENUE.

Our success depends in large part on our proprietary technologies, including tracking management software, our affiliate marketing technologies, our display advertising technologies, our technology, including SEM technology that runs our owned and operated websites, and our MOJO platform. In addition, we believe that our trademarks are key to identifying and differentiating our products and services from those of our competitors. We may be required to spend significant resources to monitor and police our intellectual property rights. If we fail to successfully enforce our intellectual property rights, the value of our products and services could be diminished and our competitive position may suffer.

We rely on a combination of copyright, trademark and trade secret laws, confidentiality procedures and licensing arrangements to establish and protect our proprietary rights. Third-party software providers could copy or otherwise obtain and use our technologies without authorization or develop similar technologies independently, which may infringe upon our proprietary rights. We may not be able to detect infringement and may lose competitive position in the market before we do so. In addition, competitors may design around our technologies or develop competing technologies. Intellectual property protection may also be unavailable or limited in some foreign countries.

We generally enter into confidentiality or license agreements with our employees, consultants, vendors, customers, and corporate partners, and generally control access to and distribution of our technologies, documentation and other proprietary information. Despite these efforts, unauthorized parties may attempt to disclose, obtain or use our products and services or technologies. Our precautions may not prevent misappropriation of our products, services or technologies, particularly in foreign countries where laws or law enforcement practices may not protect our proprietary rights as fully as in the United States.

GOVERNMENT ENFORCEMENT ACTIONS, CHANGES IN GOVERNMENT REGULATION, TECHNICAL PROPOSALS AND INDUSTRY STANDARDS, INCLUDING, BUT NOT LIMITED TO, SPYWARE, PRIVACY AND EMAIL MATTERS, COULD DECREASE DEMAND FOR OUR PRODUCTS AND SERVICES AND INCREASE OUR COSTS OF DOING BUSINESS.

Laws and regulations that apply to Internet communications, commerce and advertising are becoming more prevalent. These regulations could affect the costs of communicating on the Web and could adversely affect the demand for our advertising solutions or otherwise harm our business, results of operations and financial condition. The United States Congress has enacted Internet legislation regarding children's privacy, copyrights, sending of commercial email (e.g., the Federal CAN-SPAM Act of 2003), and taxation. The United States Congress has passed legislation regarding spyware (i.e., H.R. 964, the "Spy Act of 2007") and the New York Attorney General's office has also pursued enforcement actions against companies in this industry. In addition, on December 1, 2010, the FTC issued its long-awaited staff report criticizing industry self-regulatory efforts as too slow and lacking adequate protections for consumers and emphasizing a need for simplified notice, choice and transparency to the consumer of the collection, use and sharing of their data. The FTC suggests various methods and measures, including an implementation of a "Do Not Track" mechanism—likely a persistent setting on consumers' browsers—that consumers can choose whether to allow the tracking of their online searching and browsing activities. As a result of the report, some of the browser makers have been working on their own do-not-track technical solutions, notably Microsoft Internet Explorer, Mozilla Firefox and Google Chrome. Microsoft's Internet Explorer 9 offers a tracking protection feature that

doesn't allow for tracking by allowing internet users to download tracking protection block lists which consequently block any third-party domain included in such block lists from serving content. This content-blocking feature, depending on the adoption by internet users, may adversely affect our ability to grow our company, maintain our current revenues and profitability, serve and monetize content and utilize our behavioral targeting platform. Legislatively, Congressman Bobby Rush is working to reintroduce his bill from last year (H.R. 5777—Best Practices Act) and others within the House and the Senate are looking to introduce bills regarding the privacy of online and offline data. Other laws and regulations have been adopted and may be adopted in the future, and may address issues such as user privacy, spyware, "do not email" lists, pricing, intellectual property ownership and infringement, copyright, trademark, trade secret, export of encryption technology, acceptable content, search terms, lead generation, behavioral targeting, taxation, and quality of products and services. This legislation could hinder growth in the use of the Web generally and adversely affect our business. Moreover, it could decrease the acceptance of the Web as a communications, commercial and advertising medium. We do not use any form of spam or spyware and has policies to prohibit abusive Internet behavior, including prohibiting the use of spam and spyware by our Web publisher partners.

WE COULD BE SUBJECT TO LEGAL CLAIMS, GOVERNMENT ENFORCEMENT ACTIONS AND DAMAGE TO OUR REPUTATION AND HELD LIABLE FOR OUR OR OUR CUSTOMERS' FAILURE TO COMPLY WITH FEDERAL, STATE AND FOREIGN LAWS, REGULATIONS OR POLICIES GOVERNING CONSUMER PRIVACY, WHICH COULD MATERIALLY HARM OUR BUSINESS.

Recent growing public concern regarding privacy and the collection, distribution and use of information about Internet users has led to increased federal, state and foreign scrutiny and legislative and regulatory activity concerning data collection and use practices. The United States Congress currently has pending legislation regarding privacy and data security measures, such as S. 495, the "Personal Data Privacy and Security Act of 2007", and H.R. 5777, the Best Practices Act, introduced by Congressman Bobby Rush. Any failure by us to comply with applicable federal, state and foreign laws and the requirements of regulatory authorities may result in, among other things, indemnification liability to our customers and the advertising agencies we work with, administrative enforcement actions and fines, class action lawsuits, cease and desist orders, and civil and criminal liability. Recently, class action lawsuits have been filed alleging violations of privacy laws by ISPs. The European Union's directive addressing data privacy limits our ability to collect and use information regarding Internet users. These restrictions may limit our ability to target advertising in most European countries. Our failure to comply with these or other federal, state or foreign laws could result in liability and materially harm our business.

In addition to government activity, privacy advocacy groups and the technology and direct marketing industries are considering various new, additional or different self-regulatory standards. This focus, and any legislation, regulations or standards promulgated, may impact us adversely. Governments, trade associations and industry self-regulatory groups may enact more burdensome laws, regulations and guidelines, including consumer privacy laws, affecting our customers and us. Since many of the proposed laws or regulations are just being developed, and a consensus on privacy and data usage has not been reached, we cannot yet determine the impact these proposed laws or regulations may have on our business. However, if the gathering of profiling information were to be curtailed, Internet advertising would be less effective, which would reduce demand for Internet advertising and harm our business.

Third parties may bring class action lawsuits against us relating to online privacy and data collection. We disclose our information collection and dissemination policies, and we may be subject to claims if we act or are perceived to act inconsistently with these published policies. Any claims or

inquiries could be costly and divert management's attention, and the outcome of such claims could harm our reputation and our business.

Our customers are also subject to various federal and state laws concerning the collection and use of information regarding individuals. These laws include the Children's Online Privacy Protection Act, the Federal Drivers Privacy Protection Act of 1994, the privacy provisions of the Gramm-Leach-Bliley Act, the Federal CAN-SPAM Act of 2003, as well as other laws that govern the collection and use of consumer credit information. We cannot assure you that our customers are currently in compliance, or will remain in compliance, with these laws and their own privacy policies. We may be held liable if our customers use our technologies in a manner that is not in compliance with these laws or their own stated privacy policies.

Our common stock has been publicly traded since March 30, 2000. The market price of our common stock has been subject to significant fluctuations since the date of our initial public offering.

The stock market has from time to time experienced significant price and volume fluctuations that have affected the market prices of securities, particularly securities of technology companies. As a result, the market price of our common stock may materially decline, regardless of our operating performance. In the past, following periods of volatility in the market price of a particular company's securities, securities class action litigation has often been brought against that company. We were involved in this type of litigation, which arose shortly after our stock price dropped significantly during the third quarter of 2007. Litigation of this type is often expensive and diverts management's attention and resources.

SEVERAL STATES HAVE IMPLEMENTED OR PROPOSED REGULATIONS THAT IMPOSE SALES TAX ON CERTAIN E-COMMERCE TRANSACTIONS INVOLVING THE USE OF AFFILIATE MARKETING PROGRAMS.

In 2008, the state of New York implemented regulations that require advertisers to collect and remit sales taxes on sales made to residents of New York if the affiliate/publisher that facilitated that sale is a New York-based entity. In addition, several other states, including California, have proposed similar regulations, although most of the regulations proposed by these other states have not passed. While the New York sales tax requirement has not had a material impact on our Affiliate Marketing segment results of operations, we are unable to determine the impact on our Affiliate Marketing business if other states adopt similar requirements.

IF OUR NOTE RECEIVABLE BECOMES UNCOLLECTIBLE, WE WOULD BE REQUIRED TO RECORD A SIGNIFICANT CHARGE TO EARNINGS.

As more fully described in Note 6 to our consolidated financial statements, we sold our Web Clients business on February 1, 2010 in exchange for a note receivable with a fair market value of $32.8 million. If this note receivable were to become uncollectible, we would be required to take a charge against earnings for the amount of the note that becomes uncollectible. This may have an adverse impact on our results of operations.

WE MAY BE REQUIRED TO RECORD A SIGNIFICANT CHARGE TO EARNINGS IF OUR GOODWILL OR AMORTIZABLE INTANGIBLE ASSETS BECOME IMPAIRED.

As disclosed in our Annual Report on Form 10-K for the fiscal year ended December 31, 2008, we recorded an impairment charge as of December 31, 2008 related to our goodwill and amortizable intangible assets totaling $269.5 million. As of December 31, 2010, we have $183.2 million and $33.5 million of goodwill and amortizable intangible assets, respectively, remaining.

We perform our annual impairment analysis of goodwill as of December 31 of each year, or sooner if we determine there are indicators of impairment, in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Under GAAP, the impairment analysis of goodwill must be based on estimated fair values. The determination of fair values requires assumptions and estimates of many critical factors, including, but not limited to: expected operating results; macroeconomic conditions; our stock price; earnings multiples implied in acquisitions in the online marketing industry; industry analyst expectations; and the discount rates used in the discounted cash flow analysis. We are required to perform our next goodwill impairment analysis at December 31, 2010. If macroeconomic conditions deteriorate further in 2011 or our stock price experiences declines, we may be required to record additional impairment charges in the future.

We are also required under GAAP to review our amortizable intangible assets for impairment whenever events and circumstances indicate that the carrying value of such assets may not be recoverable. We may be required to record a significant charge to earnings in a period in which any impairment of our goodwill or amortizable intangible assets is determined.

WE MAY INCUR LIABILITIES TO TAX AUTHORITIES IN EXCESS OF AMOUNTS THAT HAVE BEEN ACCRUED WHICH MAY ADVERSELY IMPACT OUR RESULTS OF OPERATIONS AND FINANCIAL CONDITION.

As more fully described in Note 10 to our consolidated financial statements, we have recorded significant income tax liabilities. The preparation of our consolidated financial statements requires estimates of the amount of income tax that will become payable in each of the jurisdictions in which we operate. We may be challenged by the taxing authorities in these jurisdictions and, in the event that we are not able to successfully defend our position, we may incur significant additional income tax liabilities and related interest and penalties which may have an adverse impact on our results of operations and financial condition.

IF WE FAIL TO MAINTAIN AN EFFECTIVE SYSTEM OF INTERNAL CONTROLS, WE MAY NOT BE ABLE TO ACCURATELY REPORT OUR FINANCIAL RESULTS OR PREVENT FRAUD AND OUR BUSINESS MAY BE HARMED AND OUR STOCK PRICE MAY BE ADVERSELY IMPACTED.

Effective internal controls are necessary for us to provide reliable financial reports and to effectively prevent fraud. Any inability to provide reliable financial reports or to prevent fraud could harm our business. The Sarbanes-Oxley Act of 2002 requires management to evaluate and assess the effectiveness of our internal control over financial reporting. We determined that our internal control over financial reporting was effective as of December 31, 2010. In order to continue to comply with the requirements of the Sarbanes-Oxley Act, we are required to continuously evaluate and, where appropriate, enhance our policies, procedures and internal controls. If we fail to maintain the adequacy of our internal controls, we could be subject to litigation or regulatory scrutiny and investors could lose confidence in the accuracy and completeness of our financial reports. We cannot assure you that in the future we will be able to fully comply with the requirements of the Sarbanes-Oxley Act or that management will conclude that our internal control over financial reporting is effective. If we fail to fully comply with the requirements of the Sarbanes-Oxley Act, our business may be harmed and our stock price may decline.

DECREASED EFFECTIVENESS OF EQUITY COMPENSATION COULD ADVERSELY AFFECT OUR ABILITY TO ATTRACT AND RETAIN EMPLOYEES AND HARM OUR BUSINESS.

We have historically used equity compensation as a key component of our employee compensation program in order to align employees' interests with the interests of our stockholders, encourage employee retention, and provide competitive compensation packages. Volatility or lack of positive performance in our stock price may adversely affect our ability to retain key employees, many of whom

have been granted equity awards, or to attract additional highly-qualified personnel. As of December 31, 2010, many of our outstanding employee stock options have exercise prices in excess of the stock price on that date. To the extent this continues to occur, our ability to retain employees may be adversely affected. Moreover, applicable NASDAQ listing standards relating to obtaining stockholder approval of equity compensation plans could make it more difficult or expensive for us to grant stock options or other stock-based awards to employees in the future. As a result, we may incur increased compensation costs, change our equity compensation strategy or find it difficult to attract, retain and motivate employees, any of which could materially, adversely affect our business.

As of December 31, 2010, we leased facilities at the following locations (including square-feet and primary function/segment(s) using the facility):

We also lease small office space and facilities in: Monrovia, California; Chicago, Illinois; Minneapolis, Minnesota; Paris, France; Munich, Germany; Dublin, Ireland; Madrid, Spain; Stockholm, Sweden; Durban, South Africa; Seoul, Korea; Hong Kong, China; and, Tokyo, Japan. In addition, we use third-party co-location facilities that house our Web servers in: Sunnyvale, California; San Jose, California; Los Angeles, California; El Segundo, California; Irvine, California; Santa Clara, California; Palo Alto, California; Ashburn, Virginia; Stockholm, Sweden; and Shanghai, China. As a result of the divestiture of our lead generation business, operated through our Web Clients subsidiary, the lease on our Harrisburg, Pennsylvania facility was assumed by the buyer in February 2010. For additional information regarding our obligations under leases, see Note 17 to our consolidated financial statements included in this annual report on Form 10-K.

On April 8, 2008, Hypertouch, Inc. filed an action against the Company in the Superior Court of California, County of Los Angeles. The complaint asserts causes of action for violation of California Business & Professions Code §§ 17529.5 and 17200, et seq., arising from the plaintiff's alleged receipt of a large number of email messages allegedly transmitted by the Company "and/or (the Company's) agents" and seeks statutory damages for each such email. The Company filed its answer to the complaint on May 28, 2008. On May 4, 2009, the court granted the Company's motion for summary judgment which ended the case in this court. Hypertouch appealed the Court's ruling.

On January 18, 2011, the Second District of the Court of Appeal for the State of California reversed the lower court's May 4, 2009 summary judgment ruling. The ruling means that the case is remanded back to the lower court to be decided on its merits. In addition, the Court of Appeal ruled that a one-year statute of limitations applies to the emails at issue in the case. This ruling reduces the number of emails at issue in the case to less than 1,000.

From time to time, the Company may become subject to legal proceedings, claims and litigation arising in the ordinary course of business. In addition, the Company may receive letters alleging infringement of patent or other intellectual property rights. The Company is not currently a party to any material legal proceedings, except as discussed above, nor is the Company aware of any pending or threatened litigation that would have a material adverse effect on the Company's business, operating results, cash flows or financial condition should such litigation be resolved unfavorably.

No matters were submitted to a vote of security holders during the quarter ended December 31, 2010.

ITEM 5. MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES

Our common stock has traded on the NASDAQ Global Select Market (including its predecessor markets) under the symbol "VCLK" since our initial public offering on March 30, 2000. The following table sets forth, for the periods indicated, the high and low sales prices per share of our common stock as reported on the NASDAQ Global Select Market. On February 18, 2010, the last sale price of our common stock reported by the NASDAQ Global Select Market was $15.55 per share.

As of December 31, 2010, there were 527 stockholders of record who held shares of our common stock.

We have not declared or paid any cash dividends on our capital stock since our inception, and we have no immediate plans to begin paying a cash dividend.

Set forth below is a graph comparing the cumulative total stockholder return of $100 invested in our common stock on December 31, 2005 through December 31, 2010 relative to the cumulative total return of $100 invested in the NASDAQ Composite Index and the RDG Internet Composite Index calculated similarly for the same period.

The selected consolidated financial data set forth below with respect to our consolidated statements of operations for the years ended December 31, 2010, 2009 and 2008 and with respect to our consolidated balance sheets as of December 31, 2010 and 2009 have been derived from the audited consolidated financial statements of ValueClick which are included elsewhere herein. The consolidated statement of operations data for the years ended December 31, 2007 and 2006 and the consolidated balance sheet data as of December 31, 2008, 2007 and 2006 have been derived from our audited consolidated financial statements not included herein, and as adjusted for reclassification of previously reported operating results arising from discontinued operations. The selected consolidated financial data set forth below is qualified in its entirety by, and should be read in conjunction with both Item 7 "Management's Discussion and Analysis of Financial Condition and Results of Operations" of this annual report on Form 10-K, and the consolidated financial statements and the notes to those consolidated financial statements included in Item 8 "Financial Statements and Supplementary Data" of this annual report on Form 10-K.

			For the Year Ended December 31,

			2010			2009		2008			2007		2006
			(in thousands, except per share data)
Revenue			$	430,798		$	422,723	$	455,441		$	375,515	$	256,760
Cost of revenue				116,802			116,509		139,470			118,127		85,442

	Gross profit			313,996			306,214		315,971			257,388		171,318
Operating expenses:
	Sales and marketing(2)			112,282			118,457		136,466			95,939		62,395
	General and administrative(2)			53,536			60,373		88,745			60,711		47,032
	Technology(2)			35,047			25,050		31,160			27,715		25,403
	Amortization of intangible assets			20,611			19,803		21,733			16,480		10,953
	Impairment of goodwill and intangible assets			—			—		269,500			—		—

		Total operating expenses		221,476			223,683		547,604			200,845		145,783

Income (loss) from operations				92,520			82,531		(231,633	)		56,543		25,535
		Interest and other income, net		2,204			302		2,451			12,025		7,903

Income (loss) before income taxes				94,724			82,833		(229,182	)		68,568		33,438
	Income tax expense (benefit)			14,120			21,264		(33,814	)		28,406		14,353

Income (loss) from continuing operations				80,604			61,569		(195,368	)		40,162		19,085
Discontinued operations:
	(Loss) income from discontinued operations, net of tax			(134	)		7,047		(23,728	)		30,450		43,489
	Gain on disposition, net of tax			10,040			—		4,984			—		—

	Net income (loss) from discontinued operations			9,906			7,047		(18,744	)		30,450		43,489

Net income (loss)			$	90,510		$	68,616	$	(214,112	)	$	70,612	$	62,574

	Basic net income (loss) per common share
		Continuing operations	$	0.99		$	0.71	$	(2.12	)	$	0.40	$	0.19
		Discontinued operations	$	0.12		$	0.08	$	(0.20	)	$	0.31	$	0.44
		Net income (loss)	$	1.11		$	0.79	$	(2.32	)	$	0.71	$	0.63
	Diluted net income (loss) per common share
		Continuing operations	$	0.98		$	0.71	$	(2.12	)	$	0.40	$	0.19
		Discontinued operations	$	0.12		$	0.08	$	(0.20	)	$	0.30	$	0.43
		Net income (loss)	$	1.10		$	0.79	$	(2.32	)	$	0.70	$	0.62
	Weighted-average shares used to calculate basic net income (loss) per common share			81,615			86,716		92,325			99,224		99,600

	Weighted-average shares used to calculate diluted net income (loss) per common share			82,334			87,210		92,325			100,518		101,721


	As of December 31,
	2010		2009		2008	2007		2006
	(in thousands)
Cash, cash equivalents and marketable securities	$	197,317		$	180,523	$	150,412		$	287,517	$	281,594
Working capital	$	199,267		$	160,531	$	77,183		$	179,649	$	315,576
Total assets	$	613,567		$	566,562	$	603,279		$	1,011,022	$	793,266
Total non-current liabilities	$	37,668		$	61,669	$	73,195		$	81,890	$	62,143
Total stockholders' equity	$	472,641		$	406,489	$	353,479		$	709,933	$	643,709

In evaluating our business, we consider earnings from continuing operations before interest, income taxes, depreciation, amortization, stock-based compensation, and goodwill impairment charges ("Adjusted-EBITDA"), a non-GAAP financial measure, as a key indicator of financial operating performance and as a measure of the ability to generate cash for operational activities and future capital expenditures. We use Adjusted-EBITDA in evaluating the overall performance of our business operations. We believe that this measure may also be useful to investors because it eliminates the effects of period-to-period changes in income from interest on our cash and marketable securities and the costs associated with income tax expense, capital investments, and stock-based compensation expense which are not directly attributable to the underlying performance of our continuing business operations. Investors should not consider this measure in isolation or as a substitute for income from operations, or cash flow from operations determined under U.S. Generally Accepted Accounting Principles ("GAAP"), or any other measure for determining operating performance that is calculated in accordance with GAAP. In addition, because Adjusted-EBITDA is a non-GAAP measure, it may not necessarily be comparable to similarly titled measures employed by other companies.

The following is a reconciliation of net income (loss) from continuing operations to Adjusted-EBITDA:

		For the Year Ended December 31,

		2010			2009			2008			2007			2006
		(in thousands)
Net income (loss) from continuing operations		$	80,604		$	61,569		$	(195,368	)	$	40,162		$	19,085
	Interest and other income, net		(2,204	)		(302	)		(2,451	)		(12,025	)		(7,903	)
	Income tax expense (benefit)		14,120			21,264			(33,814	)		28,406			14,353
	Amortization of intangible assets		20,611			19,803			21,733			16,480			10,953
	Depreciation and leasehold amortization		6,620			7,563			8,480			8,088			7,435
	Stock-based compensation		7,944			8,869			48,166			15,389			10,919
	Impairment of goodwill and intangible assets		—			—			269,500			—			—

Adjusted-EBITDA		$	127,695		$	118,766		$	116,246		$	96,500		$	54,842

The following table sets forth certain selected financial information for our eight most recent fiscal quarters. In the opinion of our management, this unaudited financial information has been prepared on the same basis as the audited financial statements, and includes all adjustments, consisting only of normal recurring adjustments, necessary to fairly state this information when read in conjunction with our consolidated financial statements and the related notes contained elsewhere herein. These operating results are not necessarily indicative of results of any future period.

			For the Three-Month Period Ended

			Dec. 31, 2010		Sept. 30, 2010			Jun. 30, 2010		Mar. 31, 2010			Dec. 31, 2009			Sept. 30, 2009			Jun. 30, 2009		Mar. 31, 2009
			(in thousands, except per share data)
*Statement of Operations Data:*
Revenue			$	128,747	$	106,768		$	99,601	$	95,682		$	110,394		$	105,166		$	104,090	$	103,073
Cost of revenue				35,455		28,502			27,346		25,499			31,173			26,146			28,232		30,958

	Gross profit			93,292		78,266			72,255		70,183			79,221			79,020			75,858		72,115
Operating expenses:
	Sales and marketing(1)			31,319		29,351			27,117		24,495			27,228			31,093			30,927		29,209
	General and administrative(1)			14,019		12,331			13,363		13,823			14,434			16,700			14,810		14,429
	Technology(1)			9,924		8,897			8,302		7,924			6,179			6,143			6,244		6,484
	Amortization of intangible assets			5,333		5,376			4,936		4,966			4,999			4,991			4,924		4,889

		Total operating expenses		60,595		55,955			53,718		51,208			52,840			58,927			56,905		55,011

Income from operations				32,697		22,311			18,537		18,975			26,381			20,093			18,953		17,104
	Interest and other income (expense), net			1,891		(2,683	)		2,437		559			(176	)		(513	)		1,133		(142	)

Income before income taxes				34,588		19,628			20,974		19,534			26,205			19,580			20,086		16,962
	Income tax expense (benefit)			13,526		(16,549	)		8,932		8,211			8,834			(3,677	)		8,129		7,978

Income from continuing operations				21,062		36,177			12,042		11,323			17,371			23,257			11,957		8,984

Discontinued operations:
	(Loss) income from discontinued operations, net of tax(1)			—		—			—		(134	)		(1,874	)		1,773			2,915		4,233
	Gain on disposition, net of tax			—		—			—		10,040			—			—			—		—

	Net income (loss) from discontinued operations			—		—			—		9,906			(1,874	)		1,773			2,915		4,233

Net income			$	21,062	$	36,177		$	12,042	$	21,229		$	15,497		$	25,030		$	14,872	$	13,217

Basic net income (loss) per common share
		Continuing operations	$	0.26	$	0.45		$	0.15	$	0.14		$	0.20		$	0.27		$	0.14	$	0.10
		Discontinued operations		—		—			—	$	0.12		$	(0.02	)	$	0.02		$	0.03	$	0.05
		Net income	$	0.26	$	0.45		$	0.15	$	0.26		$	0.18		$	0.29		$	0.17	$	0.15
Diluted net income (loss) per common share
		Continuing operations	$	0.26	$	0.44		$	0.15	$	0.14		$	0.20		$	0.26		$	0.14	$	0.10
		Discontinued operations		—		—			—	$	0.12		$	(0.02	)	$	0.02		$	0.03	$	0.05
		Net income	$	0.26	$	0.44		$	0.15	$	0.25		$	0.18		$	0.29		$	0.17	$	0.15
*Other Data:*
Adjusted-EBITDA(2)			$	41,878	$	31,032		$	27,281	$	27,504		$	35,088		$	29,127		$	28,168	$	26,383

		For the Three-Month Period Ended

		Dec. 31, 2010			Sept. 30, 2010			Jun. 30, 2010			Mar. 31, 2010			Dec. 31, 2009		Sept. 30, 2009			Jun. 30, 2009			Mar. 31, 2009
		(in thousands)
Net income from continuing operations		$	21,062		$	36,177		$	12,042		$	11,323		$	17,371	$	23,257		$	11,957		$	8,984
	Interest and other (income) expense, net		(1,891	)		2,683			(2,437	)		(559	)		176		513			(1,133	)		142
	Income tax expense (benefit)		13,526			(16,549	)		8,932			8,211			8,834		(3,677	)		8,129			7,978
	Amortization of intangible assets		5,333			5,376			4,936			4,966			4,999		4,991			4,924			4,889
	Depreciation and leasehold amortization		1,742			1,664			1,608			1,606			1,795		1,866			1,932			1,970
	Stock-based compensation		2,106			1,681			2,200			1,957			1,913		2,177			2,359			2,420

Adjusted-EBITDA		$	41,878		$	31,032		$	27,281		$	27,504		$	35,088	$	29,127		$	28,168		$	26,383

ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read in conjunction with our consolidated financial statements and the related notes thereto included elsewhere in this annual report on Form 10-K beginning on page F-1.

The following discussion contains forward-looking statements based on the current expectations, assumptions, estimates, and projections about us and our industry. These forward-looking statements involve risks and uncertainties. Our actual results could differ materially from those discussed in these forward- looking statements as a result of certain factors, as more fully described in Item 1A "Risk Factors" and elsewhere in this annual report on Form 10-K. We undertake no obligation to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.

We offer a suite of products and services that enable marketers to advertise and sell their products through all major online marketing channels, including display advertising, comparison shopping and affiliate marketing. We also offer technology infrastructure tools and services that enable marketers to implement and manage their online advertising across multiple channels including display, email, paid search, natural search, on-site, offline, and affiliate. The broad range of products and services that we provide enables our customers to address all aspects of their online marketing process, from strategic planning through execution, including results measurement and campaign refinements.

On August 3, 2010, we completed the acquisition of Investopedia. We have included the results of operations of Investopedia in our consolidated results of operations beginning on the date of acquisition. Note 4 to our consolidated financial statements included in this annual report on Form 10-K provides unaudited pro forma revenue, net income and basic and diluted net income per common share for the year ended December 31, 2010 and 2009 as if the acquisition of Investopedia occurred as of January 1, 2009.

In October 2008, we completed the dispositions of our Mediaplex Systems subsidiary and our e-commerce operations. In February 2010, we completed the disposition of our Web Clients subsidiary. This business is treated as a disposal group and classified in our consolidated financial statements as held-for-sale as of December 31, 2009. The results of operations of these disposed businesses and disposal group have been classified as discontinued operations in our consolidated financial statements. All current year and prior year financial information discussed herein pertains to the remaining continuing operations.

We derive our revenue from four business segments. These business segments are presented on a worldwide basis and include: Affiliate Marketing, Media, Owned & Operated Websites, and Technology. Each of these four business segments is described in Item 1 "Business" of this annual report on Form 10-K.

Our operations and financial performance depend on general economic conditions. The economies in which we primarily operate have experienced, and could continue to experience, an economic downturn due to various factors including: the crisis in credit markets, slower economic activity, decreased consumer confidence, high consumer debt levels and unemployment rates, and other adverse business conditions. Such fluctuations in these economies could cause, among other things, deterioration and continued decline in business and consumer spending, reductions in our customer's advertising budgets, and a decrease in demand for the types of online marketing services we provide or the products our customers offer. These factors have negatively impacted our revenue levels and could continue to negatively impact our business in the future.

The following table provides revenue, gross profit, operating expenses, and income from operations information for each of our four business segments. Segment income from operations, as shown below, excludes the effects of stock-based compensation, amortization of intangible assets, impairment of goodwill and intangible assets, and corporate expenses, as these items are excluded from the segment performance measures utilized by our chief operating decision maker in evaluating the performance of the segments. Corporate expenses consist of those costs not directly attributable to a business segment, and include: salaries and benefits for our executive, finance, legal, corporate governance, human resources, and facilities organizations; fees for professional service providers including audit, tax, Sarbanes-Oxley compliance, acquisition related costs, and certain legal matters; insurance; and other corporate expenses. A reconciliation of segment income from operations to consolidated income from operations and a reconciliation of segment revenue to consolidated revenue are also provided in the following table.

	For the Year Ended December 31,

	2010			2009			2008
	(in thousands)
Affiliate Marketing Segment
Revenue	$	124,126		$	111,903		$	121,972
Cost of revenue		17,215			15,617			19,374

Gross profit		106,911			96,286			102,598
Operating expenses		37,359			38,165			43,143

Segment income from operations	$	69,552		$	58,121		$	59,455

Media Segment
Revenue	$	137,487		$	135,086		$	130,891
Cost of revenue		74,102			71,320			71,638

Gross profit		63,385			63,766			59,253
Operating expenses		29,760			30,505			34,038

Segment income from operations	$	33,625		$	33,261		$	25,215

Owned & Operated Websites Segment
Revenue	$	138,545		$	149,599		$	177,145
Cost of revenue		23,107			27,002			46,950

Gross profit		115,438			122,597			130,195
Operating expenses		87,475			87,563			89,263

Segment income from operations	$	27,963		$	35,034		$	40,932

Technology Segment
Revenue	$	31,889		$	27,686		$	28,670
Cost of revenue		3,359			3,709			4,147

Gross profit		28,530			23,977			24,523
Operating expenses		11,932			11,202			10,923

Segment income from operations	$	16,598		$	12,775		$	13,600

Reconciliation of segment income from operations to consolidated income (loss) from operations:
Total segment income from operations	$	147,738		$	139,191		$	139,202
Corporate expenses		(26,663	)		(27,988	)		(31,436	)
Stock-based compensation		(7,944	)		(8,869	)		(48,166	)
Amortization of intangible assets		(20,611	)		(19,803	)		(21,733	)
Impairment of goodwill and intangible assets		—			—			(269,500	)

Consolidated income (loss) from operations	$	92,520		$	82,531		$	(231,633	)

Reconciliation of segment revenue to consolidated revenue:
Affiliate Marketing	$	124,126		$	111,903		$	121,972
Media		137,487			135,086			130,891
Owned & Operated Websites		138,545			149,599			177,145
Technology		31,889			27,686			28,670
Inter-segment eliminations		(1,249	)		(1,551	)		(3,237	)

Consolidated revenue	$	430,798		$	422,723		$	455,441

Revenue. Consolidated revenue for the year ended December 31, 2010 was $430.8 million, representing a 1.9% increase from the prior year total of $422.7 million.

Affiliate Marketing segment revenue increased to $124.1 million for the year ended December 31, 2010 compared to $111.9 million in 2009. This increase of $12.2 million, or 10.9%, was due to an increase in the number of customers and an increase in transaction volumes associated with existing customers, particularly in our domestic operations.

Media segment revenue increased slightly to $137.5 million for the year ended December 31, 2010 compared to $135.1 million for 2009.

Owned & Operated Websites segment revenue decreased to $138.5 million for the year ended December 31, 2010 compared to $149.6 million in 2009. The decrease of $11.1 million, or 7.4%, was primarily due to changes made by one customer, Yahoo, at the end of the third quarter of 2009. At that time Yahoo informed us that they were increasing the conversion requirements across their partner network, including our owned and operated websites. As a result, it was no longer economically viable for us to acquire online consumer traffic to our owned and operated websites that did not meet Yahoo's new higher-converting online consumer traffic requirements. As we were not able to monetize the lower-converting online consumer traffic with other advertisers, beginning in the fourth quarter of 2009, we significantly reduced the amount of lower-converting online consumer traffic to our owned and operated websites, which had a significant negative impact on the revenue of our Owned & Operated Websites segment. Due to the timing of the change in Yahoo's requirements, our Owned & Operated Websites segment revenue was lower in 2010 as compared to the prior year. Even after the change we experienced with Yahoo as described above, the Owned & Operated Websites segment revenue is concentrated with two major customers, Google and Yahoo. A loss of, or reduction of revenue from, one or both of these customers could have a significant negative impact on the revenue and profitability of this segment and the Company.

Technology segment revenue was $31.9 million for the year ended December 31, 2010 compared to $27.7 million in 2009, an increase of $4.2 million, or 15.2%. The increase in revenue was due to new customer wins and higher volumes of ad serving, particularly in our international operations. The Technology segment has a significant customer that comprises a large portion of this segment's revenues. A loss of, or reduction of revenue from, this customer could have a significant negative impact on the revenue of this segment.

Cost of Revenue and Gross Profit. Cost of revenue for the Media and Owned & Operated Websites segments consists primarily of amounts that we pay to website publishers that are directly related to a revenue-generating event. We pay these publishers on a CPC, CPA, CPL, or CPM basis. Cost of revenue for all segments also includes labor costs, depreciation on revenue-producing technologies and Internet access costs. Consolidated cost of revenue was $116.8 million for the year ended December 31, 2010 compared to $116.5 million in 2009, an increase of $293,000, or 0.3%. Our consolidated gross margin increased slightly to 72.9% for the year ended December 31, 2010 compared to 72.4% for the year ended December 31, 2009.

Cost of revenue for the Affiliate Marketing segment was $17.2 million for the year ended December 31, 2010 compared to $15.6 million in 2009. Our Affiliate Marketing segment gross margin remained consistent at 86.1% for the year ended December 31, 2010 compared to 86.0% for the same period in 2009.

Cost of revenue for the Media segment increased to $74.1 million for the year ended December 31, 2010 compared to $71.3 million in 2009. Our Media segment gross margin decreased to 46.1% for the year ended December 31, 2010 compared to 47.2% for the same period in 2009. The decrease in Media segment gross margin resulted primarily from higher costs to secure sufficient online

advertising inventory to fulfill targeted advertiser campaigns as well as higher third-party technology costs related to ad serving and verification services.

Cost of revenue for the Owned & Operated Websites segment was $23.1 million for the year ended December 31, 2010 compared to $27.0 million in 2009. The decrease in cost of revenue was due to the lower revenue described above. Our Owned & Operated Websites segment gross margin increased to 83.3% for 2010 from 82.0% in 2009 due primarily to a mix shift in this segment's traffic acquisition strategies, which reduced the mix of consumer traffic coming from distribution partners with a revenue-share relationship.

Technology segment cost of revenue was $3.4 million for the year ended December 31, 2010 compared to $3.7 million in 2009. The decrease was primarily due to the elimination of third party vendor costs associated with services we now perform internally. Our Technology segment gross margin increased to 89.5% in 2010 compared to 86.6% in 2009 due to these lower costs and the operating leverage associated with the higher revenue. As the gross margin for the Technology segment is highly dependent upon revenue due to the existing operating leverage, any increases or decreases in segment revenue may have a significant impact on segment gross margin.

Sales and Marketing. Sales and marketing expenses consist primarily of compensation and employee benefits of sales and marketing and related support teams, certain online and offline advertising costs, travel, trade shows, and marketing materials. Online advertising costs included in sales and marketing expenses are comprised primarily of amounts that we pay to website publishers and distribution partners that are not directly associated with a revenue-generating event. In periods prior to January 1, 2010, sales and marketing expenses also included certain network development-related expenses. In periods beginning on or after January 1, 2010, all network development-related expenses are recorded as a technology expense. This change in classification was made to achieve internal consistency amongst the Company's various divisions and has no impact on the overall profitability of any particular segment or on the Company's overall profitability. Sales and marketing expenses for the year ended December 31, 2010 were $112.3 million compared to $118.5 million in 2009, a decrease of $6.2 million, or 5.2%. Sales and marketing expenses decreased primarily due to the reclassification of $8.5 million of certain network development-related expenses to technology expense. Our sales and marketing expenses as a percentage of revenue decreased to 26.1% for the year ended December 31, 2010 compared to 28.0% in 2009 due to this reclassification.

General and Administrative. General and administrative expenses consist primarily of facilities costs, executive and administrative compensation and employee benefits, depreciation, professional services fees, insurance costs, bad debt expense and other general overhead costs. General and administrative expenses decreased to $53.5 million for the year ended December 31, 2010 compared to $60.4 million in 2009, a decrease of $6.8 million, or 11.3%. General and administrative expenses decreased primarily due to a decrease in legal fees and bad debt expense in 2010. As a result, our general and administrative expenses as a percentage of revenue decreased to 12.4% for the year ended December 31, 2010 compared to 14.3% in 2009.

Technology. Technology expenses include costs associated with the maintenance and ongoing development of our technology platforms and network development, including compensation and employee benefits for our engineering and network operations departments, as well as costs for contracted services and supplies. Technology expenses for the year ended December 31, 2010 were $35.0 million compared to $25.1 million in 2009, an increase of $10.0 million, or 39.9%. The increase in technology expenses was primarily due to the $8.5 million reclassification of certain network development-related expenses from sales and marketing expense into technology expense as described above. Our technology expenses as a percentage of revenue increased to 8.1% for the year ended December 31, 2010 compared to 5.9% in 2009 due to this reclassification.

Segment Income from Operations. Affiliate Marketing segment income from operations for the year ended December 31, 2010 increased 19.7%, or $11.4 million, to $69.6 million, from $58.1 million in the prior year, and represented 56.0% and 51.9% of Affiliate Marketing segment revenue in these respective periods. The higher operating margin was due to the higher gross margin as described above as well as a slight decrease in operating expenses as compared to the year ago period.

Media segment income from operations for the year ended December 31, 2010 increased 1.1%, or $364,000, to $33.6 million, from $33.3 million in the prior year, and remained consistent at 24.5% and 24.6% of Media segment revenue in these respective periods.

Owned & Operated Websites segment income from operations for the year ended December 31, 2010 decreased to $28.0 million, from $35.0 million in the prior year, and represented 20.2% and 23.4% of Owned & Operated Websites segment revenue in these respective periods. The decrease in Owned & Operated Websites segment income from operations and operating margin was primarily attributable to the decline in revenue from one major customer as described above.

Technology segment income from operations for the year ended December 31, 2010 increased to $16.6 million, from $12.8 million in the prior year, and represented 52.0% and 46.1% of Technology segment revenue in these respective periods. The increase in Technology segment income from operations and operating margin was primarily attributable to the operating leverage associated with the higher revenue as described above.

Stock-Based Compensation. Stock-based compensation for the year ended December 31, 2010 was $7.9 million compared to $8.9 million in 2009. The decrease of $925,000 was primarily due to certain stock options becoming fully vested during 2009 and 2010.

We currently anticipate total stock-based compensation in the range of $8 million to 10 million for the year ending December 31, 2011. Such amounts may change as a result of higher or lower than anticipated equity award grants to new and existing employees, differences between actual and estimated forfeitures of stock options and restricted stock, fluctuations in the market value of our common stock, modifications to our existing stock option programs, additions of new stock-based compensation programs, or other factors.

Amortization of Intangible Assets. Amortization of intangible assets for the year ended December 31, 2010 was $20.6 million compared to $19.8 million in 2009. This expense represents the amortization of intangible assets acquired through business combinations. The increase compared to the prior year is primarily due to the addition of certain intangible assets arising from the acquisition of Investopedia, offset by certain intangible assets that became fully amortized. We currently anticipate total amortization of intangible assets of approximately $15 million for the year ending December 31, 2011. Such amounts may change as a result of any future acquisitions.

Interest and Other Income, net. Interest and other income, net, consists principally of interest earned on our cash, cash equivalents, marketable securities and note receivable, gains and losses on sales of marketable securities and foreign currency exchange gains or losses. Interest and other income, net was $2.2 million for 2010 compared to $302,000 for the same period in 2009. The increase of $1.9 million was primarily attributable to interest income earned on the note receivable from the sale of Web Clients and favorable exchange rate fluctuations in 2010 compared to 2009, offset by losses realized on the sale of certain auction rate securities.

Income Tax Expense. For the year ended December 31, 2010, we recorded an income tax expense of $14.1 million compared to an income tax expense of $21.3 million in 2009. The decrease in the effective income tax rate for the year ended December 31, 2010 to 14.9% from 25.7% for the year ended December 31, 2009 was primarily a result of the recognition of $24.9 million in tax benefits related to the reversal of contingency reserves due to the expiration of certain statutes of limitations.

We currently expect our effective tax rate to be approximately 41.0% in the year ending December 31, 2011.

Adjusted-EBITDA. Adjusted-EBITDA for the year ended December 31, 2010 increased to $127.7 million from $118.8 million in 2009, an increase of $8.9 million, or 7.5%. The increase is primarily due to the growth in our Affiliate Marketing and Technology segments as described above, offset partially by the lower operating income in our Owned & Operated Websites segment in the current year resulting from the decrease in revenue described above.

Revenue. Consolidated revenue for the year ended December 31, 2009 was $422.7 million, representing a 7.2% decrease from the prior year total of $455.4 million.

Affiliate Marketing segment revenue decreased to $111.9 million for the year ended December 31, 2009 compared to $122.0 million in 2008. This decrease of $10.1 million, or 8.3%, was due to a decrease, both in the U.S. and Europe, in e-commerce transaction activity conducted through our network and, to a lesser extent, lower prices for our services.

Media segment revenue increased 3.2% to $135.1 million for the year ended December 31, 2009 compared to $130.9 million for 2008. This growth was due to strength in our U.S. display advertising business, offset by weakness in our European display advertising business.

Owned & Operated Websites segment revenue decreased to $149.6 million for the year ended December 31, 2009 compared to $177.1 million in 2008. The decrease of $27.5 million, or 15.5%, was primarily attributable to a decrease in consumer traffic to our destination websites, lower conversion rates experienced by advertisers, and a change made by Yahoo at the end of the third quarter of 2009 that significantly reduced our volume with this customer.

Technology segment revenue was $27.7 million for the year ended December 31, 2009 compared to $28.7 million in 2008, a decrease of $1.0 million, or 3.4%. The decrease in revenue was primarily related to lower volumes of ad serving during the year ended December 31, 2009 compared to the prior year.

Cost of Revenue and Gross Profit. Consolidated cost of revenue was $116.5 million for the year ended December 31, 2009 compared to $139.5 million in 2008, a decrease of $23.0 million, or 16.5%. The consolidated gross margin increased to 72.4% for the year ended December 31, 2009 compared to 69.4% for the year ended December 31, 2008 due to the segment-level movements in gross margin as described below.

Cost of revenue for the Affiliate Marketing segment was $15.6 million for the year ended December 31, 2009 compared to $19.4 million in 2008. Our Affiliate Marketing segment gross margin increased to 86.0% for the year ended December 31, 2009 from 84.1% for the same period in 2008 due to a decline in the mix of certain lower margin revenue streams in 2009 as compared to the prior year.

Cost of revenue for the Media segment remained relatively consistent at $71.3 million for the year ended December 31, 2009 compared to $71.6 million in 2008. Our Media segment gross margin increased to 47.2% for the year ended December 31, 2009 compared to 45.3% for the same period in 2008. The increase in Media segment gross margin resulted primarily from our ability to utilize our technology platform to use advertising inventory more effectively than in the year ago period. In addition, our U.S. display advertising business had launched a number of vertical ad networks, which allowed us to achieve a higher effective CPMs than our broad-based ad network due to the branding nature of the campaigns running in the vertical networks.

Cost of revenue for the Owned & Operated Websites segment was $27.0 million for the year ended December 31, 2009 compared to $47.0 million in 2008. The decrease in cost of revenue was due to the lower revenue described above. Our Owned & Operated Websites segment gross margin

increased to 82.0% for 2009 from 73.5% in 2008 due primarily to a mix shift in this segment's traffic acquisition strategies, which reduced the mix of consumer traffic coming from distribution partners with a revenue-share relationship.

Technology segment cost of revenue was $3.7 million for the year ended December 31, 2009 compared to $4.1 million in 2008. Our Technology segment gross margin remained relatively consistent at 86.6% in 2009 compared to 85.5% in 2008.

Sales and Marketing. Sales and marketing expenses for the year ended December 31, 2009 were $118.5 million compared to $136.5 million in 2008, a decrease of $18.0 million, or 13.2%. Sales and marketing expenses decreased primarily due to lower stock-based compensation and other labor costs. Please refer to the Stock-Based Compensation section below for a discussion of the lower stock-based compensation expense in 2009. Our sales and marketing expenses as a percentage of revenue decreased to 28.0% for the year ended December 31, 2009 compared to 30.0% in 2008 due to the lower stock-based compensation.

General and Administrative. General and administrative expenses decreased to $60.4 million for the year ended December 31, 2009 compared to $88.7 million in 2008, a decrease of $28.4 million, or 32.0%. General and administrative expenses decreased due to a decrease of $24.6 million in stock-based compensation and an overall focus on reducing operating expenses in the face of a difficult economic environment. Please refer to the Stock-Based Compensation section below for a discussion of the lower stock-based compensation expense in 2009. As a result, our general and administrative expenses as a percentage of revenue decreased to 14.3% for the year ended December 31, 2009 compared to 19.5% in 2008.

Technology. Technology expenses for the year ended December 31, 2009 were $25.1 million compared to $31.2 million in 2008, a decrease of $6.1 million, or 19.6%. The decrease in technology expenses was primarily due to lower labor costs and stock-based compensation. Please refer to the Stock-Based Compensation section below for a discussion of the lower stock-based compensation expense in 2009. Our technology expenses as a percentage of revenue decreased to 5.9% for the year ended December 31, 2009 compared to 6.8% in 2008.

Segment Income from Operations. Affiliate Marketing segment income from operations for the year ended December 31, 2009 decreased 2.2%, or $1.3 million, to $58.1 million, from $59.5 million in the prior year, and represented 51.9% and 48.7% of Affiliate Marketing segment revenue in these respective periods. The higher operating margin was due to the higher gross margin as described above and lower operating expenses.

Media segment income from operations for the year ended December 31, 2009 increased 31.9%, or $8.0 million, to $33.3 million, from $25.2 million in the prior year, and represented 24.6% and 19.3% of Media segment revenue in these respective periods. Media segment operating margin increased due to the higher revenue and gross margin described above, and lower operating expenses.

Owned & Operated Websites segment income from operations for the year ended December 31, 2009 decreased to $35.0 million, from $40.9 million in the prior year, and remained relatively consistent at 23.4% and 23.1% of Owned & Operated Websites segment revenue in these respective periods.

Technology segment income from operations for the year ended December 31, 2009 decreased to $12.8 million, from $13.6 million in the prior year, and represented 46.1% and 47.4% of Technology segment revenue in these respective periods. The decrease in Technology segment income from operations and operating margin was primarily attributable to the operating leverage associated with the lower revenue as described above.

Stock-Based Compensation. Stock-based compensation for the year ended December 31, 2009 amounted to $8.9 million compared to $48.2 million in 2008. The decrease of $39.3 million was primarily due to the impact of a one-time stock-based compensation charge in 2008, which represented the acceleration of expense associated with unvested stock options that were repurchased by the Company through a tender offer process and the resulting reduction in expense thereafter.

Amortization of Intangible Assets. Amortization of intangible assets for the year ended December 31, 2009 was $19.8 million compared to $21.7 million in 2008. This expense represents the amortization of intangible assets acquired through business combinations. The decrease compared to the prior year was related to certain intangible assets that became fully amortized.

Impairment of Goodwill and Intangible Assets. In 2008, we recorded an impairment charge on our goodwill and intangible assets of $269.5 million related to our Media and Owned & Operated Websites reporting units. No such charge was recorded in continuing operations in 2009.

Interest and Other Income, net. Interest and other income, net was $302,000 for 2009 compared to $2.5 million for the same period in 2008. The decrease of $2.1 million was primarily attributable to a reduction in interest income, due to lower average cash and cash equivalents and marketable securities balances in 2009 and the achievement of lower investment yields as compared to the prior year, offset by a reduction in foreign exchange currency losses.

Income Tax Expense. For the year ended December 31, 2009, we recorded an income tax expense of $21.3 million compared to an income tax benefit of $33.8 million in 2008. The increase in the effective income tax rate for the year ended December 31, 2009 to 25.7% from (14.8)% for the year ended December 31, 2008 was primarily due to income from continuing operations before income taxes in 2009 of $82.8 million, the tax impact of which was partially offset by the recognition of $14.5 million in tax benefits related to the reversal of contingency reserves due to the expiration of certain statutes of limitations, compared to a tax benefit associated with the loss from continuing operations before income taxes of $229.2 million in 2008.

Adjusted-EBITDA. Adjusted-EBITDA for the year ended December 31, 2009 was $118.8 million, compared to $116.2 million in 2008, an increase of $2.5 million, or 2.2%. The increase was primarily due to the increased operating income in our Media segment as described above, offset partially by the lower operating income in our Owned & Operated Websites segment as described above.

In recent years, we have financed our operations, our stock repurchases and our cash acquisitions primarily through working capital generated from operations. At December 31, 2010, our combined cash and cash equivalents and marketable securities balances totaled $197.3 million.

Net cash provided by operating activities totaled $96.9 million for the year ended December 31, 2010 compared to $123.7 million in 2009 and $130.9 million in 2008. The decrease in net cash provided by operating activities of $26.8 million from 2009 to 2010 was primarily due to the disposition of our lead generation business and negative working capital changes. The decrease in net cash provided by operating activities of $7.2 million from 2008 to 2009 was primarily due to a decrease in net income before non-cash depreciation and amortization, stock-based compensation and goodwill impairment in our discontinued lead generation business offset by lower income tax payments.

Net cash used in investing activities for the year ended December 31, 2010 of $24.7 million was the result of the $41.7 million used to acquire Investopedia and net purchases of property and equipment of $7.4 million, offset by $21.8 million in proceeds from the sale of marketable securities and $2.7 million in principal payments received on our note receivable. Net cash used in investing activities for the year ended December 31, 2009 of $59.0 million was the result of earnout payments related to

the acquisition of MeziMedia of $62.7 million and purchases of property and equipment of $4.6 million, offset by proceeds from the maturity and sale of marketable securities of $8.3 million. Net cash provided by investing activities for the year ended December 31, 2008 of $67.4 million was the result of net sales and maturities of marketable securities of $168.3 million and cash proceeds from the disposition of businesses of $11.7 million, offset by earnout payments related to the acquisition of MeziMedia of $105.4 million and the use of $7.2 million for equipment purchases.

Net cash used in financing activities for the year ended December 31, 2010 of $33.8 million was primarily attributable to the use of $38.6 million to repurchase common stock under our stock repurchase program, offset by proceeds from shares issued under employee stock programs of $4.2 million. Net cash used in financing activities for the year ended December 31, 2009 of $32.1 million was primarily attributable to the use of $35.1 million to repurchase common stock under our stock repurchase program, offset by proceeds from shares issued under employee stock programs of $2.9 million. Net cash used in financing activities for the year ended December 31, 2008 of $148.8 million was primarily attributable to the use of $151.3 million to repurchase our common stock under our stock repurchase program.

Marketable securities as of December 31, 2010 consisted of one auction rate security ("ARS") with a par value of $3.0 million and an estimated fair value of $3.0 million. This ARS was sold in January 2011 at its par value. For the year ended December 31, 2010, we sold ARS with a total par value of $24.6 million and realized a loss of $2.8 million.

We have historically utilized "unobservable" (Level 3) inputs in establishing the estimated fair value of our ARS portfolio. At December 31, 2010 and 2009, we estimated the fair values of these ARS utilizing discounted cash flow analyses and information from recent sales of certain of our other ARS. The discounted cash flow analyses consider, among other factors, the collateralization underlying the security, the creditworthiness of the counterparty, the timing of expected future cash flows, and expectations of when the ARS are expected to have successful auctions.

In November 2008, we entered into a $100 million line of credit with a bank group. The line of credit has a term of three years and the availability under the line of credit is subject to our meeting certain financial and non-financial covenants, as more fully described in Note 16 to our consolidated financial statements. The line of credit provides us with additional financial flexibility for pursuing acquisitions, repurchasing our common stock, and for general corporate purposes. We did not borrow against the line of credit during 2010, and thus no amount was outstanding against the line of credit at December 31, 2010.

In September 2001, our board of directors authorized a stock repurchase program (the "Program") to allow for the repurchase of shares of our common stock at prevailing market prices in the open market or through unsolicited negotiated transactions. Since the inception of the Program and through December 31, 2009, our board of directors authorized a total of $479.1 million for repurchases under the Program and we repurchased a total of 50.7 million shares of our common stock for approximately $409.2 million. During the nine-months ended September 30, 2010, we repurchased 4.0 million shares for $38.6 million, leaving up to an additional $31.4 million of our capital to be used to repurchase shares of our outstanding common stock under the Program. In October 2010, our board of directors increased this authorization to $100 million. We did not repurchase any of our common stock in the

fourth quarter of 2010 and thus, as of December 31, 2010, $100 million of our capital is available to be used to repurchase shares of our outstanding common stock under the Program.

Repurchases have been funded from available working capital, and all shares have been retired subsequent to their repurchase. There is no guarantee as to the exact number of shares that will be repurchased by us, and we may discontinue repurchases at any time that management or our board of directors determines additional repurchases are not warranted. The amounts authorized by our board of directors exclude broker commissions.

Other commercial commitments as of December 31, 2010 are as follows (in thousands):

The standby letters of credit are maintained pursuant to certain of our lease agreements and remain in effect at declining levels through the terms of the related leases.

In the ordinary course of business, we may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain matters, including, but not limited to, losses arising out of our breach of such agreements, services to be provided by us, or from intellectual property infringement claims made by third-parties. In addition, we have entered into indemnification agreements with our directors and certain of our officers and employees that will require us, among other things, to indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. We have also agreed

to indemnify certain former officers, directors and employees of acquired companies in connection with the acquisition of such companies. We maintain director and officer insurance, which may cover certain liabilities arising from our obligation to indemnify our directors and certain of our officers, employees and former officers, directors and employees of acquired companies, in certain circumstances.

It is not possible to determine the maximum potential amount of exposure under these indemnification agreements due to the limited history of prior indemnification claims and the unique facts and circumstances involved in each particular agreement. Such indemnification agreements may not be subject to maximum loss clauses.

We believe that the combination of: our existing cash and cash equivalents; our liquid marketable securities; our $100 million line of credit; and our expected future cash flows from operations, will provide us with sufficient liquidity to fund our operations and capital requirements for at least the next twelve months. However, it is possible that we may need or elect to raise additional funds to fund our activities beyond the next year or to consummate acquisitions of other businesses, products or technologies. We could raise such funds by selling more stock to the public or to selected investors, or by borrowing, whether under the existing line of credit or a new facility. In addition, even though we may not need additional funds, we may still elect to sell additional equity securities for other reasons. We cannot assure you that we will be able to obtain additional funds on commercially favorable terms, or at all. If we raise additional funds by issuing additional equity or convertible debt securities, the ownership percentages of existing stockholders may be reduced. In addition, the equity or debt securities that we issue may have rights, preferences or privileges senior to those of the holders of our common stock.

Although we believe we have sufficient capital to fund our activities for at least the next twelve months, our future capital requirements may vary materially from those now planned. The amount of capital that we will need in the future will depend on many factors, including:

Management's discussion and analysis of financial condition and results of operations is based upon our consolidated financial statements, which have been prepared in accordance with GAAP. The preparation of these consolidated financial statements requires us to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses, and related disclosure of contingent assets and liabilities. On an ongoing basis, we evaluate our estimates and assumptions, including, but not limited to, those related to revenue recognition, allowance for doubtful accounts and sales credits, investments, income taxes, goodwill and other intangible assets, and contingencies and litigation. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable under the circumstances, the results of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent from other sources. Actual results may differ from these estimates and assumptions.

We apply the following critical accounting policies in the preparation of our consolidated financial statements:

In July 2010, the Financial Accounting Standards Board ("FASB") issued authoritative guidance that requires enhanced disclosures regarding the nature of credit risk inherent in an entity's portfolio of financing receivables, how that risk is analyzed, and the changes, as well as the reasons for such changes, in the allowance for credit losses. The guidance requires companies to enhance disclosure about the credit quality of financing receivables and the allowance for credit losses, including credit quality indicators, non-accrual and past due information, impaired loans, and modifications of financing receivables. This guidance became effective for financial statements issued for interim or annual

reporting periods ending on or after December 15, 2010. The adoption of this guidance as of December 31, 2010 did not have a material impact on our consolidated financial statements.

In January 2010, the FASB issued additional authoritative guidance to improve disclosures about fair value measurements. The guidance requires that an entity disclose separately the amounts of significant transfers in and out of Level 1 and 2 fair value measurements and describe the reasons for the transfers. Furthermore, an entity should present information about purchases, sales, issuances, and settlements for Level 3 fair value measurements. The guidance also clarifies existing disclosures for the level of disaggregation and disclosures about input and valuation techniques. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements for the activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. On January 1, 2010, we adopted the disclosure amendments, except for the amendments to Level 3 fair value measurements as described above, which we will adopt on January 1, 2011.

In June 2009, the FASB issued authoritative guidance on the consolidation of variable interest entities. The new guidance requires a qualitative approach to identifying a controlling financial interest in a variable interest entity ("VIE"), and requires ongoing assessment of whether an entity is a VIE and whether an interest in a VIE makes the holder the primary beneficiary of the VIE. We adopted this guidance as of January 1, 2010. The adoption of this guidance did not have a material impact on our consolidated financial statements.

Inflation was not a material factor in either revenue or operating expenses during the fiscal years ended December 31, 2010, 2009 and 2008.

The primary objective of our investment activities is to preserve capital while at the same time maximizing yields without significantly increasing risk. We are exposed to the impact of interest rate changes and changes in the market values of our investments in marketable securities. Our interest income is sensitive to changes in the general level of U.S. interest rates. Our exposure to market rate risk for changes in interest rates relates primarily to our marketable securities portfolio. We have not used derivative financial instruments in our marketable securities portfolio. We may invest a portion of our excess cash in debt instruments of high-quality issuers and, as a matter of policy, limit the amount of credit exposure to any one issuer. We protect and preserve our invested funds by limiting default, market and reinvestment risk. Investments in both fixed-rate and floating-rate interest-earning instruments carry a degree of interest rate risk. Fixed-rate securities may have their fair market value adversely impacted due to a rise in interest rates, while floating-rate securities may produce less income than expected if interest rates fall. Due in part to these factors, our future investment income may fall short of expectations due to changes in interest rates, or we may suffer losses in principal if forced to sell securities which have declined in market value due to changes in interest rates.

Marketable securities as of December 31, 2010 consisted of one highly rated auction rate security ("ARS") collateralized by student loan portfolios. This security was sold in January 2011 at its par value of $3 million. See further discussion of our marketable securities portfolio and ARS holdings in the "Liquidity and Capital Resources" section of Item 7 of this Form 10-K under the header "Marketable Securities".

We classify all of our investments as available-for-sale. Available-for-sale securities are carried at fair value, with unrealized gains and losses, net of tax, reported in a separate component of stockholders' equity. As of December 31, 2010, there were no unrealized gains or losses recorded on our investments in marketable securities.

We do not believe that our current investment activities subject us to significant interest rate risks that could have a material impact on our financial position or results of operations.

We transact business in various foreign countries and are thus subject to exposure from adverse movements in foreign currency exchange rates. This exposure is primarily related to revenue and operating expenses of our foreign subsidiaries, which denominate their transactions primarily in British Pounds, Euros, Swedish Kronor, Japanese Yen, and Chinese Yuan Renminbi. The effect of foreign currency exchange rate fluctuations for the year ended December 31, 2010 was not material to our consolidated results of operations. In 2009 we began hedging certain of our exposures to currency exchange rate fluctuations related to intercompany balances. There were not material gains or losses in 2009 associated with our requirement to mark-to-market certain of our intercompany loan balances or with our hedging activities.

In the future, if there were an adverse change of 10% in overall foreign currency exchange rates over an entire year, the result of translations would be a reduction of revenue of approximately $10.3 million, a reduction of income before income taxes of approximately $2.0 million and a reduction of net assets, excluding intercompany balances, of approximately $8.5 million. As of December 31, 2010, we had $42.8 million in cash and cash equivalents and $15.2 million in total current liabilities denominated in foreign currencies, including British Pounds, Euros, Swedish Kronor, Japanese Yen, and Chinese Yuan Renminbi.

Our international business is subject to risks typical of an international business, including, but not limited to, differing economic conditions, changes in political climate, differing tax structures, other

regulations and restrictions, and foreign currency exchange rate volatility. Accordingly, our future results could be materially and adversely affected by changes in these or other factors.

The Company's financial statements, schedules and supplementary data, as listed under Item 15, appear in a separate section of this annual report on Form 10-K beginning on page F-1.

ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE

The Company maintains disclosure controls and procedures that are designed to ensure that the information required to be disclosed in the Company's reports under the Securities Exchange Act of 1934, as amended (the "Exchange Act"), is recorded, processed, summarized, and reported within the time periods specified in the SEC's rules and forms, and that such information is accumulated and communicated to management, including the Company's Chief Executive Officer ("CEO") and Chief Financial Officer ("CFO"), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives.

In connection with the preparation of this annual report on Form 10-K as of December 31, 2010, an evaluation was performed under the supervision and with the participation of the Company's management, including the CEO and CFO, of the effectiveness of the design and operation of the Company's disclosure controls and procedures (as defined in Rule 13a-15(e) under the Exchange Act). Based on this evaluation, the Company's CEO and CFO have concluded that the Company's disclosure controls and procedures are effective as of December 31, 2010 to provide reasonable assurance that the information required to be disclosed by it in reports or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in the rules and forms of the SEC and that such information is accumulated and communicated to management, including the Company's CEO and CFO, as appropriate, to allow timely decisions regarding required disclosure.

The Company's management is responsible for establishing and maintaining adequate internal control over financial reporting as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act. The Company's internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of consolidated financial statements for external purposes in accordance with generally accepted accounting principles. The Company's internal control over financial reporting includes those policies and procedures that:

Because of its inherent limitations, internal control over financial reporting may not prevent or detect financial statement misstatements. Also, projections of any evaluation of internal control effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

The Company's management has assessed the effectiveness of the Company's internal control over financial reporting as of December 31, 2010. In making this assessment, management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission ("COSO") in Internal Control—Integrated Framework. Based on this evaluation, the Company's management has concluded that the Company's internal control over financial reporting was effective as of December 31, 2010.

The effectiveness of the Company's internal control over financial reporting as of December 31, 2010 has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in their report which appears in this annual report on Form 10-K.

Additionally, the Company's Chief Executive Officer and Chief Financial Officer have determined that there have been no changes to the Company's internal control over financial reporting during the three-month period ended December 31, 2010 that have materially affected, or are reasonably likely to materially affect, the Company's internal control over financial reporting.

The information required by this Item is incorporated by reference from our definitive Proxy Statement for the 2011 Annual Meeting of Stockholders to be held on or about May 6, 2011.

ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS

The following table provides aggregated information with respect to our compensation plans under which equity securities of ValueClick are authorized for issuance as of December 31, 2010:

(1): For additional information with respect to the outstanding option pricing categories as of December 31, 2010, refer to Note 12 to the consolidated financial statements included in Item 8 "Financial Statements and Supplementary Data."
(2): The equity compensation plans not approved by security holders represent stock option plans assumed in business combinations.
(3): Of these shares, 720,908 were available under the Employee Stock Purchase Plan and 6,389,439 were available for award grant purposes under the 2002 Stock Incentive Plan. During the current purchase period, which ends on February 28, 2011, an estimated 112,000 shares of the Company's common stock may become issuable under the Employee Stock Purchase Plan. The 2002 Stock Incentive Plan provides for an automatic increase on January 1 of each year equal to 1% of the total outstanding shares of ValueClick common stock as of the last day of the previous year. An additional 809,741shares were made available under the 2002 Stock Incentive Plan effective January 1, 2011, which are not included in the 7,110,347 shares shown herein.

The remaining information required by this Item is incorporated by reference from our definitive Proxy Statement for the 2011 Annual Meeting of Stockholders to be held on or about May 6, 2011.

ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE

The information required by this Item is incorporated by reference from our definitive Proxy Statement for the 2010 Annual Meeting of Stockholders to be held on or about May 6, 2011.

The information required by this Item is incorporated by reference from our definitive Proxy Statement for the 2011 Annual Meeting of Stockholders to be held on or about May 6, 2011.

Exhibit Number		Description of Document

2.1(1)		Amended and Restated Agreement and Plan of Merger, dated as of July 24, 2007 and effective as of July 13, 2007, by and among ValueClick, MM Acquisition Corp. and MeziMedia
2.2(2)		Agreement and Plan of Merger, dated as of June 13, 2005, by and among ValueClick and E-Babylon, Inc.
2.3(3)		Agreement and Plan of Merger, dated as of June 10, 2005, by and among ValueClick, Spider Acquisition Corporation and Web Marketing Holdings, Inc.
2.4(4)		Agreement and Plan of Merger and Reorganization, dated as of August 10, 2005, among ValueClick, Fastclick, Inc. and FC Acquisition Sub, Inc.
2.5(5)		Agreement and Plan of Merger, dated as of August 6, 2004, by and among ValueClick and Pricerunner AB
2.6(6)		Stock Purchase Agreement, dated January 29, 2004, by and among ValueClick and Livedoor Co., Ltd (formerly Edge Co., Ltd), a Japanese Corporation
2.7(7)		Agreement and Plan of Merger, dated as of December 7, 2003, by and among ValueClick, HS Acquisition Corporation and HiSpeed Media, Inc.
2.8(8)		Agreement and Plan of Merger, dated as of October 9, 2003, by and among ValueClick, NCJ Acquisition Corporation and Commission Junction, Inc.
2.9(9)		Agreement and Plan of Merger, dated as of May 30, 2003, by and among ValueClick, Search123.com Acquisition Corporation and Search123
3.1(10)		Second Amended and Restated Certificate of Incorporation of ValueClick
3.2(11)		Amended and Restated Bylaws of ValueClick
4.1		See Exhibits 3.1 and 3.2 for provisions of the Certificate of Incorporation and Bylaws for ValueClick, Inc. defining the rights of holders of common stock of ValueClick, Inc.
4.2(12)		Specimen stock certificate for the ValueClick common stock
4.3(13)		Rights Agreement, dated as of June 4, 2002, between ValueClick, Inc. and Mellon Investor Services LLC, a New Jersey limited liability company, which includes the form of Certificate of Designation for the Series A junior participating preferred stock as Exhibit A, the form of Rights Certificate as Exhibit B and the Summary of Rights to Purchase Series A Preferred Stock as Exhibit C
10.1(14)		Form of Indemnification Agreement by and between ValueClick and directors and executive officers
10.2(12)		Deed of Assignment, dated January 1, 1999 by and between Web-Ignite Corporation and ValueClick
10.3(12)		Trademark Assignment, dated as of May 1, 1998 from Web-Ignite Corporation to ValueClick
10.4(12)		Exchange Agreement, dated December 31, 1998, by and between ValueClick and ValueClick, LLC
10.5(12)		Bill of Sale and Assignment and Assumption of Liabilities, dated December 31, 1998
10.6(12)		License and Option Agreement, dated January 1, 1999, by and between ValueClick, LLC and ValueClick Japan, Inc. in effect from January 1, 1999 to December 17, 1999

Exhibit Number		Description of Document

10.7(12)		Share Purchase Agreement, dated December 31, 1999, by and between ValueClick and James R. Zarley
10.8(12)		License Agreement, dated August 17, 1999, between ValueClick and ValueClick Europe, Limited
10.9(15)†		1999 Stock Option Plan, as amended, and form of option agreement
10.10(16)†		2002 Stock Incentive Plan and form of option agreement
10.11(17)†		2007 Employee Stock Purchase Plan and form of subscription agreement
10.12(23)†		Key Employee Agreement between ValueClick and James R. Zarley dated February 7, 2008
10.13(18)†		Key Employee Agreement between ValueClick and Samuel J. Paisley dated January 1, 2002
10.14(24)†		Key Employee Agreement between ValueClick and Peter Wolfert dated February 7, 2008
10.15(25)†		Key Employee Agreement between ValueClick and Tom A. Vadnais dated February 7, 2008
10.16(26)†		Key Employee Agreement between ValueClick and John P. Pitstick dated February 7, 2008
10.17(27)†		Key Employee Agreement between ValueClick and Scott P. Barlow dated February 7, 2008
10.18(12)		Intercompany License Agreement dated December 19, 1999, between ValueClick and ValueClick Japan, Inc.
10. 19(28)†		Key Employee Agreement between ValueClick and David Yovanno dated February 7, 2008
10.20(20)		Credit Agreement dated as of November 14, 2008 by and among ValueClick, Inc., Wells Fargo Bank, National Association (as Administrative Agent, Swing Line Lender and L/C Issuer), and certain other financial institutions from time to time party thereto
10.21(21)		Security Agreement dated as of November 14, 2008 by and among ValueClick, Inc., Hi-Speed Media, Inc., Web Marketing Holdings, LLC, Web Clients, LLC, I-Deal Direct Interactive, LLC, Mezi Media, Inc., Search123.com Inc., Mediaplex, Inc., BeFree, Inc., Commission Junction, Inc. and Wells Fargo Bank, National Association
10.22(22)		Guaranty Agreement dated as of November 14, 2008 by Hi-Speed Media, Inc., Web Marketing Holdings, LLC, Web Clients, LLC, I-Deal Direct Interactive, LLC, Mezi Media, Inc., Search123.com Inc., Mediaplex, Inc., Be Free, Inc., and Commission Junction, Inc. in favor of Wells Fargo Bank, National Association
10.23(29)		Amendment to Credit Agreement dated as of November 14, 2008 by and among ValueClick, Inc., Wells Fargo Bank, National Association (as Administrative Agent, Swing Line Lender and L/C Issuer), and certain other financial institutions from time to time party thereto
21.1		Subsidiaries of ValueClick
23.1		Consent of PricewaterhouseCoopers LLP
31.1		Certification of CEO Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

†: Indicates a management contract or compensatory arrangement.
*: XBRL information is furnished and not filed for purposes of Sections 11 and 12 of the Securities Act of 1933 and Section 18 of the Securities Exchange Act of 1934, and is not subject to liability under those sections, is not part of any registration statement or prospectus to which it relates and is not incorporated or deemed to be incorporated by reference into any registration statement, prospectus or other document.
(1): Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K filed by ValueClick on August 2, 2007.
(2): Incorporated by reference to Exhibit 2.1 to the annual report on Form 10-K filed by ValueClick on March 31, 2006.
(3): Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K filed by ValueClick on June 29, 2005.
(4): Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K filed by ValueClick on August 12, 2005.
(5): Incorporated by reference to Exhibit 2.1 to the annual report on Form 10-K filed by ValueClick on March 31, 2005.
(6): Incorporated by reference to Exhibit 2.2 to the annual report on Form 10-K filed by ValueClick on March 31, 2005.
(7): Incorporated by reference to Exhibit 2.6 to the annual report on Form 10-K filed by ValueClick on March 31, 2006.
(8): Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K/A filed by ValueClick on February 23, 2004.
(9): Incorporated by reference to Exhibit 2.1 to the current report on Form 8-K filed by ValueClick on June 11, 2003.
(10): Incorporated by reference to Exhibit 3.1 to the annual report on Form 10-K filed by ValueClick on March 31, 2006.
(11): Incorporated by reference to Exhibit 3.1 to the current report on Form 8-K filed by ValueClick on December 8, 2010.
(12): Incorporated by reference from Registration Statement on Form S-1 (File No. 333-88765), as amended, originally filed with the Securities and Exchange Commission on October 12, 1999.

(13): Incorporated by reference to Exhibit 4 to the current report on Form 8-K filed by ValueClick on June 14, 2002.
(14): Incorporated by reference to Exhibit 10.1 to the annual report on Form 10-K filed by ValueClick on March 31, 2006.
(15): Incorporated by reference from Registration Statement on Form S-8 (File No. 333-61278) originally filed with the Securities and Exchange Commission on April 19, 2001.
(16): Incorporated by reference from Registration Statement on Form S-8 (File No. 333-89396) originally filed with the Securities and Exchange Commission on May 30, 2002.
(17): Incorporated by reference from Registration Statement on Form S-8 (File No. 333-145853) originally filed with the Securities and Exchange Commission on August 31, 2007.
(18): Incorporated by reference to Exhibit 10.15 to the annual report on Form 10-K filed by ValueClick on March 28, 2003.
(19): Not used.
(20): Incorporated by reference to Exhibit 10.1 to the current report on Form 8-K filed by ValueClick on November 18, 2008.
(21): Incorporated by reference to Exhibit 10.2 to the current report on Form 8-K filed by ValueClick on November 18, 2008.
(22): Incorporated by reference to Exhibit 10.3 to the current report on Form 8-K filed by ValueClick on November 18, 2008.
(23): Incorporated by reference to Exhibit 10.12 to the annual report on Form 10-K filed by ValueClick on February 29, 2008.
(24): Incorporated by reference to Exhibit 10.14 to the annual report on Form 10-K filed by ValueClick on February 29, 2008.
(25): Incorporated by reference to Exhibit 10.15 to the annual report on Form 10-K filed by ValueClick on February 29, 2008.
(26): Incorporated by reference to Exhibit 10.16 to the annual report on Form 10-K filed by ValueClick on February 29, 2008.
(27): Incorporated by reference to Exhibit 10.17 to the annual report on Form 10-K filed by ValueClick on February 29, 2008.
(28): Incorporated by reference to Exhibit 10.19 to the annual report on Form 10-K filed by ValueClick on February 29, 2008.
(29): Incorporated by reference to Exhibit 99.2 to the current report on Form 8-K filed by ValueClick on February 1, 2010.

In our opinion, the consolidated financial statements listed in the index appearing under Item 15(a)(1) present fairly, in all material respects, the financial position of ValueClick, Inc. and its subsidiaries at December 31, 2010 and 2009, and the results of their operations and their cash flows for each of the three years in the period ended December 31, 2010 in conformity with accounting principles generally accepted in the United States of America. In addition, in our opinion, the financial statement schedule listed in the index appearing under Item 15(a)(2) presents fairly, in all material respects, the information set forth therein when read in conjunction with the related consolidated financial statements. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2010, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management is responsible for these financial statements and financial statement schedule, for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Report on Internal Control over Financial Reporting appearing under Item 9A. Our responsibility is to express opinions on these financial statements, on the financial statement schedule, and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

				As of December 31,

				2010			2009
				(in thousands, except share data)
Assets
Current assets:
	Cash and cash equivalents			$	194,317		$	158,497
	Marketable securities				3,000			—
	Accounts receivable, net of allowances of $3,976 and $4,225 as of December 31, 2010 and 2009, respectively				86,738			68,484
	Prepaid expenses and other current assets				5,688			5,246
	Income taxes receivable				7,091			7,629
	Deferred tax assets				5,691			7,981
	Current assets held for sale				—			11,098

		Total current assets			302,525			258,935
Assets held for sale, less current portion					—			25,777
Marketable securities, less current portion					—			22,026
Note receivable, less current portion					31,267			—
Property and equipment, net					12,414			11,272
Goodwill					183,218			157,123
Intangible assets acquired in business combinations, net					33,525			38,718
Deferred tax assets, less current portion					49,360			51,357
Other assets					1,258			1,354

		Total assets		$	613,567		$	566,562

Liabilities and Stockholders' Equity
Current liabilities:
	Accounts payable and accrued expenses			$	100,974		$	91,703
	Other current liabilities				2,284			2,295
	Liabilities related to assets held for sale				—			4,406

		Total current liabilities			103,258			98,404
Income taxes payable, less current portion					36,595			60,154
Deferred tax liabilities, less current portion					1,073			1,515

		Total liabilities			140,926			160,073

Commitments and contingencies (Note 17)
Stockholders' equity:
	Convertible preferred stock, $0.001 par value; 20,000,000 shares authorized; no shares issued or outstanding at December 31, 2010 and 2009				—			—
	Common stock, $0.001 par value; 500,000,000 shares authorized; 80,974,145 and 83,877,696 shares issued and outstanding at December 31, 2010 and 2009, respectively				81			84
	Additional paid-in capital				555,859			583,682
	Accumulated other comprehensive loss				(6,389	)		(9,857	)
	Accumulated deficit				(76,910	)		(167,420	)

		Total stockholders' equity			472,641			406,489

			Total liabilities and stockholders' equity	$	613,567		$	566,562

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

			For the Year Ended December 31,

			2010			2009		2008
			(in thousands, except per share data)
Revenue			$	430,798		$	422,723	$	455,441
Cost of revenue				116,802			116,509		139,470

	Gross profit			313,996			306,214		315,971
Operating expenses:
	Sales and marketing (includes stock-based compensation of $1,280, $1,907 and $15,621 for 2010, 2009 and 2008, respectively)			112,282			118,457		136,466
	General and administrative (includes stock-based compensation of $5,815, $6,034 and $30,620 for 2010, 2009 and 2008, respectively)			53,536			60,373		88,745
	Technology (includes stock-based compensation of $849, $928 and $1,925 for 2010, 2009 and 2008, respectively)			35,047			25,050		31,160
	Amortization of intangible assets acquired in business combinations			20,611			19,803		21,733
	Impairment of goodwill and intangible assets			—			—		269,500

		Total operating expenses		221,476			223,683		547,604

Income (loss) from operations				92,520			82,531		(231,633	)
	Interest and other income, net			2,204			302		2,451

Income (loss) before income taxes				94,724			82,833		(229,182	)
	Income tax expense (benefit)			14,120			21,264		(33,814	)

Income (loss) from continuing operations				80,604			61,569		(195,368	)

Discontinued operations (Note 5):
	(Loss) income from discontinued operations, net of tax			(134	)		7,047		(23,728	)
	Gain on sale, net of tax			10,040			—		4,984

	Net income (loss) from discontinued operations			9,906			7,047		(18,744	)

Net income (loss)			$	90,510		$	68,616	$	(214,112	)

	Basic net income (loss) per common share
		Continuing operations	$	0.99		$	0.71	$	(2.12	)
		Discontinued operations		0.12			0.08		(0.20	)

			$	1.11		$	0.79	$	(2.32	)

	Diluted net income (loss) per common share
		Continuing operations	$	0.98		$	0.71	$	(2.12	)
		Discontinued operations		0.12			0.08		(0.20	)

			$	1.10		$	0.79	$	(2.32	)

	Weighted-average shares used to calculate net income (loss) per common share:
		Basic		81,615			86,716		92,325

		Diluted		82,334			87,210		92,325

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

			Preferred Stock				Common Stock									Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)

			Preferred Stock				Common Stock						Additional Paid-In Capital									Total Stockholders' Equity
			Shares		Amount		Shares			Amount			Additional Paid-In Capital									Total Stockholders' Equity
			(in thousands, except share data)
Balance at December 31, 2007				—		—		98,211,949		$	98		$	653,430		$	9,279		$	47,126		$	709,933
	Non-cash, stock-based compensation			—		—		—			—			53,376			—			—			53,376
	Shares issued in connection with employee stock programs			—		—		714,954			1			6,849			—			—			6,850
	Repurchase and retirement of common stock			—		—		(12,183,291	)		(12	)		(82,196	)		—			(69,050	)		(151,258	)
	Tax benefit shortfall from employee stock transactions			—		—		—			—			(44	)		—			—			(44	)
	Repurchase of employee stock options			—		—		—			—			(5,029	)		—			—			(5,029	)
	Tax effect related to the repurchase of employee stock options			—		—		—			—			(19,243	)		—			—			(19,243	)
	Comprehensive loss:
		Net loss		—		—		—			—			—			—			(214,112	)		(214,112	)
		Change in market value of marketable securities, net of tax		—		—		—			—			—			(8,344	)		—			(8,344	)
		Foreign currency translation		—		—		—			—			—			(18,650	)		—			(18,650	)

	Total comprehensive loss																						(241,106	)

Balance at December 31, 2008				—		—		86,743,612		$	87		$	607,143		$	(17,715	)	$	(236,036	)	$	353,479
	Non-cash, stock-based compensation			—		—		—			—			9,241			—			—			9,241
	Shares issued in connection with employee stock programs			—		—		733,515			—			2,914			—			—			2,914
	Repurchase and retirement of common stock			—		—		(3,599,431	)		(3	)		(35,145	)		—			—			(35,148	)
	Tax benefit shortfall from employee stock transactions			—		—		—			—			(471	)		—			—			(471	)
	Comprehensive income:
		Net income		—		—		—			—			—			—			68,616			68,616
		Change in market value of marketable securities, net of tax		—		—		—			—			—			2,577			—			2,577
		Foreign currency translation		—		—		—			—			—			5,281			—			5,281

	Total comprehensive income																						76,474

Balance at December 31, 2009				—		—		83,877,696		$	84		$	583,682		$	(9,857	)	$	(167,420	)	$	406,489
	Non-cash, stock-based compensation			—		—		—			—			7,944			—			—			7,944
	Shares issued in connection with employee stock programs			—		—		1,056,426			1			4,202			—			—			4,203
	Repurchase and retirement of common stock			—		—		(3,959,977	)		(4	)		(38,552	)		—			—			(38,556	)
	Tax benefit shortfall from employee stock transactions			—		—		—			—			(1,417	)		—			—			(1,417	)
	Comprehensive income:
		Net income		—		—		—			—			—			—			90,510			90,510
		Change in market value of marketable securities, net of tax		—		—		—			—			—			5,524			—			5,524
		Foreign currency translation		—		—		—			—			—			(2,056	)		—			(2,056	)

	Total comprehensive income																						93,978

Balance at December 31, 2010				—		—		80,974,145		$	81		$	555,859		$	(6,389	)	$	(76,910	)	$	472,641

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

				For the Year Ended December 31,

				2010			2009			2008
				(in thousands)
Cash flows from operating activities:
	Net income (loss)			$	90,510		$	68,616		$	(214,112	)
Adjustments to reconcile net income to net cash provided by operating activities:
	Depreciation and amortization expense				27,231			33,576			39,264
	Amortization of discount on note receivable				(2,488	)		—			—
	Provision for doubtful accounts and sales credits				1,636			4,865			7,212
	Non-cash, stock-based compensation				7,944			9,241			53,376
	Impairment of goodwill and intangible assets				—			5,500			322,000
	Gain on sale of businesses, net of tax				(10,040	)		—			(4,984	)
	Realized loss on securities				2,783			—			—
	Deferred income taxes				7,848			4,501			(55,520	)
	Net tax (shortfall) windfall from stock-based awards				(1,417	)		(452	)		442
	Excess tax benefit from stock-based awards				(556	)		(175	)		(599	)
	Changes in operating assets and liabilities, net of effects of acquisitions:
		Accounts receivable			(19,169	)		25,253			5,174
		Prepaid expenses and other assets			1,918			438			(843	)
		Accounts payable and accrued expenses			8,759			(15,826	)		2,703
		Income taxes receivable/payable			(18,313	)		(11,746	)		(20,021	)
		Deferred revenue			291			(55	)		(240	)
		Other non-current liabilities			—			—			(2,951	)

			Net cash provided by operating activities		96,937			123,736			130,901

Cash flows from investing activities:
	Proceeds from the sales of marketable securities				21,617			2,133			180,035
	Proceeds from the maturities of marketable securities				150			6,200			27,936
	Purchases of marketable securities				—			—			(39,660	)
	Acquisition of businesses, net of cash acquired				(41,661	)		(62,696	)		(105,419	)
	Proceeds from disposition of property and equipment				2,613			—			—
	Proceeds from disposition of businesses, net of cash disposed and taxes paid				—			—			11,746
	Principal payments received on note receivable				2,652			—			—
	Purchases of property and equipment				(10,029	)		(4,625	)		(7,227	)

			Net cash (used in) provided by investing activities		(24,658	)		(58,988	)		67,411

Cash flows from financing activities:
	Repurchases and retirement of common stock				(38,556	)		(35,148	)		(151,258	)
	Repurchase of employee stock options				—			—			(5,029	)
	Proceeds from shares issued under employee stock programs				4,203			2,914			6,850
	Excess tax benefit from stock-based awards				556			175			599

			Net cash used in financing activities		(33,797	)		(32,059	)		(148,838	)
			Effect of foreign currency translations		(2,662	)		3,321			(9,754	)

			Net increase in cash and cash equivalents		35,820			36,010			39,720
Cash and cash equivalents, beginning of period					158,497			122,487			82,767

Cash and cash equivalents, end of period				$	194,317		$	158,497		$	122,487

Supplemental disclosures of cash flow information:
	Cash paid for interest			$	—		$	—		$	—
	Cash paid for income taxes, net			$	25,955		$	33,002		$	50,346
Supplemental disclosure of non-cash investing and financing activities:
	Fair value of note receivable issued in connection with disposal of business			$	32,800		$	—		$	—

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

ValueClick, Inc. and its subsidiaries ("ValueClick" or "the Company") offer a suite of products and services that enable marketers to advertise and sell their products through major online marketing channels including display advertising, comparison shopping, and affiliate marketing. The Company also offers technology infrastructure tools and services that enable marketers to implement and manage their own online advertising across multiple channels including display, email, paid search, natural search, on-site, offline and affiliate. The broad range of products and services that the Company provides enables its customers to address all aspects of their online marketing process, from strategic planning through execution, including results measurement and campaign refinements. The Company derives its revenue from four business segments. These business segments are presented on a worldwide basis and include: Affiliate Marketing, Media, Owned & Operated Websites, and Technology.

AFFILIATE MARKETING—ValueClick's Affiliate Marketing segment, which operates under the "Commission Junction" brand name, provides the technology, network and customer service that, in combination, enable advertisers to create their own fully-commissioned online sales force comprised of third-party website publishers, also known as affiliates. Advertisers that utilize the Commission Junction platform generally are only obligated to pay affiliates when the affiliate delivers a consumer who achieves the desired result, which is typically a closed e-commerce transaction or a new customer lead. By joining the Commission Junction network, advertisers gain access to: a) the Company's proprietary technology platform that has been developed over the past decade and is completely focused on the unique needs of the affiliate marketing channel; b) a proprietary network of tens of thousands of high-quality website publishers; and c) the Company's digital marketing expertise and campaign management teams who ensure advertisers' campaigns are optimized for maximum performance. Commission Junction's revenues are driven primarily by variable compensation that is generally based on either a percentage of commissions paid by the Company's customers to affiliates or on a percentage of transaction revenue generated by the Company's customers from the programs managed with the Company's affiliate marketing platforms.

MEDIA—ValueClick's Media segment, which operates under the "ValueClick Media" brand name, provides a comprehensive suite of online marketing services and tailored programs that help marketers create and increase awareness for their products and brands, attract visitors and generate leads and sales through the Internet. ValueClick Media is able to access its customers' target audiences through the unique combination of: its proprietary broad-based network of thousands of high-quality online publishers; its vertically-focused networks in the areas of pharma/healthcare (AdRx Media), home and garden (Modern Living Media), and moms (Mom's Media); its ability to acquire inventory by bidding on a real-time basis through ad exchanges and other channels; and its ability to access inventory from ValueClick's owned and operated websites, as described below. ValueClick Media applies its proprietary data and targeting and optimization technologies to these inventory sources to ensure that the metrics that are most important to its customers are achieved. ValueClick Media's services are sold on a variety of pricing models, including cost-per-action ("CPA"), cost-per-thousand-impression ("CPM"), and cost-per-click ("CPC").

On February 1, 2010, the Company divested its promotional lead generation marketing business. In October 2008, the Company divested its interest in its e-commerce websites. The results of operations of the promotional lead generation marketing and e-commerce businesses are reported as discontinued operations for all periods presented. See Note 5 for additional information on these divestitures.

OWNED & OPERATED WEBSITES—ValueClick's Owned & Operated Websites segment services are offered through a number of transaction-focused branded websites including Pricerunner, Smarter.com, Couponmountain.com, and Investopedia.com. In 2009, ValueClick also launched a limited number of content websites in key online verticals such as healthcare, finance, travel, home and garden, education and business services.

The Smarter.com and Couponmountain.com websites operate primarily in the United States and, to a lesser extent, Japan and China. The Pricerunner comparison shopping destination websites operate in the United Kingdom, Sweden, Germany, France, Denmark, and Austria. The Pricerunner and Smarter.com websites enable consumers to research and compare products from among thousands of online and/or offline merchants using its proprietary technologies. The Company gathers product and merchant data and organizes it into comprehensive catalogs on its destination websites, along with relevant consumer and professional reviews. The Couponmountain.com website allows consumers to locate coupons and deals related to products and services that may be of interest to them. The Company's Investopedia.com website, which the Company acquired on August 3, 2010 as more fully described in Note 4, provides information on a broad range of financial and investment topics, including a proprietary dictionary of financial terms, and the Company's other vertical content websites offer consumers information and reference material across a variety of topics. The Company's services in these areas are free for consumers, and revenue is generated in one of three ways: on a CPC basis for traffic delivered to the customers' websites from listings on the Company's websites; on a CPA basis when a consumer completes a purchase or other specific event; and on a CPM basis for display advertising shown on the Company's websites.

In addition to the Company's destination websites, Search123, which operates primarily in Europe, is ValueClick's self-service paid search offering that generates its traffic primarily through syndication relationships with content websites. Search syndication revenues are driven primarily on a CPC basis.

TECHNOLOGY—ValueClick's Technology segment, which operates under the brand name "Mediaplex", is an application services provider ("ASP") offering technology products and services that enable marketers to implement and manage their online advertising across multiple channels including display, email, paid search, natural search, on-site, offline and affiliate. Mediaplex's MOJO® product suite is supported by a single proprietary technology platform, which has the ability to manage all aspects of online advertising from campaign implementation to real-time behavioral targeting to enterprise-level cross channel analysis. Revenues are primarily driven by software access and usage fees which are priced on a CPM or email-delivered basis.

In October 2008, the Company sold its Mediaplex Systems business, which had previously been included in the Company's Technology segment. As a result, the Company has classified Mediaplex Systems as discontinued operations for all periods presented.

The consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation.

The consolidated financial statements include the accounts of the Company and its subsidiaries from the acquisition date of majority voting control and through the date of disposition, if any.

Accounting principles generally accepted in the United States ("GAAP") require management of the Company to make estimates and assumptions in the preparation of these consolidated financial statements that affect the reported amounts of assets and liabilities and the disclosure of contingent

assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenses during the reporting period. Actual results could differ from these estimates and assumptions.

The most significant areas that require management judgment and which are susceptible to possible change in the near term include the Company's revenue recognition, allowance for doubtful accounts and sales credits, investments, stock-based compensation, income taxes, goodwill and other intangible assets, and contingencies and litigation. The accounting policies for these areas are discussed elsewhere in these consolidated financial statements.

No material subsequent events have occurred since December 31, 2010 that required recognition or disclosure in these financial statements.

The Company considers all short-term highly liquid investments with a remaining maturity at the date of purchase of three months or less to be cash equivalents. At December 31, 2010 and 2009, cash equivalents consisted primarily of money market accounts.

Marketable securities are classified as available-for-sale and accordingly are recorded at fair value with unrealized gains and losses reflected as a separate component of stockholders' equity titled accumulated other comprehensive income (loss), net of tax, until realized or until a determination is made that an other-than-temporary decline in market value has occurred. Factors considered by management in assessing whether an other-than-temporary impairment has occurred include: the nature of the investment; whether the decline in fair value is attributable to specific adverse conditions affecting the investment; the financial condition of the investee; the severity and the duration of the impairment; and whether the Company intends to sell the investment or will be required to sell the investment before recovery of its amortized cost basis. When it is determined that an other-than-temporary impairment has occurred, the investment is written down to its fair value at the end of the period in which it is determined that an other-than-temporary decline has occurred, and the Company recognizes a corresponding loss for the amount of the unrealized loss not previously recognized. The cost of marketable securities sold is based upon the specific identification method. Fair value of the Company's marketable securities is determined based upon quoted market rates when available. Refer to Notes 2 and 3 for additional details on the Company's determination of fair value of its auction rate securities.

Trade accounts receivable are stated net of an allowance for doubtful accounts and sales credits.

The Company estimates its allowance for doubtful accounts using two methods. First, the Company evaluates specific accounts where information indicates the Company's customers may have an inability to meet financial obligations, such as due to bankruptcy, and receivable amounts outstanding for an extended period beyond contractual terms. In these cases, the Company uses assumptions and judgment, based on the best available facts and circumstances, to record a specific allowance for those customers against amounts due to reduce the receivable to the amount expected to be collected. These specific allowances are re-evaluated and adjusted as additional information is received. Second, an allowance is established for all customers based on a range of loss percentages applied to receivables aging categories based upon the Company's historical collection and write-off experience. The amounts calculated from each of these methods are analyzed to determine the total amount of the allowance for doubtful accounts. The Company also estimates an allowance for sales credits based upon its historical sales credits experience.

The Company defines financing receivables as financing arrangements that represent a contractual right to receive money either on demand or on fixed or determinable dates, have maturities greater than one year and that are recognized as an asset on its consolidated balance sheets. As of December 31, 2010, the Company determined that its note receivable, net of discount, of $32.6 million is a financing receivable. The Company records this note receivable at amortized cost and recognizes interest income as earned. The Company monitors the financial condition of its debtor by reviewing quarterly financial statements of the debtor and the debtor's ability to meet its regularly scheduled payments. For the year ended and as of December 31, 2010, there have been no indicators of possible credit loss. As such, the Company has not recorded any allowance for credit losses associated with this note receivable. While the Company uses the best information available in making its determination, the ultimate recovery of this note receivable is also dependent upon future economic events and other conditions that may be beyond our control. Should such unfavorable events arise in the future, the Company will record an allowance for credit losses to reflect the impaired value of the note receivable. Refer to Note 6 for additional details on this note receivable.

Property and equipment are stated at historical cost less accumulated depreciation and amortization. Depreciation and amortization expense are computed using the straight-line method over the estimated useful lives of the assets, generally, three years for computer equipment and purchased software, three to five years for furniture and equipment, the shorter of five years or the term of the lease for leasehold improvements, three years for vehicles, and 30 years for buildings.

On January 1, 2009, the Company adopted new accounting guidance issued by the Financial Accounting Standards Board ("FASB") for business combinations. The new accounting guidance establishes principles and requirements for how an acquirer in a business combination recognizes and measures in its financial statements the identifiable assets acquired, liabilities assumed, and any noncontrolling interests in the acquiree, as well as the goodwill acquired. For all business combinations (whether partial, full or step acquisitions), the acquirer will record 100% of all assets and liabilities of the acquired business, including goodwill, generally at their fair values; contingent consideration will be recognized at its fair value on the acquisition date and; for certain arrangements, changes in fair value will be recognized in earnings until settlement; and acquisition—related transaction and restructuring costs will be expensed rather than treated as part of the cost of the acquisition. The adoption of this accounting guidance did not have a material impact on the Company's consolidated financial statements.

The Company tests for impairment of goodwill annually as of December 31 at the reporting unit level or whenever events or circumstances indicate that goodwill might be impaired. The Company has determined it has four reporting units consisting of the Affiliate Marketing, Media, Owned & Operated Websites, and Technology operating segments. The impairment test is a two-step process, whereby in the first step, the Company compares the estimated fair value of the reporting unit with the reporting unit's carrying amount, including goodwill. The Company generally determines the estimated fair value of each reporting unit using a discounted cash flow approach, giving consideration to the market valuation approach. If the carrying amount of a reporting unit exceeds the reporting unit's fair value, the Company performs the second step of the goodwill impairment test to determine the amount of impairment, if any. Due to the weakening economy and the significant decline of the Company's stock price in 2008, the Company determined that there was an impairment of goodwill for the year ended

December 31, 2008. See Note 7 for a discussion of the impairment charge taken. For the years ended December 31, 2010, and 2009, there was no impairment of goodwill for the Company's continuing operations. For the year ended December 31, 2009, the Company recorded a goodwill impairment charge related to its discontinued operations as described in Note 7.

Management evaluates the recoverability of the Company's identifiable intangible assets and other long-lived assets when events or circumstances indicate a potential impairment exists. Events and circumstances considered by the Company in determining whether the carrying value of identifiable intangible assets and other long-lived assets may not be recoverable include, but are not limited to: significant changes in performance relative to expected operating results; significant changes in the use of the assets; significant negative industry or economic trends; a significant decline in the Company's stock price for a sustained period of time; and changes in the Company's business strategy. In determining if impairment exists, the Company estimates the undiscounted cash flows to be generated from the use and ultimate disposition of these assets. If impairment is indicated based on a comparison of the assets' carrying values and the undiscounted cash flows, the impairment loss is measured as the amount by which the carrying amount of the assets exceeds the fair value of the assets. During the year ended December 31, 2008, as a result of the weakening economy and revenue results for certain businesses that were lower than initial expectations, the Company tested its long-lived assets for impairment, and recorded an impairment loss related to certain identifiable intangible assets. The Company determined that there was no impairment of long-lived assets for the years ended December 31, 2010 and 2009 for the Company's continuing operations. For the year ended December 31, 2009, the Company recorded an impairment charge on long-lived assets related to its discontinued operations. See Note 7 for a discussion of the impairment charges taken in 2008 and 2009.

The Company recognizes revenue when the following criteria have been met: persuasive evidence of an arrangement exists, no significant Company obligations remain, collection of the related receivable is reasonably assured, and the fees are fixed or determinable.

Revenue for the Company's Affiliate Marketing segment is generated primarily from: commission fees earned from transactions, including product sales made by the Company's advertiser customers, occurring on the Company's affiliate marketing networks; fixed monthly fees from program management services; and, to a lesser extent, implementation fees. Commission fee revenue from transactions on the Company's affiliate marketing networks are recognized on a net basis as the Company acts as an agent in these transactions and the payments to publishers are the contractual obligation of the advertiser customers. Commission fee revenue is recognized in the period that the Company's advertiser customer generates a sale or other agreed-upon action on the Company's affiliate marketing networks, provided that no significant Company obligations remain, collection of the resulting receivable is reasonably assured, and the fees are fixed or determinable. Program management services fees revenue is recognized over the contractual service period, provided no significant Company obligations remain, collection of the resulting receivable is reasonably assured, and the fees are fixed or determinable. Implementation fee revenue is recognized over the estimated customer lives, provided no significant Company obligations remain, collection of the resulting receivable is reasonably assured, and the fees are fixed or determinable.

The Company's Media and Owned & Operated Websites segments revenue is recognized in the period that the advertising impressions, click-throughs or actions occur, when lead-based information is delivered, provided that no significant Company obligations remain, collection of the resulting receivable is reasonably assured, and the fees are fixed or determinable. The Company acts as a principal in Media and Owned & Operated Websites segment transactions in that the Company is the

primary obligor to the advertiser customers. Revenue is recognized in the Company's Media and Owned & Operated Websites segments on a gross basis and publisher expenses that are directly related to a revenue-generating event are recorded as a component of cost of revenue.

Revenue for the Company's Technology segment is generated primarily from fixed monthly fees or monthly transaction volume-based fees earned by the Company for making its technologies available to the Company's customers on an ASP basis. Such revenue is recognized monthly, provided no significant Company obligations remain, collection of the resulting receivable is reasonably assured, and the fees are fixed or determinable.

Deferred revenue consists primarily of the unrecognized portion of implementation fee revenue for the Company's Affiliate Marketing segment. Prepayments and amounts on deposit from customers are classified as an advertiser deposit liability.

The Company estimates a provision for sales returns which is recorded as a reduction to revenue. The provision for sales returns reflects an estimate of commission based fee reversals related to product returns from consumers of the Company's Affiliate Marketing customers. In determining the estimate for sales returns, the Company relies upon historical data, contract information and other factors. The estimated provision for sales returns can vary from actual results. More or less product may be returned from consumers of the Company's Affiliate Marketing as compared to what was estimated. These factors and unanticipated changes in the economic and industry environment could make the provision for sales returns estimates differ from actual returns.

Cost of revenue consists of payments to website publishers that are directly related to a revenue-generating event, labor costs, and depreciation on revenue- producing technologies and Internet access costs. The Company becomes obligated to make payments related to website publishers in the period the advertising impressions, click-throughs, actions or lead-based information are delivered or occur. Such expenses are classified as cost of revenue in the corresponding period in which the revenue is recognized in the accompanying consolidated statement of operations.

Sales and marketing expenses consist primarily of compensation and employee benefits of sales and marketing, network development and related support teams, certain online and offline advertising costs, travel, trade shows, and marketing materials. Online advertising costs included in sales and marketing expenses are primarily comprised of amounts that the Company pays to search engines for driving consumer traffic to the Company's owned and operated websites.

Advertising costs, which consist primarily of online advertising costs as described above, are expensed as incurred and totaled $67.6 million, $65.2 million and $64.0 million for the years ended December 31, 2010, 2009 and 2008, respectively.

General and administrative expenses include facilities costs, executive and administrative compensation and employee benefits, depreciation, professional services fees, insurance costs, bad debt and other general overhead costs.

Technology expenses include costs associated with the maintenance and ongoing development of the Company's technology platforms, including compensation and employee benefits associated with the Company's engineering and network operations departments, as well as costs for contracted services

and supplies. The Company reviews costs incurred in the application development stage and assesses such costs for capitalization. Due to the constant evolution and ongoing development of the Company's technology platforms, no internal software development costs were capitalized in the years ended December 31, 2010, 2009 and 2008.

The Company records stock-based compensation based on its estimate of fair value of stock-based awards to employees and directors on the date of grant using either: an option-pricing model for stock options; or the fair market value of the Company's common stock on the date of grant for restricted stock. The value of the portion of an award that is ultimately expected to vest is recognized as an expense over the requisite service period using the straight-line attribution method.

Accounting guidance prohibits recognition of a deferred tax asset for an excess tax benefit that has not been realized. The Company will recognize a benefit from stock-based compensation in stockholders' equity if an incremental tax benefit is realized by following the ordering provisions of the U.S. tax law.

Refer to Note 12 for information on the accounting impact of the stock- based compensation guidance and the assumptions used to calculate the fair value of share-based employee compensation.

The Company's foreign subsidiaries record their assets, liabilities and results of operations in their respective local currencies, which are their functional currencies. The Company translates its subsidiaries' financial statements into U.S. dollars each reporting period for purposes of consolidation.

Assets and liabilities of the Company's foreign subsidiaries are translated at the period-end currency exchange rates while revenue, expenses, gains, and losses are translated at the average currency exchange rates in effect for the period. Except for certain intercompany balances that have been designated as short-term in nature, the effects of these translation adjustments are reported in a separate component of stockholders' equity titled accumulated other comprehensive income. The Company records the effects of the translation adjustments for these intercompany balances in interest and other income, net. These amounts totaled $914,000, $36,000 and $3.6 million for the years ended December 31, 2010, 2009 and 2008.

Transaction gains and losses related to transactions with third parties denominated in other than the functional currency were not significant for the years ended December 31, 2010, 2009 and 2008.

Financial instruments that potentially subject the Company to concentration of credit risk consist of cash and cash equivalents, marketable securities and accounts receivable. Cash and cash equivalents are deposited in the local currency with a limited number of financial institutions in the United States and Europe. The balances in the United States held at any one financial institution are generally in excess of Federal Deposit Insurance Corporation ("FDIC") insurance limits and certain balances in Europe may not be insured. Marketable securities are held in local currency with major financial institutions and, with the exception of the Company's investments in certain municipal obligations, are generally not insured.

Credit is extended to customers based on an evaluation of their financial condition and other factors. The Company generally does not require collateral or other security to support accounts receivable. The Company performs ongoing credit evaluations of its customers and maintains an allowance for doubtful accounts and sales credits. At December 31, 2010 and 2009, no customers accounted for more than 10% of the accounts receivable balance. For the year ended December 31,

2010, one customer, Google, accounted for approximately 15.1% of total revenue. For the year ended December 31, 2009, Yahoo! accounted for approximately 17.0% of total revenue and Google accounted for approximately 10.6% of total revenue. For the year ended December 31, 2008, Yahoo! accounted for approximately 16.8% of total revenue and Google accounted for approximately 11.1% of total revenue.

The Company's financial instruments, including cash and cash equivalents, net accounts receivable, accounts payable and accrued expenses, are carried at historical cost. At December 31, 2010 and 2009, the carrying amounts of these instruments approximated their fair values because of the short-term nature of these instruments. The Company's marketable securities are carried at fair value as discussed in Note 2.

The Company uses the asset and liability method of accounting for income taxes. Under this method, income tax expense is recognized for the amount of: (i) taxes payable or refundable for the current year; and, (ii) deferred tax consequences of temporary differences resulting from matters that have been recognized in an entity's financial statements or tax returns. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the results of operations in the period that includes the enactment date. A valuation allowance is provided to reduce the deferred tax assets reported if, based on the weight of the available positive and negative evidence, it is more likely than not some portion or all of the deferred tax assets will not be realized. A liability (including interest if applicable) is established in the consolidated financial statements to the extent a current benefit has been recognized on a tax return for matters that are considered contingent upon the outcome of an uncertain tax position. Interest and penalties, if any, are included as components of income tax expense and income taxes payable.

Tax benefits are initially recognized in the consolidated financial statements when it is more likely than not the position will be sustained upon examination by the tax authorities. Such tax positions are initially and subsequently measured as the largest amount of tax benefit that is greater than 50 percent likely of being realized upon ultimate settlement with the tax authority assuming full knowledge of the position and relevant facts. See Note 10 for additional information.

Basic net income per common share is computed by dividing net income by the weighted-average number of shares of common stock outstanding for the period. Diluted net income per common share is computed using the weighted-average number of common shares outstanding for the period, and, if dilutive, potential common shares outstanding during the period. Potential common shares consist of the incremental common shares issuable upon the exercise of stock options and release of restricted stock awards, and shares issuable under the Company's Employee Stock Purchase Plan, determined using the treasury stock method. The Company determines potential windfall tax benefits and shortfalls on stock options on an "as if" basis for purposes of calculating assumed stock option proceeds under the treasury stock method when determining the denominator for diluted net income per common share.

GAAP establishes standards for reporting comprehensive income and its components in financial statements. Comprehensive income, as defined, includes all changes in equity (net assets) during a period from non-owner sources. The elements of comprehensive income, other than net income, relate to foreign currency translation adjustments and unrealized gains/losses on marketable securities for the years ended December 31, 2010, 2009 and 2008. As of December 31, 2010 and 2009, the accumulated balance of the foreign currency translation adjustment was a $6.4 million loss and a $4.3 million loss, respectively. As of December 31, 2010, there was no net unrealized gain or loss on marketable securities. The unrealized loss on marketable securities, net of tax and valuation allowance was $5.5 million and $8.1 million as of December 31, 2009 and 2008, respectively. At December 31, 2009 and 2008, the Company had recorded a full valuation allowance against the related deferred tax asset associated with the unrealized losses on marketable securities due to the uncertainty as to whether such losses and related deferred tax asset would be realized. The valuation allowance on the deferred tax asset associated with the unrealized losses on marketable securities was subsequently reversed during the year ended December 31, 2010 when the marketable securities were sold.

The Company uses the "management approach" to identify its operating segments. The management approach designates the internal organization used by management for making operating decisions and assessing performance as the basis for identifying the Company's four operating segments.

In January 2010, the FASB issued additional authoritative guidance to improve disclosures about fair value measurements. The guidance requires that an entity disclose separately the amounts of significant transfers in and out of Level 1 and 2 fair value measurements and describe the reasons for the transfers. Furthermore, an entity should present information about purchases, sales, issuances, and settlements for Level 3 fair value measurements. The guidance also clarifies existing disclosures for the level of disaggregation and disclosures about input and valuation techniques. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements for the activity in Level 3 fair value measurements. Those disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. On January 1, 2010, the Company adopted the disclosure amendments, except for the amendments to Level 3 fair value measurements as described above, which the Company will adopt on January 1, 2011.

adopted this guidance as of January 1, 2010 and applied this guidance to its divested Web Clients subsidiary as described in Note 5. Additionally, the Company determined that it was the primary beneficiary of a VIE that was established in China in June 2010. Accordingly, the VIE has been consolidated by the Company at December 31, 2010. The VIE's financial position, results of operations and cash flows were immaterial to the Company's consolidated financial statements contained herein.

Marketable securities consisted of one municipal student loan-backed auction rate security as of December 31, 2010 (in thousands) with a cost and estimated fair value of $3 million. This security was sold in January 2011 for $3 million.

Marketable securities consisted of the following as of December 31, 2009 (in thousands):

Realized losses from sales and maturities of marketable securities are included in interest and other income, net, in the consolidated statements of operations. For the year ended December 31, 2010, the Company recognized realized losses of $2.8 million from the sales of marketable securities. Realized gains and losses were immaterial for the years ended December 31, 2009 and 2008. The Company recognizes realized gains and losses upon sale or maturity of marketable securities using the specific identification method.

As of December 31, 2010, there were no marketable securities in an unrealized loss position. The following table summarizes, for all investments in an unrealized loss position, the fair value and gross unrealized losses of investments aggregated by type of investment instrument and length of time that individual securities have been in a continuous unrealized loss position as of December 31, 2009 (in thousands):

As of December 31, 2010, the Company held certain assets that are required to be measured at fair value on a recurring basis. GAAP establishes a three-tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. These tiers include: Level 1, defined as fair value measured based on observable inputs such as quoted prices in active markets for identical assets; Level 2, defined as fair value measured based on observable inputs such as quoted prices in active markets for similar assets, and inputs other than quoted prices in active markets that are either directly or indirectly observable and for identifiable assets in less active markets; and Level 3, defined as fair value measured based on unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions. The fair value hierarchy also requires an entity to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value.

The Company's assets required to be measured at fair value include the Company's investment in marketable securities, which are classified as available-for-sale. Available-for-sale securities are carried at fair value, with unrealized gains and losses, net of tax, generally recorded in a separate component of stockholders' equity within the accumulated other comprehensive income balance. Unrealized losses on available-for-sale securities that are related to credit losses or an other-than-temporary impairment

("OTTI") are charged to earnings. Marketable securities consisted of auction rate securities ("ARS") at December 31, 2010 with an aggregate cost and estimated fair value of $3.0 million and at December 31, 2009 with an aggregate cost of $27.6 million and an estimated fair value of $22.0 million.

During the year ended December 31, 2010, the Company sold ARS with a total par value of $24.6 million and realized a loss of $2.8 million, which is included interest and other income, net, in the consolidated statements of operations.

The Company's assets measured at fair value on a recurring basis subject to the disclosure requirements at December 31, 2010, were as follows (in thousands):

The Company's assets measured at fair value on a recurring basis subject to the disclosure requirements at December 31, 2009, were as follows (in thousands):

The following table presents the Company's assets measured at fair value on a recurring basis at December 31, 2010 (in thousands):

There were no transfers of assets between levels within the fair value hierarchy for the year ended December 31, 2010. In January 2011, the Company sold its remaining ARS at its par value of $3.0 million.

Investopedia.com. On August 3, 2010, the Company completed the acquisition of Investopedia.com ("Investopedia"), a leading financial information and investing education website. Under the terms of the agreement, the Company acquired the assets and assumed certain liabilities of Investopedia for an aggregate purchase price of $41.7 million. The Company incurred $110,000 in transaction costs, which is recorded in the "General and administrative expense" caption in the accompanying Consolidated Statements of Operations. Investopedia provides consumers with a comprehensive library of financial terms, articles, tutorials, and investing education tools.

Investopedia provides content, organic traffic and established advertiser relationships in the financial services advertising vertical, as well as an experienced team and synergy opportunities with the Company's existing business units within its Media and Owned & Operated Websites segments. These factors contributed to a purchase price in excess of the fair value of Investopedia's net tangible and intangible assets acquired, and, as a result, the Company has recorded goodwill in connection with this transaction. The results of Investopedia's operations are included in the Company's consolidated financial statements beginning on August 3, 2010.

The final allocation of the purchase price to the assets acquired and liabilities assumed based on the estimated fair values and the useful lives, in years, assigned to intangible assets was as follows (in thousands):

The Company expects approximately $18.4 million of goodwill recognized to be tax deductible.

The historical operating results of Investopedia prior to August 3, 2010 have not been included in the Company's historical operating results. Pro forma data (unaudited) for the years ended December 31, 2010 and 2009 as if the Investopedia acquisition was completed on January 1, 2009 is as follows (in thousands, except per share data):

These unaudited, pro forma results of operations are not necessarily indicative of future operating results. The Company does not consider the acquisition of Investopedia material for further disclosure.

In October 2008, the Company sold two non-core businesses, Mediaplex Systems and the ink-jet e-commerce business. Mediaplex Systems was included in the Company's Technology operating segment, while the e-commerce business was included in the Media operating segment. The divestitures generated total gross consideration in 2008 of $15.9 million and a pretax gain of $10.1 million ($5.0 million, net of income taxes).

On February 1, 2010, the Company completed the disposition of its promotional lead generation marketing business, operated through its subsidiary Web Marketing Holdings LLC ("Web Clients"). The proceeds from the sale consisted of a $45 million (face amount) five-year note receivable bearing interest at the rate of five percent. The estimated fair value of the note receivable was $32.8 million on the date of sale. Refer to Note 6 for additional information on the note receivable. The divestiture generated a pre-tax gain of $1.1 million, and a $10.0 million gain net of income taxes due to an $8.9 million tax benefit related to tax deductible goodwill that was realized upon the sale of Web Clients. The assets and liabilities of Web Clients are classified as held for sale as of December 31, 2009, and the historical results of Web Clients are treated as discontinued operations herein. The Company determined that Web Clients met the definition of an asset held for sale in October 2009.

The following amounts related to Web Clients, Mediaplex Systems and the ink-jet e-commerce business were derived from historical financial information and have been segregated from continuing operations and reported as discontinued operations (in thousands):

The components of assets and liabilities held for sale at December 31, 2009 are as follows:

		December 31, 2009

Current assets held for sale:
	Receivables, net	$	10,814
	Other current assets		284

		$	11,098

Assets held for sale, less current portion:
	Property and equipment, net	$	664
	Goodwill		14,512
	Intangible assets acquired in business combinations		10,541
	Other assets		60

		$	25,777

Liabilities related to assets held for sale:
	Accounts payable and accrued expenses	$	4,224
	Other current liabilities		182

		$	4,406

As discussed in Note 5, the Company sold its Web Clients business on February 1, 2010. The net proceeds from the sale of approximately $32.8 million consisted of the estimated fair value of a $45 million (face amount) five-year note receivable bearing interest at the rate of five percent, with monthly payments amortized over a ten-year period and a balloon payment at the end of the fifth year. The note is collateralized by substantially all of the assets of the buyer, consisting of Web Clients and other unrelated businesses. The collateralization of Web Clients resulted in the identification of Web Clients as a variable interest entity. However, because the Company does not have the power to direct the day-to-day operations of Web Clients and the risk of loss is limited to the amount of the note receivable, the Company is not considered the primary beneficiary and is not required to consolidate this VIE. Other than the note receivable, the Company has not, nor does it intend to, provide financial or other support to Web Clients.

The following table details the composition of the note receivable at December 31, 2010 (in thousands):

The Company classifies the portion of the note receivable due within one year as current assets in the caption "Prepaid expenses and other current assets" in the accompanying Consolidated Balance Sheets. The total long-term portion of the note receivable as of December 31, 2010 is classified separately on the Consolidated Balance Sheet. Through the Company's review of the buyer's financial statements and its history of on-time payments, the Company determined that as of December 31,

2010, an allowance for credit loss was not required. The Company reflects interest income associated with this note in the "Interest and other income, net" caption in the accompanying Consolidated Statements of Operations. Total interest income recognized for the year ended December 31, 2010 was $4.1 million.

In performing the annual goodwill impairment test as of December 31, 2010 for the Company's held and used reporting units, no impairment was identified. Furthermore, the estimated fair values of each of our reporting units exceeded their carrying values by at least 85% as of December 31, 2010. In addition, no events or circumstances indicated the existence of a potential impairment in the Company's held and used intangible assets. Accordingly, an impairment test was not performed for the Company's held and used intangible assets.

The Company performed its impairment testing for its assets held for sale as of December 31, 2009 in the following order: 1) goodwill, and 2) the remainder of the disposal group. The book value of the disposal group exceeded the estimated fair value of the disposal group, and consequently the Company determined that the goodwill of the disposal group was impaired by $3.2 million. Additionally, after recording this goodwill impairment, the Company recorded intangible asset impairment of $2.3 million in order to reduce the remaining book value of the disposal group to the estimated fair value of the disposal group less estimated costs to sell. As a result, the Company recorded a total impairment charge of $5.5 million related to the assets held for sale. This charge is reported in discontinued operations and was primarily driven by the diminishing financial performance of the disposal group during 2009. The tax benefit related to the impairment charge was $1.4 million.

After conducting its impairment test as of December 31, 2008, the Company determined that goodwill in its Media and Owned & Operated Websites reporting units was impaired by $112 million and $210 million, respectively. The total goodwill impairment charge of $322 million is included in the consolidated results of operations for the year ended December 31, 2008. The goodwill impairment charge was primarily driven by the significant decline in the Company's stock price during 2008 and the weak economic environment, which resulted in lower projected cash flows for these reporting units as compared to projections used in goodwill impairment tests completed in prior periods. The tax benefit related to the impairment charge was $51.2 million.

As of December 31, 2010, the Company's reporting units consisted of the Affiliate Marketing, Media, Owned & Operated Websites, and Technology operating segments. As required by GAAP, the

Company assigned goodwill to its reporting units. The Technology segment has no goodwill associated with it. Below is assigned goodwill by reporting unit (in thousands):

		Affiliate Marketing		Media			Owned & Operated Websites			Total

Balance at December 31, 2008			29,840		231,455			233,288			494,583
Accumulated impairment losses			—		(112,000	)		(210,000	)		(322,000	)

			29,840		119,455			23,288			172,583
	Foreign currency translation adjustments		337		144			677			1,158
	Tax adjustments		—		(20	)		(2,820	)		(2,840	)
	Allocation to disposal group(1)		—		(13,778	)		—			(13,778	)

Balance at December 31, 2009			30,177		217,801			231,145			479,123
Accumulated impairment losses			—		(112,000	)		(210,000	)		(322,000	)

		$	30,177	$	105,801		$	21,145		$	157,123
	Foreign currency translation adjustments		264		113			603			980
	Tax adjustments		—		—			—			—
	Acquisition		—		—			25,115			25,115

Balance at December 31, 2010			30,441		217,914			256,863			505,218
Accumulated impairment losses			—		(112,000	)		(210,000	)		(322,000	)

		$	30,441	$	105,914		$	46,863		$	183,218

As of December 31, 2010, goodwill with a book value of $46.9 million is tax deductible. As of December 31, 2009, goodwill with a book value of $31.6 million, of which $21.1 million related to the Owned & Operated Websites reporting unit and $10.5 million related to the Media reporting unit, was tax deductible.

The Company's acquired intangible assets as of December 31, 2010 are being amortized on a straight-line basis over the following weighted-average useful lives (in years):

The gross carrying amounts and accumulated amortization of the Company's acquired intangible assets were as follows at December 31, 2010 and 2009 (in thousands):

		Gross Balance		Accumulated Amortization			Net Carrying Amount

December 31, 2010:
	Customer, affiliate and advertiser relationships	$	48,327	$	(39,507	)	$	8,820
	Trademarks, trade names and domain names		29,811		(16,899	)		12,912
	Developed technologies and websites		34,399		(23,690	)		10,709
	Covenants not to compete		7,500		(6,416	)		1,084

Total intangible assets		$	120,037	$	(86,512	)	$	33,525

December 31, 2009:
	Customer, affiliate and advertiser relationships	$	46,793	$	(32,246	)	$	14,547
	Trademarks, trade names and domain names		23,211		(12,532	)		10,679
	Developed technologies and websites		26,700		(16,167	)		10,533
	Covenants not to compete		7,525		(4,566	)		2,959

Total intangible assets		$	104,229	$	(65,511	)		38,718

The increase in the gross intangible assets balance was primarily due to the acquisition of Investopedia in August 2010 of $15.2 million. The remaining increase related to foreign currency translation adjustments for the year. In 2009, the Company wrote off fully amortized intangible assets totaling $17.5 million and reclassified $41.3 million to the disposal group classified as assets held for sale. This decrease in the gross balance of the intangible assets at December 31, 2009 was offset by foreign currency translation adjustments totaling approximately $1.7 million. Amortization expense related to intangible assets was $20.6 million, $19.8 million and $21.7 million for the years ended December 31, 2010, 2009 and 2008, respectively. Estimated intangible asset amortization expense for the next five years ending December 31 and thereafter is as follows (in thousands):

Total depreciation expense, including the amortization of leasehold improvements, for the years ended December 31, 2010, 2009 and 2008 was $6.6 million, $7.6 million and $8.5 million, respectively.

Accounts payable and accrued expenses consisted of the following (in thousands):

The components of income (loss) from continuing operations before income taxes are as follows (in thousands):

Income tax expense (benefit) attributable to continuing operations is comprised of the following provision (benefit) components (in thousands):

Income tax expense (benefit) attributable to discontinued operations is $(9.0) million, $4.0 million, and $11.6 million for the years ended December 31, 2010, 2009 and 2008, respectively.

Income tax expense of $1.4 million and $0.5 million attributable to stock option grants and restricted stock awards during 2010 and 2009, respectively, and income tax expense primarily attributable to employee stock option tender offer of $19.2 million during 2008 were recorded as decreases to additional paid-in capital and did not, therefore, result in an expense in the consolidated statements of operations.

The components of the deferred tax assets and deferred tax liabilities are as follows (in thousands):

			As of December 31,

			2010			2009
Deferred tax assets:
		Net operating loss carryforwards	$	5,615		$	6,701
		Depreciation and amortization		38,296			49,660
		Stock options		3,327			5,079
		State tax		3,703			4,152
		Unrealized loss on marketable securities		0			2,395
		Discount on Note		3,858			—
		Capital loss carryforward		1,118			—
		Other		7,373			8,552

	Gross deferred tax assets			63,290			76,539
		Valuation allowance		(2,354	)		(3,676	)

	Net deferred tax assets			60,936			72,863

Deferred tax liabilities:
		Acquired intangible assets		3,938			13,517
		Other		3,020			1,532

	Total deferred tax liabilities			6,958			15,049

	Net deferred tax assets			53,978			57,814

Current portion of net deferred tax assets				5,691			7,972
Long-term portion of net deferred tax assets				48,287			49,842

	Net deferred tax assets		$	53,978		$	57,814

As of December 31, 2010 and 2009, based upon the Company's evaluation of both positive and negative evidence, the Company determined it is more likely than not that certain deferred tax assets may not be realizable. As of December 31, 2010 and 2009, the valuation allowance attributable to deferred tax assets was $2.4 million and $3.7 million, respectively, representing an overall decrease of $1.3 million. The decrease in valuation allowance relates primarily to the realization of previously unrealized losses on marketable securities partially offset by originating capital loss carryforwards which the Company deems more likely than not will expire unutilized. As of December 31, 2010, the Company had net operating loss carryforwards for federal and state purposes of $11.8 million and $9.2 million, respectively. The federal and state net operating loss carryforwards begin to expire in 2019 and 2013, respectively.

A reconciliation of the beginning and ending amount of unrecognized tax benefits during 2010 and 2009 is as follows (in thousands):

The total amount of unrecognized tax benefits of $31.8 million at December 31, 2010, if ultimately recognized, will reduce the Company's annual effective tax rate.

The Company's policy is to recognize interest and penalties expense, if any, related to uncertain tax positions as a component of income tax expense. For the years ended December 31, 2010, 2009, and 2008, the Company recognized $1.7 million, $2.6 million, and $4.3 million, respectively, in gross interest and penalties expense related to uncertain tax positions. During the years ended December 31, 2010, 2009, and 2008, gross interest expense was offset by a reversal of prior accrued interest of $4.4 million, $2.8 million, and $2.1 million, respectively, as a result of the expiration of certain statutes of limitations. As of December 31, 2010 and 2009, the Company had an accrued liability of $5.6 million and $8.3 million, respectively, for interest and penalties related to uncertain tax positions. These amounts are included in non-current income taxes payable.

The Company's uncertain tax positions are related to tax years that remain subject to examination by the relevant tax authorities. These include the 2007 through 2010 tax years for federal purposes, 1999 and 2004 through 2010 tax years for various state jurisdictions, and 2004 through 2010 tax years for various foreign jurisdictions. The Company is currently under examination by various state and foreign tax authorities for the 2004 through 2009 tax years and under federal examination for the 2007 tax year. Facts and circumstances could arise in the twelve-month period following December 31, 2010 that could cause the Company to reduce the liability for unrecognized tax benefits, including, but not limited to, settlement of income tax positions or expiration of the statutes of limitations. Since the ultimate resolution of uncertain tax positions depends on many factors and assumptions, the Company is not able to estimate the range of potential changes in the liability for unrecognized tax benefits or the timing of such changes.

The overall effective income tax rate for continuing operations differs from the statutory federal tax rate as follows:

The Company files a consolidated federal income tax return as well as state and foreign tax returns.

As of December 31, 2010, withholding and U.S. income taxes have not been provided on $36.4 million of unremitted earnings of certain non-U.S. subsidiaries because such earnings will be permanently reinvested in foreign operations. The determination of taxes associated with the $36.4 million of unremitted earnings is not practicable.

In September 2001, the Company's board of directors authorized a stock repurchase program (the "Program") to allow for the repurchase of shares of the Company's common stock at prevailing market prices in the open market or through unsolicited negotiated transactions.

Since the inception of the Program and through December 31, 2009, the Company's board of directors authorized a total of $479.1 million for repurchases under the Program and the Company had repurchased a total of 50.7 million shares of its common stock for approximately $409.2 million. The Company repurchased 4.0 million shares for $38.6 million for the nine-months ended September 30, 2010, leaving up to an additional $31.4 million of the Company's capital to be used to repurchase shares of the Company's outstanding common stock under the Program. In October 2010, the Company's board of directors increased this authorization to $100 million. The Company did not repurchase any of its common stock in the fourth quarter of 2010 and thus, as of December 31, 2010, $100 million of its capital is available to be used to repurchase shares of its outstanding common stock under the Program. Repurchases have been funded from available working capital and all shares have been retired subsequent to their repurchase. There is no guarantee as to the exact number of shares that will be repurchased by the Company, and the Company may discontinue repurchases at any time that the Company's management or board of directors determines additional repurchases are not warranted. The amounts authorized by the Company's board of directors exclude broker commissions.

On June 4, 2002, the Company's board of directors declared a dividend of one preferred share purchase right for each outstanding share of the Company's common stock. The dividend was payable on June 14, 2002 to the stockholders of record at the close of business on that date. Each right entitles the registered holder to purchase from the Company one unit consisting of one-thousandth of a share of Series A junior participating preferred stock of the Company at a price of $25.00 per unit. The

description and terms of the rights are set forth in a Rights Agreement, dated as of June 4, 2002, by and between the Company and Mellon Investor Services LLC, a New Jersey Limited Liability Company, as Rights Agent.

Until the earlier to occur of (i) the close of business on the tenth day after a public announcement that a person or group of affiliated or associated persons has acquired beneficial ownership of 15% or more of the Company's outstanding common stock or (ii) ten business days (or such later date as may be determined by action of the Company's board of directors prior to such time as any person becomes an acquiring person) following the commencement of, or announcement of an intention to make, a tender offer or exchange offer, the consummation of which would result in the bidder's beneficial ownership of 15% or more of the Company's outstanding common stock (the earlier of such dates being called the distribution date), the rights will be evidenced by the Company's common stock certificates.

The rights are not exercisable until the distribution date. The rights will expire at the close of business on June 4, 2012 unless the final expiration date is extended or the rights are earlier redeemed or exchanged by the Company.

The Series A junior participating preferred stock purchasable upon exercise of the rights will not be redeemable. Each share of Series A junior participating preferred stock will be entitled to a dividend of 1,000 times the dividend declared per share of common stock. In the event of liquidation, the holders of the shares of Series A junior participating preferred stock will be entitled to a payment of 1,000 times the payment made per share of common stock. Each share of Series A junior participating preferred stock will have 1,000 votes, voting together with the common stock. Finally, in the event of any merger, consolidation or other transaction in which shares of common stock are exchanged, each share of Series A junior participating preferred stock will be entitled to receive 1,000 times the amount received per share of common stock. These rights are protected by customary anti-dilution provisions.

The terms of the rights may be amended by the board of directors of the Company without the consent of the holders of the rights except that from and after such time that there is an acquiring person no amendment may adversely affect the interests of the holders of the rights.

Until a right is exercised, the holder of a right will have no rights by virtue of ownership as a stockholder of the Company, including, without limitation, the right to vote or to receive dividends.

On May 13, 1999, the Company's board of directors adopted and the stockholders approved the 1999 Stock Option Plan (the "1999 Stock Plan"). A total of 5,000,000 shares of common stock were reserved for issuance under the 1999 Stock Plan.

On May 23, 2002, the board of directors adopted and the stockholders approved the 2002 Stock Incentive Plan and reserved an additional 10,000,000 shares of common stock for issuance under this plan. The 2002 Stock Incentive Plan replaced the 1999 Stock Plan and all available shares under the 1999 Stock Plan were transferred to the 2002 Stock Incentive Plan (collectively the "2002 Stock Plan"), resulting in 15,000,000 common shares reserved for issuance. In addition, the shares under the 2002 Stock Plan increase annually on January 1 of each year equal to 1% of the total outstanding shares of ValueClick common stock as of the last day of the previous year. As of December 31, 2010, there are 6,389,439 shares available for future grant.

The 2002 Stock Plan provides for the granting of non-statutory and incentive stock options and restricted stock awards to, among other parties, employees, officers and directors of the Company.

Stock options granted to new employees or officers generally begin vesting on the new employee's or officer's first date of employment, and vest over a four-year period, with one-fourth vesting on the first anniversary date and the remainder vesting pro-rata monthly over the remaining three years, and expire five to ten years from the date of grant. Stock options granted to existing employees or officers typically vest on a monthly pro-rata basis over a four-year period and expire five to ten years from the date of grant. Stock options granted to directors generally vest over a two-year period and expire five to ten years from the date of grant. Restricted stock grants generally vest over a four-year period or, in the case of certain restricted stock grants to directors, over a two- to four-year period.

The following table summarizes stock option activity under the Company's stock plans for the years ended December 31, 2010, 2009, and 2008:

				Weighted- Average Exercise Price		Weighted- Average Remaining Contractual Term		Aggregate Intrinsic Value

						(in years)		(in thousands)
Options outstanding at December 31, 2007		9,125,478		$	22.04
	Granted	150,000		$	21.27
	Exercised	(420,394	)	$	9.48
	Forfeited/expired	(5,875,317	)	$	26.31

Options outstanding at December 31, 2008		2,979,767		$	15.35
	Granted	—			—
	Exercised	(83,062	)	$	9.22
	Forfeited/expired	(279,790	)	$	16.73

Options outstanding at December 31, 2009		2,616,915		$	15.40
	Granted	—			—
	Exercised	(244,344	)	$	9.23
	Forfeited/expired	(341,394	)	$	31.95

Options outstanding at December 31, 2010		2,031,177		$	13.41		2.92	$	6,817

Options vested at December 31, 2010 and expected to vest after December 31, 2010		2,030,888		$	13.41		2.92	$	6,817

Options exercisable at December 31, 2010		2,003,346		$	13.30		2.93	$	6,817

The total intrinsic value of stock options exercised during the years ended December 31, 2010, 2009 and 2008 was $979,000, $193,000 and $2.6 million, respectively. There were no stock options granted in 2010 and 2009. The weighted-average estimated grant date fair value of stock options granted for the year ended December 31, 2008 was $8.89.

As of December 31, 2010 and 2009, there were $96,000 and $579,000, respectively, of total unrecognized stock-based compensation related to unvested stock options. The weighted-average remaining vesting period for stock options is one year.

In September 2008, the Company completed a tender offer process in which it agreed to purchase certain underwater stock options from eligible employees, officers and directors. Under the terms of the tender offer process, the Company acquired and cancelled 4.8 million outstanding stock options with exercise prices ranging from $25.66 to $29.73, which resulted in cash payments of $5.0 million. The completed tender offer triggered the acceleration of stock-based compensation resulting in an additional charge of $30.3 million in the three-month period ended September 30, 2008, which

represents the product of the number of unvested stock options purchased times the original Black-Scholes value that was established for each option on the original grant date.

The Company began granting restricted stock awards in 2008. Restricted stock awards granted to executive officers and certain of its employees generally vest over a four-year period. Restricted stock awards granted to directors generally vest over a two- to four-year period. If the employment of any recipient of a restricted stock grant terminates for any reason, the Company shall automatically reacquire any unvested shares without cost to the Company.

The following table summarizes activity for restricted stock awards during the years ended December 31, 2010 and 2009:

				Weighted-Average Grant Date Fair Value

Unvested at December 31, 2007		—		$	—
	Granted	2,028,500		$	11.28
	Vested	(79,878	)	$	19.33
	Forfeited	(58,187	)	$	19.33

Unvested at December 31, 2008		1,890,435		$	10.69
	Granted	—		$	—
	Vested	(321,500	)	$	12.98
	Forfeited	(61,125	)	$	10.34

Unvested at December 31, 2009		1,507,810		$	10.22
	Granted	883,000		$	9.72
	Vested	(576,625	)	$	10.92
	Forfeited	(200,562	)	$	11.00

Unvested at December 31, 2010		1,613,623		$	9.60

The intrinsic value of unvested restricted stock awards at December 31, 2010, 2009 and 2008 was $25.9 million, $15.3 million and $12.9 million, respectively. The fair value of restricted stock that vested during the years ended December 31, 2010, 2009 and 2008 was $6.6 million, $3.3 million and $508,000, respectively. As of December 31, 2010 and 2009, there was $13.1 million and $12.8 million, respectively, of total unrecognized stock-based compensation related to unvested restricted stock awards. The weighted-average remaining vesting period is 2.4 years for these awards.

The Company commenced its Employee Stock Purchase Plan ("the Purchase Plan") in September 2007, which allows employees to purchase shares of the Company's common stock through payroll deductions of up to 20 percent of their annual, eligible compensation subject to certain Internal Revenue Code and Purchase Plan limitations. The Purchase Plan provides for the issuance of a cumulative maximum of 1.5 million shares of common stock. The price of common stock purchased under the Purchase Plan is equal to 85 percent of the lower of the fair market value of the common stock on the commencement date of each twelve-month offering period or the specified purchase date. For the years ended December 31, 2010, 2009 and 2008, 235,000 shares, 329,000 shares and 215,000 shares, respectively, were purchased under the Purchase Plan. For the years ended December 31, 2010, 2009 and 2008, stock-based compensation recognized under the Purchase Plan was $776,000, $972,000 and $1.1 million, respectively. As of December 31, 2010, there was $502,000 of unrecognized compensation cost related to the Purchase Plan which is expected to be recognized over a weighted-average period of approximately five months.

For the years ended December 31, 2010, 2009 and 2008, the Company recognized stock-based compensation of $7.9 million, $8.9 million and $48.2 million, respectively, in continuing operations. The following table summarizes, by consolidated statement of operations line item the impact of stock-based compensation and the related income tax benefits recognized for the years ended December 31, 2010, 2009 and 2008, (in thousands):

There was no stock-based compensation recorded in discontinued operations for the year ended December 31, 2010. Stock-based compensation of $400,000 and $5.2 million, net of tax, was recorded in discontinued operations for the years ended December 31, 2009 and 2008, respectively. The Company has not capitalized as an asset any stock-based compensation for the years ended December 31, 2010, 2009 and 2008.

GAAP requires cash flows resulting from excess tax benefits to be classified as a financing activity. Excess tax benefits are realized tax benefits from tax deductions for exercised stock options in excess of the deferred tax asset attributable to the recognized stock-based compensation for such stock options. Pursuant to GAAP, $556,000, $175,000 and $599,000 of excess tax benefits for the years ended December 31, 2010, 2009 and 2008, respectively, have been classified as a financing activity in the consolidated statements of cash flows.

The Company calculated the estimated fair value of each stock-based award on the date of grant using the Black-Scholes option-pricing model and the following weighted-average assumptions:

No stock options were granted by the Company in 2010 or 2009. The risk-free interest rate used in the Company's fair value estimates are based on the implied yield available on U.S. Treasury securities with an equivalent remaining term. The Company estimated the expected life of each stock option granted in 2008 using the short-cut method permissible under GAAP, which utilizes the weighted-average expected life of each tranche of the granted stock option, which was determined based on the sum of each tranche's vesting period plus one-half of the period from the vesting date of each tranche to its expiration. The expected life of options granted under the Purchase Plan represents the weighted-average amount of time remaining in the twelve-month offering period. The Company's computation of expected volatility for the years ended December 31, 2010, 2009 and 2008 was based on a combination of historical and market-based implied volatility from traded options on the Company's common stock.

The following table sets forth the computation of basic and diluted net income per common share for the periods indicated (in thousands, except per share data):

			Year Ended December 31,

			2010		2009		2008
Numerator:
	Income (loss) from continuing operations		$	80,604	$	61,569	$	(195,368	)
	Income (loss) from discontinued operations			9,906		7,047		(18,744	)

		Net (loss) income	$	90,510	$	68,616	$	(214,112	)

Denominator:
	Denominator for basic calculation—weighted-average common shares			81,615		86,716		92,325
	Weighted-average effect of dilutive securities			719		494		—

	Denominator for diluted calculation			82,334		87,210		92,325

Net income per common share:
	Basic income (loss) from continuing operations		$	0.99	$	0.71	$	(2.12	)
	Basic income (loss) from discontinued operations			0.12		0.08		(0.20	)

		Basic net income (loss)	$	1.11	$	0.79	$	(2.32	)

	Diluted income (loss) from continuing operations		$	0.98	$	0.71	$	(2.12	)
	Diluted income (loss) from discontinued operations			0.12		0.08		(0.20	)

		Diluted net income (loss)	$	1.10	$	0.79	$	(2.32	)

Employee stock-based awards totaling 1.9 million shares, 2.8 million shares and 6.4 million shares for the years ended December 31, 2010, 2009 and 2008, respectively, were excluded from the computation of diluted net income per common share because their effect would have been anti-dilutive under the treasury stock method. There were no employee stock-based awards included in the denominator for the diluted calculation for the year ended December 31, 2008 as the Company recognized a loss from continuing operations and, therefore, inclusion of stock-based awards would be anti-dilutive to the Company's loss per share.

Prior to 2006, the Company had various savings plans (the "Savings Plans") that qualified as defined contribution plans under Section 401(k) of the Internal Revenue Code. In 2006, the Savings Plans were consolidated into one savings plan (the "Master Savings Plan"), which also qualifies as a defined contribution plan under Section 401(k) of the Internal Revenue Code. Under the Master

Savings Plan, participating employees may defer a percentage of their eligible pre-tax earnings up to the Internal Revenue Service's annual contribution limit. All full-time domestic employees of the Company are eligible to participate in the Master Savings Plan. The Master Savings Plan does not permit investment of participant contributions in the Company's common stock. Company matching contributions to the Master Savings Plan is discretionary. Company contributions to the Master Savings Plan amounted to $738,000, $734,000 and $764,000 for the years ended December 31, 2010, 2009 and 2008, respectively.

There were no related party transactions for the year ended December 31, 2010. For the years ended December 31, 2009 and 2008, the Company recorded advertising costs in discontinued operations totaling $656,000, and $1.2 million, which were paid to Acquisis LLC, of which a member of the Company's board of directors was the managing partner and greater than 5% owner. The Company had outstanding amounts due to this entity of $43,000 as of December 31, 2009, which were reflected in liabilities related to assets held for sale at December 31, 2009.

In November 2008, the Company obtained a line of credit with a bank group which allows for borrowings of up to $100 million through November 14, 2011 ("Line of Credit"). The Line of Credit was amended on February 1, 2010. Advances under the Line of Credit bear interest at either (i) the Base Rate, which is equal to the highest of (a) the Agent's prime rate, (b) the federal funds rate plus 1.50%, and (c) the one month reserve adjusted daily LIBOR rate plus 1.50%, or (ii) the London Interbank Offered Rate ("LIBOR"), in each case plus an applicable margin as in effect at each interest calculation date. The applicable margin in effect from time to time is based on the Company's total leverage ratio. The applicable margins range from 1.50% to 2.25% for LIBOR loans and from 0.50% to 1.25% for Base Rate loans.

Certain of the Company's domestic subsidiaries have guaranteed the obligations of the Company and all future domestic subsidiaries of the Company also are required to guarantee the obligations of the Company under the Line of Credit. The Company's obligations are secured by a lien on substantially all of its present and future assets pursuant to a separate security agreement (the "Security Agreement"). In addition, the obligations of each subsidiary guarantor are secured by a lien on substantially all of such subsidiary's present and future assets pursuant to a separate guaranty agreement (the "Guaranty Agreement"). The subsidiary guarantees and the collateral under the Security Agreement are subject to release upon fulfillment of certain conditions specified in the Line of Credit, Security Agreement and the Guaranty Agreement.

The Line of Credit is available to be used by the Company to, among other things, fund its working capital needs and for other general corporate purposes, including acquisitions and stock repurchases. The Company will pay a commitment fee on unused amounts that ranges, based on the Company's total leverage ratio, from 0.35% to 0.50% of the unused portion of the Line of Credit. The agreement also contains customary events of default such as failure to pay interest or principal when due, material inaccuracy of representations or warranties, bankruptcy events, change of control, a material adverse change in financial condition or operations, or a default of covenant. Upon the occurrence of an event of default, the principal and accrued interest under the Line of Credit then outstanding may be declared due and payable. At December 31, 2010, no amount was outstanding on the Line of Credit.

The Company has provided various representations and agreed to certain financial covenants including a total leverage ratio, minimum trailing twelve-month EBITDA (defined as earnings before interest income, income taxes, depreciation, amortization, stock-based compensation, and certain other

non-cash or non-recurring income or expenses) of $100 million, and minimum unrestricted, unencumbered liquid asset requirements. At December 31, 2010 and 2009, the Company was in compliance with all of the covenants of the Line of Credit.

Future minimum lease payments as of December 31, 2010 under noncancellable operating leases, and related sublease income, with initial lease terms in excess of one year, for the next five years and thereafter are as follows (in thousands):

Operating leases consist primarily of facility leases. Certain of the Company's operating leases include escalation clauses that periodically adjust rental expense to reflect changes in price indices. The Company records rent expense on a straight-line basis over the lease term.

Total rent expense under operating leases, net of sublease income, was $5.7 million, $5.6 million and $6.2 million for the years ended December 31, 2010, 2009 and 2008, respectively.

As of December 31, 2010, the Company had the following purchase obligations (in thousands):

Purchase obligations include agreements to purchase goods or services that are enforceable, legally binding and specify all significant terms. Purchase obligations exclude agreements that are cancelable without penalty.

Standby letters of credit are maintained pursuant to certain of the Company's lease agreements. The standby letters of credit remain in effect at declining levels through the terms of the related leases. Commitments under standby letters of credit as of December 31, 2010 are scheduled to expire as follows (in thousands):

In the ordinary course of business, the Company may provide indemnifications of varying scope and terms to customers, vendors, lessors, business partners, and other parties with respect to certain

matters, including, but not limited to, losses arising out of the Company's breach of such agreements, services to be provided by the Company, or from intellectual property infringement claims made by third parties. In addition, the Company has entered into indemnification agreements with its directors and certain of its officers and employees that will require the Company to, among other things, indemnify them against certain liabilities that may arise by reason of their status or service as directors, officers or employees. The Company has also agreed to indemnify certain former officers, directors and employees of acquired companies in connection with the acquisition of such companies. The Company maintains director and officer insurance, which may cover certain liabilities arising from its obligation to indemnify its directors and certain of its officers and employees, and former officers, directors and employees of acquired companies, in certain circumstances.

The Company derives its revenue from four business segments. These business segments are presented on a worldwide basis and include: Affiliate Marketing, Media, Owned & Operated Websites, and Technology. The following table provides revenue, segment income from operations and total assets for each of the Company's four business segments. Segment income from operations, as shown below, excludes the effects of: stock-based compensation; amortization of intangible assets; impairment of goodwill and intangible assets; and corporate expenses as these items are excluded from the segment performance measures utilized by the Company's chief operating decision maker in evaluating the performance of the segments. Corporate expenses consist of those costs not directly attributable to a business segment, and include: salaries and benefits for the Company's executive, finance, legal, corporate governance, human resources, and facilities organizations; fees for professional service

providers including audit, tax, Sarbanes-Oxley compliance and certain legal fees; insurance; and, other corporate expenses.

	Revenue									Segment Income from Operations						Total Assets

	2010			2009			2008			2010		2009		2008		2010		2009
	(in thousands)
Affiliate Marketing	$	124,126		$	111,903		$	121,972		$	69,552	$	58,121	$	59,455	$	59,336	$	50,980
Media		137,487			135,086			130,891			33,625		33,261		25,215		290,684		282,135
Owned & Operated Websites		138,545			149,599			177,145			27,963		35,034		40,932		162,490		87,058
Technology		31,889			27,686			28,670			16,598		12,775		13,600		10,639		6,951
Inter-segment revenue		(1,249	)		(1,551	)		(3,237	)		—		—		—		—		—
Corporate assets		—			—			—			—		—		—		90,418		139,438

Total	$	430,798		$	422,723		$	455,441		$	147,738	$	139,191	$	139,202	$	613,567	$	566,562

A reconciliation of segment income from operations to consolidated income from operations is as follows for each period (in thousands):

Depreciation and leasehold amortization expense included in the determination of segment income from operations as presented above for the Affiliate Marketing, Media, Owned & Operated Websites, and Technology segments is as follows for each period (in thousands):

Depreciation and amortization expense included in corporate expenses in the determination of consolidated income from operations was $725,000, $1.5 million and $1.4 million for the years ended December 31, 2010, 2009 and 2008, respectively.

The Company's operations are domiciled in the United States with operations in Europe, Canada, China and Japan through wholly-owned subsidiaries. Revenue is attributed to a geographic region based upon the country in which the customer relationship is maintained. The Company's operations in Canada and China primarily support the revenue generated in the United States, and therefore, the costs associated with these operations are attributed to the United States in the determination of geographic income from operations shown below. Geographic long-lived assets exclude deferred tax assets and other assets in the Company's consolidated balance sheets.

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this annual report on Form 10-K to be signed on its behalf by the undersigned, thereunto duly authorized, in the City of Westlake Village, State of California, on the 28th day of February, 2011.

KNOW ALL MEN BY THESE PRESENTS, the undersigned hereby constitute and appoint each of James R. Zarley and John Pitstick their true and lawful attorney-in-fact and agent, with full power of substitution and resubstitution, for them and in their name, place and stead, in any and all capacities, to sign any and all amendments to this annual report on Form 10-K, and to file the same, with exhibits thereto, and other documents in connection therewith, with the Securities and Exchange Commission, granting unto said attorney-in-fact and agent, full power and authority to do and perform each and every act and thing requisite or necessary to be done in connection therewith, as fully to all intents and purposes as they might or could do in person, hereby ratifying and confirming all that said attorney-in-fact and agent, or his respective substitute or substitutes, may lawfully do or cause to be done by virtue hereof.

Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated:


(Mark One)
ý		ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the Year Ended December 31, 2010
or
o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to


Delaware (State or Other Jurisdiction of Incorporation or Organization)		77-0495335 (I.R.S. Employer Identification No.)
30699 RUSSELL RANCH ROAD, SUITE 250 WESTLAKE VILLAGE, CALIFORNIA 91362 (Address of principal executive offices, including zip code)
Registrant's Telephone Number, Including Area Code: (818) 575-4500
Securities registered pursuant to Section 12(b) of the Act:

		Title of each class		Name of each exchange on which registered

		Common Stock, $0.001 par value		NASDAQ Global Select Market


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

			Page

PART I			1
	ITEM 1.	BUSINESS	1
	ITEM 1A.	RISK FACTORS	9
	ITEM 1B.	UNRESOLVED STAFF COMMENTS	20
	ITEM 2.	PROPERTIES	20
	ITEM 3.	LEGAL PROCEEDINGS	20
	ITEM 4.	SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS	21
PART II			22
	ITEM 5.	MARKET FOR THE REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES	22
	ITEM 6.	SELECTED FINANCIAL DATA	23
	ITEM 7.	MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS	29
	ITEM 7A.	QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK	45
	ITEM 8.	FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA	46
	ITEM 9.	CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE	46
	ITEM 9A.	CONTROLS AND PROCEDURES	46
	ITEM 9B.	OTHER INFORMATION	47
PART III			47
	ITEM 10.	DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT	47
	ITEM 11.	EXECUTIVE COMPENSATION	47
	ITEM 12.	SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS	48
	ITEM 13.	CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE	48
	ITEM 14.	PRINCIPAL ACCOUNTANT FEES AND SERVICES	48
PART IV			49
	ITEM 15.	EXHIBITS AND FINANCIAL STATEMENT SCHEDULE	49
		SIGNATURES
		CERTIFICATION OF CEO—Sarbanes-Oxley Act Section 302
		CERTIFICATION OF CFO—Sarbanes-Oxley Act Section 302
		CERTIFICATION OF CEO—Sarbanes-Oxley Act Section 906
		CERTIFICATION OF CFO—Sarbanes-Oxley Act Section 906

	Price Range of Common Stock

	High		Low
Fiscal Year Ended December 31, 2010
Fourth Quarter	$	17.23	$	12.61
Third Quarter	$	13.84	$	9.80
Second Quarter	$	12.33	$	8.88
First Quarter	$	10.85	$	8.60

	Price Range of Common Stock

	High		Low
Fiscal Year Ended December 31, 2009
Fourth Quarter	$	13.94	$	9.08
Third Quarter	$	13.54	$	9.38
Second Quarter	$	12.39	$	8.31
First Quarter	$	8.75	$	5.47

Acquisitions		Date

Investopedia		August 2010
MeziMedia		July 2007
Shopping.net		December 2006

Dispositions		Disposition Date

Mediaplex Systems		October 2008
E-Babylon, Inc		October 2008
Web Marketing Holdings, LLC ("Web Clients")		February 2010

		Payments due by period

		Total		Less than 1 year		1 to less than 3 years		3 to less than 5 years		More than 5 years		Other
Operating leases(1)		$	29,496	$	6,002	$	10,122	$	6,767	$	6,605	$	—
Purchase obligations(2)			5,470		3,625		1,845		—		—		—
Liability for unrecognized tax benefits(3)			31,831		—		—		—		—		31,831

	Total contractual obligations	$	66,797	$	9,627	$	11,967	$	6,767	$	6,605	$	31,831

Plan category		Weighted-average exercise price of outstanding options, warrants and rights(1)

Equity compensation plans approved by security holders	3,590,265	$	7.53	7,110,347
Equity compensation plans not approved by security holders(2)	54,536	$	3.69	—

Total	3,644,801	$	7.48	7,110,347

			Page

	ValueClick, Inc. Consolidated Financial Statements
		Report of PricewaterhouseCoopers LLP, Independent Registered Public Accounting Firm	F-2
		Consolidated Balance Sheets at December 31, 2010 and 2009	F-3
		Consolidated Statements of Operations for the years ended December 31, 2010, 2009 and 2008	F-4
		Consolidated Statements of Stockholders' Equity for the years ended December 31, 2010, 2009 and 2008	F-5
		Consolidated Statements of Cash Flows for the years ended December 31, 2010, 2009 and 2008	F-6
		Notes to Consolidated Financial Statements	F-7
2.	Financial Statement Schedule. The following financial statement schedule of ValueClick, Inc. is included in a separate section of this annual report on Form 10-K commencing on the pages referenced below. All other schedules have been omitted because they are not applicable, not required, or the information is included in the consolidated financial statements or notes thereto.
		Schedule II—Valuation and Qualifying Accounts	F-39

Exhibit Number		Description of Document

31.2		Certification of CFO Pursuant to Securities Exchange Act Rules 13a-14(a) and 15d-14(a), as adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1		Certification of CEO and CFO Pursuant to 18 U.S.C. Section 1350, as adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS*		XBRL Instance Document.
101.SCH*		XBRL Taxonomy Extension Schema Document.
101.CAL*		XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*		XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*		XBRL Taxonomy Extension Label Linkbase Document.
101.PRE*		XBRL Taxonomy Extension Presentation Linkbase Document.

	Less Than 12 Months				12 Months or Greater				Total

	Fair Value		Unrealized Losses		Fair Value		Unrealized Losses		Fair Value		Unrealized Losses
Municipal obligations	$	—	$	—	$	22,026	$	5,524	$	22,026	$	5,524

			Fair Value Measurements at Reporting Date Using

	December 31, 2010		Quoted Prices in Active Markets for Identical Assets (Level 1)		Significant Other Observable Inputs (Level 2)		Significant Unobservable Inputs (Level 3)
Description:
Auction rate securities measured at fair value	$	3,000	$	—	$	—	$	3,000

		Fair Value Measurements Using Significant Unobservable Inputs (Level 3)

		Auction Rate Securities
Balance at December 31, 2008		$	25,750
	Less: Sales and redemptions		(6,300	)
	Reversals of unrealized losses on securities sold or redeemed		2,576

Balance at December 31, 2009		$	22,026

	Less: Sales and redemptions		(24,550	)
	Realized losses on securities sold or redeemed		2,783
	Change in unrealized losses included in other comprehensive income		2,741

Balance at December 31, 2010		$	3,000

		Useful life

Accounts receivable and other assets			$	1,586
Property, plant and equipment				317
Amortizable intangible assets:
	Advertiser relationships	3		1,040
	Trademarks, trade names and domain names	9		6,480
	Developed technologies and websites	3 - 6		7,680
Goodwill				25,115

	Total assets acquired			42,218
Liabilities assumed				(557	)

	Total		$	41,661

	2010		2009

	(pro forma)		(pro forma)
Revenue	$	436,201	$	431,287
Net income	$	91,936	$	69,236
Basic net income per common share	$	1.13	$	0.80
Diluted net income per common share	$	1.12	$	0.79

	December 31, 2010

Note receivable, gross	$	42,348
Discount		(9,712	)

Note receivable, net of discount		32,636
Less: current portion		(1,369	)

Note receivable, less current portion	$	31,267


2011	$	15,360
2012	$	7,791
2013	$	2,733
2014	$	1,655
2015	$	1,655
Thereafter	$	4,331

	As of December 31,

	2010			2009
Land	$	—		$	1,470
Building		—			1,330
Computer equipment and purchased software		34,582			32,984
Furniture and equipment		4,429			4,066
Vehicles		35			35
Leasehold improvements		2,415			2,979

		41,461			42,864
Less: accumulated depreciation and amortization		(29,047	)		(31,592	)

	$	12,414		$	11,272

	As of December 31,

	2010		2009
Accounts payable, including amounts due to publishers	$	63,416	$	53,954
Advertiser deposits		16,815		17,232
Accrued salaries and benefits		7,436		7,357
Other accrued expenses		13,307		13,160

	$	100,974	$	91,703

		2010			2009			2008

Unrecognized tax benefits balance at January 1		$	52,032		$	62,476		$	68,597
Add:
	Additions based on tax positions related to the current year		2,303			1,888			2,349
	Additions for tax positions of prior years		959			1,071			919
Deduct:
	Settlements with tax authorities		(83	)		—			(120	)
	Reductions as a result of lapse of applicable statute of limitations		(22,869	)		(12,815	)		(8,819	)
	Reductions for tax positions of prior years		(511	)		(588	)		(450	)

Unrecognized tax benefits balance at December 31		$	31,831		$	52,032		$	62,476

		Year Ended December 31, 2010			Year Ended December 31, 2009			Year Ended December 31, 2008

Sales and marketing		$	1,280		$	1,907		$	15,621
General and administrative			5,815			6,034			30,620
Technology			849			928			1,925

	Stock-based compensation		7,944			8,869			48,166
Related income tax benefits			(2,977	)		(2,884	)		(18,123	)

	Stock-based compensation, net of tax benefits	$	4,967		$	5,985		$	30,043

Year Ending December 31:		Operating Lease Commitments		Operating Sublease Income

2011		$	6,002	$	(227	)
2012			5,608		(32	)
2013			4,514		—
2014			3,661		—
2015			3,106		—
Thereafter			6,605		—

	Total minimum lease payments	$	29,496	$	(259	)

	Year Ended December 31, 2010

	Year Ended December 31, 2010					Long-lived Assets at December 31, 2010
	Revenue			Income from Operations		Long-lived Assets at December 31, 2010
United States	$	341,110		$	76,250	$	11,334
United Kingdom		49,960			10,201		112
Other countries		45,804			6,069		968
Inter-regional eliminations		(6,076	)		—		—

Total	$	430,798		$	92,520	$	12,414

	Year Ended December 31, 2009

	Year Ended December 31, 2009					Long-lived Assets at December 31, 2009
	Revenue			Income from Operations		Long-lived Assets at December 31, 2009
United States	$	339,685		$	71,537	$	9,735
United Kingdom		42,308			6,998		365
Other countries		45,936			3,996		1,172
Inter-regional eliminations		(5,206	)		—		—

Total	$	422,723		$	82,531	$	11,272

	Year Ended December 31, 2008

	Year Ended December 31, 2008						Long-lived Assets at December 31, 2008
	Revenue			Income (loss) from Operations			Long-lived Assets at December 31, 2008
United States	$	351,134		$	(237,237	)	$	13,329
United Kingdom		61,057			913			580
Other countries		50,643			4,691			1,605
Inter-regional eliminations		(7,393	)		—			—

Total	$	455,441		$	(231,633	)	$	15,514

		Balance at Beginning of Period		Additions Charged To Expense/ Against Revenue		Other Adjustments(2)			Deductions			Balance at End of Period

Allowance for doubtful accounts and sales credits(1):
	Year ended December 31, 2010	$	4,225	$	1,636	$	—		$	(1,885	)	$	3,976
	Year ended December 31, 2009	$	5,886	$	4,860	$	(196	)	$	(6,325	)	$	4,225
	Year ended December 31, 2008	$	6,535	$	7,212	$	37		$	(7,898	)	$	5,886


		VALUECLICK, INC.
		By:		/s/ JAMES R. ZARLEY James R. Zarley Chief Executive Officer

Signature	Title	Date


/s/ JAMES R. ZARLEY James R. Zarley	Director and Chief Executive Officer (Principal Executive Officer)	February 28, 2011
/s/ JOHN PITSTICK John Pitstick	Chief Financial Officer (Principal Financial and Accounting Officer)	February 28, 2011
/s/ DAVID S. BUZBY David S. Buzby	Director	February 28, 2011
/s/ MARTIN T. HART Martin T. Hart	Director	February 28, 2011
/s/ JEFFREY F. RAYPORT Jeffrey F. Rayport	Director	February 28, 2011
/s/ JAMES A. CROUTHAMEL James A. Crouthamel	Director	February 28, 2011
/s/ JAMES R. PETERS James R. Peters	Director	February 28, 2011