9. Acquisitions

Geek.com

In May 2010, the Company acquired the Geek.com web site for $1.0 million in cash. Geek.com is an online technology resource and community for technology enthusiasts and professionals.

The Company allocated the $1.0 million purchase price to the intangible assets acquired based on their estimated fair values. The excess purchase price over those fair values was recorded as goodwill. In determining the purchase price, the Company considered the audience and traffic patterns of Geek.com and the opportunity for the Company to monetize Geek.com through its direct and indirect sales channels as well as through its E-commerce business.

The fair values assigned to intangible assets acquired are based on management estimates and assumptions, including third-party valuations that utilize established valuation techniques appropriate for internet domains and web sites. The fair value of the domain name and web site was estimated by applying the cost approach. This fair value measurement is based on significant inputs that are not observable in the market and thus represents a Level 3 measurement. Key assumptions include the estimated costs to develop the web site. The purchase price was allocated as follows (in thousands):

Identified intangible assets	$	746
Goodwill		254
	$	1,000

The identified intangible assets are comprised of Geek.com's domain name and have a useful life of three years. In December 2010 the Company sold the Geek.com business to Ziff Davis, Inc. for $0.8 million. The net loss from Geek.com has been treated as a discontinued operation in the accompanying consolidated financial statements.

Ohloh

On September 30, 2010, the Company sold the Ohloh website, including the developed technology and related equipment required to operate the website to Black Duck for consideration of $1.3 million in cash and a convertible promissory note in the principal amount of $1.3 million, bearing annual interest at 3.25 percent and due on September 30, 2013. A portion of the cash, $0.3 million, was deposited in an escrow account to secure certain representations, warranties and covenants made by Geeknet to Black Duck. The escrow funds, less any claims were released to Geeknet as follows: (1) 25% on October 31, 2010, (2) 25% on November 30, 2010, (3) and the remaining 50% on September 30, 2011. The sale of the Ohloh website resulted in a $1.4 million gain, which is included in the gain on sale of asset.

The note receivable was subordinate to existing Black Duck debt, was secured by Black Duck assets, other than those securing Black Duck's senior debt, and was convertible into common or preferred stock in the event of a future financing activity, or acquisition of Black Duck. Geeknet valued the note receivable at $0.7 million using a discounted cash flow model based on interest rates of similar instruments adjusted for the credit, liquidity and security premiums on the note, and the timing and amount of expected cash flows.

On September 30, 2011, Geeknet agreed to discharge the obligations of Black Duck to pay and perform the note upon payment to Geeknet by Black Duck of $0.8 million. This resulted in a $0.1 million gain, which is included in the Gain on sale of an asset.