Software developer LivePerson (NASDAQ:LPSN) has had a nice rally since August, going from $3.71 to $6.23. But to keep things moving, it will need to find more growth -- which likely means buying companies.

In the fiscal fourth quarter earnings report released last week, revenues increased 64% year over year to $10.3 million (there was a 16% sequential growth rate). Net income was $1.2 million or $0.03 per share, which compares to net income of $1.1 million or $0.03 per share in the same period a year ago.

LivePerson currently has software platform called Timpani that helps companies convert online visitors into customers. This is done using things like chat, email, voice, and self-service knowledge bases.

The company has both a thriving base of small-and-medium size businesses, and marquee customers such as Verizon (NYSE:VZ), Apple (NASDAQ:AAPL), and Bank of America (NYSE:BAC).

LivePerson certainly has a big market opportunity. While e-commerce continues to grow (a 14% compounded annual growth rate over the past five years), the conversion rate for Internet traffic is fairly low, under 3%. In other words, e-commerce players could certainly boost their bottom lines if that ratio was improved.

LivePerson expects revenues of $10.8 million to $10.9 million in the fiscal first quarter of 2007 and net income of $0.02 per share. Full-year guidance is for revenues of $48.5 million to $49.5 million and earnings of $0.09 per share.

The company certainly has serious competition. Rival RightNow (NASDAQ:RNOW) is getting lots of traction, and there is also potential competition from heavyweights Google (NASDAQ:GOOG), Yahoo! (NASDAQ:YHOO), and Microsoft (NASDAQ:MSFT).

The acquisition of Proficient Systems has been critical to LivePerson's recent growth, and the company has thus far been savvy with its deals. But it will probably need to do more acquisitions to keep the growth moving, which is certainly risky. Or perhaps the endgame is to position itself for a sale to a bigger player that wants a footprint in the sector.

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Fool contributor Tom Taulli does not own shares mentioned in this article. Yahoo! is a Stock Advisor pick, Microsoft is an Inside Value selection, and Bank of America has been chosen by Income Investor. The Fool's disclosure policy is here.