XNYS:DMD Demand Media Inc Quarterly Report 10-Q Filing - 6/30/2012

Effective Date 6/30/2012

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DMD 6.30.2012 10-Q


 
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
x
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

 For the quarterly period ended June 30, 2012
 
OR
o
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 
For the transition period from              to             
 
Commission file number 001-35048
DEMAND MEDIA, INC.
(Exact name of registrant as specified in its charter)
Delaware
 
20-4731239
(State or other jurisdiction of
incorporation or organization)
 
(I.R.S. Employer
Identification No.)
 
 
 
1299 Ocean Avenue, Suite 500
Santa Monica, CA
 
90401
(Address of principal executive offices)
 
(Zip Code)
(310) 394-6400
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes x  No o
 
Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).  Yes x  No o
 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer. See definition of “accelerated filer,” “large accelerated filer” and “smaller reporting company’ in Rule 12b-2 of the Exchange Act.
 
Large accelerated filer o
 
Accelerated filer o
 
 
 
Non-accelerated filer x
 
Smaller reporting company o
(Do not check if a smaller reporting company)
 
 
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act.):  Yes o  No x
 As of August 9, 2012, there were 85,043,856 shares of the registrant’s common stock, $0.0001 par value, outstanding.

 
 




DEMAND MEDIA, INC.

INDEX TO FORM 10-Q
 
 
 
Page
Part I
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Part II
 
 
 
 
 
 
 
 
 
 


i



Part I.     FINANCIAL INFORMATION
 
Item 1.         CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

Demand Media, Inc. and Subsidiaries
Consolidated Balance Sheets
(In thousands, except per share amounts) 
(unaudited)
 
December 31,
2011
 
June 30,
2012
Assets
 

 
 

Current assets
 

 
 

Cash and cash equivalents
$
86,035

 
$
94,187

Accounts receivable, net
32,665

 
37,511

Prepaid expenses and other current assets
8,656

 
8,958

Deferred registration costs
50,636

 
57,513

Total current assets
177,992

 
198,169

Deferred registration costs, less current portion
9,555

 
11,128

Deferred tax assets
42

 
1,758

Property and equipment, net
32,626

 
34,105

Intangible assets, net
111,304

 
94,525

Goodwill
256,060

 
256,037

Other assets
2,524

 
21,713

Total assets
$
590,103

 
$
617,435

Liabilities, Convertible Preferred Stock and Stockholders’ Equity
 

 
 

Current liabilities
 

 
 

Accounts payable
$
10,046

 
$
12,865

Accrued expenses and other current liabilities
33,932

 
31,496

Deferred tax liabilities
18,288

 
20,109

Deferred revenue
71,109

 
79,366

Total current liabilities
133,375

 
143,836

Deferred revenue, less current portion
14,802

 
16,200

Other liabilities
1,660

 
2,663

Total liabilities
149,837

 
162,699

Commitments and contingencies (Note 8)


 


Stockholders’ equity
 

 
 

Common Stock, $0.0001 par value. Authorized 500,000 shares; 85,946 and 87,889 shares issued, and 83,605 and 85,016 shares outstanding at December 31, 2011 and June 30, 2012, respectively
10

 
10

Additional paid-in capital
528,032

 
548,227

Accumulated other comprehensive income
59

 
38

Treasury stock at cost, 2,341 and 2,873 shares at December 31, 2011 and June 30, 2012, respectively
(17,064
)
 
(21,020
)
Accumulated deficit
(70,771
)
 
(72,519
)
Total stockholders’ equity
440,266

 
454,736

Total liabilities, convertible preferred stock and stockholders’ equity
$
590,103

 
$
617,435


The accompanying notes are an integral part of these condensed consolidated financial statements. 

1



Demand Media, Inc. and Subsidiaries

Consolidated Statements of Operations
 
(In thousands, except per share amounts)
 
(unaudited)
 
Three months ended June 30,
 
Six months ended June 30,
 
2011
 
2012
 
2011
 
2012
Revenue
$
79,455

 
$
93,055

 
$
158,978

 
$
179,289

Operating expenses:
 

 
 

 
 
 
 
Service costs (exclusive of amortization of intangible assets shown separately below)
37,869

 
44,367

 
75,523

 
85,629

Sales and marketing
9,286

 
11,660

 
18,869

 
22,053

Product development
9,642

 
10,587

 
18,893

 
20,711

General and administrative
13,787

 
15,754

 
30,811

 
31,149

Amortization of intangible assets
9,750

 
9,759

 
19,953

 
21,715

Total operating expenses
80,334

 
92,127

 
164,049

 
181,257

Income (loss) from operations
(879
)
 
928

 
(5,071
)
 
(1,968
)
Other income (expense):
 

 
 

 
 
 
 
Interest income
5

 
10

 
47

 
25

Interest expense
(163
)
 
(173
)
 
(325
)
 
(310
)
Other income (expense), net
(2
)
 
(45
)
 
(259
)
 
(64
)
Total other expense
(160
)
 
(208
)
 
(537
)
 
(349
)
Income (loss) before income taxes
(1,039
)
 
720

 
(5,608
)
 
(2,317
)
Income tax (expense)/benefit
(1,332
)
 
(626
)
 
(2,345
)
 
569

Net income (loss)
(2,371
)
 
94

 
(7,953
)
 
(1,748
)
Cumulative preferred stock dividends

 

 
(2,477
)
 

Net income (loss) attributable to common stockholders
$
(2,371
)
 
$
94

 
$
(10,430
)
 
$
(1,748
)
 
 

 
 

 
 
 
 
Net income (loss) per share - basic
$
(0.03
)
 
$

 
$
(0.14
)
 
$
(0.02
)
Net income (loss) per share - diluted
$
(0.03
)
 
$

 
$
(0.14
)
 
$
(0.02
)
 
 
 
 
 
 
 
 
Weighted average number of shares - basic
83,088

 
83,925

 
73,477

 
83,433

Weighted average number of shares - diluted
83,088

 
86,802

 
73,477

 
83,433

 
The accompanying notes are an integral part of these condensed consolidated financial statements.

 

2



Demand Media, Inc. and Subsidiaries

Consolidated Statements of Comprehensive Income
 
(In thousands, except per share amounts)
 
(unaudited)
 
Three months ended June 30,
 
Six months ended June 30,
 
2011
 
2012
 
2011
 
2012
Net income/(loss)
$
(2,371
)
 
$
94

 
(7,953
)
 
(1,748
)
Other comprehensive income/(loss)





 
 
 
 
Foreign currency translation adjustment
(16
)
 
(15
)
 
(8
)
 
(21
)
Other comprehensive income/(loss)
(16
)

(15
)
 
(8
)
 
(21
)
Comprehensive income/(loss)
$
(2,387
)

$
79

 
$
(7,961
)
 
$
(1,769
)
 
The accompanying notes are an integral part of these condensed consolidated financial statements.


3




Demand Media, Inc. and Subsidiaries

Consolidated Statements of Stockholders’ Equity
 
(In thousands)
 
(unaudited)
 
 
Common stock
 
Additional
paid-in
capital
amount
 
Treasury Stock
 
Accumulated
other
comprehensive
income
 
Accumulated
deficit
 
Total
Stockholders’
Equity
 
Shares
 
Amount
 
 
 
 
 
Balance at December 31, 2011
83,605

 
$
10

 
$
528,032

 
$
(17,064
)
 
$
59

 
$
(70,771
)
 
$
440,266

Issuance of stock under employee stock awards, net
1,943

 

 
5,724

 

 

 

 
5,724

Stock option windfall tax benefits

 

 
(88
)
 

 

 

 
(88
)
Repurchases of common stock to be held in treasury
(532
)
 

 

 
(3,956
)
 

 

 
(3,956
)
Stock-based compensation expense

 

 
14,559

 

 

 

 
14,559

Foreign currency translation adjustment

 

 

 

 
(21
)
 

 
(21
)
Net loss

 

 

 

 

 
(1,748
)
 
(1,748
)
Balance at June 30, 2012
85,016

 
$
10

 
$
548,227

 
$
(21,020
)
 
$
38

 
$
(72,519
)
 
$
454,736

 
The accompanying notes are an integral part of these condensed consolidated financial statements.



4



Demand Media, Inc. and Subsidiaries
Consolidated Statements of Cash Flows
 (In thousands)
 (unaudited)
 
Six months ended June 30,
 
2011
 
2012
Cash flows from operating activities
 

 
 

Net loss
$
(7,953
)
 
$
(1,748
)
Adjustments to reconcile net loss to net cash provided by operating activities
 

 
 

Depreciation and amortization
30,542

 
31,507

Deferred income taxes
1,726

 
105

Stock-based compensation
14,262

 
15,940

Windfall tax benefit from exercises of stock options
(90
)
 

Other
433

 
(488
)
Change in operating assets and liabilities, net of effect of acquisitions
 

 
 

Accounts receivable
(3,695
)
 
(4,872
)
Prepaid expenses and other current assets
555

 
(1,736
)
Deferred registration costs
(4,059
)
 
(8,450
)
Deposits with registries
17

 
641

Other assets
335

 
(358
)
Accounts payable
184

 
1,599

Accrued expenses and other liabilities
(1,682
)
 
(1,444
)
Deferred revenue
5,493

 
9,655

Net cash provided by operating activities
36,068

 
40,351

Cash flows from investing activities
 

 
 

Purchases of property and equipment
(10,830
)
 
(7,443
)
Purchases of intangible assets
(30,062
)
 
(5,122
)
Payments for gTLD applications

 
(18,202
)
Cash paid for acquisitions, net of cash acquired
(3,839
)
 
(269
)
Other

 
(855
)
Net cash used in investing activities
(44,731
)
 
(31,891
)
Cash flows from financing activities
 

 
 

Principal payments on capital lease obligations
(305
)
 
(225
)
Proceeds from issuances of common stock (net of issuance costs of $3,192)
78,625

 

Proceeds from exercises of stock options and contributions to ESPP
1,525

 
5,856

Windfall tax benefit from exercises of stock options
90

 

Repurchases of common stock

 
(3,956
)
Payments of withholding tax on net exercise of stock-based awards

 
(1,962
)
Net cash provided by (used in) financing activities
79,935

 
(287
)
Effect of foreign currency on cash and cash equivalents
(8
)
 
(21
)
Change in cash and cash equivalents
71,264

 
8,152

Cash and cash equivalents, beginning of period
32,338

 
86,035

Cash and cash equivalents, end of period
$
103,602

 
$
94,187

 
The accompanying notes are an integral part of these condensed consolidated financial statements.

5



Demand Media, Inc. and Subsidiaries

Notes to Condensed Consolidated Financial Statements (Unaudited)
 
(In thousands, except per share amounts)
 
1.
Company Background and Overview
 
Demand Media, Inc., together with its consolidated subsidiaries (the “Company”) is a Delaware corporation headquartered in Santa Monica, California. The Company’s business is focused on an Internet-based model for the professional creation of content at scale, and is comprised of two distinct and complementary service offerings, Content & Media and Registrar.
 
Content & Media
 
The Company’s Content & Media service offering is engaged in creating long-lived media content, primarily consisting of text articles and videos, and delivering it along with social media and monetization tools to the Company’s owned and operated websites and network of customer websites. Content & Media services are delivered through the Company’s Content & Media platform, which includes its content creation studio, social media applications and a system of monetization tools designed to match content with advertisements in a manner that is optimized for revenue yield and end-user experience.
 
Registrar
 
The Company’s Registrar service offering provides domain name registration and related value added service subscriptions to third parties through its wholly owned subsidiary, eNom.
 
Initial Public Offering
 
In January 2011, the Company completed its initial public offering whereby it received proceeds, net of underwriters discounts but before deducting offering expenses, of $81,817 from the issuance of 5,175 shares of common stock. As a result of the initial public offering, all shares of the Company’s convertible preferred stock converted into 61,672 shares of common stock and warrants to purchase common stock or convertible preferred stock net exercised into 477 shares of common stock.
 
Reverse Stock-Split
 
In October 2010, the Company’s stockholders approved a 1-for-2 reverse stock split of its outstanding common stock, and a proportional adjustment to the existing conversion ratios for each series of preferred stock which was effected in January 2011. Accordingly, all common stock share and per share amounts for all periods presented in these consolidated financial statements and notes thereto, have been adjusted retrospectively, where applicable, to reflect this reverse split and adjustment of the preferred stock conversion ratio.


2.
Basis of Presentation and Summary of Significant Accounting Policies
 
A summary of the significant accounting policies consistently applied in the preparation of the accompanying consolidated financial statements follows.
 
Basis of Preparation
 
The accompanying interim consolidated balance sheet as of June 30, 2012, the consolidated statements of operations and statements of comprehensive income for the three and six month periods ended June 30, 2011 and 2012, the consolidated statements of cash flows for the six month periods ended June 30, 2011 and 2012 and the consolidated statement of stockholders’ equity (deficit) for the six month period ended June 30, 2012 are unaudited. 

In the opinion of the Company’s management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited consolidated financial statements and include all adjustments, which include only normal recurring adjustments, necessary for the fair statement of the Company’s statement of financial position as of June 30, 2012 and its results of operations for the three and six month periods ended June 30, 2011 and 2012 and its cash flows for the six month periods ended June 30, 2011 and 2012. The results for the three and six month periods ended June 30, 2012 are not necessarily indicative of the results expected for the full year. The consolidated balance sheet as of December 31, 2011 has been derived

6



from the Company’s audited financial statements included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011.

The interim unaudited condensed consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States (“GAAP”), for interim financial information and with the instructions to Securities and Exchange Commission (“SEC”) Form 10-Q and Article 10 of SEC Regulation S-X. They do not include all of the information and footnotes required by GAAP for complete financial statements. Therefore, these financial statements should be read in conjunction with the Company’s audited consolidated financial statements and notes thereto, included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2011 filed with the SEC.
 
Principles of Consolidation
 
The consolidated financial statements include the accounts of Demand Media, Inc. and its wholly owned subsidiaries. Acquisitions are included in the Company’s consolidated financial statements from the date of the acquisition. The Company’s purchase accounting resulted in all assets and liabilities of acquired businesses being recorded at their estimated fair values on the acquisition dates. All significant intercompany transactions and balances have been eliminated in consolidation.
 
Investments in affiliates over which the Company has the ability to exert significant influence, but does not control and is not the primary beneficiary of, including NameJet, LLC (“NameJet”), are accounted for using the equity method of accounting. Investments in affiliates which the Company has no ability to exert significant influence are accounted for using the cost method of accounting. The Company’s proportional shares of affiliate earnings or losses accounted for under the equity method of accounting, which are not material for all periods presented, are included in other income (expense) in the Company’s consolidated statements of operations. Affiliated companies are not material individually or in the aggregate to the Company’s financial position, results of operations or cash flows for any period presented.
 
Use of Estimates
 
The preparation of the consolidated financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. Significant items subject to such estimates and assumptions include revenue, allowance for doubtful accounts, investments in equity interests, fair value of issued and acquired stock warrants, the assigned value of acquired assets and assumed liabilities in business combinations, useful lives and impairment of property and equipment, intangible assets, goodwill and other assets, the fair value of the Company’s equity-based compensation awards, and deferred income tax assets and liabilities. Actual results could differ materially from those estimates. On an ongoing basis, the Company evaluates its estimates compared to historical experience and trends, which form the basis for making judgments about the carrying value of assets and liabilities.
 
Revenue Recognition
 
The Company recognizes revenue when four basic criteria are met: persuasive evidence of a sales arrangement exists; performance of services has occurred; the sales price is fixed or determinable; and collectability is reasonably assured. The Company considers persuasive evidence of a sales arrangement to be the receipt of a signed contract or insertion order. Collectability is assessed based on a number of factors, including transaction history with the customer and the credit worthiness of the customer. If it is determined that the collection is not reasonably assured, revenue is not recognized until collection becomes reasonably assured, which is generally upon receipt of cash. The Company records cash received in advance of revenue recognition as deferred revenue.
 
For arrangements with multiple deliverables, the Company allocates revenue to each deliverable if the delivered item(s) has value to the customer on a standalone basis and, if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the undelivered item(s) is considered probable and substantially in the control of the Company.  The fair value of the selling price for a deliverable is determined using a hierarchy of (1) Company specific objective and reliable evidence, then (2) third-party evidence, then (3) best estimate of selling price.  The Company allocates any arrangement fee to each of the elements based on their relative selling prices.
 
The Company’s revenue is principally derived from the following services:

Content & Media
 

7



Advertising Revenue.  Advertising revenue is generated by performance-based Internet advertising, such as cost-per-click, or CPC, in which an advertiser pays only when a user clicks on its advertisement that is displayed on the Company’s owned and operated websites and customer websites; fees generated by users viewing third-party website banners and text-link advertisements; fees generated by enabling customer leads or registrations for partners; and fees from referring users to, or from users making purchases on, sponsors’ websites. In determining whether an arrangement exists, the Company ensures that a binding arrangement is in place, such as a standard insertion order or a fully executed customer-specific agreement. Obligations pursuant to the Company’s advertising revenue arrangements typically include a minimum number of impressions or the satisfaction of the other performance criteria. Revenue from performance-based arrangements, including referral revenue, is recognized as the related performance criteria are met. The Company assesses whether performance criteria have been met and whether the fees are fixed or determinable based on a reconciliation of the performance criteria and an analysis of the payment terms associated with the transaction. The reconciliation of the performance criteria generally includes a comparison of third-party performance data to the contractual performance obligation and to internal or customer performance data in circumstances where that data is available.
 
When the Company enters into advertising revenue sharing arrangements where it acts as the primary obligor, the Company recognizes the underlying revenue on a gross basis. In determining whether to report revenue gross for the amount of fees received from the advertising networks, the Company assesses whether it maintains the principal relationship with the advertising network, whether it bears the credit risk and whether it has latitude in establishing prices. In circumstances where the customer acts as the primary obligor, the Company recognizes the underlying revenue on a net basis.
 
In certain cases, the Company records revenue based on available and preliminary information from third parties. Amounts collected on the related receivables may vary from reported information based upon third party refinement of estimated and reported amounts owing that occurs typically within 30 days of the period end. For the three and six months ended June 30, 2011 and 2012, the difference between the amounts recognized based on preliminary information and cash collected was not material.
 
Content Revenue. Content revenue is generated through the sale or license of media content. Revenue from the sale or perpetual license of content is recognized when the content has been delivered and the contractual performance obligations has been fulfilled. Revenue from the license of content is recognized over the period of the license as content is delivered or when other related performance criteria are fulfilled.

Subscription Services and Social Media Services.  Subscription services revenue is generated through the sale of membership fees paid to access content available on certain owned and operated websites. The majority of the memberships range from 6 to 12 month terms, and renew automatically at the end of the membership term, if not previously canceled. Subscription services revenue is recognized on a straight-line basis over the membership term.
 
The Company configures, hosts, and maintains its platform social media services under private-labeled versions of software for commercial customers. The Company earns revenue from its social media services through initial set-up fees, recurring management support fees, overage fees in excess of standard usage terms, and outside consulting fees. Due to the fact that social media services customers have no contractual right to take possession of the Company’s private labeled software, the Company accounts for its social media services revenue as service arrangements, whereby social media services revenue is recognized when persuasive evidence of an arrangement exists, delivery of the service has occurred and no significant obligations remain, the selling price is fixed or determinable, and collectability is reasonably assured.

Social media service arrangements may contain multiple deliverables, including, but not limited to, single arrangements containing set-up fees, monthly support fees and overage billings, consulting services and advertising services. To the extent that consulting services have value on a standalone basis, the Company allocates revenue to each element in the multiple deliverable arrangement based upon their relative fair values.  Fair value is determined based upon the best estimate of the selling price. To date, substantially all consulting services entered into concurrent with the original social media service arrangements are not treated as separate deliverables as such services do not have value to the customer on a standalone basis. In such cases, the arrangement is treated as a single unit of accounting with the arrangement fee recognized over the term of the arrangement on a straight-line basis.  Set-up fees are recognized as revenue on a straight-line basis over the greater of the contractual or estimated customer life once monthly recurring services have commenced. The Company determines the estimated customer life based on analysis of historical attrition rates, average contractual term and renewal expectations. The Company periodically reviews the estimated customer life at least quarterly and when events or changes in circumstances, such as significant customer attrition relative to expected historical of projected future results, occur. Overage billings are recognized when delivered and at contractual rates in excess of standard usage terms.
 
Outside consulting services performed for customers that have value on a stand-alone basis are recognized as services are

8



performed.
 
Registrar
 
Domain Name Registration Service Fees.  Registration fees charged to third parties in connection with new, renewed, and transferred domain name registrations are recognized on a straight-line basis over the registration term, which customarily range from one to two years but can extend to ten years. Payments received in advance of the domain name registration term are included in deferred revenue in the accompanying consolidated balance sheets. The registration term and related revenue recognition commences once the Company confirms that the requested domain name has been recorded in the appropriate registry under contractual performance standards. Associated direct and incremental costs, which principally consist of registry and Internet Corporation for Assigned Names and Numbers ("ICANN") fees, are also deferred and amortized to service costs on a straight-line basis over the registration term.
 
The Company’s wholly owned subsidiary, eNom, is an ICANN accredited registrar. Thus, the Company is the primary obligor with its reseller and retail registrant customers and is responsible for the fulfillment of its registrar services. As a result, the Company reports revenue derived from the fees it receives from resellers and retail registrant customers for registrations on a gross basis in the accompanying consolidated statements of operations. A minority of the Company’s resellers have contracted with the Company to provide billing and credit card processing services to the resellers’ retail customer base in addition to domain name registration services. Under these circumstances, the cash collected from these resellers’ retail customer base is in excess of the fixed amount per transaction that the Company charges for domain name registration services. As such, these amounts, which are collected for the benefit of the reseller, are not recognized as revenue and are recorded as a liability until remitted to the reseller on a periodic basis. Revenue from these resellers is reported on a net basis because the reseller determines the price to charge retail customers and maintains the primary customer relationship.
 
Value Added Services.  Revenue from online value added services, which includes, but is not limited to, web hosting services, email services, domain name identification protection, charges associated with alternative payment methods, and security certificates, is recognized on a straight-line basis over the period in which services are provided. Payments received in advance of services being provided are included in deferred revenue.
 
Auction Service Revenue.  Domain name auction service revenue represents fees received from selling third-party owned domains via an online bidding process primarily through NameJet, a domain name aftermarket auction company formed in October 2007 by the Company and an unrelated third party. For names sold through the auction process that are registered on the Company’s registrar platform upon sale, the Company has determined that auction revenue and related registration revenue represent separate units of accounting given the domain name has value to the customers on a standalone basis.  As a result, the Company recognizes the related registration fees on a straight-line basis over the registration term. The Company recognizes the bidding portion of auction revenue upon sale, net of payments to third parties since it is acting as an agent only.

Service Costs
 
Service costs consist primarily of fees paid to registries and ICANN associated with domain registrations, advertising revenue recognized by the Company and shared with its customers or partners as a result of its revenue-sharing arrangements, such as traffic acquisition costs and content revenue-sharing arrangements, Internet connection and co-location charges and other platform operating expenses associated with the Company’s owned and operated and customer websites, including depreciation of the systems and hardware used to build and operate the Company’s Content & Media platform and Registrar, personnel costs relating to in-house editorial, customer service, information technology and certain content production costs such as our multi-channel video deal with Youtube.

Registry fee expenses consist of payments to entities accredited by ICANN as the designated registry related to each top level domain (“TLD”). These payments are generally fixed dollar amounts per domain name registration period and are recognized on a straight-line basis over the registration term. The costs of renewal registration fee expenses for owned and operated undeveloped websites are also included in service costs. Amortization of the cost of website names and media content owned by the Company is included in amortization of intangible assets.
 
Deferred Revenue and Deferred Registration Costs
 
Deferred revenue consists substantially of amounts received from customers in advance of the Company’s performance for domain name registration services, subscription services for premium media content, social media services and online value added services. Deferred revenue is recognized as revenue on a systematic basis that is proportionate to the unexpired term of the related domain name registration, media subscription as services are rendered, over customer useful life, or online value

9



added service period.
 
Deferred registration costs represent incremental direct cost paid in advance to registries, ICANN, and other third parties for domain name registrations and are recorded as a deferred cost on the balance sheets. Deferred registration costs are amortized to expense on a straight-line basis concurrently with the recognition of the related domain name registration revenue and are included in service costs.

Long-lived Assets
 
The Company evaluates the recoverability of its long-lived assets with finite useful lives for impairment when events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable. Such trigger events or changes in circumstances may include: a significant decrease in the market price of a long-lived asset, a significant adverse change in the extent or manner in which a long-lived asset is being used, significant adverse change in legal factors or in the business climate, including those resulting from technology advancements in the industry, the impact of competition or other factors that could affect the value of a long-lived asset, a significant adverse deterioration in the amount of revenue or cash flows we expect to generate from an asset group, an accumulation of costs significantly in excess of the amount originally expected for the acquisition or development of a long-lived asset, current or future operating or cash flow losses that demonstrate continuing losses associated with the use of a long-lived asset, or a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. The Company performs impairment testing at the asset group level that represents the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities. If events or changes in circumstances indicate that the carrying amount of an asset group may not be recoverable and the expected undiscounted future cash flows attributable to the asset group are less than the carrying amount of the asset group, an impairment loss equal to the excess of the asset’s carrying value over its fair value is recorded. Fair value is determined based upon estimated discounted future cash flows. Through June 30, 2012, the Company has identified no such impairment loss. Assets to be disposed of would be separately presented on the balance sheets and reported at the lower of their carrying amount or fair value less costs to sell, and would no longer be depreciated or amortized.
 
Google, the largest provider of search engine referrals to the majority of the Company's websites, regularly deploys changes to its search engine algorithms, some of which have led the Company to experience fluctuations in the total number of Google search referrals to its owned and operated and network of customer websites. In 2011, the overall impact of these changes on the Company's owned and operated websites was negative primarily due to a decline in traffic to eHow.com, the Company's largest website. From October 2011 to March 2012, and in response to the changes in search engine algorithms in 2011, the Company performed an evaluation of its existing content library to identify potential improvements in its content creation and distribution platform. As a result of this evaluation, the Company elected to remove certain content assets from service, resulting in $1,818 of accelerated amortization expense in the first quarter of 2012.

We intend to evolve and continuously improve our content creation and distribution platform and to create new content formats to enhance our content product offerings. In 2012 to date, such changes included ongoing improvements to our content creation process to enhance quality, diversifying our content investment into video, long-form content, images and diagrams, publishing content directed at international markets and in languages other than English as well as increasing and expanding distribution of our content to our network of customer websites.
There can be no assurance that these changes or any future changes that may be implemented by the Company, by search engines to their algorithms and search methodologies, or by consumers in their web usage habits will not adversely impact the carrying value, estimated useful life or intended use of our long-lived assets. The Company will continue to monitor these changes as well as any future changes and emerging trends in search engine algorithms and methodologies, including the resulting impact that these changes may have on future operating results, the economic performance of the Company's long-lived assets and in its assessment as to whether significant changes in circumstances might provide an indication of potential impairment of the carrying value of its long-lived assets, including its media content and goodwill arising from acquisitions.

Property and equipment
 
Property and equipment are stated at cost less accumulated depreciation. Depreciation is computed using the straight-line method over the estimated useful lives of the assets. Computer equipment is amortized over two to five years, software is amortized over two to three years, and furniture and fixtures are amortized over seven to ten years. Leasehold improvements are amortized straight-line over the shorter of the remaining lease term or the estimated useful lives of the improvements ranging from one to six years. Upon the sale or retirement of property or equipment, the cost and related accumulated depreciation or amortization is removed from the Company’s financial statements with the resulting gain or loss reflected in the

10



Company’s results of operations. Repairs and maintenance costs are expensed as incurred. In the event that property and equipment is no longer in use, the Company will record a loss on disposal of the property and equipment, which is computed as the net remaining value (gross amount of property and equipment less accumulated depreciation expense) of the related equipment at the date of disposal.
 
Intangibles—Undeveloped Websites
 
The Company capitalizes costs incurred to acquire and to initially register its owned and operated undeveloped websites (i.e. Uniform Resource Locators). The Company amortizes these costs over the expected useful life of the underlying undeveloped websites on a straight-line basis. The expected useful lives of the website names range from 12 months to 84 months. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on historical experience with domain names of similar quality and value.
 
In order to maintain the rights to each undeveloped website acquired, the Company pays periodic renewal registration fees, which generally cover a minimum period of twelve months. The Company records renewal registration fees of website name intangible assets in deferred registration costs and recognizes the costs over the renewal registration period, which is included in service costs.
 
Intangibles—Media Content
 
The Company capitalizes the direct costs incurred to acquire its media content that is determined to embody a probable future economic benefit. Costs are recognized as finite lived intangible assets based on their acquisition cost to the Company. Direct content costs primarily represent amounts paid to unrelated third parties for completed content units, and to a lesser extent, specifically identifiable internal direct labor costs incurred to enhance the value of specific content units acquired prior to their publication. Internal costs not directly attributable to the enhancement of an individual content unit acquired are expensed as incurred. All costs incurred to deploy and publish content are expensed as incurred, including the costs for the ongoing maintenance of the Company’s websites in which the Company’s content is deployed.
 
Capitalized media content is amortized on a straight-line basis over five years, representing the Company’s estimate of the pattern that the underlying economic benefits are expected to be realized and based on its estimates of the projected cash flows from advertising revenue expected to be generated by the deployment of its content. These estimates are based on the Company’s plans and projections, comparison of the economic returns generated by its content of comparable quality and an analysis of historical cash flows generated by that content to date. Amortization of media content is included in amortization of intangible assets in the accompanying statement of operations and the acquisition costs are included in purchases of intangible assets within cash flows from investing activities in the Consolidated Statements of Cash Flows.

Intangibles—Acquired in Business Combinations
 
The Company performs valuations on each acquisition accounted for as a business combination and allocates the purchase price of each acquired business to its respective net tangible and intangible assets. Intangible assets acquired in business combinations include: trade names, non-compete agreements, owned website names, customer relationships, technology, media content, and content publisher relationships. The Company determines the appropriate useful life by performing an analysis of expected cash flows based on historical experience of the acquired businesses. Intangible assets are amortized over their estimated useful lives using the straight line method which approximates the pattern in which the economic benefits are consumed.
 
Goodwill
 
Goodwill represents the excess of the cost of an acquired entity over the fair value of the acquired net assets. The Company tests goodwill for impairment annually during the fourth quarter of its fiscal year or when events or circumstances change that would indicate that goodwill might be impaired. Events or circumstances which could trigger an impairment review include, but are not limited to a significant adverse change in legal factors or in the business climate, an adverse action or assessment by a regulator, unanticipated competition, a loss of key personnel, significant changes in the manner of the Company’s use of the acquired assets or the strategy for the Company’s overall business, significant negative industry or economic trends or significant underperformance relative to expected historical or projected future results of operations.
 
The testing for a potential impairment of goodwill involves a two-step process. The first step is to identify whether a potential impairment exists by comparing the estimated fair values of the Company’s reporting units with their respective book values, including goodwill. If the estimated fair value of the reporting unit exceeds book value, goodwill is considered not to be

11



impaired and no additional steps are necessary. If, however, the fair value of the reporting unit is less than book value, then the second step is performed to determine if goodwill is impaired and to measure the amount of impairment loss, if any. The amount of the impairment loss is the excess of the carrying amount of the goodwill over its implied fair value. The estimate of implied fair value of goodwill is primarily based on an estimate of the discounted cash flows expected to result from that reporting unit but may require valuations of certain internally generated and unrecognized intangible assets such as the Company’s software, technology, patents and trademarks. If the carrying amount of goodwill exceeds the implied fair value of that goodwill, an impairment loss is recognized in an amount equal to the excess.

Business acquisitions and supplemental pro forma information

The Company did not complete any business acquisitions in the six months ended June 30, 2012.
 
Supplemental information on an unaudited pro forma basis, as if the four acquisitions completed in 2011 had been consummated as of January 1, 2011 is as follows:

 
Three months ended June 30,
 
Six months ended June 30,
 
2011
 
2011
 
(unaudited)
Revenue
$
81,182

 
$
162,512

Net loss
(3,576
)
 
(10,459
)

The unaudited pro forma supplemental information is based on estimates and assumptions which the Company believes are reasonable and reflects amortization of intangible assets as result of the acquisitions. The pro forma results are not necessarily indicative of the results that have been realized had the acquisitions been consolidated as of the beginning of the periods presented.

Other Long-Term Assets

The Internet Corporation for Assigned Names and Numbers, or ICANN, has approved a framework for the significant expansion of the number of generic Top Level Domains ("gTLDs") in 2012 ("New gTLD Program").  During the six months ended June 30, 2012, the Company paid $18.2 million for certain gTLD applications under the New gTLD Program. The Company capitalizes the costs incurred to pursue the acquisition of gTLD operator rights that are determined to embody probable economic benefit.  Capitalized payments for gTLD applications are included in long-term other assets during the application process. While there can be no assurance that the Company will be awarded any gTLDs, capitalized payments will be reclassified as finite lived intangible assets following the delegation of operator rights for each gTLD by ICANN. Payments for gTLD applications primarily represent amounts paid directly to ICANN or third parties in the pursuit of gTLD operator rights. The Company may receive partial cash refunds for certain gTLD applications, and to the extent the Company elects to sell or dispose of its interest in certain gTLD applications throughout the process, it may also incur gains or losses on amounts invested. Gains on the sale of the Company's interest in gTLD applications will be recognized when realized, while losses will be recognized when deemed probable. Other costs incurred by the Company as part of its gTLD initiative not directly attributable to the acquisition of gTLD operator rights are expensed as incurred. Capitalized costs will be amortized on a straight-line basis over the estimated useful life of the gTLD operator rights acquired commencing the date that each asset is available for its intended use, which is expected to occur following commencement of delegation by ICANN in 2013.
    
Stock-Based Compensation
 
Stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as expense over the requisite service period, which is the vesting period, on a straight-line basis. The Company uses the Black-Scholes option pricing model to determine the fair value of stock options that do not include market conditions. Stock-based awards are comprised principally of stock options, restricted stock awards (“RSA”) and restricted stock units ("RSU").

Under the Company's Employee Stock Purchase Plan (the "ESPP"), eligible officers and employees may purchase a limited amount of our common stock at a discount to the market price in accordance with the terms of the plan as described in Note 11 - Share-based Compensation Plans and Awards. The Company uses the Black-Scholes option pricing model to determine the fair value of the ESPP awards granted which is recognized straight-line over the total offering period.  
    

12



Some equity awards granted by the Company contain certain performance and/or market conditions. The Company recognizes compensation cost for awards with performance conditions based upon the probability of that performance condition being met, net of an estimate of pre-vesting forfeitures. Awards granted with performance and/or market conditions are amortized using the graded vesting method.
 
The effect of a market condition is reflected in the award’s fair value on the grant date. The Company uses a Monte Carlo simulation model or binomial lattice model to determine the grant date fair value of awards with market conditions. Compensation cost for an award that has a market condition is recognized as the requisite service period is fulfilled, even if the market condition is never satisfied.

Stock-based awards issued to non-employees are accounted for at fair value determined using the Black-Scholes option-pricing model. Management believes that the fair value of the stock options is more reliably measured than the fair value of the services received. The fair value of each non-employee stock-based compensation award is re-measured each period until a commitment date is reached, which is generally the vesting date.

Stock Repurchases

Under a stock repurchase plan, shares repurchased by the Company are accounted for when the transaction is settled. Repurchased shares held for future issuance are classified as treasury stock. Shares formally or constructively retired are deducted from common stock at par value and from additional paid in capital for the excess over par value. If additional paid in capital has been exhausted, the excess over par value is deducted from retained earnings. Direct costs incurred to acquire the shares are included in the total cost of the repurchased shares.

Income Taxes
 
Deferred income taxes are recognized for differences between financial reporting and tax bases of assets and liabilities at the enacted statutory tax rates in effect for the years in which the temporary differences are expected to reverse. The effect on deferred taxes of a change in tax rates is recognized in income in the period that includes the enactment date. The Company evaluates the realizability of deferred tax assets and recognizes a valuation allowance for its deferred tax assets when it is more likely than not that a future benefit on such deferred tax assets will not be realized.
 
The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained on examination by the taxing authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such positions are then measured based on the largest benefit that has a greater than 50% likelihood of being realized upon settlement. The Company recognizes interest and penalties accrued related to unrecognized tax benefits in its income tax (benefit) provision in the accompanying statements of operations.
 
Net Income (Loss) Per Share
 
Basic income (loss) per share is computed by dividing the net loss attributable to common stockholders by the weighted average number of common shares outstanding during the period. Net income (loss) attributable to common stockholders is increased for cumulative preferred stock dividends earned during the period. Diluted income (loss) per share is computed by dividing the net income (loss) attributable to common stockholders by the weighted average common shares outstanding plus potentially dilutive common shares. Because the Company reported losses in certain the periods presented, potentially dilutive common shares comprising of stock options, RSUs, stock from the employee stock purchase plan, warrants and convertible preferred stock are antidilutive in those periods.
 
RSUs and other restricted awards are considered outstanding common shares and included in the computation of basic earnings per share as of the date that all necessary conditions of vesting are satisfied. RSUs are excluded from the dilutive earnings per share calculation when their impact is antidilutive.
 
Fair Value of Financial Instruments
 
Fair value represents the exchange price that would be received for an asset or paid to transfer a liability (an exit price) in the principal or most advantageous market for the asset or liability in an orderly transaction between market participants on the measurement date. The Company measures its financial assets and liabilities in three levels, based on the markets in which the assets and liabilities are traded and the reliability of the assumptions used to determine fair value.
 

13



Level 1—valuations for assets and liabilities traded in active exchange markets, or interest in open-end mutual funds that allow a company to sell its ownership interest back at net asset value on a daily basis. Valuations are obtained from readily available pricing sources for market transactions involving identical assets, liabilities or funds.
 
Level 2—valuations for assets and liabilities traded in less active dealer, or broker markets, such as quoted prices for similar assets or liabilities or quoted prices in markets that are not active. Level 2 includes U.S. Treasury, U.S. government and agency debt securities, and certain corporate obligations.

Valuations are usually obtained from third party pricing services for identical or comparable assets or liabilities.
 
Level 3—valuations for assets and liabilities that are derived from other valuation methodologies, such as option pricing models, discounted cash flow models and similar techniques, and not based on market exchange, dealer, or broker traded transactions. Level 3 valuations incorporate certain assumptions and projections in determining the fair value assigned to such assets or liabilities.
 
In determining fair value, the Company utilizes valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs to the extent possible as well as considers counterparty credit risk in its assessment of fair value.
 
The carrying amounts of the Company’s financial instruments, including cash and cash equivalents, accounts receivable, receivables from domain name registries, registry deposits, restricted cash, accounts payable, accrued liabilities and customer deposits approximate fair value because of their short maturities.  The Company’s investments in marketable securities are recorded at fair value. Certain assets, including equity investments, investments held at cost, goodwill and intangible assets are also subject to measurement at fair value on a nonrecurring basis, if they are deemed to be impaired as the result of an impairment review. For the year ended December 31, 2011 and six month period ended June 30, 2012, no impairments were recorded on those assets required to be measured at fair value on a nonrecurring basis.
 
Financial assets and liabilities carried at fair value on a recurring basis were as follows:
 
December 31, 2011

 
 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 

 
 

 
 

 
 

Cash equivalents(1)
$
54,701

 
$
15,447

 
$

 
$
70,148

Total assets at fair value
$
54,701

 
$
15,447

 
$

 
$
70,148

___________________________________
(1)Comprises money market funds which are included in Cash and cash equivalents in the accompanying balance sheet

June 30, 2012

 
Level 1
 
Level 2
 
Level 3
 
Total
Assets
 

 
 

 
 

 
 

Cash equivalents(1)
$
29,421

 
$
7,447

 
$

 
$
36,868

Total assets at fair value
$
29,421

 
$
7,447

 
$

 
$
36,868

___________________________________
(1)Comprises money market funds which are included in Cash and cash equivalents in the accompanying balance sheet
    

For financial assets that utilize Level 1 and Level 2 inputs, the Company utilizes both direct and indirect observable price quotes, including quoted market prices (Level 1 inputs) or inputs that are derived principally from or corroborated by observable market data (Level 2 inputs).
 


14






 Recent Accounting Pronouncements 
In May 2011, the FASB issued Accounting Standards Update 2011-04, “Fair Value Measurement” (“ASU 2011-04”). The primary focus of ASU 2011-04 is the convergence of accounting requirements for fair value measurements and related financial statement disclosures under U.S. GAAP and International Financial Reporting Standards (“IFRS”). While ASU 2011-04 does not significantly change existing guidance for measuring fair value, it does require additional disclosures about fair value measurements and changes the wording of certain requirements in the guidance to achieve consistency with IFRS. ASU 2011-04 is effective for interim and annual periods beginning after December 15, 2011, and is required to be applied prospectively. There was not a material impact to the consolidated financial statements upon adoption in 2012.
In June 2011, the FASB issued Accounting Standards Update 2011-05, “Presentation of Comprehensive Income” (“ASU 2011-05”). This guidance requires companies to present the components of comprehensive income either in a single continuous statement of comprehensive income or in two separate but consecutive statements. Under either method, amounts reclassified from Other Comprehensive Income ("OCI") to net income for each reporting period must be displayed as components of both net income and OCI on the face of the financial statements. The guidance does not change the items that are reported in OCI. ASU 2011-05 is effective for interim and annual periods beginning after December 15, 2011. Other than presentational changes, there was not a significant impact to the consolidated financial statements upon adoption in 2012.
In September 2011, FASB issued amendments to its accounting guidance on testing goodwill for impairment. The amendments allow entities to use a qualitative approach to test goodwill for impairment. This permits an entity to first perform a qualitative assessment to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying value. If it is concluded that this is the case, it is required to perform the currently prescribed two-step goodwill impairment test. Otherwise, the two-step goodwill impairment test is not required. This guidance is effective for annual and interim goodwill impairment test performed for fiscal years beginning after December 15, 2011 and early adoption is permitted. The Company did not early adopt this guidance and does not anticipate a material impact to the consolidated financial statements upon adoption in 2012.

3.
Property and Equipment
 
Property and equipment consisted of the following:
 
 
December 31,
2011
 
June 30,
2012
Computers and other related equipment
$
33,680

 
$
37,994

Purchased and internally developed software
45,074

 
50,582

Furniture and fixtures
2,380

 
2,577

Leasehold improvements
3,368

 
3,368

 
84,502

 
94,521

Less accumulated depreciation
(51,876
)
 
(60,416
)
Property and equipment, net
$
32,626

 
$
34,105


Depreciation and software amortization expense by classification for the three and six months ended June 30, 2011 and 2012 is shown below:
 
 
Three months ended June 30,
 
Six months ended June 30,
 
2011
 
2012
 
2011
 
2012
Service costs
$
4,149

 
$
3,552

 
$
8,193

 
$
7,202

Sales and marketing
115

 
106

 
187

 
240

Product development
438

 
271

 
759

 
553

General and administrative
878

 
899

 
1,450

 
1,797

Total depreciation
$
5,580

 
$
4,828

 
$
10,589

 
$
9,792



15



4.
Intangible Assets
 
Intangible assets consist of the following:
 
 
December 31, 2011
 
 
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net
 
Weighted
average
useful life
Owned website names
$
43,343

 
$
(35,674
)
 
$
7,669

 
3.8
Customer relationships
27,325

 
(20,257
)
 
7,068

 
5.8
Media content
130,981

 
(56,847
)
 
74,134

 
5.1
Technology
38,694

 
(24,055
)
 
14,639

 
5.8
Non-compete agreements
14,806

 
(14,513
)
 
293

 
3.3
Trade names
11,294

 
(4,652
)
 
6,642

 
14.5
Content publisher relationships
2,092

 
(1,233
)
 
859

 
5.0
 
$
268,535

 
$
(157,231
)
 
$
111,304

 
5.3
 
June 30, 2012
 
 
 
Gross
carrying
amount
 
Accumulated
amortization
 
Net
 
Weighted
average
useful life
Owned website names
$
43,792

 
$
(38,409
)
 
$
5,383

 
3.7
Customer relationships
27,325

 
(21,769
)
 
5,556

 
5.8
Media content
131,249

 
(67,115
)
 
64,134

 
5.1
Technology
38,694

 
(26,306
)
 
12,388

 
5.8
Non-compete agreements
14,806

 
(14,602
)
 
204

 
3.3
Trade names
11,294

 
(5,175
)
 
6,119

 
14.5
Content publisher relationships
2,092

 
(1,351
)
 
741

 
5.0
 
$
269,252

 
$
(174,727
)
 
$
94,525

 
5.3
 
Identifiable finite-lived intangible assets are amortized on a straight-line basis over their estimated useful lives commencing the date that the asset is available for its intended use.

Amortization expense by classification for the three and six months ended June 30, 2011 and 2012 is shown below:
 
 
Three months ended
 
Six months ended
 
June 30,
 
June 30,
 
2011
 
2012
 
2011
 
2012
Service costs
$
7,771

 
$
7,785

 
$
15,547

 
$
17,705

Sales and marketing
762

 
653

 
1,590

 
1,363

Product development
992

 
1,068

 
2,280

 
2,136

General and administrative
225

 
253

 
536

 
511

Total amortization
$
9,750

 
$
9,759

 
$
19,953

 
$
21,715

 

5.
Goodwill
     
The following table presents the changes in the Company’s goodwill balance:


16



Balance at December 31, 2010
$
224,920

Goodwill arising from acquisitions
31,140

Balance at December 31, 2011
256,060

Other
(23
)
Balance at June 30, 2012
$
256,037

 
Goodwill in 2011 arose from four acquisitions completed in that year. The movement in 2012 relates to revisions to the preliminary purchase price allocation in respect of acquisitions in the second half of 2011. There were no business acquisitions during the six months ended June 30, 2012.
        
The Company's most recent annual impairment analysis was performed in the fourth quarter of the year ended December 31, 2011 and indicated that the fair value of each of its three reporting units significantly exceeded the carrying amount of the respective reporting unit's book value of goodwill at that time.


6.
Other Assets
     
Other long term assets consisted of the following:
 
 
December 31,
2011
 
June 30,
2012
Payments for gTLD applications
$

 
$
18,202

Other
2,524

 
3,511

Other assets
$
2,524

 
$
21,713


During the six months ended June 30, 2012, the Company paid $18.2 million for certain gTLD applications under the New gTLD Program. Payments for gTLD applications, represent amounts paid directly to ICANN or third parties in the pursuit of gTLD operator rights. The majority of this balance has been paid to Donuts Inc as described in Note 8 - Commitments and Contingencies.

Other includes $855 of restricted cash comprising a collateralized letter of credit connected with the Company's applications under the New gTLD Program. The restrictions require the cash to be maintained in a bank account for a minimum of five years from the delegation of the gTLDs.

7.
Other Balance Sheets Items
 
Accounts receivable consisted of the following:
 
 
December 31,
2011
 
June 30,
2012
Accounts receivable—trade
$
29,695

 
$
32,999

XNYS:DMD Demand Media Inc Quarterly Report 10-Q Filling

Demand Media Inc XNYS:DMD Stock - Get Quarterly Report SEC Filing of Demand Media Inc XNYS:DMD stocks, including company profile, shares outstanding, strategy, business segments, operations, officers, consolidated financial statements, financial notes and ownership information.

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