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Note 5 - Goodwill and Other Intangible Assets
12 Months Ended
Dec. 31, 2014
Goodwill and Intangible Assets Disclosure [Abstract]  
Goodwill and Intangible Assets Disclosure [Text Block]

5. Goodwill and Other Intangible Assets


Goodwill


Goodwill represents the excess of purchase price over the fair value of tangible or identifiable intangible assets acquired and liabilities assumed in our acquisitions.


Goodwill consists of the following:


   

Boardtown

Corporation

   

Hosted

Messaging

Assets of

Critical Path

   

Innerwise

Inc.

   

Mailbank.com

Inc.

   

EPAG

Domainservices

GmbH

   

Total

 

Balances, December 31, 2014

  $ 2,044,847     $ 4,072,297     $ 5,801,040     $ 6,072,623     $ 882,320     $ 18,873,127  

Balances, December 31, 2013

  $ 2,044,847     $ 4,072,297     $ 5,801,040     $ 6,072,623     $ 882,320     $ 18,873,127  

The Company’s goodwill relates entirely to its Domain Services operating segment. Goodwill is not amortized, but is subject to an annual impairment test. The Company performed an impairment analysis as outlined in note 2(f) and there were no indications of impairment in the 2014 and 2013 impairment tests.


Other Intangible Assets:


All of the Company’s intangible assets relate to its Domain Services operating segment. Intangible assets consist of acquired technology, brand, customer relationships, surname domain names and direct navigation domain names. The Company treats its intangible assets consisting of surname domain names and direct navigation domain names as indefinite life intangible assets. The Company has the exclusive right to these domain names as long as the annual renewal fees are paid to the applicable registry. Renewals occur routinely and at a nominal cost. The indefinite life intangible assets are not amortized, but are subject to impairment tests performed throughout the year. During 2014, the Company assessed that certain of the domain names that were originally acquired in the June 2006 acquisition of Mailbank.com Inc. that were up for renewal, should not be renewed. During the year ended December 31, 2014, domain names, with a book value of $ 577,145, were not renewed and were recorded as an impairment of indefinite life intangible assets. No impairment was recorded on indefinite-life intangible assets during the years ended December 31, 2013 and 2012.


Intangible assets, comprising technology, brand and customer relationships related to the acquisition of Boardtown Corporation in April 2004, the acquisition of the Hosted Messaging Business of Critical Path, Inc. in January 2006, the acquisition of Mailbank.com Inc. in June 2006, the acquisition of Innerwise, Inc. in July 2007 and the acquisition of EPAG Domainservices GmbH in August 2011, are being amortized on a straight-line basis over periods of two to seven years.


Acquired intangible assets consist of the following:


   

Surname

domain names

   

Direct

navigation

domain names

   

Technology

   

Brand

   

Customer

relationships

         

Amortization period

 

indefinite life

   

indefinite life

   

2 - 7

years

   

7

years

   

4 - 7

years

   

Total

 

Balances, December 31, 2012

  $ 12,110,017     $ 2,013,374     $ 83,790     $ 398,290     $ 1,810,180     $ 16,415,651  

Additions to/(disposals from) domain portfolio, net

    (13,305

)

    (39,208

)

                      (52,513

)

Amortization expense

                (83,790

)

    (173,640

)

    (702,480

)

    (959,910

)

Balances, December 31, 2013

    12,096,712       1,974,166             224,650       1,107,700       15,403,228  

Additions to/(disposals from) domain portfolio, net

    (6,490

)

    (20,388

)

                      (26,878

)

Impairment of indefinite life intangible assets

    (564,598

)

    (12,547

)

                      (577,145

)

Amortization expense

                      (114,140

)

    (482,480

)

    (596,620

)

Balances, December 31, 2014

  $ 11,525,624     $ 1,941,231     $     $ 110,510     $ 625,220     $ 14,202,585  

The following table shows the estimated amortization expense for each of the next 4 years, assuming no further additions to acquired intangible assets are made:


   

Year ending

December 31,

 

2015

    205,320  

2016

    205,320  

2017

    205,320  

2018

    119,770  

Total

  $ 735,730