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Intangible Assets and Goodwill | 12 Months Ended
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Dec. 31, 2011
Notes to Financial Statements |
Note 5 - Intangible Assets and Goodwill | During 2011, we tested all reporting units for potential impairment during step 1 of our analysis. Based on the results of step 1, there were indications of impairment within our web properties segment primarily due to the cessation of our call center activities in 2011. We completed step 2 of the analysis on the intangible assets in our web properties and we determined that there was an impairment of our goodwill and names database and consequently we recognized an impairment charge of approximately $2.6 million. Additionally, in fiscal 2012 we will amortize the names database costs over nine months as management has determined that the useful life for our names database has decreased due to the cessation of our call center operations. We will apply this change in estimate prospectively. During 2010, we tested all reporting units for impairment. Based on the results of these tests, there were no indications of impairment. However in 2010, the tradenames associated with Morex and Primary Ads were impaired because we are no longer using these names and consequently, we recorded an impairment loss of $400,000. The following is a schedule of our intangible assets from continuing operations as of December 31, 2011:
| Term |  | Carrying Value |  |  | Accumulated Amortization and Impairment |  |  | Net Carrying Value |
Names database (1) | 9 months |  | $ | 16,130,086 |  |  | $ | (15,182,204 | ) |  | $ | 947,882 |
Website development | 5 Years |  |  | 4,210,000 |  |  |  | (4,210,000 | ) |  |  | - |
Customer lists | 5 Years |  |  | 3,500,000 |  |  |  | (3,500,000 | ) |  |  | - |
Exclusivity agreement | 1 Year |  |  | 150,000 |  |  |  | (150,000 | ) |  |  | - |
Tradenames (1) | Indefinite |  |  | 390,000 |  |  |  | - |  |  |  | 390,000 |
Total intangible assets |  |  | $ | 24,380,086 |  |  | $ | (23,042,204 | ) |  | $ | 1,337,882 |
Goodwill |  |  | $ | 3,893,405 |  |  | $ | (2,116,861 | ) |  | $ | 1,776,544 |
The following is a schedule of our intangible assets from continuing operations as of December 31, 2010:
| Term |  | Carrying Value |  |  | Accumulated Amortization and Impairment |  |  | Net Carrying Value |
Names database (1) | 1-2 Years |  | $ | 13,563,058 |  |  | $ | (11,600,097 | ) |  | $ | 1,962,961 |
Website development | 5 Years |  |  | 4,210,000 |  |  |  | (4,110,729 | ) |  |  | 99,271 |
Customer lists | 5 Years |  |  | 3,500,000 |  |  |  | (3,477,814 | ) |  |  | 22,186 |
Exclusivity agreement | 1 Year |  |  | 150,000 |  |  |  | (112,500 | ) |  |  | 37,500 |
Tradenames (1) | Indefinite |  |  | 390,000 |  |  |  | - |  |  |  | 390,000 |
Total intangible assets |  |  | $ | 21,813,058 |  |  | $ | (19,301,140 | ) |  | $ | 2,511,918 |
Goodwill |  |  | $ | 3,893,405 |  |  | $ | (542,000 | ) |  | $ | 3,351,405 |
___________
(1) | Amortization of Names Database included in cost of revenue for the years ended December 31, 2011 and 2010 was approximately $2.5 million and $2.0 million, respectively. As of January 1, 2012, the names database will be amortized over nine months due to the change in our estimate of useful life. The change in estimate resulted in the names database being classified as current in the 2011 consolidated balance sheet. Per ASC 250, Accounting Changes and Error Corrections, this change in estimate does not require a restatement in amounts in prior periods and will only change classifications prospectively. We do not amortize the carrying value of our Tradenames.
Our amortization expense over the next five years is as follows:
2012 |  | $ | 947,882 |
2013 |  |  | - |
2014 |  |  | - |
2015 |  |  | - |
2016 |  |  | - |
Total |  | $ | 947,882 |

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- Definition The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6905597&loc=d3e13816-109267 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 1 -URI http://asc.fasb.org/extlink&oid=6905858&loc=d3e16265-109275 Reference 3: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Statement of Financial Accounting Standard (FAS) -Number 142 -Paragraph 42, 43, 44, 45, 46, 47 -LegacyDoc This reference is SUPERSEDED by the Accounting Standards Codification effective for interim and annual periods ending after September 15, 2009. This reference is included to help users transition from the previous accounting hierarchy and will be removed from future versions of this taxonomy. Reference 4: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 3 -URI http://asc.fasb.org/extlink&oid=6905858&loc=d3e16373-109275 Reference 5: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 30 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6905858&loc=d3e16323-109275 Reference 6: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 350 -SubTopic 20 -Section 50 -Paragraph 2 -URI http://asc.fasb.org/extlink&oid=6905597&loc=d3e13854-109267 + Details
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