CSGPCoStar Group

Please explain how your revenue recognition policy disclosures addresses revenue earned from your Apartments.com business. In this rega rd, it appears that Apartments.com earns revenue from advertising however your policy disclosure does not discuss this revenue stream. Indicate if all advertising revenue is subject to a subscription arrangement.

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If not, consider revising your disclosure s to include advertising revenue. Further, consider expanding your MD&A results of operations disclosure to discuss underlying metrics (e.g., number of paid clicks and price per click). In addition, consider providing the disclosure required by ASC 280 -10-50-40. Please advise.

The Company respectfully advises the Staff that Apartments.com advertising revenue is generated by providing subscription-based advertising on its online marketplace for commercial real estate listings and apartment rentals. The Company charges a fixed monthly amount for these subscription-based advertising services. Advertising revenue generated from the Apartments.com business is not based on the number of paid clicks, price per click or other variable measurements.

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The advertising subscription contract rates are primarily based on the number of advertised properties and the prominence and placement of advertised properties in the search results.

The Company considered revenue generated from the Apartments.com business when preparing its revenue recognition policy disclosure. Because advertising revenue derived from the Apartments.com business is subject to a subscription arrangement, the Company believes its existing disclosures regarding subscription-based services incorporate the treatment of the Apartments.com advertising revenue. The Company acknowledges the Staff's comment and respectfully advises the Staff that the Company intends to expand its existing disclosure in future filings to clarify that the advertising revenue derived from the Apartments.com business is subject to subscription arrangements.

The Company currently discloses metrics for subscription services, including subscription revenues of the Apartments.com business, in its MD&A results of operations disclosure. The Company believes these metrics are meaningful to investors. As previously noted, the advertising revenue generated from the Apartments.com business is not based on variable measurements and, as a result, metrics such as number of paid clicks and price per click are not relevant. The Company will continue to assess these and other metrics as the business continues to develop and grow. If, in the future, other metrics are deemed to provide meaningful disclosure to investors or gain similar significance to the metrics that are currently disclosed, the Company will include those metrics in its MD&A results of operations disclosure in its future periodic filings.

The Company considered the guidance in Accounting Standards Codification (“ASC”) 280-10-50-40, Segment Reporting, in assessing the disclosures related to revenues from its services. All of the Company’s information and advertising services are similar in that they are derived from the building-specific data collected and analyzed by its researchers and maintained in the Company’s database. The Company’s services offer customers specialized tools for accessing, analyzing and using different portions of its commercial real estate database to meet their individual information and advertising needs. The Company delivers these similar services through the Internet and the database is maintained on the Company’s servers. Due to the fact that the Company’s information and advertising services are all derived from its database of commercial real estate information, the Company respectfully advises the Staff that its current disclosure is consistent with the requirements of ASC 280-10-50-40, Segment Reporting.

The Company acknowledges that: (i) the Company is responsible for the adequacy and accuracy of the disclosure in the filing; (ii) it is the position of the Securities and Exchange Commission (the “Commission”) that comments by the Commission Staff or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing, and (iii) it is the Commission's position that the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

The Company believes that the foregoing is responsive to your comment. The Company understands that you will be reviewing its response and may have additional comments. If you have any questions concerning the Company's response please feel free to contact the undersigned at (202) 336-6920 or via email at bradecki@costargroup.com or Jonathan Coleman at (202) 336-6997 or via email at jcoleman@costargroup.com.

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In the risk factor disclosures on page 18, you state that your success and revenues depend on attracting and retaining subscribers. Please tell us whether you considered disclosing the number of subscribers for each period and the average revenue per subscriber or explain to us why you do not believe this information would be meaningful to investors.

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Also, tell us what other metrics, aside from renewal and cancellation rates, you use in analyzing your business. We refer you to Item 303(a)(3)(iii) of Regulation S-K and Section III.D of SEC Release No. 33-6835.

The Company respectfully advises the Staff that it considered disclosing the number of subscribers for each period and the average revenue per subscriber. As part of that process, the Company considered the guidance in Item 303(a)(3)(iii) of Regulation S-K and Section III.D of SEC Release No. 33-6835, each of which relates to the disclosure of the reasons for material year-to-year changes in financial statement line items.

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The Company has not disclosed the number of subscribers for each period and the average revenue per subscriber in its periodic filings because a wide range of contract rates exists among the numerous services provided by the Company. These contract rates are generally based on the number of sites, number of users, organization size, the client's business focus, geography and the number and type of services to which a client subscribes. For this reason, the Company believes that fluctuations in the number of subscribers and average revenue per subscriber are not material to investors and do not necessarily correlate as closely with the Company's revenue results and operating performance as do fluctuations in the trailing twelve-month contract renewal rate and cancellation rate for annual subscription-based services.

The Company disclosed the trailing twelve-month contract renewal rate and cancellation rate for annual subscription-based services on page 36 in the “Overview” section of Management's Discussion and Analysis of Financial Condition and Results of Operations (“MD&A”) in the Form 10-K because management believes these are the quantitative metrics that are most closely correlated with the Company's revenue results and are potential indicators of future revenue results. Therefore, management focuses on these metrics when evaluating the Company's operating performance. The Company believes these are the most meaningful metrics to its investors and has disclosed them in the Company's periodic filings and earnings releases. The Company also routinely discusses these metrics on its earnings conference calls.

Aside from renewal and cancellation rates, management may also look at subscription services revenue as a percentage of total revenue, annualized net new sales of subscription services and other operating or quantitative metrics in analyzing its business. The term “annualized net new sales of subscription services” refers to the annualized amount of change in the Company's sales resulting from new annual subscription contracts or upsales on existing annual subscription contracts, less write downs and cancellations, for the period reported. The Company believes subscription services revenue as a percentage of total revenue, annualized net new sales of subscription services and other operating or quantitative metrics that are discussed from time to time during quarterly earnings conference calls only provide ancillary information to the disclosure in the Company's periodic and current reports. Therefore, the Company did not disclose them in its periodic filing. The Company will continue to review these and other operating metrics as the business continues to develop and grow. If, in the future, other metrics are deemed to provide meaningful disclosure to investors or gain similar significance to the metrics that are currently disclosed, the Company expects to include those metrics in its MD&A in its future periodic filings.

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We note that you had foreign losses of approximately $13.0 million during the year ended December 31, 2012. We also note that your rate reconciliation includes an adjustment for foreign income taxes that appears to increase the tax benefit relating to these losses by $3.0 million and an adjustment to the valuation allowance that appears to decrease the tax benefit relating to these losses by $3.0 million.

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Please clarify whether you have recognized a full valuation allowance for the tax benefit associated with the $13.0 million foreign operating losses recognized in 2012 and how your rate reconciliation reflects this. As part of your response, please clarify the nature of any reconciling items that have been presented on a net basis and what consideration you gave to separate disclosure of these items as required by Rule 4-08(h) of Regulation S-X.

The Company respectfully advises the Staff that it recognized a full valuation allowance for the tax benefit associated with the foreign operating losses recognized in 2012. The Company's rate reconciliation reflects the full valuation allowance through disclosure of the foreign tax benefit resulting from those losses (included in the line captioned “Foreign income taxes, net effect” in the rate reconciliation) and a corresponding increase in the valuation allowance (included in the line captioned “Increase in valuation allowance” in the rate reconciliation) as reported on page F-27 of the

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Form 10-K.

In the rate reconciliation, state income taxes are presented net of any federal tax effect and foreign income taxes are presented on a combined basis for all foreign jurisdictions. The Company respectfully advises the Staff that it separately presents all reconciling items which exceed five percent of the amount computed by multiplying the income before tax by the applicable statutory federal rate, as required by Rule 4-08(h) of Regulation S-X.

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We note your disclosure on page F-15 that you recorded $32.6 million of deferred income taxes, net in connection with the LoopNet acquisition. Please clarify the nature of these deferred taxes and how they are reflected in the deferred tax assets and liabilities disclosed in the table on page F-26. In this regard, we note that your deferred tax liability relating to intangibles increased by $55.5 million.

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Please clarify the composition of the other deferred tax assets and liabilities acquired.

The Company respectfully advises the Staff that the $32.6 million of deferred income taxes, net recorded in connection with the LoopNet acquisition as reported on page F-15 of the Form 10-K reflects a balance as of April 30, 2012. These deferred income taxes, net are comprised of deferred tax liabilities related to intangibles of $63.8 million, partially offset by deferred tax assets from net operating loss carryforwards of $28.9 million and other acquired assets and liabilities totaling $2.3 million which netted to the $32.6 million disclosed on page F-15 of the Form 10-K.

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Each component disclosed in the table on page F-26 of the Company's Form 10-K includes the December 31, 2012 balances of both the acquired deferred tax assets and liabilities from the LoopNet acquisition as well as the Company's other deferred tax assets and liabilities. The $55.5 million increase in the deferred tax liability relating to intangibles for the year ended December 31, 2012 described in the Staff's comment includes the $63.8 million deferred tax liabilities related to intangibles recorded in connection with the LoopNet acquisition on April 30, 2012 net of amortization through December 31, 2012.

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We note that as of March 31, 2013, you reassessed the probability of achieving the performance condition associated with your February 2012 grant of restricted common stock and determined that it was probable that the performance condition would be met by the March 31, 2017 forfeiture date.

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As a result, you recorded a total of approximately $11.3 million of stock-based compensation expense for the three months ended March 31, 2013 related to these grants and expect to record an additional estimated unrecognized stock-based compensation expense of approximately $12.4 million during the remainder of 2013 and in 2014. Please clarify the factors that changed between December 31, 2012 and March 31, 2013, which resulted in your determination that it was now probable that the performance conditions would be met. As part of your response, please clarify whether there were significant changes in your actual performance results for the first quarter of fiscal 2013 as compared to the fourth quarter of fiscal 2012. In addition, we note from the disclosure in your Form 8-K filed on April 24, 2013, that forecasted non-GAAP income before income taxes will range between $95 million and $100 million for 2013. Please clarify why you do not consider it probable that the performance condition will be achieved in fiscal 2013. Please also tell us the authoritative accounting literature upon which you relied in accounting for these grants and determining the period over which to recognize the compensation expense.

The Company respectfully advises the Staff that the consideration of whether it was probable that the performance condition was met as of December 31, 2012 and as of March 31, 2013 was based on multiple factors. On April 30, 2012 the Company completed its acquisition of LoopNet, the most significant transaction in the Company's history.

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While its revenues increased in 2012 as a result of this acquisition, the Company incurred significant costs in connection with both the acquisition and the integration of the two businesses which negatively impacted its EBITDA and overall financial results during 2012. EBITDA for the year ended December 31, 2012 was $60.2 million, which was significantly less than the $90 million EBITDA required to achieve the performance condition. In order to achieve the performance condition of $90 million of cumulative EBITDA over a period of four consecutive calendar quarters, the Company would have to average $22.5 million of quarterly EBITDA for four consecutive quarters, a quarterly EBITDA amount that the Company historically has never achieved. While the Company had realized cost and revenue synergies from the LoopNet acquisition, such synergies had not fully materialized in its financial results as of December 31, 2012, which was consistent with expectations, as the LoopNet acquisition was consummated only eight months earlier. For these reasons, the Company concluded as of December 31, 2012, that it was not yet probable that the performance condition would be met.

As of March 31, 2013, the Company was nearing the first anniversary of the LoopNet acquisition and the financial results of the first quarter of 2013 exceeded the Company's expectations. Those results reflected the Company's successful efforts to integrate LoopNet into the rest of its business, both in terms of cost and revenue synergies. Specifically, the Company achieved its cost synergy goal during the first quarter of 2013 due in part to the elimination of redundant or unnecessary expenses. The Company also experienced an increase in revenue synergies in excess of 25% during the first quarter of 2013 through the cross selling of each company's complementary services, which increased the Company's confidence in achieving future revenue synergies. As of March 31, 2013, the Company had also refocused LoopNet's operations on its core strength of marketing commercial properties on the internet and began to shift LoopNet's focus from monthly contracts to annual contracts, which the Company believes will further strengthen future revenue results.

Additionally, due in part to the continued high renewal rates, revenue in the first quarter of 2013 increased approximately $3.9 million compared to the fourth quarter of 2012, which significantly exceeded the Company's expectations and resulted in the highest quarterly revenue recorded in the Company's history. The Company's international business also achieved improved performance results for the first quarter of 2013 as international EBITDA improved by approximately 50% as compared to the fourth quarter of 2012. As a result of the Company's significant positive financial results in the first quarter of 2013, the Company updated its outlook for future financial performance for the remainder of 2013 and beyond, including increases in both revenue and EBITDA. The culmination of several consecutive quarters of strong financial results coupled with the specific accomplishments that occurred during the first quarter of 2013 as discussed above, increased the probability of continued high quarterly EBITDA results and growth, including achievement of the performance condition. As a result, as of March 31, 2013, the Company determined that it was probable that the performance condition associated with the performance based restricted stock grants would be achieved.

The Company acknowledges the Staff's reference to the forecasted non-GAAP income before income taxes in the range of $95 million and $100 million for 2013. The Company respectfully advises the Staff that the performance condition is based upon the Company's achievement of $90 million of cumulative EBITDA over a period of four consecutive calendar quarters without any adjustments. The non-GAAP income before income taxes performance measure described in the Staff's comment differs from EBITDA because it excludes stock-based compensation expense, acquisition and integration related costs and restructuring and related costs. These costs are included when calculating EBITDA. These costs were approximately $43.6 million to $46.7 million in the Company's guidance range for the period ended December 31, 2013.

The Company respectfully advises the Staff that it relied on Accounting Standards Codification (“ASC”) 718-10-25-20, Compensation - Stock Compensation, in accounting for these grants and began recognizing compensation cost when the achievement of the performance condition was deemed probable. Specifically, ASC 718-10-25-20 states “Accruals of compensation cost for an award with a performance condition shall be based on the probable outcome of that performance condition-compensation cost shall be accrued if it is probable that the performance condition will be achieved and shall not be accrued if it is not probable that the performance condition will be achieved.” The Company deemed achievement probable as of March 31, 2013. Once achievement of the performance condition was deemed probable the Company relied on ASC 718-10-35-2 and 718-10-35-3, Compensation - Stock Compensation, to determine the period over which to recognize the compensation cost. That guidance requires the compensation cost for an award of share-based employee compensation classified as equity to be recognized over the requisite service period. As further stated in ASC 718-10-35-5, Compensation - Stock Compensation, the requisite service period may be explicit or it may be implicit, being inferred from an analysis of other terms in the award, including other explicit service or performance conditions. The Company is recognizing the compensation expense over the implicit service period, the period beginning on the grant through the time that the performance condition is expected to be achieved and the recipients vest in their respective awards. In accordance with ASC 718-10-35-3, Compensation - Stock Compensation, the cumulative effect on current and prior periods of a change in the estimated number of instruments for which the requisite service is expected to be or has been rendered shall be recognized in compensation cost in the period of the change. Accordingly, in the quarter ended March 31, 2013, the period in which the Company's estimate changed, the Company recognized compensation expense of $11.3 million, based on its estimated implicit service period. The Company will reassess the probability of achieving the performance condition each reporting period until such time that the performance condition is achieved and the awards vest.

The Company acknowledges that: (i) the Company is responsible for the adequacy and accuracy of the disclosure in the filing; (ii) it is the position of the Securities and Exchange Commission (the “Commission”) that comments by the Commission Staff or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing, and (iii) it is the Commission's position that the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

The Company believes that the foregoing is responsive to your comments. The Company understands that you will be reviewing its responses and may have additional comments. If you have any questions concerning the Company's responses please feel free to contact the undersigned at (202) 336-6920 or via email at bradecki@costar.com or Jonathan Coleman at (202) 336-6997 or via email at jcoleman@costar.com.

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We note from your response to prior comment 1 that in addition to renewal and cancellation rates, management also looks to other quantitative metrics when analyzing your business. We further note that you discussed annualized net new sales and/or the number of new customers in each of your last three earnings conference calls.

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Please explain further the statement in your response where you indicate that you believe these metrics only provide ancillary information to the disclosure in your filings and tell us why you do not believe disclosing these metrics would provide meaningful information to your investors.

The Company respectfully advises the Staff that it believes annualized net new sales and the number of new customers which are discussed from time to time during quarterly earnings conference calls only provide ancillary information to the disclosure in the Company's periodic reports because these metrics do not necessarily correlate as closely with the Company's revenue results and operating performance as do fluctuations in the trailing twelve-month contract renewal rate and cancellation rate for annual subscription-based services.

The Company respectfully advises the Staff that while the

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number of new customers provides some insight into the Company's success and potential future revenue results, the financial success of the Company is more dependent on the retention of existing customers, which can be measured by the trailing twelve-month contract renewal rate. Additionally, similar to the number of subscribers metric discussed in the Company's prior response, the Company has not disclosed the number of new customers for each period in its filings because a wide range of contract rates exists among the numerous services provided by the Company. These contract rates are generally based on the number of sites, number of users, organization size, the client's business focus, geography and the number and type of services to which a client subscribes. For these reasons, the Company believes that fluctuations in the number of new customers only provide ancillary information to the disclosure in its filings and is not as meaningful to its investors as the trailing twelve-month contract renewal rate and cancellation rate for annual subscription-based services.

As previously indicated, the Company respectfully advises that it believes annualized net new sales of subscription services, discussed from time to time during quarterly earnings conference calls, only provides ancillary information to the disclosure in the Company's periodic reports. However, the Company acknowledges the Staff's comment and in future filings will enhance its disclosures to include this metric.

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We note your response to prior comment 2. Please explain further how you determined the $2.98 million of foreign income taxes, net effect and the offsetting increase in the valuation allowance in your rate reconciliation table.

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In this regard, it appears that the $8.1 million of expected federal income tax provision at the statutory rate includes a $4.5 million foreign tax benefit relating to the $13.0 million of foreign losses incurred during the year ended December 31, 2012. Taking into consideration the additional $2.9 million foreign income tax benefit reflected in your rate reconciliation, it appears that the total foreign tax benefit was $7.4 million for the year ended December 31, 2012. Please clarify how an increase in the valuation allowance of $2.9 million reflects a full valuation allowance for the tax benefits associated with the foreign operating losses recognized in 2012.

The Company respectfully advises the Staff that the foreign losses are generated by United Kingdom ("U.K.") subsidiaries which are disregarded entities under Treasury regulations section 301.7701-3. As a result, the losses incurred by these subsidiaries of approximately $13.0 million generated a federal income tax benefit of approximately $4.5 million in 2012, calculated at the United States enacted statutory tax rate of 35%.

These subsidiaries are also subject to U.K. income tax, thereby generating a U.K. tax benefit by increasing the U.K. net operating loss carryover.

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The $13.0 million of losses generated a foreign tax benefit of approximately $3.0 million in 2012, calculated at the U.K. enacted statutory tax rate of 23% and that benefit was reflected in the Company's rate reconciliation. Due to the cumulative loss in recent years by these subsidiaries, the Company established a valuation allowance related to the U.K. net operating loss carryovers. As a result, the Company's rate reconciliation disclosed a $3.0 million increase in the valuation allowance, reflecting a full valuation allowance for the foreign tax benefit.

The Company acknowledges that: (i) the Company is responsible for the adequacy and accuracy of the disclosure in the filing; (ii) it is the position of the Securities and Exchange Commission (the “Commission”) that comments by the Commission Staff or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing, and (iii) it is the Commission's position that the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

The Company believes that the foregoing is responsive to your comments. The Company understands that you will be reviewing its responses and may have additional comments. If you have any questions concerning the Company's responses please feel free to contact the undersigned at (202) 336-6920 or via email at bradecki@costar.com or Jonathan Coleman at (202) 336-6997 or via email at jcoleman@costar.com.

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We note from your response to prior comment 2 that your foreign losses are generated by U.K. subsidiaries which are disregarded entities under Treasury regulations and as a result, the losses incurred by these subsidiaries generated a federal income tax benefit of approximately $4.5 million in 2012. You also state that the losses incurred by these subsidiaries generated a foreign tax benefit calculated at the U.K.

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statutory rate. Tell us what consideration you gave to disclosing the impact of your U.K. subsidiaries being treated as disregarded entities, including the federal and foreign tax rates that will apply to these earnings, and whether federal income taxes incurred or benefits received will be reduced by any foreign taxes incurred or benefits received. In this regard, we note that your current disclosure only indicates that a valuation allowance was established for the foreign deferred tax assets due to the cumulative loss in recent years in those jurisdictions. There is no indication that you have recognized a federal income tax benefit relating to these losses.

The Company respectfully advises the Staff that it considered disclosing the impact of the Company’s United Kingdom (“U.K.”) subsidiaries being treated as disregarded entities for United States (“U.S.”) income tax purposes, including the information described in the Staff's comment. Because the Company’s operating results from its U.K. subsidiaries were significantly less than the Company’s consolidated operating results, disclosing the impact of the treatment of the Company’s U.K. subsidiaries as disregarded entities for U.S.

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income tax purposes, or the other information described in the Staff’s comment, was not deemed to have a significant effect on the related disclosure. Additionally, the Company respectfully advises that it could not identify a specific rule within Accounting Standards Codification 740-10-50, Income Taxes, or Rule 4-08(h) of Regulation S-X requiring such disclosure.

However, the Company acknowledges the Staff's comment and respectfully advises the Staff that in future filings it will include additional disclosure in the Income Tax Note of its Form 10-K to provide supplemental information about the Company’s U.K. subsidiaries that are treated as disregarded entities for U.S. income tax purposes. The Company currently expects such disclosure will read as follows but this disclosure may change based on the facts and circumstances at the time of the filings:

“The Company’s U.K. subsidiaries with foreign losses are disregarded entities for U.S. income tax purposes. Accordingly, the losses from these disregarded entities are included in the Company’s consolidated federal income tax provision at the statutory rate. Federal income taxes attributable to income from these disregarded entities are reduced by foreign taxes paid by those disregarded entities.”

The Company acknowledges that: (i) the Company is responsible for the adequacy and accuracy of the disclosure in the filing; (ii) it is the position of the Securities and Exchange Commission (the “Commission”) that comments by the Commission Staff or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing, and (iii) it is the Commission's position that the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

The Company believes that the foregoing is responsive to your comment. The Company understands that you will be reviewing its response and may have additional comments. If you have any questions concerning the Company's response please feel free to contact the undersigned at (202) 336-6920 or via email at bradecki@costar.com or Jonathan Coleman at (202) 336-6997 or via email at jcoleman@costar.com.

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We note your disclosure on page F-28 that EBITDA for your international segment has been negative for the past three years. We further note your disclosure on page F-24 that the company has not had sufficient taxable income historically to utilize the foreign deferred tax assets, and it is uncertain whether you will generate sufficient taxable income in the future to utilize the foreign deferred tax assets.

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However, your disclosure on page 37 indicates that as of October 31, 2011, the estimated fair value of each of your reporting units substantially exceeded the carrying value of your reporting units. Please tell us the percentage by which the fair value of your international reporting unit exceeded the carrying value. Further, tell us how the actual cash flows achieved, to date, for your international reporting unit compare to the projected cash flows used in your discounted cash flows analysis, and what consideration you gave to disclosing the degree of uncertainty associated with the key assumptions used in determining fair value and the potential events and/or changes in circumstances that could reasonably be expected to negatively affect the key assumptions used in determining fair value.

The Company respectfully advises the Staff that the fair value of its international reporting unit exceeded the carrying value by approximately 117%.

The actual cash flows achieved for the international reporting unit for the period from October 1, 2011 to June 30, 2012 were favorable compared to those used in the discounted cash flows analysis. Further, the Company continues to make investments in the international reporting unit which the Company believes will increase the total revenue earned by that reporting unit in the future.

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The Company believes that its investments and the resulting increases in revenue will result in positive cash flows in the international reporting unit in the future. As a result, the Company continues to believe that the projected cash flows used in its discounted cash flow analysis are reflective of the projected performance of the international reporting unit.

The Company respectfully advises the Staff that it considered disclosing the degree of uncertainty associated with the key assumptions used in determining the fair value of its international reporting unit and the potential events and/or changes in circumstances that could reasonably be expected to negatively affect the key assumptions used in determining fair value. After consideration, the Company did not disclose this supplemental information because the fair value of its international reporting unit was substantially in excess of the carrying value. In the future, should the Company determine that the fair value of the international reporting unit is not substantially in excess of its carrying value, the Company will consider disclosing supplemental information.

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We note your recent accounting pronouncements disclosures include a discussion of standards that you have already adopted as well as those that were recently issued but not yet adopted. Please tell us why you believe a separate discussion of those standards that were adopted during each of the periods presented is necessary here.

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In this regard, it would seem that a discussion of recently adopted standards, which materially impact your operations, would be more appropriate within the applicable subheadings in your summary of significant accounting policies. As such, please consider revising your disclosures in future filings to limit your discussion here to the disclosures required by SAB Topic 11M - Disclosure of the Impact that Recently Issued Accounting Standards Will Have on the Financial Statements of the Registrant When Adopted in a Future Period.

The Company acknowledges the Staff's comment regarding the requirements of SAB Topic 11M. In future filings the Company will limit its disclosures in the “Recent Accounting Pronouncements” section to a discussion of recently issued accounting standards that the Company believes will have a material effect on its financial statements when adopted in a future period. Read in the reply ↗

We note that you incorporated LoopNet’s December 31, 2011 Form 10-K and March 31, 2012 Form 10-Q into the Form 8-K/A filed on June 22, 2012. Please tell us how you considered Exchange Act Rule 12b-23(a)(3) to include the pertinent pages of the Form 10-K and Form 10-Q as an exhibit to the Form 8-K.

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In this regard, the financial statements that were incorporated by reference should have been filed with the Form 8- K/A. We refer you also to Compliance and Disclosure Interpretation 234.01 of the Exchange Act Rules available at http://www.sec.gov/divisions/corpfin/guidance/exchangeactrules-interps.htm.

The Company acknowledges the Staff's comment regarding the requirements of Exchange Act Rule 12b-23. The Company respectfully informs the Staff that on August 14, 2012, the Company filed an amendment to the Form 8-K to include the pertinent pages of LoopNet's December 31, 2011 Form 10-K and March 31, 2012 Form 10-Q as exhibits to the Form 8-K.

In accordance with your letter, the Company acknowledges that: (i) the Company is responsible for the adequacy and accuracy of the disclosure in the filing; (ii) it is the position of the Securities and Exchange Commission (the “Commission”) that

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comments by the Commission staff or changes to disclosure in response to staff comments do not foreclose the Commission from taking any action with respect to the filing, and (iii) it is the Commission's position that the Company may not assert staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

We believe that the foregoing is responsive to your comments. We understand that you will be reviewing the Company's responses and may have additional comments. If you have any questions concerning the Company's response please feel free to contact the undersigned at (202) 336-6920 or via email at bradecki@costar.com or Jonathan Coleman at (202) 336-6997 or via email at jcoleman@costar.com.

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We note your response to prior comment 1. To the extent your international operations have not achieved positive cash flows to date or have achieved minimal cash flows to date, and your future projected cash flows are largely dependent on investments in these operations and expected future increases in revenues from these investments, tell us what consideration you gave to disclosing these factors and the potential

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events or changes in circumstances that could reasonably be expected to negatively affect your analysis. See Section V of SEC Release No. 33-8350.

The Company respectfully advises the Staff that the future projected cash flows from its international operations are not largely dependent on significant, future investments in those operations.

The Company considered disclosing the degree of uncertainty associated with the key assumptions used in determining the fair value of its international reporting unit. After consideration, the Company did not disclose this supplemental information because the fair value of its international reporting unit was substantially in excess of the carrying value.

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The Company considered the guidance in Section V of SEC Release No. 33-8350 and concluded there were no potential events and/or changes in circumstances that could reasonably be expected to negatively affect the Company's analysis.

The Company acknowledges the Staff's comment and respectfully advises the Staff that in future filings the Company will add supplemental information to its existing disclosures regarding its impairment analysis within Management's Discussion and Analysis of Financial Condition and Results of Operations. The Company currently expects such disclosure will read as follows but this disclosure may change based on the facts and circumstances at the time of future filings:

“When performing our impairment analysis, we estimate the fair value of each reporting unit based on a projected discounted cash flow model that includes significant assumptions and estimates including our discount rate, growth rate and future financial performance. Assumptions about the discount rate are based on a weighted average cost of capital for comparable companies. Assumptions about the growth rate and future financial performance of a reporting unit are based on our forecasts, business plans, economic projections and anticipated future cash flows. These assumptions are subject to change from period to period and could be adversely impacted by the uncertainty surrounding global market conditions, commercial real estate conditions, and the competitive environment in which we operate. Changes in these or other factors could negatively affect our reporting units' fair value and potentially result in impairment charges. Such impairment charges could have an adverse effect on our results of operations.”

The Company acknowledges that: (i) the Company is responsible for the adequacy and accuracy of the disclosure in the filing; (ii) it is the position of the Securities and Exchange Commission (the “Commission”) that comments by the Commission Staff or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing, and (iii) it is the Commission's position that the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

We believe that the foregoing is responsive to your comment. We understand that you will be reviewing the Company's response and may have additional comments. If you have any questions concerning the Company's response please feel free to contact the undersigned at (202) 336-6920 or via email at bradecki@costar.com or Jonathan Coleman at (202) 336-6997 or via email at jcoleman@costar.com.

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We note from your response to prior comment 1 that the future projected cash flows from your international operations are not largely dependent on significant future investments in these operations. However, we note the disclosures on page F-28 of your Form 10-K and page 23 of your recent Form 10-Q that EBITDA for your international segment has been negative for the past three years and the six months ended June 30,

Rest of the question

2012, respectively. We also note from your disclosure on page F-24 that the company has not had sufficient taxable income historically to utilize the foreign deferred tax assets and it is uncertain whether you will generate sufficient taxable income in the future. In addition, your response to comment 1 in your letter dated August 14, 2012 indicates that the company will continue to make investments in the international reporting unit, which you believe will increase the total revenues earned by that reporting unit in the future and that you believe your investments and the resulting increases in revenue will result in positive cash flows in the international reporting unit in the future. Please clarify your current response in light of the disclosures noted herein and the information provided in your prior response and explain further the source of the projected cash flows used in your impairment analysis. To the extent the projected cash flow assumptions differ significantly from your historical results for your international operations, please explain further for us the source of your projected cash flows and any uncertainties associated with achieving such results.

To address the Staff's additional inquiries and to clarify the previous responses submitted by the Company, the response below provides additional information regarding the Company's historical results and the projected future performance of its international reporting unit.

The Company respectfully advises the Staff that the Company made investments in development beginning in 2011 to upgrade its international platform of services and expand the coverage of its service offerings within the international reporting unit.

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These development costs represent costs incurred to modify the Company's existing technology in the United States (“U.S.”) in order to sell a similar platform of service offerings within the international reporting unit. These development costs accelerated from 2011 to 2012 and are not currently expected to continue beyond 2012, which is consistent with the Company's assumptions about the timing of the development costs included in the Company's impairment analysis.

The Company acknowledges the Staff's reference to the disclosure on page F-28 of its Form 10-K and page 23 of its recent Form 10-Q of negative EBITDA for the international operating segment for the past three years and the six months ended June 30, 2012, respectively. Decreased revenue resulting from a depressed economic environment and the resulting downturn in the commercial real estate market contributed to negative EBITDA for the international reporting unit. Additionally, the accelerated investments described above for the development of the Company's upgraded international platform in 2011 and 2012 resulted in an increased cost structure, which also contributed to negative EBITDA for the international reporting unit.

The Company acknowledges the Staff's reference to the disclosure on page F-24 of its Form 10-K that the Company has not had sufficient taxable income historically to utilize the foreign deferred tax assets and it is uncertain whether the Company will generate sufficient taxable income in the future to utilize such deferred tax assets. Notwithstanding the Company's projections, it determined that a cumulative loss in recent years is a significant piece of negative evidence that is difficult to overcome when assessing whether a valuation allowance is needed. Based on the international reporting unit's successive years of negative pre-tax income, the Company believes the valuation allowance is appropriate. Although U.S. generally accepted accounting principles (“GAAP”) requires the Company to maintain a valuation allowance on its deferred tax assets, the Company expects that the financial performance of the international reporting unit will improve in the future for the reasons discussed below.

In 2012, the international reporting unit has achieved positive revenue growth through June 30, 2012, and the Company expects continued positive revenue growth in the international reporting unit from its existing platform through the end of 2012. The Company plans to release its upgraded platform of international service offerings at the end of 2012. In 2013, the Company expects revenue growth to continue to move towards positive growth levels experienced prior to the downturn in the commercial real estate market. For several years beyond 2013, due in part to the release of the upgraded platform of service offerings, the Company expects accelerated revenue growth for the international reporting unit. In addition, the Company expects operating expenses for the international reporting unit to decrease following completion of the development of the upgraded platform of international service offerings in 2012 and any related marketing efforts planned thereafter. As a result of the factors discussed above, the EBITDA results for the international reporting unit are expected to improve in 2013 and thereafter.

The primary source of the projected cash flows used in the Company's impairment analysis is revenue from international service offerings both under the existing platform and under the upgraded platform. The Company expects revenue from these sources will increase as a result of positive revenue growth from the existing platform as indicated above, anticipated further penetration of the Company's international subscription-based information services into a larger potential customer base for the upgraded platform and the successful cross-selling of the Company's service offerings under the upgraded platform to its customers in existing markets within the international reporting unit. The Company's projection of increased revenue for the international reporting unit is based on over 24 years of its historical experience growing its business, developing and launching new services, and expanding into new markets.

One of the key assumptions in the impairment analysis is the Company's growth rate. The 2012 actual revenue growth rate for the international reporting unit through June 30, 2012 exceeded the assumed revenue growth rate used in the impairment analysis, and the revenue growth rate for the remainder of 2012 is expected to continue to exceed the assumed revenue growth rate used in the impairment analysis. The Company continues to believe that the projected revenue growth rates it used in the impairment analysis for years beyond 2012 are reflective of the projected performance of the international reporting unit based on current commercial real estate market conditions and the fact that the assumed release date for the upgraded platform of service offerings for the international reporting unit is consistent with the release date used in the impairment analysis.

As discussed in the Company's prior response to comment 1, the actual cash flows achieved for the international reporting unit for the period from October 1, 2011 to June 30, 2012 were favorable compared to those used in the Company's impairment analysis. In summary, both the revenue growth rate and financial performance of the international reporting unit for the period from October 1, 2011 to June 30, 2012 have exceeded the assumptions used in the impairment analysis. Therefore, the Company continues to believe that the cash flow assumptions used in its impairment analysis are appropriate. These assumptions may change if there are significant changes in global market conditions, commercial real estate conditions or the competitive environment in which the Company operates.

As previously indicated, in future filings, the Company intends to modify its existing disclosures regarding its impairment analysis within Management's Discussion and Analysis of Financial Condition and Results of Operations. The Company currently expects such disclosure will read as follows but this disclosure may change based on the facts and circumstances at the time of the filings (underlining shows language added since previous response):

“When performing our impairment analysis, we estimate the fair value of each reporting unit based on a projected discounted cash flow model that includes significant assumptions and estimates including our discount rate, growth rate and future financial performance. Assumptions about the discount rate are based on a weighted average cost of capital for comparable companies. Assumptions about the growth rate and future financial performance of a reporting unit are based on our forecasts, business plans, economic projections and anticipated future cash flows. Our assumptions regarding the future financial performance of the International reporting unit reflect our expectation that in 2013 the expenses for our International reporting unit will decrease, as we expect to complete our initiatives to upgrade the platform of services and expand the coverage of our service offerings within our International segment by the end of 2012. Additionally, our assumptions regarding the future financial performance of the International reporting unit reflect our expectation that revenues will increase as a result of further penetration of our international subscription-based information services and the successful cross-selling of our services to our customers in existing markets due to the release of our upgraded international platform and expansion of coverage of our international service offerings. These assumptions are subject to change from period to period and could be adversely impacted by the uncertainty surrounding global market conditions, commercial real estate conditions, and the competitive environment in which we operate. Changes in these or other factors could negatively affect our reporting units' fair value and potentially result in impairment charges. Such impairment charges could have an adverse effect on our results of operations.”

The Company acknowledges that: (i) the Company is responsible for the adequacy and accuracy of the disclosure in the filing; (ii) it is the position of the Securities and Exchange Commission (the “Commission”) that comments by the Commission Staff or changes to disclosure in response to Staff comments do not foreclose the Commission from taking any action with respect to the filing, and (iii) it is the Commission's position that the Company may not assert Staff comments as a defense in any proceeding initiated by the Commission or any person under the federal securities laws of the United States.

We believe that the foregoing is responsive to your comment. We understand that you will be reviewing the Company's response and may have additional comments. If you have any questions concerning the Company's response please feel free to contact the undersigned at (202) 336-6920 or via email at bradecki@costar.com or Jonathan Coleman at (202) 336-6997 or via email at jcoleman@costar.com.

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