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Description of Business and Basis of Presentation
 9 Months Ended
Sep. 30, 2013
Description of Business and Basis of Presentation

(1) Description of Business and Basis of Presentation

Marchex, Inc. (the “Company”) was incorporated in the state of Delaware on January 17, 2003. The Company is a mobile advertising technology company that delivers customer phone calls to businesses while its technology analyzes these calls to help maximize campaign results. The Company through its Archeo division also provides performance-based online advertising that connects advertisers with consumers across its proprietary network of owned web sites as well as third party web sites. Archeo’s domain and advertising marketplace enables the buying, selling and development of domain names.

The accompanying unaudited condensed consolidated financial statements of Marchex, Inc. and its wholly-owned subsidiaries have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”). Accordingly, they do not include all of the information and notes required by generally accepted accounting principles for annual financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended September 30, 2013 are not necessarily indicative of the results that may be expected for the year ending December 31, 2013, or for any other period. The balance sheet at December 31, 2012 has been derived from the audited consolidated financial statements at that date but does not include all of the information and notes required by accounting principles generally accepted in the United States of America for complete financial statements. These condensed consolidated financial statements and notes should be read in conjunction with the Company’s audited consolidated financial statements and accompanying notes included in the Annual Report on Form 10-K for the year ended December 31, 2012 filed with the SEC.

The condensed consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. Acquisitions are included in the Company’s consolidated financial statements as of and from the date of acquisition. All inter-company transactions and balances have been eliminated in consolidation. Certain reclassifications have been made to the condensed consolidated financial statements in the prior period to conform to the current period presentation primarily related to discontinued operations (see Note 15. Discontinued Operations) and segment reporting (see Note 6. Segment Reporting and Geographic Information).

The Company’s condensed consolidated financial statements presented include the condensed consolidated balance sheets as of December 31, 2012 and September 30, 2013, the condensed consolidated statements of operations for the three and nine months ended September 30, 2012 and 2013 and the condensed consolidated statements of cash flows for the nine months ended September 30, 2012 and 2013.

In July 2013, the Company sold certain assets related to Archeo’s pay per click advertising services. As a result, the operating results related to these certain pay per click assets are shown as discontinued operations in the condensed consolidated statements of operations for all periods presented (see Note 15. Discontinued Operations).

Proposed Separation Update

On November 1, 2012, the Company announced that its board of directors had authorized the Company to pursue the separation of its mobile advertising business focused on calls and Archeo, a domain and click-based advertising business. On September 19, 2013, the Company announced following a strategic review that it would no longer pursue the separation and Archeo will continue to operate as a division of the Company. The Company will continue to evaluate various strategic alternatives for the Archeo assets.