Overstock.com 2014 Annual Report Download - page 49

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Table of Contents
In late 2012, Google, Inc. (“Google”) discontinued providing its free Google Base product listing service to retailers and instead offered retailers a
new fee-based product listing service. In addition, during the third quarter of 2013, Google tested and later implemented changes to its search engine
algorithms, which reduced our ranking in certain Google search results during some periods. While we worked on adapting to Google's changes, we
emphasized other marketing channels, such as sponsored search, which generated revenue growth but with higher associated marketing expenses as a
percentage of revenue than was the case for revenue coming from Google Base and natural search.
Technology expense in 2013 increased $6.3 million compared to 2012, primarily due to an increase in staff-related costs partially offset by a
decrease in depreciation.
G&A expense in 2013 increased $10.9 million compared to 2012, primarily due to $10.1 million of increased activity on legal matters, including
our defense of a case brought by district attorneys in eight California counties, and for civil penalties assessed in an adverse judgment received in the case.
Provision (benefit) for income taxes in 2013 was ($68.0) million compared to $485,000 in 2012. The large income tax benefit in 2013 was due to a
$75.5 million deferred tax asset valuation release in 2013 after we concluded that it was more likely than not that we will realize our deferred tax assets.
The balance of our Management’s Discussion and Analysis of Financial Condition and Results of Operations provides further information about the
matters discussed above and other important matters affecting our business.
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