OPERATING SEGMENTS

6 Months Ended

Jun. 30, 2012

Segment Reporting [Abstract]

OPERATING SEGMENTS

2.           OPERATING SEGMENTS

We operate in two business segments: data center services and IP services. The data center services segment includes colocation services, which involves providing physical space within our data centers, as well as associated services such as power, interconnection, environmental controls and security. This segment also includes hosting services in which customers own and manage their software applications and content, while we provide and maintain the hardware, operating system, data center infrastructure and interconnection. Hosting services include our managed hosting offering in which customers receive dedicated hardware environments. Our data center services also include our cloud computing, storage business and related software services. The IP services segment includes our patented Performance IP™ service, Accelerated IP or XIP™, CDN services and flow control platform (“FCP”) products.

The following table shows operating results for our business segments, along with reconciliations from segment profit to income (loss) before income taxes and equity in (earnings) of equity-method investment:

	Three Months Ended June 30,							Six Months Ended June 30,
	2012				2011			2012			2011
Revenues:
Data center services	$	41,493		$		32,481		$	81,431		$	64,023
IP services		27,194				27,929			54,284			55,791
Total revenues		68,687				60,410			135,715			119,814
Direct costs of network, sales and services, exclusive of depreciation and        amortization:
Data center services		22,649				19,733			43,619			38,263
IP services		9,992				10,836			20,177			21,336
Total direct costs of network, sales and services, exclusive of depreciation    and amortization		32,641				30,569			63,796			59,599
Segment profit:
Data center services		18,844				12,748			37,812			25,760
IP services		17,202				17,093			34,107			34,455
Total segment profit		36,046				29,841			71,919			60,215
Restructuring		645				1,304			688			1,492
Other operating expenses, including direct costs of customer support, depreciation and amortization		35,310				30,208			69,432			61,282
Income (loss) from operations		91				(1,671	)		1,799			(2,559	)
Non-operating expense		2,008				923			3,634			1,609
Loss before income taxes and equity in (earnings) of equity-method investment	$	(1,917	)	$		(2,594	)	$	(1,835	)	$	(4,168	)