Classmates.com 2006 Annual Report Download - page 84

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The purchase price was allocated based on the estimated fair values of assets and liabilities, including identifiable intangible assets. The
purchase price allocation is considered final. 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 the acquired intangible assets is 4.8 years. The $5.7 million of goodwill is tax deductible. The pro
forma effect of the transaction is immaterial to the consolidated financial statements.
Cash paid for acquisitions during the year ended December 31, 2006 included a $1.5 million payment for the acquisition of certain assets
related to PhotoSite, which amount was included in accrued liabilities at December 31, 2005.
In the December 2006 quarter, the Company recorded impairment charges totaling $8.8 million related to its photo-sharing service (see
Note 6).
Classmates Online, Inc.
In November 2004, the Company acquired Classmates, which operates Classmates.com (www.classmates.com), connecting millions of
members throughout the U.S. and Canada with friends and acquaintances from school, work and the military. Its Classmates International
subsidiary also operates leading community-based networking sites in Sweden (www.klasstraffen.com), and in Germany (www.stayfriends.de).
The acquisition was accounted for under the purchase method in accordance with SFAS No. 141. The primary reason for the acquisition was to
acquire Classmates’ services and account base to continue to expand the Company’s subscription offerings. Classmates’
results of operations are
included in the consolidated financial statements from the date of acquisition.
F- 22
Description
Estimated
Fair
Value
Estimated
Amortizable
Life
Net liabilities assumed:
Property and equipment
$
4
Deferred revenue
(190
)
Total net liabilities assumed
(186
)
Intangible assets acquired:
Pay accounts
330
2 years
Proprietary rights
20
5 years
Software and technology
4,200
5 years
Total intangible assets acquired
4,550
Goodwill
5,738
Total purchase price
$
10,102