OPERATING SEGMENTS

12 Months Ended

Dec. 31, 2012

Segment Reporting [Abstract]

OPERATING SEGMENTS

11. OPERATING SEGMENTS

We operate in two business segments: data center services and IP services. The data center services segment includes colocation, hosting and cloud services.  Colocation involves providing physical space within data centers and associated services such as power, interconnection, environmental controls and security while allowing our customers to deploy and manage their servers, storage and other equipment in our secure data centers. Hosting and cloud services involve the provision and maintenance of customers’ hardware, operating system software, data center infrastructure and interconnection, while allowing our customers to own and manage their software applications and content.  Our IP services segment includes our patented Performance IP™ service, CDN services and IP routing and hardware and software platform.

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

	Year Ended December 31,
	2012			2011			2010
Revenues:
Data center services	$	167,286		$	133,453		$	128,200
IP services		106,306			111,175			115,964
Total revenues		273,592			244,628			244,164
Direct costs of network, sales and services, exclusive of depreciation and amortization:
Data center services		90,604			78,907			82,761
IP services		40,350			41,403			44,662
Total direct costs of network, sales and services, exclusive of depreciation and amortization		130,954			120,310			127,423
Segment profit:
Data center services		76,682			54,546			45,439
IP services		65,956			69,772			71,302
Total segment profit		142,638			124,318			116,741
Exit activities, restructuring and impairments		1,422			2,833			1,411
Other operating expenses, including direct costs of customer support, depreciation and amortization		137,452			125,408			116,226
Income (loss) from operations		3,764			(3,923	)		(896	)
Non-operating expense		7,849			3,866			2,170
Loss before income taxes and equity in (earnings) of equity-method investment	$	(4,085	)	$	(7,789	)	$	(3,066	)

Total assets by segment are as follows (in thousands):

	December 31,
	2012		2011
Data center services	$	233,727	$	215,004
IP services		166,985		141,706
	$	400,712	$	356,710

For the years ended December 31, 2012, 2011 and 2010, revenues generated and long-lived assets located outside the U.S. were less than 10% of our total revenues and assets.

We present goodwill by segment in note 6, and as discussed in that note, we did not record an impairment charge during the years ended December 31, 2012 and 2011.