Though Vignette (NASDAQ:VIGN) has been revamping its business, there are signs that its efforts may be coming undone. Investors have grown alarmed as the company's stock price plunged 13% to $18.35 following its Q1 earnings results this week.

The company develops software to help customers manage the growing volume of Word documents, spreadsheets, Web pages, SMS messages, emails, and other content rapidly clogging the corporate world.

As the fiscal first quarter showed, Vignette's not exactly revving up its growth. Overall revenue increased 2% to $47.6 million, and the company posted zero growth in license revenue.

Things were much better on the bottom line, though. Net income more than tripled to $4.8 million, or $0.16 per share. Earnings got a big boost from Vignette chopping sales & marketing expenses by 20%, to $13.9 million.

But the company can only cut so deep, and further cost reductions may ultimately hinder sales growth. On the conference call, management indicated that its sales force has undergone lots of turnover, and that the company needs to fill key positions. Keep in mind that it takes about nine months to get new salespeople up to full productivity.

In light of all this, it's no surprise that Vignette provided tepid guidance for Q2. The company expects revenue to range from $44 million to $49 million.

There's probably a floor on Vignette's stock price, however, thanks to recent buyout activity in its sector. IBM (NYSE:IBM) and Oracle (NASDAQ:ORCL) purchased content management companies at multiples of 3.37 to 3.61 times revenues, respectively. Other major players such as Hewlett-Packard (NYSE:HPQ), CA (NYSE:CA), and BEA Systems (NASDAQ:BEAS) would probably like to dip their toes in the sector as well.

Still, it's tough to predict when or if a buyout may arrive. In the meantime, Vignette is posting lackluster license revenue growth, and it faces challenges within its sales organization. As seen in yesterday's stock-price reaction, that's something investors don't like to see.

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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 3,449 out of 27,827 in CAPS.