Mecklermedia Corp - FORM 10-Q

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EX-31.1 - CERTIFICATION - Mecklermedia Corp	webmediabrands_10q-ex3101.htm
EX-31.2 - CERTIFICATION - Mecklermedia Corp	webmediabrands_10q-ex3102.htm
EX-32.1 - CERTIFICATION - Mecklermedia Corp	webmediabrands_10q-ex3201.htm
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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

x	Quarterly Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

	For the quarterly period ended June 30, 2011.

¨	Transition Report Pursuant to Section 13 or 15 (d) of the Securities Exchange Act of 1934

	For the transition period from to

Commission file number: 000-26393

WebMediaBrands Inc.

(Exact name of Registrant as specified in its charter)

Delaware (State or other jurisdiction of incorporation or organization)	06-1542480 (I.R.S. Employer Identification No.)

50 Washington Street, Suite 912 Norwalk, Connecticut (Address of principal executive offices)	06854 (Zip Code)

(203) 662-2800 (Registrant’s telephone number, including area code)

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

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Website, 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 x No ¨

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

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

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

The number of outstanding shares the Registrant’s common stock, par value $.01 per share, as of August 9, 2011 was 42,583,560.

WebMediaBrands Inc.

Index

		Page
PART I. Financial Information

Item 1.	Financial Statements

	Consolidated Condensed Balance Sheets – December 31, 2010 and June 30, 2011 (unaudited)	2

	Unaudited Consolidated Condensed Statements of Operations – For the Three Months and Six Months Ended June 30, 2010 and 2011	3

	Unaudited Consolidated Condensed Statements of Cash Flows – For the Six Months Ended June 30, 2010 and 2011	4

	Notes to Unaudited Consolidated Condensed Financial Statements	5

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	13

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	18

Item 4.	Controls and Procedures	18

PART II. Other Information

Item 1.	Legal Proceedings	19

Item 1A.	Risk Factors	19

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	19

Item 3.	Defaults Upon Senior Securities	19

Item 4.	(Removed and Reserved)	19

Item 5.	Other Information	19

Item 6.	Exhibits	19

Signatures		20

WebMediaBrands Inc.

Consolidated Condensed Balance Sheets

December 31, 2010 and June 30, 2011

(in thousands, except share and per share amounts)

	December 31, 2010			June 30, 2011
				(unaudited)
ASSETS
Current assets:
Cash and cash equivalents	$	12,970		$	2,535
Accounts receivable, net of allowances of $10 and $11, respectively		581			716
Prepaid expenses and other current assets		912			401
Total current assets		14,463			3,652

Property and equipment, net of accumulated depreciation of $1,556 and $1,268, respectively		728			595
Intangible assets, net		1,535			1,732
Goodwill		10,261			24,365
Investments and other assets		1,005			1,333
Total assets	$	27,992		$	31,677

LIABILITIES AND STOCKHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	1,210		$	632
Accrued payroll and related expenses		424			485
Accrued expenses and other current liabilities		1,447			698
Deferred revenues		817			1,330
Total current liabilities		3,898			3,145

Loan from related party		5,947			5,897
Deferred revenues		19			23
Deferred income taxes		410			426
Other long-term liabilities		57			58
Total liabilities		10,331			9,549

Commitments and contingencies (see note 13)

Stockholders’ equity:
Preferred stock, $.01 par value, 4,000,000 shares authorized, no shares issued		—			—
Common stock, $.01 par value, 75,000,000 shares authorized, 37,986,851 and 42,623,560 shares issued at December 31, 2010 and June 30, 2011, respectively		380			426
Additional paid-in capital		281,087			287,864
Accumulated deficit		(263,700	)		(266,056	)
Treasury stock, 65,000 shares at cost		(106	)		(106	)
Total stockholders’ equity		17,661			22,128
Total liabilities and stockholders’ equity	$	27,992		$	31,677

See notes to unaudited consolidated condensed financial statements.

WebMediaBrands Inc.

Unaudited Consolidated Condensed Statements of Operations

For the Three Months and Six Months Ended June 30, 2010 and 2011

(in thousands, except per share amounts)

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2011			2010			2011
Revenues	$	2,453		$	3,800		$	4,357		$	6,046
Cost of revenues		1,400			2,123			2,698			3,571
Advertising, promotion and selling		495			633			1,024			1,065
General and administrative		1,371			1,366			3,013			2,721
Depreciation		118			81			246			165
Amortization		21			93			32			211
Contingent acquisition consideration		—			329			—			329
Total operating expenses		3,405			4,625			7,013			8,062
Operating loss from continuing operations		(952	)		(825	)		(2,656	)		(2,016	)
Other income (loss), net		31			1			39			(3	)
Interest income		196			5			213			40
Interest expense		(203	)		(178	)		(433	)		(357	)
Loss from continuing operations before income taxes		(928	)		(997	)		(2,837	)		(2,336	)
Provision for income taxes		17			10			20			20
Loss from continuing operations		(945	)		(1,007	)		(2,857	)		(2,356	)
Loss on sale of discontinued operations		(23	)		—			(29	)		—
Net loss	$	(968	)	$	(1,007	)	$	(2,886	)	$	(2,356	)
Loss per share:
Basic
Loss from continuing operations	$	(0.03	)	$	(0.02	)	$	(0.08	)	$	(0.06	)
Loss from discontinued operations		—			—			—			—
Net loss	$	(0.03	)	$	(0.02	)	$	(0.08	)	$	(0.06	)
Diluted
Loss from continuing operations	$	(0.03	)	$	(0.02	)	$	(0.08	)	$	(0.06	)
Loss from discontinued operations		—			—			—			—
Net loss	$	(0.03	)	$	(0.02	)	$	(0.08	)	$	(0.06	)
Shares used in computing loss per share:
Basic		37,493			40,463			37,340			39,277
Diluted		37,493			40,463			37,340			39,277

See notes to unaudited consolidated condensed financial statements.

WebMediaBrands Inc.

Unaudited Consolidated Condensed Statements of Cash Flows

For the Six Months Ended June 30, 2010 and 2011

(in thousands)

	Six Months Ended June 30,
	2010			2011
Cash flows from operating activities:
Net loss	$	(2,886	)	$	(2,356	)
Less: Loss on sale of discontinued operations		(29	)		—
Loss from continuing operations		(2,857	)		(2,356	)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization		278			376
Stock-based compensation		82			198
Provision for losses on accounts receivable		—			5
Amortization of debt issuance costs		45			15
Deferred income taxes		4			16
Changes in assets and liabilities (net of businesses acquired):
Accounts receivable, net		(159	)		(83	)
Prepaid expenses and other assets		1,648			373
Accounts payable, accrued expenses and other liabilities		(608	)		(1,813	)
Deferred revenues		164			280
Discontinued operations		(29	)		—
Net cash used in operating activities		(1,432	)		(2,989	)
Cash flows from investing activities:
Purchases of property and equipment		(27	)		(30	)
Acquisitions of businesses, assets and other		(135	)		(7,495	)
Net cash used in investing activities		(162	)		(7,525	)
Cash flows from financing activities:
Repayment of borrowings from related party		(150	)		(50	)
Proceeds from exercise of stock options		209			129
Net cash provided by financing activities		59			79
Effects of exchange rates on cash		(1	)		—
Net decrease in cash and cash equivalents		(1,536	)		(10,435	)
Cash and cash equivalents, beginning of period		15,012			12,970
Cash and cash equivalents, end of period	$	13,476		$	2,535

See notes to unaudited consolidated condensed financial statements.

WebMediaBrands Inc.

Notes to Unaudited Consolidated Condensed Financial Statements

June 30, 2011

1. THE COMPANY

WebMediaBrands Inc. (“WebMediaBrands” or the “Company”) is an Internet media company that provides content, education and career services to media and creative professionals through a portfolio of vertical online properties, communities and trade shows. The Company’s online business includes:

mediabistro.com, a blog network providing content, education, community and career resources about major media industry verticals including new media, social media, Facebook, TV news, sports media news, advertising, public relations, publishing, design, mobile and the Semantic Web that includes the following:

10,000Words	AllTwitter	FishbowlLA	MediaJobsDaily	SocialTimes	TVSpy
AgencySpy	eBookNewser	FishbowlNY	PRNewser	SportsNewser	UnBeige
AllFacebook	FishbowlDC	GalleyCat	SemanticWeb.com	TVNewser

The mediabistro.com business also includes an industry-leading job board for media and creative professionals focusing on job categories such as social media, online/new media, publishing, public relations/marketing, advertising, sales, design, web development, television and more;

InsideNetwork.com, a network of online properties dedicated to providing original market research, data services, news, events and job listings on the Facebook platform, social gaming and mobile applications ecosystems that includes the following:

AppData	Inside Mobile Apps	Inside Virtual Goods
Inside Facebook	Inside Social Games	The Facebook Marketing Bible
Inside Facebook Gold

AllCreativeWorld.com, a network of online properties providing content, education, community, career and other resources for creative and design professionals that includes the following:

AdsoftheWorld	DynamicGraphics	LiquidTreat
BrandsoftheWorld	Graphics.com	StepInsideDesign
Creativebits	GraphicsDesignForum	StockLogos

Community, membership and e-commerce offerings including a freelance listing service, a marketplace for designing and purchasing logos and premium membership services.

The Company’s education business features online and in-person courses, panels, certificate programs and video subscription libraries for media and creative professionals.

The Company’s trade shows include, among others, the Semantic Tech and Business Conference (“SemTech”), Inside Social Apps, Socialize: Monetizing Social Media, Social Gaming Summit + Virtual Goods Summit, AF Expo and Publishing App Expo.

2. BASIS OF PRESENTATION

The accompanying unaudited consolidated condensed financial statements have been prepared from the books and records of WebMediaBrands in accordance with accounting principles generally accepted in the United States of America and Rule 10-01 of Regulation S-X promulgated by the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America ("U.S. GAAP") for complete financial statements. The consolidated condensed statements of operations for the three and six months ended June 30, 2011 are not necessarily indicative of the results to be expected for the full year or any future interim period. These unaudited consolidated condensed financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in WebMediaBrands’s Annual Report on Form 10-K for the year ended December 31, 2010. In the opinion of management, all adjustments considered necessary for a fair presentation of the results for the interim periods presented have been reflected in such consolidated condensed financial statements.

The consolidated financial statements include the accounts of WebMediaBrands and its wholly-owned subsidiaries: Mediabistro Inc., a Delaware corporation; and Inside Network, Inc., a California corporation. All significant intercompany balances and transactions have been eliminated in consolidation.

3. RECENT ACCOUNTING PRONOUNCEMENTS

In May 2011, the Financial Accounting Standards Board issued Accounting Standards Update ("ASU") No. 2011-04, "Fair Value Measurement (Topic 820): Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS". The amendments in ASU No. 2011-04 generally represent clarification of Topic No. 820, but also include instances where a particular principle or requirement for measuring fair value or disclosing information about fair value measurements has changed. ASU No. 2011-04 results in common principles and requirements for measuring fair value and for disclosing information about fair value measurements in accordance with U.S. GAAP and International Financial Reporting Standards. The amendments are effective for interim and annual periods beginning after December 15, 2011 and are to be applied prospectively. Early application is not permitted. The Company does not expect the adoption of ASU No. 2011-04 will have a material impact on its financial statements.

4. SEGMENT INFORMATION

WebMediaBrands presents segment information in accordance with Accounting Standards Codification Topic 280-10 "Segment Reporting". This pronouncement is typically based on a management approach that designates the internal organization used for making operating decisions and assessing performance. Operating segments are defined as business areas or lines of an enterprise about which financial information is available and evaluated on a regular basis by the chief operating decision-makers, or decision-making groups, in deciding how to allocate capital and other resources to such lines of business. The Company operates in one reportable segment. The Company’s segment is affected by seasonality as customers generally post more job listings during the first calendar quarter and fewer job listings during the fourth calendar quarter. Also, advertisers generally place fewer advertisements during the first and third calendar quarters of each year, both of which directly affect our business. The Company’s results will also be impacted by the number and size of trade shows the Company holds in each quarter. In addition, there may be fluctuations as trade shows held in one period in the current year may be held in a different period in future years.

5. ACQUISITION

On May 11, 2011, WebMediaBrands entered into a stock purchase agreement with the stockholders of Inside Network, Inc. and Justin Smith as the Stockholder Representative, pursuant to which the Company purchased all of the outstanding shares of capital stock of Inside Network for an aggregate purchase price comprised of $7.5 million in cash plus an aggregate of 4,183,130 newly issued shares of the Company's common stock.

Of the 4,183,130 shares of the Company's common stock issued as part of the purchase price for Inside Network's capital stock, the Company issued an aggregate of 3,882,255 unregistered shares of the Company's common stock to Eric Eldon and Justin Smith. These shares are subject to registration rights that required the Company to file for registration of these shares with the Securities and Exchange Commission. In connection with the indemnification obligations of Inside Network's stockholders under the stock purchase agreement, a portion of the purchase price paid by the Company is subject to an escrow agreement.

Of the 4,183,130 shares of the Company's common stock issued as part of the purchase price for Inside Network's capital stock, 300,875 shares are subject to restricted stock purchase agreements by and between the Company and each of five Inside Network stockholders who are also employees of Inside Network. The shares subject to the restricted stock purchase agreements were issued under the Company's 2008 Stock Incentive Plan and are subject to vesting. Each restricted stock purchase agreement includes customary representations, warranties and covenants and customary indemnification obligations.

The Company allocated the total purchase price to the assets and liabilities based on estimates of their respective fair values. The following table summarizes the preliminary purchase price allocation of the acquisition of Inside Network (in thousands):

Cash and cash equivalents	$	661
Accounts receivable		58
Prepaid expenses and other		3
Goodwill		14,138
Total assets acquired		14,860
Accounts payable		25
Accrued payroll and related expenses		271
Income taxes payable		142
Accrued expenses		247
Deferred revenue		237
Total liabilities assumed		922
Net assets acquired	$	13,938

WebMediaBrands is in the process of obtaining a third party valuation of certain intangible assets, thus the allocation of the purchase price relating to acquisition of Inside Network is subject to refinement. The goodwill associated with the acquisition of Inside Network is not deductible for tax purposes.

The acquisition of Inside Network strengthens WebMediaBrands’s position in covering the Facebook, social gaming and mobile applications ecosystems. The acquisition of Inside Network further diversifies the Company’s revenue sources since a significant percentage of Inside Network’s revenue is generated from market research and data services. WebMediaBrands believes that the acquisition of Inside Network will dramatically augment its editorial coverage of social media, its online education offerings and its online job board presence in the social media space. These factors lead to a significant portion of the purchase price of Inside Network being allocated to goodwill on a preliminary basis.

Unaudited pro forma information below presents results of operations as if the acquisition of Inside Network had occurred on the first day of the periods presented. The unaudited pro forma information is not necessarily indicative of the results of operations for the combined companies had these events occurred at the beginning of the periods presented, nor is it indicative of future results (in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2011			2010			2011
Revenues	$	3,040		$	4,023		$	5,226		$	7,042
Net loss	$	(616	)	$	(916	)	$	(2,470	)	$	(1,847	)
Basic and diluted earnings per share	$	(0.01	)	$	(0.02	)	$	(0.06	)	$	(0.04	)

6. ACCOUNTING FOR STOCK-BASED COMPENSATION

Total employee stock-based compensation is as follows (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2010		2011		2010		2011
Stock options for employees	$	36	$	82	$	82	$	166
Restricted stock for employees		—		32		—		32
Total employee stock based compensation	$	36	$	114	$	82	$	198

Stock-based compensation increased additional paid-in capital by $198,000 during the six months ended June 30, 2011.

The Company estimates the fair value of each stock option grant using the Black-Scholes option pricing model to estimate the fair value of stock-based awards with the following assumptions used for grants during the periods presented:

	Six Months Ended June 30,
	2010		2011
Risk-free interest rate	0.88	%	2.21	%
Expected life (in years)	2.5		6.0
Dividend yield	0	%	0	%
Expected volatility	118	%	93	%

The expected stock price volatility is based on the historical volatility of WebMediaBrands’s common stock. The risk-free interest rate is based on the implied yield available on U.S. Treasury zero-coupon issues with an equivalent remaining term. WebMediaBrands had previously issued stock options with a five-year life. The Company calculated the expected life for these stock options using historical data. However, during the third quarter of 2010, the Company began issuing stock options with a ten-year life and as a result, calculated the expected life using the simplified method.

The weighted-average grant date fair value of stock options granted during the six months ended June 30, 2010 and 2011 was $0.63 and $1.26, respectively.

The following table summarizes stock option activity during the six months ended June 30, 2011:

	Shares		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term (years)	Aggregate Intrinsic Value (in thousands)
Outstanding at December 31, 2010	5,173,911		$	1.00
Granted	176,312		$	1.62
Exercised	(453,579	)	$	0.28
Forfeited, expired or cancelled	(128,669	)	$	2.85
Outstanding at June 30, 2011	4,767,975		$	1.05	4.49	$	3,166
Vested and expected to vest at June 30, 2011	4,608,348		$	1.05	4.36	$	3,094
Exercisable at June 30, 2011	2,762,861		$	1.19	2.47	$	2,171

The aggregate intrinsic value in the table above is before income taxes, based on WebMediaBrands’s closing stock price of $1.32 as of June 30, 2011. During the three months ended June 30, 2010 and 2011, the total intrinsic value of stock options exercised was $200,000 and $422,000, respectively. During the six months ended June 30, 2010 and 2011, the total intrinsic value of stock options exercised was $450,000 and $547,000, respectively.

Restricted stock is valued at the closing price of the Company’s traded stock on the date of grant. In connection with the acquisition of Inside Network, the Company issued 300,875 shares of restricted common stock on May 11, 2011 with a fair market value of $1.67. These shares will vest over a period of four years with the 25% vesting after one year and the remainder vesting 1/36th each month for the following three years.

As of June 30, 2011, there was $1.4 million of total unrecognized compensation cost related to nonvested stock-based compensation arrangements granted under the Company’s stock incentive plan. The Company expects to amortize that cost over a weighted-average period of 19 months.

7. COMPUTATION OF LOSS PER SHARE

The Company computes basic loss per share using the weighted average number of common shares outstanding during the period. The Company computes diluted loss per share using the weighted average number of common and dilutive common equivalent shares outstanding during the period. Common equivalent shares consist of the incremental common shares issuable upon the exercise of stock options. Common equivalent shares are excluded from the calculation if their effect is anti-dilutive.

Computations of basic and diluted loss per share for the periods presented are as follows (in thousands, except per share amounts):

	Three Months Ended June 30,						Six Months Ended June 30,
	2010			2011			2010			2011
Loss from continuing operations	$	(945	)	$	(1,007	)	$	(2,857	)	$	(2,356	)
Loss on sale of discontinued operations		(23	)		—			(29	)		—
Net loss	$	(968	)	$	(1,007	)	$	(2,886	)	$	(2,356	)

Basic weighted average number of common shares outstanding		37,493			40,463			37,340			39,277
Effect of dilutive stock options		—			—			—			—
Total basic weighted average number of common shares and dilutive stock options		37,493			40,463			37,340			39,277

Loss per share:
Basic
Loss from continuing operations	$	(0.03	)	$	(0.02	)	$	(0.08	)	$	(0.06	)
Loss from discontinued operations		—			—			—			—
Net loss	$	(0.03	)	$	(0.02	)	$	(0.08	)	$	(0.06	)
Diluted
Loss from continuing operations	$	(0.03	)	$	(0.02	)	$	(0.08	)	$	(0.06	)
Loss from discontinued operations		—			—			—			—
Net loss	$	(0.03	)	$	(0.02	)	$	(0.08	)	$	(0.06	)

The following table summarizes the number of outstanding stock options excluded from the calculation of diluted loss per share for the periods presented because the result would have been anti-dilutive (in thousands, except weighted average exercise price):

	Three and Six Months Ended June 30,
	2010			2011
Number of anti-dilutive stock options			4,586			4,768
Weighted average exercise price		$	1.23		$	1.05

8. INTANGIBLE ASSETS AND GOODWILL

Amortized Intangible Assets

The following tables set forth the intangible assets that are subject to amortization, including the related accumulated amortization (in thousands):

	December 31, 2010
	Cost		Accumulated Amortization		Net Carrying Value
Website development costs	$	238	$	(36)	$	202
Customer relationships		187		(62)		125
Content development costs		160		(77)		83
Copyrights and trademarks		39		(7)		32
Non-compete agreements		53		(27)		26
Total	$	677	$	(209)	$	468

	June 30, 2011
	Cost		Accumulated Amortization		Net Carrying Value
Customer relationships	$	374	$	(140)	$	234
Website development costs		296		(91)		205
Content development costs		165		(114)		51
Non-compete agreements		109		(61)		48
Copyrights and trademarks		39		(14)		25
Total	$	983	$	(420)	$	563

The Company amortizes intangible assets that are subject to amortization on a straight-line basis over their expected useful lives. The Company amortizes website development costs, copyrights and trademarks and customer relationships over three years and content development costs over a two-year period. The Company amortizes non-compete agreements over the period of the agreements, typically from one to three years.

Amortization expense related to intangible assets subject to amortization was $21,000 and $32,000 for the three and six months ended June 30, 2010, respectively and $93,000 and $211,000 for the three and six months ended June 30, 2011, respectively. The Company expects estimated annual amortization expense for the next five years, including the remainder of 2011, to be as follows (in thousands):

Years Ending December 31:
2011	$	179
2012		289
2013		91
2014		4
2015 & thereafter		—
	$	563

Unamortized Intangible Assets

The following tables set forth the intangible assets that are not subject to amortization (in thousands):

		December 31, 2010				June 30, 2011
Domain names		$	1,067			$	1,169

Goodwill

The changes in the carrying amount of goodwill for the six months ended June 30, 2011 are as follows (in thousands):

Balance as of December 31, 2010	$	10,261
Goodwill acquired during the year		14,443
Purchase accounting adjustments		(339)
Balance as of June 30, 2011	$	24,365

Goodwill acquired during the year primarily relates to the Company’s acquisition of Inside Network. WebMediaBrands is in the process of obtaining a third party valuation of certain intangible assets, thus the allocation of the purchase price relating to acquisition of Inside Network is subject to refinement.

Purchase accounting adjustments primarily relate to adjustments made in finalizing the purchase price of the SemTech Conference and SemanticUniverse blog. This purchase occurred during the third quarter of 2010.

9. ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES

Accrued expenses and other current liabilities consist of the following (in thousands):

	December 31, 2010		June 30, 2011
Accrued contingent acquisition consideration	$	695	$	—
Customer overpayments		274		231
Other		478		467
Total	$	1,447	$	698

10. DEBT

On May 29, 2009, WebMediaBrands entered into a loan agreement in the amount of $7.2 million with the Company’s Chief Executive Officer, Alan M. Meckler (the “Meckler Loan”).

In conjunction with the Meckler Loan, the Company (1) entered into a promissory note jointly and severally payable by the Company and its subsidiary, Mediabistro, to Mr. Meckler (the “Note”), (2) entered into a Security Agreement by and between the Company and Mr. Meckler (the “Security Agreement”) pursuant to which the Company granted to Mr. Meckler a security interest in the Company’s assets, (3) entered into an Intellectual Property Security Agreement by and between the Company and Mr. Meckler (the “IP Security Agreement”) pursuant to which the Company granted to Mr. Meckler a security interest in the Company’s intellectual property, (4) entered into a Pledge Agreement by the Company in favor of Mr. Meckler (the “Pledge Agreement”) pursuant to which the Company granted to Mr. Meckler a security interest in and an assignment of all of the shares of stock or other equity interest of Mediabistro owned by the Company, and (5) agreed to enter into a Blocked Account Control Agreement by and among the Company, Mr. Meckler and a depositary bank, to further secure the Note (the “Control Agreement,” and together with the Note, the Security Agreement, the IP Security Agreement and the Pledge Agreement, the “Company Loan Documents”).

Simultaneously, Mediabistro (1) entered into a Security Agreement by and between Mediabistro and Mr. Meckler pursuant to which Mediabistro granted to Mr. Meckler a security interest in Mediabistro’s assets (the “Mediabistro Security Agreement”), (2) entered into an Intellectual Property Security Agreement by and between Mediabistro and Mr. Meckler pursuant to which Mediabistro granted to Mr. Meckler a security interest in Mediabistro’s intellectual property (the “Mediabistro IP Security Agreement”), and (3) agreed to enter into a Blocked Account Control Agreement by and among Mediabistro, Mr. Meckler and a depositary bank, to further secure the Note (the “Mediabistro Control Agreement” and, together with the Mediabistro Security Agreement and the Mediabistro IP Security Agreement, the “Mediabistro Documents”).

To fund the Meckler Loan, Mr. Meckler used a portion of the proceeds of a residential mortgage loan that Bank of America, N.A. (“BOA”) granted to Mr. Meckler and Mrs. Ellen L. Meckler (the “BOA Loan”). Pursuant to a Collateral Assignment of the Note dated May 29, 2009, by Mr. Meckler to BOA, Mr. Meckler collaterally assigned the Note to BOA as additional collateral for the BOA Loan. Payment terms of the Meckler Loan reflect pass through of the BOA Loan payment terms (excluding those funds borrowed pursuant to the BOA Loan for Mr. Meckler’s personal use). As a result, the interest rate, amortization schedule and maturity date of each loan are identical.

The original principal amount of the Meckler Loan equaled the amount that was required to pay off and terminate an interest rate swap agreement between the Company and KeyBank and related transactional expenses. On September 1, 2010, WebMediaBrands entered into a note modification agreement with Mr. Meckler. The note modification reduced the interest rate of the Note from 4.7% to 3.4% per annum. Interest on the outstanding principal amount is due and payable on the first day of each calendar month through June 2014. Thereafter, principal and interest is due and payable in equal monthly payments in an amount sufficient to pay the loan in full based on an amortization term of 15 years. The Note is due and payable in full on May 29, 2016, and may be prepaid at any time without penalty or premium. WebMediaBrands made three principal payments on the Meckler Loan totaling $250,000 during the year ended December 31, 2010 and one principal payment in the amount of $50,000 during the six months ended June 30, 2011. So long as any amount remains outstanding under the Meckler Loan, the Company must pay Mr. Meckler a monthly accommodation fee of $40,000 in order to adjust the effective interest rate of the Note. The effective interest rate on the Note was 11.5% at June 30, 2011. Interest expense on the Note was $192,000 and $416,000 during the three and six months ended June 30, 2010, respectively, and $170,000 and $340,000 during the three and six months ended June 30, 2011, respectively.

In addition to the interest rate reduction noted above, the note modification agreement also reduced the required minimum monthly principal and interest payments that commence on July 1, 2014. Although there are no future minimum principal payments due under the Meckler Loan for the years ended December 31, 2011 through December 31, 2013, the Company had repaid approximately $1.3 million of the Meckler Loan as of June 30, 2011. There are future minimum payments due in the amount of $159,000 for the year ended December 31, 2014; $325,000 for the year ended December 31, 2015; and $5.4 million for the year ended December 31, 2016.

11. CONTINGENT ACQUISITION CONSIDERATION

During the fourth quarter of 2009, the Company entered into two asset purchase agreements. Both of the purchase agreements included a two year earn-out that could result in additional cash consideration payable by the Company. WebMediaBrands recorded a liability of $1.6 million as of December 31, 2009 for the estimated consideration to be paid. During the three months ended June 30, 2011, the Company made its final earn-out payments related to these acquisitions. The total additional cash consideration the Company paid during the two year earn-out period was $1.9 million and resulted in $329,000 being recorded as contingent acquisition consideration during the three months ended June 30, 2011.

12. INCOME TAXES

The Company recorded a provision for income taxes of $17,000 and $20,000 during the three and six months ended June 30, 2010 and $10,000 and $20,000 during the three and six months ended June 30, 2011, respectively.

Based on current projections, management believes that it is more likely than not that WebMediaBrands will have insufficient taxable income to allow recognition of its deferred tax assets. Accordingly, a valuation allowance has been established against deferred tax assets to the extent that deductible temporary differences cannot be offset by taxable temporary differences. To the extent that the net book value of indefinite lived assets exceeds the net tax value of indefinite lived assets, an additional tax provision will be incurred as the assets are amortized.

The total amount of unrecognized tax benefits was $85,000 as of December 31, 2010 and June 30, 2011, all of which would affect the effective tax rate, if recognized, as of June 30, 2011.

13. COMMITMENTS AND CONTINGENCIES

WebMediaBrands is subject to legal proceedings and claims that arise in the ordinary course of its business. In the opinion of management, the amount of ultimate liability with respect to these actions should not materially affect the financial statements of WebMediaBrands.

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

The following discussion should be read in conjunction with our unaudited consolidated condensed financial statements and the accompanying notes that appear elsewhere in this filing. Statements in this Form 10-Q that are not historical facts are “forward-looking statements” under the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve risks and uncertainties that could cause actual results to differ materially from those described. The potential risks and uncertainties address a variety of subjects including, for example: general economic conditions; the competitive environment in which WebMediaBrands competes; the unpredictability of WebMediaBrands’s future revenues, expenses, cash flows and stock price; WebMediaBrands’s ability to integrate acquired businesses, products and personnel into its existing businesses; WebMediaBrands’s dependence on a limited number of advertisers; and WebMediaBrands’s ability to protect its intellectual property. For a more detailed discussion of these risks and uncertainties, refer to WebMediaBrands’s other reports filed with the Securities and Exchange Commission pursuant to the Securities Exchange Act of 1934. The forward-looking statements included herein are made as of the date of this Form 10-Q, and we are under no obligation to update the forward-looking statements after the date hereof, except as required by law.

Overview

WebMediaBrands is a leading Internet media company that provides content, education and career services to media and creative professionals through a portfolio of vertical online properties, communities and trade shows. Our online business includes:

mediabistro.com, a leading blog network providing content, education, community and career resources about major media industry verticals including new media, social media, Facebook, TV news, sports media news, advertising, public relations, publishing, design, mobile and the Semantic Web that includes the following:

10,000Words	AllTwitter	FishbowlLA	MediaJobsDaily	SocialTimes	TVSpy
AgencySpy	eBookNewser	FishbowlNY	PRNewser	SportsNewser	UnBeige
AllFacebook	FishbowlDC	GalleyCat	SemanticWeb.com	TVNewser

Our mediabistro.com business also includes an industry-leading job board for media and business professionals focusing on job categories such as social media, online/new media, publishing, public relations/marketing, advertising, sales, design, web development, television and more;

InsideNetwork.com, a leading network of online properties dedicated to providing original market research, data services, news, events and job listings on the Facebook platform, social gaming and mobile applications ecosystems that includes:

AppData	Inside Mobile Apps	Inside Virtual Goods
Inside Facebook	Inside Social Games	The Facebook Marketing Bible
Inside Facebook Gold

AllCreativeWorld.com, a leading network of online properties providing content, education, community, career and other resources for creative and design professionals that includes the following:

AdsoftheWorld	DynamicGraphics	LiquidTreat
BrandsoftheWorld	Graphics.com	StepInsideDesign
Creativebits	GraphicsDesignForum	StockLogos

Community, membership and e-commerce offerings including a freelance listing service, a marketplace for designing and purchasing logos and premium membership services.

Our education business features online and in-person courses, panels, certificate programs and video subscription libraries for media and creative professionals.

Our trade shows include, among others, the Semantic Tech and Business Conference (“SemTech”), Inside Social Apps, Socialize: Monetizing Social Media, Social Gaming Summit + Virtual Goods Summit, AF Expo and Publishing App Expo.

Our businesses cross-leverage and cross-promote our content, product and service offerings. For example, users of our Websites read our content, search for jobs on our job boards, attend our trade shows, subscribe to and purchase products and services and take courses.

We generate our revenues from:

fees charged for online job postings;

attendee registration fees for our online and in-person courses;

advertising on our Websites and e-mail newsletters;

attendee registration fees to our trade shows;

exhibition space fees and vendor sponsorships to our trade shows;

subscription sales for our paid membership services; and

social media related research and data analysis products.

Customers generally post more job listings during the first calendar quarter and fewer job listings during the fourth calendar quarter. Also, advertisers generally place fewer advertisements during the first and third calendar quarters of each year, both of which directly affect our business. Our results will also be impacted by the number and size of trade shows we hold in each quarter. In addition, there may be fluctuations as trade shows held in one period in the current year may be held in a different period in future years.

The principal costs of our business relate to: payroll and benefits costs for our personnel; technology-related costs; facilities and equipment; and venue, speaker and advertising expenses for our trade shows and courses.

Recent Acquisition

On May 11, 2011, we acquired all of the shares of Inside Network, Inc. (“Inside Network”) for $7.5 million in cash plus an aggregate of 4,183,130 newly issued shares of our common stock to the stockholders of Inside Network.

Results of Operations

Revenues

Revenues were $2.5 million for the three months ended June 30, 2010 and $3.8 million for the three months ended June 30, 2011, representing an increase of 55%. Revenues were $4.4 million for the six months ended June 30, 2010 and $6.0 million for the six months ended June 30, 2011, representing an increase of 39%. These changes were primarily due to an increase in trade show revenues and online job postings. We ran five trade shows during the three months ended June 30, 2011 and six trade shows during the six months ended June 30, 2011 compared to four trade shows during the three months ended June 30, 2010 and six trade shows during the six months ended June 30, 2010. In addition, we ran our SemTech Conference for the first time during the second quarter of 2011. The acquisition of Inside Network contributed $319,000 to our revenues during the three and six months ended June 30, 2011, representing the results of Inside Network from May 12 through June 30.

The following table sets forth, for the periods indicated, the components of our revenues (in thousands):

	Three Months Ended June 30,				2010 vs. 2011				Six Months Ended June 30,				2010 vs. 2011
	2010		2011		$		%		2010		2011		$		%

Online job postings	$	911	$	1,119	$	208	23	%	$	1,703	$	2,268	$	565	33	%
Education		451		536		85	19			914		996		82	9
Advertising		422		602		180	43			753		958		205	27
Trade shows		452		1,095		643	142			566		1,129		563	99
Other		217		448		231	106			421		695		274	65
Total	$	2,453	$	3,800	$	1,347	55	%	$	4,357	$	6,046	$	1,689	39	%

Cost of revenues

Cost of revenues primarily consists of payroll and benefits costs for technology and editorial personnel, freelance costs, communications infrastructure and trade show and education operations. Cost of revenues excludes depreciation and amortization. Cost of revenues was $1.4 million for the three months ended June 30, 2010 and $2.1 million for the three months ended June 30, 2011, representing an increase of 52%. This change was primarily due to increases in trade show costs of $387,000 mainly due to the SemTech Conference that we ran during the second quarter of 2011, as well as increases in employee-related costs of $108,000 and in editorial freelance costs of $89,000 as we continued to expand our development of blog content, including in the areas of social media, social networks, social gaming and virtual goods. In addition, the acquisition of Inside Network added $133,000 to cost of revenues during the second quarter of 2011, including $30,000 in stock-based compensation.

Cost of revenues was $2.7 million for the six months ended June 30, 2010 and $3.6 million for the six months ended June 30, 2011, representing an increase of 32%. This change was primarily due to increases in trade show costs of $368,000 mainly due to the SemTech Conference that we ran during the second quarter of 2011, as well as increases in employee-related costs of $195,000 and in editorial freelance costs of $172,000 along with the impact of the Inside Network acquisition.

We intend to make investments through internal development and, where appropriate opportunities arise, through acquisitions to continue to expand our content offerings. We might need to increase our spending in order to create additional content related to new topics or offerings.

Advertising, promotion and selling

Advertising, promotion and selling expenses primarily consist of payroll and benefits costs for sales and marketing personnel, sales commissions and promotion costs. Advertising, promotion and selling expenses were $495,000 for the three months ended June 30, 2010 and $633,000 for the three months ended June 30, 2011, representing an increase of 28%. This was primarily due to an increase in trade show advertising costs of $52,000 and an increase in employee-related costs of $34,000.

Advertising, promotion and selling expenses were $1.0 million for the six months ended June 30, 2010 and $1.1 million for the six months ended June 30, 2011, representing an increase of 4%.

General and administrative

General and administrative expenses consist primarily of payroll and benefit costs for administrative personnel, office-related costs and professional fees. General and administrative expenses were $1.4 million for both the three months ended June 30, 2010 and the three months ended June 30, 2011. We incurred one-time acquisition related costs of $147,000 in conjunction with the acquisition of Inside Network, which was primarily offset by a reduction in employee-related costs of $93,000,

General and administrative expenses were $3.0 million for the six months ended June 30, 2010 and $2.7 million for the six months ended June 30, 2011, representing a decrease of 10%. This change was due to a decrease in employee-related costs of $277,000, which was partially offset by one-time acquisition related costs of $177,000 that was primarily made in connection with the acquisition of Inside Network.

Depreciation and amortization

Depreciation expense was $118,000 for the three months ended June 30, 2010 and $81,000 for the three months ended June 30, 2011, representing a decrease of 31%. Depreciation expense was $246,000 for the six months ended June 30, 2010 and $165,000 for the six months ended June 30, 2011, representing a decrease of 33%. These decreases are due primarily to the write-off of fixed assets during the first and second quarter of 2011.

Amortization expense was $21,000 for the three months ended June 30, 2010 and $93,000 for the three months ended June 30, 2011, representing an increase of 343%. Amortization expense was $32,000 for the six months ended June 30, 2010 and $211,000 for the six months ended June 30, 2011, representing an increase of 559%. These increases are due primarily to the finalization of the purchase price allocation of the SemTech conference and SemanticUniverse blog. This purchase occurred during the third quarter of 2010.

Our depreciation and amortization expenses might vary in future periods based upon a change in our capital expenditure levels or any future acquisitions.

Contingent acquisition consideration

During the fourth quarter of 2009, we entered into two asset purchase agreements. Both of the purchase agreements included a two year earn-out that could result in additional cash consideration. We recorded a liability of $1.6 million as of December 31, 2009 for the estimated consideration to be paid. During the three months ended June 30, 2011, we made our final earn-out payment related to these acquisitions. The total additional cash consideration we paid during the two year earn-out period was $1.9 million and resulted in $329,000 being recorded as contingent acquisition consideration during the three months ended June 30, 2011.

Other income (loss), net

Other income of $31,000 and $39,000 during the three and six months ended June 30, 2010, respectively, relates primarily to the gain on the sale of an investment in a portfolio company of one of our former venture funds that was previously impaired. Other income was $1,000 for the three months ended June 30, 2011 and other loss was $3,000 for the six months ended June 30, 2011.

Interest income and interest expense

The following table sets forth, for the periods indicated, a comparison of our interest income and interest expense (dollars in thousands):

	Three Months Ended June 30,						2010 vs. 2011						Six Months Ended June 30,						2010 vs. 2011
	2010			2011			$			%			2010			2011			$			%
Interest income	$	196		$	5		$	(191	)		(97	)%	$	213		$	40		$	(173	)		(81	)%
Interest expense		(203	)		(178	)		25			12	%		(433	)		(357	)		76			18	%

Interest expense during the three and six months ended June 30, 2010 and June 30, 2011 relates primarily to costs associated with our loan from a related party. See Related Party Transactions section below for a description of the loan.

Provision for income taxes

We recorded a provision for income taxes of $17,000 and $20,000 during the three months and six ended June 30, 2010, respectively and $10,000 and $20,000 during the three months and six ended June 30, 2011, respectively.

Based on current projections, management believes that it is more likely than not that we will have insufficient taxable income to allow recognition of our deferred tax assets. Accordingly, we have established a valuation allowance against deferred tax assets to the extent that deductible temporary differences cannot be offset by taxable temporary differences. To the extent that the net book value of indefinite lived assets exceeds the net tax value of indefinite lived assets, we will incur an additional tax provision as the assets are amortized.

The total amount of unrecognized tax benefits was $85,000 as of December 31, 2010 and June 30, 2011, all of which would affect the effective tax rate, if recognized, as of June 30, 2011.

Liquidity and Capital Resources

The following table sets forth, for the periods indicated, a comparison of the key components of our liquidity and capital resources (dollars in thousands):

	Six Months Ended June 30,						2010 vs. 2011
	2010			2011			$			%
Operating cash flows	$	(1,432	)	$	(2,989	)	$	(1,557	)	(109	)%
Investing cash flows		(162	)		(7,525	)		(7,363	)	(4,545	)
Financing cash flows		59			79			20		34

	As of				2010 vs. 2011
	December 31, 2010		June 30, 2011		$			%
Cash and cash equivalents	$	12,970	$	2,535	$	(10,435	)		(80	)%
Working capital		10,565		507		(10,058	)		(95	)
Loan from related party		5,947		5,897		(50	)		—

Since inception, we have funded operations through various means, including public offerings of our common stock, the sales of our Events, Research, Online images and Internet.com businesses, credit agreements and cash flows from operating activities.

Operating activities. Cash used by operating activities decreased during the six months ended June 30, 2011 compared to the same period of 2010 due primarily to reduced losses from continuing operations.

Investing activities. The amounts of cash used in investing activities vary in correlation to the number and cost of the acquisitions consummated. Net cash used in investing activities during the six months ended June 30, 2010, related primarily to the acquisition of a Website and domain names. Net cash used during the six months ended June 30, 2011, related primarily to the acquisition of Inside Network.

Financing activities. Cash provided by financing activities during the six months ended June 30, 2010 and 2011 related primarily to stock option exercises offset by a repayment of borrowings from a related party.

We expect to continue our investing activities on a limited basis for the foreseeable future, which includes the potential to strategically acquire content that is complementary to our business. We expect to finance any near-term acquisitions with cash on hand.

Our cash balance declined significantly during the first six months of 2011 primarily because we paid $7.5 million in cash to acquire Inside Network. Our cash might decline further during the remainder of 2011 for a number of reasons, including a downturn in the general economy or changes in our planned cash outlay. We believe the remaining cash flow together with our existing cash balances and our current business plan and revenue prospects will be sufficient to meet the working capital and operating resource expenditure requirements of our business for the next 12 months, but we might have to raise money or curtail planned expenses if circumstances change, which could dilute our stockholders and/or harm our business.

Off-Balance Sheet Arrangements

We have not entered into off-balance sheet arrangements or issued guarantees to third parties.

Recent Accounting Pronouncements

We are required to adopt certain new accounting pronouncements. See note 3 to the consolidated financial statements included in Item 1 of this Form 10-Q.

Related Party Transactions

On May 29, 2009, we entered into a loan agreement in the amount of $7.2 million with our Chief Executive Officer, Alan M. Meckler (the “Meckler Loan”).

In conjunction with the Meckler Loan, we (1) entered into a promissory note jointly and severally payable by us and our subsidiary, Mediabistro, to Mr. Meckler (the “Note”), (2) entered into a Security Agreement with Mr. Meckler (the “Security Agreement”) pursuant to which we granted to Mr. Meckler a security interest in the our assets, (3) entered into an Intellectual Property Security Agreement with Mr. Meckler (the “IP Security Agreement”) pursuant to which the we granted to Mr. Meckler a security interest in the our intellectual property, (4) entered into a Pledge Agreement by us in favor of Mr. Meckler (the “Pledge Agreement”) pursuant to which we granted to Mr. Meckler a security interest in and an assignment of all of the shares of stock or other equity interest of Mediabistro owned by us, and (5) agreed to enter into a Blocked Account Control Agreement with Mr. Meckler and a depositary bank, to further secure the Note (the “Control Agreement,” and together with the Note, the Security Agreement, the IP Security Agreement and the Pledge Agreement, the “Company Loan Documents”).

Simultaneously, Mediabistro (1) entered into a Security Agreement with Mr. Meckler pursuant to which Mediabistro granted to Mr. Meckler a security interest in Mediabistro’s assets (the “Mediabistro Security Agreement”), (2) entered into an Intellectual Property Security Agreement with Mr. Meckler pursuant to which Mediabistro granted to Mr. Meckler a security interest in Mediabistro’s intellectual property (the “Mediabistro IP Security Agreement”), and (3) agreed to enter into a Blocked Account Control Agreement with Mr. Meckler and a depositary bank, to further secure the Note (the “Mediabistro Control Agreement” and, together with the Mediabistro Security Agreement and the Mediabistro IP Security Agreement, the “Mediabistro Documents”).

The original principal amount of the Meckler Loan equaled the amount required to pay off and terminate an interest rate swap agreement between us and KeyBank and related transactional expenses. On September 1, 2010, we entered into a note modification agreement with Mr. Meckler. The note modification reduced the interest rate of the Note from 4.7% to 3.4% per annum. Interest on the outstanding principal amount is due and payable on the first day of each calendar month through June 2014. Thereafter, principal and interest is due and payable in equal monthly payments in an amount sufficient to pay the loan in full based on an amortization term of 15 years. The Note is due and payable in full on May 29, 2016, and may be prepaid at any time without penalty or premium. We made three principal payments on the Meckler Loan totaling $250,000 during the year ended December 31, 2010 and one principal payment in the amount of $50,000 during the six months ended June 30, 2011. So long as any amount remains outstanding under the Meckler Loan, we must pay Mr. Meckler a monthly accommodation fee of $40,000 in order to adjust the effective interest rate of the Note. The effective interest rate on the Note was 11.5% at June 30, 2011. Interest expense on the Note was $192,000 and $416,000 during the three and six months ended June 30, 2010, respectively, and $170,000 and $340,000 during the three and six months ended June 30, 2011, respectively.

In addition to the interest rate reduction noted above, the note modification agreement also reduced the required minimum monthly principal and interest payments that commence on July 1, 2014. Although there are no future minimum principal payments due under the Meckler Loan for the years ended December 31, 2011 through December 31, 2013, we had repaid approximately $1.3 million of the Meckler Loan as of June 30, 2011. There are future minimum payments due in the amount of $159,000 for the year ended December 31, 2014; $325,000 for the year ended December 31, 2015; and $5.4 million for the year ended December 31, 2016. The outstanding principal balance as of June 30, 2011 was $5.9 million.

Critical Accounting Policies

There have been no changes to our critical accounting policies from those included in our most recent Form 10-K for the year ended December 31, 2010.

Item 3. Quantitative and Qualitative Disclosures about Market Risk

As a smaller reporting company as defined by Item 10(f)(1) of Regulation S-K, we are not required to provide the information required by this Item.

Item 4. Controls and Procedures

Disclosure Controls and Procedures. The Company conducted an evaluation of the effectiveness of the design and operation of our disclosure controls and procedures, as defined in Rule 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934, as amended (“Exchange Act”) under the supervision and with the participation of its management including the Company’s Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), or persons performing similar functions, as appropriate to allow timely decisions regarding required disclosure.

Disclosure controls and procedures are designed only to provide reasonable assurance that (i) information required to be disclosed in an issuer’s reports filed under the Exchange Act is recorded, processed, summarized and reported within the time period specified in the SEC rules and forms and (ii) information is accumulated and communicated to management as appropriate to allow timely decisions regarding required disclosures.

As a result of this evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures are effective to provide the reasonable assurance discussed above.

Management’s Report on Internal Control over Financial Reporting. Management of the Company 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 preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A control system, no matter how well conceived and operated, can provide only reasonable assurance that the objectives of the control system are met. Management applied its judgment in assessing the benefits of controls relative to their cost. Because of the inherent limitations in control systems, no evaluation of controls can provide absolute assurance that all controls issues and instances of fraud, if any, within the company have been detected. Because of its inherent limitations, internal control over financial reporting might not prevent or detect misstatements. Also, projections of any evaluation of the effectiveness of internal control over financial reporting to future periods are subject to the risk that controls might become inadequate because of changes in conditions, or that the degree of compliance with policies or procedures might deteriorate. The Company’s management, with the participation of the CEO and CFO, assessed the effectiveness of the Company’s internal control over financial reporting as of June 30, 2011. Based on the Company’s evaluation, management concluded that our internal control over financial reporting was effective as of June 30, 2011 based on criteria in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission.

Changes in Internal Control over Financial Reporting. There were no changes in our internal control over financial reporting during the quarter ended June 30, 2011 that have material affected, or are reasonably likely to affect our internal control over financial reporting.

PART II - OTHER INFORMATION

Item 1.

LEGAL PROCEEDINGS

None.

Item 1A.

RISK FACTORS

The primary risk factors affecting our business have not changed materially from the risk factors set forth in our Annual Report on Form 10-K for the year ended December 31, 2010.

Item 2.

UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Not Applicable

Item 3.

DEFAULTS UPON SENIOR SECURITIES

Not Applicable

Item 4.

(REMOVED AND RESERVED)

Item 5.

OTHER INFORMATION

Not Applicable

Item 6.

EXHIBITS

The following is a list of exhibits filed as part of this Report on Form 10-Q.

Exhibit Number		Description

	31.1	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	31.2	Certification pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

	32.1	Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

	32.2	Certification 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 Schema Document

	101.CAL		XBRL Calculation Linkbase Document

	101.DEF		XBRL Definition Linkbase Document

	101.LAB		XBRL Label Linkbase Document

	101.PRE		XBRL Presentation Linkbase Document

SIGNATURES

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


Dated: August 12, 2011		WebMediaBrands Inc.


		/s/ Alan M. Meckler
		Alan M. Meckler Chairman and Chief Executive Officer


		/s/ Donald J. O’Neill
		Donald J. O’Neill Vice President and Chief Financial Officer (Principal Financial Officer and Chief Accounting Officer)

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