GOODWILL AND INTANGIBLE ASSETS

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Intangible Assets

In performing the annual goodwill impairment test as of December 31, 2011 no impairment was identified. Furthermore, the estimated fair values of each of our reporting units exceeded their carrying values by at least 44% as of December 31, 2011. In addition, no events or circumstances indicated the existence of a potential impairment in the Company's held and used intangible assets. Accordingly, an impairment test was not performed for the Company's held and used intangible assets.

As of December 31, 2011, the Company's reporting units consisted of the Affiliate Marketing, Media, Dotomi, Owned & Operated Websites, and Technology operating segments. As required by GAAP, the Company assigned goodwill to its reporting units. The Technology segment has no goodwill associated with it. Below is assigned goodwill by reporting unit (in thousands):



	Affiliate Marketing			Media			Dotomi		Owned & Operated Websites			Total
Balance at December 31, 2009	$	30,177		$	217,801		$	—	$	231,145		$	479,123
Accumulated impairment losses	—			(112,000		)	—		(210,000		)	(322,000		)
	30,177			105,801			—		21,145			157,123
Foreign currency translation adjustments	264			113			—		603			980
Acquisition	—			—			—		25,115			25,115
Balance at December 31, 2010	30,441			217,914			—		256,863			505,218
Accumulated impairment losses	—			(112,000		)	—		(210,000		)	(322,000		)
	30,441			105,914			—		46,863			183,218
Foreign currency translation adjustments	(78		)	(33		)	—		(308		)	(419		)
Tax adjustments	—			(9		)	—		—			(9		)
Acquisitions	—			46,497			207,746		—			254,243
Balance at December 31, 2011	30,363			264,369			207,746		256,555			759,033
Accumulated impairment losses	—			(112,000		)	—		(210,000		)	(322,000		)
	$	30,363		$	152,369		$	207,746	$	46,555		$	437,033

Goodwill with a book value of $46.6 million and $46.9 million is tax deductible as of December 31, 2011 and 2010, respectively.

The Company's acquired intangible assets as of December 31, 2011 are being amortized on a straight-line basis over the following weighted-average useful lives (in years):



	Weighted-Average Useful Life
Customer, affiliate and advertiser relationships	6
Trademarks, trade names and domain names	7
Developed technologies and websites	4
Covenants not to compete	1

The gross carrying amounts and accumulated amortization of the Company's acquired intangible assets were as follows at December 31, 2011 and 2010 (in thousands):



	Gross Balance		Accumulated Amortization			Net Carrying Amount
December 31, 2011:
Customer, affiliate and advertiser relationships	$	107,686	$	(42,238	)	$	65,448
Trademarks, trade names and domain names	33,583		(20,340		)	13,243
Developed technologies and websites	66,125		(33,277		)	32,848
Covenants not to compete	4,070		(1,602		)	2,468
Total intangible assets	$	211,464	$	(97,457	)	$	114,007

December 31, 2010:
Customer, affiliate and advertiser relationships	$	48,327	$	(39,507	)	$	8,820
Trademarks, trade names and domain names	29,811		(16,899		)	12,912
Developed technologies and websites	34,399		(23,690		)	10,709
Covenants not to compete	7,500		(6,416		)	1,084
Total intangible assets	$	120,037	$	(86,512	)	33,525

The increase in the gross intangible assets balance was primarily due to the acquisition of Dotomi in August 2011 of $82.5 million and the acquisition of Greystripe in April 2011 of $24.3 million, offset by a $7.5 million write-off of a fully amortized customer relationship asset and a $7.5 million write-off of a fully amortized non-compete agreement asset. Amortization expense related to intangible assets totaled $26.3 million, $20.6 million and $19.8 million for the years ended December 31, 2011, 2010 and 2009, respectively. The following table summarizes, by consolidated statement of operations line item the impact of amortization expense recognized for the years ended December 31, 2011, 2010 and 2009 (in thousands):



	Year Ended December 31,
	2011	2010	2009
Amortization of acquired developed technologies and websites included in consolidated cost of revenue	9,633	7,522	6,675
Amortization of acquired intangible assets included in operating expenses	16,646	13,089	13,128
Total	26,279	20,611	19,803

Estimated intangible asset amortization expense for the next five years ending December 31 and thereafter is as follows (in thousands):



	Amortization included in:
	Cost of revenue		Operating expenses		Total
2012	$	9,964	$	22,414	$	32,378
2013	$	9,343	$	15,514	$	24,857
2014	$	8,472	$	15,312	$	23,784
2015	$	4,760	$	15,253	$	20,013
2016	$	309	$	9,795	$	10,104
Thereafter	$	—	$	2,871	$	2,871

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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