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GOODWILL, INTERNAL-USE SOFTWARE DEVELOPMENT COSTS, NET, AND INTANGIBLE ASSETS, NET | 12 Months Ended
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Dec. 31, 2022
Goodwill and Intangible Assets Disclosure [Abstract] |
GOODWILL, INTERNAL-USE SOFTWARE DEVELOPMENT COSTS, NET, AND INTANGIBLE ASSETS, NET | GOODWILL, INTERNAL-USE SOFTWARE DEVELOPMENT COSTS, NET, AND INTANGIBLE ASSETS, NET Goodwill The changes to goodwill by reportable segments were as follows:
| Owned and Operated Advertising |  | Partner Network |  | Subscription |  | Total
Goodwill at January 27, 2022 | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | — |
Additions | 355,316 |  |  | 93,400 |  |  | 433,184 |  |  | 881,900 |
Impairment | (355,316) |  |  | (10,993) |  |  | — |  |  | (366,309) |
Goodwill at December 31, 2022 | $ | — |  |  | $ | 82,407 |  |  | $ | 433,184 |  |  | $ | 515,591 |
Additions to Goodwill were from the acquisitions of S1 Holdco, Protected.net, CouponFollow, RoadWarrior and Answers in 2022. See discussion below regarding impairment of goodwill. There was no Goodwill activity for the year ended December 31, 2021 and the period from January 1, 2021 through January 26, 2022 (Predecessor). Goodwill by reportable segments as of December 31, 2021 was as follows:
| Owned and Operated Advertising |  | Partner Network |  | Total
Goodwill at December 31, 2021 | $ | 24,403 |  |  | $ | 20,417 |  |  | $ | 44,820 |
Goodwill Impairment The Company assesses goodwill for impairment annually as of December 31 or more frequently if events or changes in circumstances indicate the asset might be impaired. Prior to the fourth quarter of 2022, the Company had four reporting units, as follows: i.Publishing and Lead Generation - within Owned and Operated Advertising reportable segment ii.Search and Applications - within Owned and Operated Advertising reportable segment iii.Partner Network – reportable segment and reporting unit iv.Subscription – reportable segment and reporting unit The Company has experienced adverse macroeconomic impacts as a result of changes in market conditions and increases in interest rates, which contributed to reduced forecasted revenues and reduced expectations for future cash flows. In response to these ongoing macroeconomic conditions and a broad weakening of consumer demand during the third quarter of 2022, the Company reduced its earnings forecasts for the Owned and Operated Advertising & Partner Network reportable segments. Given these adverse impacts, the Company performed an interim quantitative goodwill impairment analysis for all its reporting units as of September 30, 2022. Based on the Company’s quantitative impairment analysis as of September 30, 2022: •the fair value of the Subscription reporting unit exceeded its carrying amount by 13%. •the fair value of the Search and Applications reporting unit exceeded its carrying amount by 2%. •the fair value of the Publishing and Lead Generation reporting unit was substantially less than its carrying amount. As a result, the Company impaired all the goodwill attributable to this reporting unit of $329,133. •the fair value of the Partner Network reporting unit was less than its carrying amount, resulting in a $10,976 impairment of goodwill attributable to this reporting unit. During the quarter ended December 31, 2022, the Company realigned its reporting structure due to changes in management such that the Search and Applications reporting unit became part of the Publishing and Lead Generation reporting unit and the new reporting unit was renamed Owned and Operated Advertising. Based on the Company’s December 31, 2022 annual impairment analysis: •the fair value of the Subscription reporting unit exceeded its carrying amount by 18%. •the fair value of the Owned and Operated Advertising reporting unit was substantially less than its carrying amount. As a result, the Company impaired all the goodwill attributable to this reporting unit of $26,200. •the fair value of the Partner Network reporting unit exceeded the carrying amount by 9%, as the Partner Network reporting unit experienced improved results during the fourth quarter of 2022. The fair values of the Company’s reporting units as of September 30, 2022 and December 31, 2022 were computed by weighting a discounted cash flow model and a reference transaction model which included inputs developed using both internal and market-based data. The Company's key assumptions in the discounted cash flow model included, but were not limited to, the weighted average cost of capital, revenue growth rates (including long-term growth rates), and operating margins. The weighted average cost of capital reflected the increases in market interest rates. The Company's reference transaction model derives indications of value based on mergers and acquisition transactions in the digital advertising industry. Key assumptions in this model include, but were not limited to, selection of comparable transactions, revenue and EBITDA multiples and EBITDA margins from those transactions. Any deviation in actual financial results compared to the forecasted financial results or valuation assumptions, a decline in equity valuations, or increases in interest rates, among other factors, could have a material adverse effect to the fair value of the reporting units and could result in a future impairment charge. There can be no assurance that the Company’s future asset impairment testing will not result in a material charge to earnings. Internal-use software development costs and intangible assets Internal-use software development costs and intangible assets consisted of the following:
| December 31, 2022 (Successor)
| Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Total internal-use software development costs | $ | 7,206 |  |  | $ | (258) |  |  | $ | 6,948 |
Intangibles: |  |  |  |  |
Developed technology | $ | 196,128 |  |  | $ | (45,322) |  |  | $ | 150,806 |
Trademarks and trade names | 287,857 |  |  | (26,241) |  |  | 261,616 |
Software | 5,100 |  |  | (1,066) |  |  | 4,034 |
Customer relationships | 121,000 |  |  | (44,770) |  |  | 76,230 |
Total intangible costs | $ | 610,085 |  |  | $ | (117,399) |  |  | $ | 492,686 |
| December 31, 2021 (Predecessor)
| Gross Carrying Amount |  | Accumulated Amortization |  | Net Carrying Amount
Total internal-use software development costs | $ | 21,274 |  |  | $ | (10,061) |  |  | $ | 11,213 |
Intangibles: |  |  |  |  |
Developed technology | $ | 8,398 |  |  | $ | (7,242) |  |  | $ | 1,156 |
Trademarks and trade names | 69,007 |  |  | (21,375) |  |  | 47,632 |
Professional service agreement | 3,100 |  |  | (2,359) |  |  | 741 |
Customer relationships | 1,500 |  |  | (661) |  |  | 839 |
Total intangible costs | $ | 82,005 |  |  | $ | (31,637) |  |  | $ | 50,368 |
The internal-use software development costs include capitalized costs not ready for its internal use of $4,955 and $2,540 as of December 31, 2022 and 2021, respectively. Amortization expense for internal-use software development costs and intangible assets were as follows:
| Successor |  |  | Predecessor
| Period from January 27, 2022 through December 31, 2022 |  |  | Period from January 1, 2022 through January 26, 2022 |  | Year Ended December 31, 2021
Amortization expense for internal-use software development | $ | 467 |  |  |  | $ | 355 |  |  | $ | 4,934 |
Amortization expense for intangible assets | $ | 117,399 |  |  |  | $ | 629 |  |  | $ | 8,641 |
No impairment of internal-use software development cost or intangible assets was identified for the periods presented in this report. As of December 31, 2022, the expected amortization expense associated with the Company’s intangible assets and internal-use software development costs was as follows:
Amortization Expense |
2023 | $ | 111,177
2024 | 102,167
2025 | 95,217
2026 | 43,903
2027 | 29,258
Thereafter | 117,912
Total amortization expense | $ | 499,634
As of December 31, 2022, the weighted average amortization period for all intangible assets was 7 years.

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