Note 3 - Balance Sheet Components

Intellectual Property Prepaid Royalties

Total amortization for these license agreements in 2011 and 2010 were $761,000 and $694,000, respectively. As of December 31, 2011, the Company had a balance of $4.3 million in unamortized prepaid royalties. Amortization of these licenses is estimated as follows (in thousands):

Year Ending:
2012	$	833
2013		833
2014		815
2015		498
2016		389
Thereafter		980
	$	4,348

Property and Equipment

	December 31,
	2011			2010
	In thousands
Computer and other equipment	$	102,061		$	87,531
Software		12,579			9,124
Leasehold improvements		9,559			7,133
Furniture and fixtures		3,762			3,006
Capitalized software and website development costs		35,842			25,173
		163,803			131,967
Less: Accumulated depreciation and amortization		(109,680	)		(92,241	)
Net property and equipment	$	54,123		$	39,726

Depreciation and amortization expense for the years ended December 31, 2011, 2010 and 2009 was $22,316,000, $23,429,000 and $25,122,000, respectively.

Total capitalized software and website development costs, net of accumulated amortization totaled $16,923,000 and $11,588,000 at December 31,2011 and 2010, respectively. Amortization of capitalized costs totaled approximately $5,371,000, $4,207,000 and $3,314,000 for the years ended December 31, 2011, 2010 and 2009, respectively.

Intangible Assets

Intangible assets are comprised of the following at December 31:

	Weighted Average Useful Life	December 31,
		2011			2010
		In thousands
Purchased technology	12 Years	$	76,843		$	9,878
Less: accumulated amortization			(12,771	)		(5,228	)
			64,072			4,650

Customer relationships	7 Years		35,235			1,935
Less: accumulated amortization			(4,742	)		(1,065	)
			30,493			870

Licenses and other	3 Years		871			416
Less: accumulated amortization			(420	)		(264	)
			451			152

Total		$	95,016		$	5,672

Purchased technology is amortized over a period ranging from two to sixteen years. Customer relationships are amortized over a period ranging from one to seven years. Licenses and other is amortized over a period ranging from two to five years.

Intangible asset amortization expense for the years ended December 31, 2011, 2010 and 2009 was $11,375,000, $1,849,000 and $1,838,000, respectively. Amortization of existing intangible assets is estimated to be as follows (in thousands):

Year Ending:
2012	$	14,931
2013		12,638
2014		11,762
2015		9,455
2016		8,321
Thereafter		37,909
	$	95,016

Goodwill

Changes in the carrying amount of goodwill are as follows (in thousands):

Balance, December 31, 2009	$	8,268
Acquisition of business		2,895
Goodwill adjustments		-
Balance, December 31, 2010		11,163
Acquisition of business		329,245
Goodwill adjustments		-
Balance, December 31, 2011	$	340,408

The increase in goodwill for the year ended December 31, 2011 was a result of the acquisition of Tiny Prints in April 2011.

Accrued Liabilities

	December 31,
	2011		2010
	In thousands
Accrued marketing expenses	$	19,072	$	11,766
Accrued production costs		16,939		8,551
Accrued income and sales taxes		11,106		7,342
Accrued compensation		5,485		5,701
Accrued purchases		1,504		1,313
Accrued other		5,165		4,158
	$	59,271	$	38,831