Subsequent Events

12 Months Ended

Dec. 31, 2011

Subsequent Events [Abstract]

Subsequent Events

14. Subsequent Events

On February 24, 2012, the Company acquired all of the outstanding shares of Corporation (iContact), a provider of cloud-based email and social marketing software that enables organizations to create and publish professional-quality emails designed to engage, educate and retain customers. The Company believes the acquisition will provide an email capability component to its marketing suite. The purchase price consisted of approximately $90,470,000 of cash, 401,701 shares of the Company’s common stock with a deemed value at issuance of approximately $9,330,000, and 1,000,000 shares of the Company’s newly-created Series A convertible preferred stock, with a deemed value at issuance of approximately $78,788,000, aggregating to approximately $168,588,000 of total consideration, net of $10,000,000 cash acquired. The Series A convertible preferred stock does not provide for interest and is entitled to participate in any dividends declared on the Company’s common stock on an as-converted basis. On February 24, 2017, the Company will be required to redeem each issued and outstanding share of Series A convertible preferred stock for $77.30 per share from its legally available funds, or such lesser amount of shares as it may then redeem under Delaware corporate law. Each share of Series A convertible preferred stock is convertible into shares of the Company’s common stock at any time at the option of the holder. For conversions occurring on or before February 24, 2017, each share of Series A convertible preferred stock may be converted into 3.0256 shares of common stock (subject to customary adjustments, and subject to increase if we fail to fulfill our obligation to redeem the preferred stock on February 24, 2017). On and after February 25, 2017, each share of Series A convertible preferred stock which has not been redeemed may be converted into 3.3282 shares of common stock (subject to customary adjustments). The acquisition will be accounted for under the purchase method of accounting and will recognize assets acquired and liabilities assumed at their fair values. The Company is currently evaluating the purchase price allocation and expects to complete it in the first quarter of 2012.

On February 27, 2012, the Company established a $15,000,000 revolving credit facility with a major lending institution which will be available for use until February 27, 2013. The revolving credit facility will be used for general working capital purposes and to provide increased liquidity and financial flexibility. The revolving credit facility has a one-year, annual renewable term and bears interest equal to the BBA LIBOR Daily Floating Rate plus 2.25%. In addition, the Company will pay a fee equal to 0.4% on any unused funds under the revolving facility. As collateral for extension of credit under the facility, the Company and certain of its subsidiaries granted security interests in favor of the institution of substantially all of their assets, and the Company pledged the stock of its directly owned domestic subsidiaries and 65% of the shares of its foreign subsidiaries.

On February 16, 2012, the Company decided that it will close its operations in China to place more focus on its investments and efforts on domestic operations and the cloud marketing space. The Company’s China-based subsidiaries contributed less than 1% of the Company’s consolidated revenues in 2011 and operated in a loss position. As of December 31, 2011, the Company’s China-based total assets and liabilities were $2,665,000 and $1,257,000, respectively. The Company intends to dissolve operations and settle all outstanding contracts within the next three months.

On March 14, 2012, the Company provided notification to certain employees of iContact that it is terminating their employment immediately in an effort to eliminate redundancies in the combined workforce. As a result, the employees affected will receive cash payments for severance and outplacement services of approximately $1,700,000. The Company expects to complete payments of these amounts through the second quarter of 2012.