3. Acquisitions

Over the last three years, we acquired six businesses in the media services industry. The objective of each transaction was to expand our product offerings, customer base, global digital distribution network, and/or to better serve the advertising community. We expect to realize operating synergies from each of the transactions, or the acquired operation has created, or will create, opportunities for the acquired entity to sell its services to our customers. Both of these factors resulted in a purchase price that contributed to the recognition of goodwill. The acquisitions are summarized as follows:

Business Acquired		Net Assets Acquired (in millions)		Form of Consideration

North Country	July 31, 2012	$	3.7	Cash
Peer 39	April 30, 2012		15.7	Cash/Stock
EyeWonder	September 1, 2011		61.0	Cash
MediaMind	July 26, 2011		499.3	Cash
MIJO	April 1, 2011		43.8	Cash
Match Point	October 1, 2010		27.7	Cash

Each of the acquired businesses has been included in our results of operations since the date of closing. Accordingly, the operating results for the periods presented are not entirely comparable due to these acquisitions and related costs. In each acquisition, the excess of the purchase price over the fair value of the net identifiable assets acquired has been allocated to goodwill. A brief description of each acquisition is as follows:

Purchase of North Country

On July 31, 2012, we acquired the assets and operations of privately-held North Country Media Group, Inc. ("North Country"), a market leader in the customization and distribution of direct response advertising, for $1.8 million in cash plus contingent consideration we valued at $1.9 million. The contingent consideration payment ranges from $0 to $1.9 million. Payment of the contingent consideration is dependent upon North Country meeting three separate future revenue targets through July 2014. North Country provides media advertising services to advertising agencies and advertisers participating in the direct response advertising industry and is part of our television segment.

The purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values. We allocated $1.1 million to customer relationships, $0.2 million to trade name and $0.5 million to noncompetition agreements. The customer relationships, trade name and noncompetition agreements acquired in the transaction are being amortized on a straight-line basis over 10 years, 6 years and 5 years, respectively. The weighted average amortization period is 8.2 years. The goodwill and intangible assets created in the acquisition are deductible for tax purposes. The acquired assets include $0.4 million of gross receivables which we recognized at their estimated fair value of $0.4 million. For 2012, we recognized $1.4 million of revenue and $0.3 million of income before income taxes from North Country in our consolidated results of operations. The North Country purchase price allocation is final.

Purchase of Peer 39

On April 30, 2012, we acquired Peer39, Inc. ("Peer 39"), a provider of webpage level data for approximately $15.7 million in cash, shares of our common stock and an installment payment. Peer 39, based in New York City, is the leading provider of data based on the content and structure of web pages for the purpose of improving the relevance and effectiveness of online display advertising. Peer 39 analyzes web pages in terms of quality, safety and brand category allowing advertisers to make better buying decisions. In connection with the transaction, we (i) paid $10.1 million in cash, (ii) issued 357,143 shares of our common stock and (iii) agreed to pay up to $2.3 million in an installment payment within one year of the acquisition. Peer 39's operating results are included in our online segment.

The purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values. In 2012 we finalized the Peer 39 purchase price allocation. The customer relationships, trade name, developed technology and noncompetition agreements acquired in the transaction are being amortized on a straight-line basis over 10 years, 10 years, 6 years and 4 years, respectively. The weighted average amortization period is 7.1 years. Earlier, we had planned on making an election to treat the acquisition as an asset purchase for tax purposes; however, upon further analysis we did not make the election. Accordingly, the goodwill and intangible assets created in the acquisition are not deductible for income tax purposes. The acquired assets include $0.8 million of gross receivables which we recognized at their estimated fair value of $0.8 million. For 2012, we recognized $4.4 million of revenue and a $1.4 million loss before income taxes from Peer 39 in our consolidated results of operations.

Purchase of EyeWonder and Transfer Majority of Chors

On September 1, 2011, we paid $61.0 million in cash to acquire all the equity interests of EyeWonder LLC ("EyeWonder") and chors GmbH (a German limited liability company "Chors") from Limelight Networks, Inc. ("Limelight"), a NASDAQ listed company. The $61.0 million purchase price excluded $5 million we held back to fund allowable transaction costs in the first year after the acquisition. Within one-year of the purchase date, we spent the entire $5 million fund on transaction costs we believe are allowable and therefore have not recognized any amount as a payable to the EyeWonder seller. As part of the EyeWonder purchase agreement, we agreed to collect receivables on behalf of the EyeWonder seller. At December 31, 2012, we had $2.8 million included in our receivables attributable to acquired balances and had an offsetting payable to the EyeWonder seller. See Note 6.

On April 2, 2012, in consideration of $0.1 million, we transferred the majority of the assets, agreements and employees of Chors to 24/7 Real Media Deutschland GmbH ("24/7 Germany"), a German limited liability company, and an affiliate of WPP plc, an international advertising and media investment management firm. In addition, 24/7 Germany agreed to refer or transition no less than $5.0 million worth of revenue (as defined) to us within one year of the closing. In the event the $5.0 million revenue commitment is not met, 24/7 Germany is required to pay us the shortfall up to a maximum of $2.0 million as a penalty. For the three months ended March 31, 2012, we reported $1.3 million of revenue and $0.3 million of income before income taxes from Chors. We did not report a significant gain or loss in connection with the transfer.

EyeWonder is a leading provider of interactive digital advertising products and services, including online video and rich media solutions. EyeWonder is recognized globally for its technological expertise around targeting. The purchase price was paid from cash on hand. In connection with the acquisition, we incurred transaction costs of $1.9 million, which are included in acquisition and integration expense. EyeWonder's operating results are included in our online segment.

The purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values. The purchase price allocation was finalized during 2012. Substantially all of the goodwill and other intangible assets created in the acquisition are deductible for income tax purposes. We are amortizing customer relationships, trade name, developed technology and noncompetition agreements over 12 years, 5 years, 3 years and 3-5 years, respectively. The acquired assets include $10.1 million of gross receivables, which we recognized at their estimated fair value of $10.1 million. For 2011, we recognized $12.4 million of revenue and a $0.9 million loss before income taxes from EyeWonder in our consolidated results of operations.

Purchase of MediaMind

On July 26, 2011, pursuant to a tender offer and subsequent merger, we acquired all of the outstanding shares of MediaMind Technologies, Inc. ("MediaMind"), for $499.3 million in cash, which includes $71.4 million paid to the holders of vested stock options that were "in-the-money." In addition, we incurred transaction costs of $11.7 million, which are included in acquisition and integration expense. In connection with the acquisition, we borrowed $490 million from our Amended Credit Facility (see Note 7). Prior to the acquisition, MediaMind was a NASDAQ listed company that traded under the symbol MDMD. MediaMind's operating results are included in our online segment.

MediaMind, with its principal office located in Herzeliya, Israel, is a leading global provider of digital advertising campaign management solutions to advertising agencies and advertisers. MediaMind provides its customers with an integrated campaign management platform that helps advertisers and agencies manage their advertising budgets across multiple digital media channels and formats, including online, mobile, rich media, in-stream video, display and search. Using the campaign management platform, MediaMind's customers can plan, create, deliver, measure, track and optimize their digital media campaigns. MediaMind markets its services directly in the United States and through its subsidiaries in Israel, the United Kingdom, France, Germany, Australia, Spain, Japan, China, Mexico and Brazil.

The purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values. The purchase price allocation was finalized during 2012.

The goodwill and other intangible assets created in the acquisition are not deductible for income tax purposes. We are amortizing customer relationships, trade name, developed technology and noncompetition agreements over 11 years, 10 years, 4 years and 5 years, respectively. The acquired assets included $32.7 million of gross receivables, which we recognized at their estimated fair value of $32.3 million. For 2011, we recognized $45.2 million of revenue and a $2.5 million loss before income taxes from MediaMind in our consolidated results of operations.

Purchase of MIJO

On April 1, 2011, we acquired substantially all the assets and operations, and assumed certain liabilities, of privately-held MIJO Corporation ("MIJO") for $43.8 million in cash. MIJO, established in 1978 and based in Toronto, Canada, provides broadcast and digital media services to the Canadian advertising, entertainment and broadcast industries. The purchase price was paid from cash on hand. In connection with the acquisition, we incurred transaction costs of $0.3 million which are included in acquisition and integration expense. MIJO's operating results are included in our television segment.

The purchase price was allocated to the assets acquired and liabilities assumed based upon their estimated fair values. The customer relationships, trade name, developed technology and noncompetition agreements acquired in the transaction are being amortized over 15 years, 10 years, 6 years and 3-5 years, respectively. The goodwill and intangible assets created in the acquisition are deductible for income tax purposes. The acquired assets include $4.7 million of gross receivables which we recognized at their estimated fair value of $4.7 million. For 2011, we recognized $16.2 million of revenue and $2.5 million of income before income taxes from MIJO in our consolidated results of operations.

Purchase of Match Point

On October 1, 2010, we acquired the assets and operations of privately-held Match Point Media LLC and its divisions, Treehouse Media Services, Inc. and Voltage Video, Inc. (collectively referred to as "Match Point"), a market leader in the customization and distribution of direct response advertising, for $26.7 million in cash, plus up to $3.0 million in contingent payments depending on Match Point's 2010 adjusted earnings, and its 2011 and 2012 adjusted revenues. The fair value of the contingent payments was estimated at $2.6 million as of the acquisition date. The contingent payments are based on three separate measurement criteria with a maximum payment of $1.0 million each. The 2010 adjusted earnings criterion was met, which resulted in our payment of $1.0 million during 2011. The 2011 adjusted revenue criterion was not met, which resulted in us reducing cost of revenues by $0.9 million at the end of 2011. At present, it appears the vast majority of the $1.0 million 2012 earnout payment will be met. See Note 8.

In connection with the acquisition, we incurred transaction costs of $0.3 million, which are included in acquisition and integration expense. Match Point provides media advertising services to advertising agencies and advertisers participating in the direct response advertising industry and its operating results are included in our television segment.

The purchase price has been allocated to the assets acquired and liabilities assumed based upon their estimated fair values. We are amortizing the customer relationships, trade names and noncompetition agreements over a weighted average term of 10 years, 6 years and 5 years, respectively. The goodwill and intangible assets created in the acquisition are deductible for income tax purposes. The acquired assets included $3.0 million of gross receivables which we recognized at their estimated fair value of $2.4 million. For 2010, we recognized $4.9 million of revenue and $0.7 million of income before income taxes from Match Point in our consolidated results of operations.

Purchase Price Allocations

The following table summarizes the estimated fair values of the assets acquired and liabilities assumed at the respective dates of acquisition for the above referenced transactions (in millions).

Category	North Country			Peer 39			EyeWonder			MediaMind			MIJO			Match Point

Current assets	$	0.5		$	2.4		$	13.4		$	139.0		$	5.1		$	2.8
Property and equipment		0.7			0.7			2.3			9.1			4.0			0.8
Other assets		—			0.5			1.6			12.7			—			—
Customer relationships		1.1			3.1			10.7			62.4			7.8			8.7
Trade names		0.2			0.2			1.8			10.0			1.8			1.7
Developed technology		—			1.8			1.3			14.3			2.6			—
Noncompetition agreements		0.5			1.0			2.2			7.6			4.6			3.8
Goodwill		0.8			7.2			43.4			292.1			19.5			11.5

Total assets acquired		3.8			16.9			76.7			547.2			45.4			29.3
Less deferred tax liabilities		—			—			(2.3	)		(19.3	)		—			—
Less other liabilities assumed		(0.1	)		(1.2	)		(13.4	)		(28.6	)		(1.6	)		(1.6	)

Net assets acquired	$	3.7		$	15.7		$	61.0		$	499.3		$	43.8		$	27.7

Pro Forma Information

The following pro forma information presents our results of operations for the years ended December 31, 2012 and 2011 as if (i) the acquisitions of North Country, Peer 39, EyeWonder, MediaMind and MIJO and (ii) the disposition of the Chors assets, had occurred on January 1, 2011 (in thousands, except per share amounts). A table of actual amounts is provided for reference.

	As Reported Years Ended December 31,					Unaudited Pro Forma Years Ended December 31,

	2012			2011		2012			2011
Revenue	$	386,613		$	324,257	$	388,655		$	406,224
Income (loss) from continuing operations		(238,755	)		26,537		(240,114	)		6,417
Income (loss) per share—continuing operations:
Basic	$	(8.69	)	$	0.96	$	(8.70	)	$	0.23
Diluted	$	(8.69	)	$	0.95	$	(8.70	)	$	0.23