Classmates.com 2004 Annual Report Download - page 88

Download and view the complete annual report

Please find page 88 of the 2004 Classmates.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 134

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134

About Web Services
In April 2004, the Company acquired substantially all of the assets associated with the Web-hosting business of About, Inc. The business
offers consumers Web-site services, including hosting, domain and email services. The acquisition has been accounted for under the purchase
method in accordance with SFAS No. 141. The primary reason for the acquisition was to acquire About, Inc.'s Web-
hosting services and account
base in order to expand the Company's service offerings.
The purchase price of approximately $11.9 million was paid in cash and allocated to the net assets acquired based on their estimated fair
values, including identifiable intangible assets. The following table summarizes the net liabilities assumed and the intangible assets and goodwill
acquired in connection with the acquisition (in thousands):
The weighted average amortizable life of acquired intangible assets is 3.8 years. The $7.5 million of goodwill acquired is deductible for tax
purposes. The pro forma effect of the transaction is immaterial to the consolidated financial statements.
BlueLight
On November 4, 2002, the Company acquired the Internet access assets of BlueLight. The acquisition has been accounted for under the
purchase method in accordance with SFAS No. 141. The primary reason for the acquisition was to acquire BlueLight's pay account base in order
to accelerate the Company's pay account growth and leverage its operating and cost infrastructure.
The purchase price of approximately $8.4 million, including $0.1 million of acquisition-related costs, was paid in cash and allocated to the
assets acquired based on their estimated fair values,
F-19
Description
Estimated
Fair Value
Estimated
Amortizable
Life
Net liabilities assumed:
Accounts receivable
$
292
Property and equipment
199
Other assets
69
Accounts payable
(215
)
Deferred revenue
(1,710
)
Total net liabilities assumed
(1,365
)
Intangible assets acquired:
Pay accounts
3,190
4 years
Proprietary rights
400
7 years
Software and technology
2,220
3 years
Total intangible assets acquired
5,810
Goodwill
7,489
Total purchase price
$
11,934