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Segment Reporting | 6 Months Ended
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Jun. 30, 2013
Segment Reporting [Abstract] |
Segment Reporting |
5. | Segment reporting
Reporting segments are based upon the Company’s internal organizational structure, the manner in which the Company’s operations are managed, the criteria used by management to evaluate the Company’s performance, the availability of separate financial information, and overall materiality considerations. Segment reporting is based on geography as the main basis of segment breakdown to reflect the evaluation of the Company’s performance defined by the management. The Company’s segments include Brazil, Argentina, Mexico, Venezuela and other countries (such as Chile, Colombia, Costa Rica, Dominican Republic, Ecuador, Panama, Peru, Portugal, Uruguay and USA). Direct contribution consists of net revenues from external customers less direct costs. Direct costs include specific costs of net revenues, sales and marketing expenses, and general and administrative expenses over which segment managers have direct discretionary control, such as advertising and marketing programs, customer support expenses, allowances for doubtful accounts, headcount compensation, third party fees. All corporate related costs have been excluded from the Company’s direct contribution. Expenses over which segment managers do not currently have discretionary control, such as certain technology and general and administrative costs are monitored by management through shared cost centers and are not evaluated in the measurement of segment performance. The following tables summarize the financial performance of the Company’s reporting segments:
|  | Three Months Ended June 30, 2013 |
|  | Brazil |  |  | Argentina |  |  | Mexico |  |  | Venezuela |  |  | Other Countries |  |  | Total |
Net revenues |  | $ | 51,116,153 |  |  | $ | 29,000,836 |  |  | $ | 7,823,566 |  |  | $ | 17,563,547 |  |  | $ | 6,679,258 |  |  | $ | 112,183,360 |
Direct costs |  |  | (27,849,992 | ) |  |  | (16,203,748 | ) |  |  | (5,122,425 | ) |  |  | (6,478,796 | ) |  |  | (3,215,003 | ) |  |  | (58,869,964 | )
Direct contribution |  |  | 23,266,161 |  |  |  | 12,797,088 |  |  |  | 2,701,141 |  |  |  | 11,084,751 |  |  |  | 3,464,255 |  |  |  | 53,313,396 |
Operating expenses and indirect costs of net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (17,864,101 | )
Income from operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 35,449,295 |
Other income (expenses): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,202,314 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (531,668 | )
Foreign currency gain |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 3,600,866 |
Other gains, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 1,393 |
Net income before income / asset tax expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 40,722,200 |
|  | Three Months Ended June 30, 2012 |
|  | Brazil |  |  | Argentina |  |  | Mexico |  |  | Venezuela |  |  | Other Countries |  |  | Total |
Net revenues |  | $ | 44,205,857 |  |  | $ | 20,561,213 |  |  | $ | 6,046,812 |  |  | $ | 12,417,318 |  |  | $ | 5,612,859 |  |  | $ | 88,844,059 |
Direct costs |  |  | (25,066,435 | ) |  |  | (9,543,476 | ) |  |  | (3,269,574 | ) |  |  | (3,728,913 | ) |  |  | (2,896,426 | ) |  |  | (44,504,824 | )
Direct contribution |  |  | 19,139,422 |  |  |  | 11,017,737 |  |  |  | 2,777,238 |  |  |  | 8,688,405 |  |  |  | 2,716,433 |  |  |  | 44,339,235 |
Operating expenses and indirect costs of net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (12,454,315 | )
Income from operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 31,884,920 |
Other income (expenses): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 2,982,303 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (474,300 | )
Foreign currency gain |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 749,008 |
Other losses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (7,009 | )
Net income before income / asset tax expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 35,134,922 |
|  | Six Months Ended June 30, 2013 |
|  | Brazil |  |  | Argentina |  |  | Mexico |  |  | Venezuela |  |  | Other Countries |  |  | Total |
Net revenues |  | $ | 98,881,836 |  |  | $ | 54,621,583 |  |  | $ | 15,613,867 |  |  | $ | 32,694,097 |  |  | $ | 13,097,724 |  |  | $ | 214,909,107 |
Direct costs |  |  | (58,843,536 | ) |  |  | (29,679,458 | ) |  |  | (9,239,252 | ) |  |  | (12,486,903 | ) |  |  | (6,082,984 | ) |  |  | (116,332,133 | )
Direct contribution |  |  | 40,038,300 |  |  |  | 24,942,125 |  |  |  | 6,374,615 |  |  |  | 20,207,194 |  |  |  | 7,014,740 |  |  |  | 98,576,974 |
Operating expenses and indirect costs of net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (34,556,496 | )
Income from operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 64,020,478 |
Other income (expenses): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 5,596,320 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (892,020 | )
Foreign currency loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2,648,848 | )
Other losses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (2,340 | )
Net income before income / asset tax expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | $ | 66,073,590 |
|  | Six Months Ended June 30, 2012 |
|  | Brazil |  |  | Argentina |  |  | Mexico |  |  | Venezuela |  |  | Other Countries |  |  | Total |
Net revenues |  | $ | 86,370,511 |  |  | $ | 38,677,682 |  |  | $ | 12,630,678 |  |  | $ | 23,658,890 |  |  | $ | 11,242,304 |  |  | $ | 172,580,065 |
Direct costs |  |  | (50,809,649 | ) |  |  | (17,666,411 | ) |  |  | (6,916,211 | ) |  |  | (8,576,248 | ) |  |  | (5,712,094 | ) |  |  | (89,680,613 | )
Direct contribution |  |  | 35,560,862 |  |  |  | 21,011,271 |  |  |  | 5,714,467 |  |  |  | 15,082,642 |  |  |  | 5,530,210 |  |  |  | 82,899,452 |
Operating expenses and indirect costs of net revenues |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (26,083,786 | )
Income from operations |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 56,815,666 |
Other income (expenses): |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Interest income and other financial gains |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 6,070,862 |
Interest expense and other financial losses |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (551,617 | )
Foreign currency loss |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (283,969 | )
Other losses, net |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | (11,263 | )
Net income before income / asset tax expense |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  | 62,039,679 |
The following table summarizes the allocation of the long-lived tangible assets based on geography, as of June 30, 2013 and December 31, 2012:
|  | June 30, |  |  | December 31, |
|  | 2013 |  |  | 2012 |
|  | (Unaudited) |  |  | (Audited) |
US long-lived tangible assets |  | $ | 9,519,177 |  |  | $ | 6,782,077 |
Other countries long-lived tangible assets |  |  |  |  |  |  |  |
Argentina |  |  | 33,568,284 |  |  |  | 16,955,438 |
Brazil |  |  | 3,459,910 |  |  |  | 2,421,618 |
Mexico |  |  | 572,537 |  |  |  | 378,653 |
Venezuela |  |  | 29,755,221 |  |  |  | 8,455,816 |
Other countries |  |  | 3,206,530 |  |  |  | 2,732,620 |
|  | $ | 70,562,482 |  |  | $ | 30,944,145 |
Total long-lived tangible assets |  | $ | 80,081,659 |  |  | $ | 37,726,222 |
Long-lived tangible assets acquired: Office building acquisition agreement in Buenos Aires In April 2013, the Company acquired three floors or 3,865 square meters in a new office building located in Buenos Aires for a total amount of $18.0 million plus VAT. The price will be paid in Argentine pesos. At the date of this interim condensed consolidated financial statements the Company paid: i) $0.4 million plus VAT in advance; ii) $3.2 million plus VAT at the date of signing of the purchase agreement and iii) the first two installments in June and in July 2013, for an aggregate amount of $4.1 million. As of June 30, 2013, the Company recorded a liability for the unpaid balance of this building acquisition for a total amount of $12.2 million. Office building acquisition agreement in Caracas In May 2013, the Company acquired 1,158 square meters, 13 parking spaces and 4 storage spaces, in an office building located in Caracas for a total amount of $20.0 million or BF$126.0 million. The price has been paid in Bolivares Fuertes. The following table summarizes the allocation of the goodwill and intangible assets based on geography, as of June 30, 2013 and December 31, 2012:
|  | June 30, 2013 |  |  | December 31, 2012 |
|  | (Unaudited) |  |  | (Audited) |
US intangible assets |  | $ | 15,754 |  |  | $ | 21,005 |
Other countries goodwill and intangible assets |  |  |  |  |  |  |  |
Argentina |  |  | 19,067,487 |  |  |  | 20,328,154 |
Brazil |  |  | 11,129,343 |  |  |  | 10,724,007 |
Mexico |  |  | 14,667,740 |  |  |  | 14,644,795 |
Venezuela |  |  | 6,980,576 |  |  |  | 6,595,117 |
Other countries |  |  | 14,414,889 |  |  |  | 15,332,850 |
|  | $ | 66,260,035 |  |  | $ | 67,624,923 |
Total goodwill and intangible assets |  | $ | 66,275,789 |  |  | $ | 67,645,928 |
Consolidated net revenues by similar products and services for the three and six-months ended June 30, 2013 and 2012 were as follows:
Consolidated Net |  | Three Months Ended June 30, |
Revenues |  | 2013 |  |  | 2012 |
Marketplace |  | $ | 77,915,508 |  |  | $ | 61,936,103 |
Non-marketplace (*) |  | $ | 34,267,852 |  |  | $ | 26,907,956 |
Total |  | $ | 112,183,360 |  |  | $ | 88,844,059 |
Consolidated Net |  | Six Months Ended June 30, |
Revenues |  | 2013 |  |  | 2012 |
Marketplace |  | $ | 149,630,271 |  |  | $ | 122,218,201 |
Non-marketplace (*) |  | $ | 65,278,836 |  |  | $ | 50,361,864 |
Total |  | $ | 214,909,107 |  |  | $ | 172,580,065 |
(*) | Includes, among other things, Ad Sales, Real Estate, Motors, Financing Fees, Off-platform Payment Fees and other ancillary services.

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8380-108599 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 32 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8933-108599 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8538-108599 Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 26 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8844-108599 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 29 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8864-108599 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 34 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8981-108599 Reference 7: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 35 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8984-108599 Reference 8: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 41 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9038-108599 Reference 9: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 30 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8906-108599 Reference 10: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 42 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9054-108599 Reference 11: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 31 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8924-108599 Reference 12: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 40 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e9031-108599 Reference 13: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 33 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8971-108599 Reference 14: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -SubTopic 10 -Section 50 -Paragraph 12 -URI http://asc.fasb.org/extlink&oid=6534315&loc=d3e8595-108599 + Details
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