Vignette (NASDAQ:VIGN), which develops content management software, definitely impressed investors Thursday. On its earnings news, the stock rose 9.22% to $15.17. However, the company is still in transition and its results are likely to remain unsteady.

In the third quarter, revenues increased 5% to $49.3 million. Net income was $3.3 million, or $0.11 per share, compared with net income of $1.3 million and $0.04 per share for the same period a year ago.

Vignette develops sophisticated software to manage Web content using collaboration, records management, and portals. Hewlett-Packard (NYSE:HPQ) uses the software to help employees locate product descriptions and get competitive information on the @hp portal, which has about 12 million pages.

In late September, the company announced a new version of its Web content system: Vignette Content Management. The system has improved search, more publishing tools, and support for a variety of IT systems, such as Microsoft's (NASDAQ:MSFT) SQO.

As for the guidance for the next quarter, management forecasts revenues of $48 million to $53 million, with net income from $0.09 to $0.17 per share.

But keep in mind that Vignette is in the midst of a transition. In February, the company hired a new CEO, Mike Aviles. Then, in July, Pat Kelly came on board as the chief financial officer. And, according to the earnings press release, Alex Shootman has been hired to lead global sales and services.

In other words, the team will need some time to refine and execute its strategy.

Moreover, competitors are consolidating. IBM (NYSE:IBM), for instance, recently bought one of Vignette's major competitors -- FileNet. Thus, a prospective customer may select IBM because it can offer a comprehensive offering that goes beyond content management.

Microsoft is another threat. While its content management offerings have been weak, that's likely to change with the release of SharePoint 2007 in the fourth quarter.

Yes, Vignette had a good quarter. But, for the most part, there is still a lot of risk with this stock.

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Fool contributor Tom Taulli does not own shares mentioned in this article.