3. Business

Combinations

The Company uses its best estimates and assumptions as a part of the purchase price allocation process to accurately value assets acquired and liabilities assumed at the business combination date, its estimates and assumptions are inherently uncertain and subject to refinement. As a result, during the preliminary purchase price allocation period, which may be up to one year from the business combination date, the Company records adjustments to the assets acquired and liabilities assumed, with the corresponding offset to goodwill. The Company records adjustments to assets acquired or liabilities assumed subsequent to the purchase price allocation period in its operating results in the period in which the adjustments were determined. None of the goodwill is deductible for tax purposes.

For the years ended December 31, 2011 and 2010, approximately $0.7 million and $2.6 million of transaction related costs are included in general and administrative expenses.

2009 Acquisitions

Certifica

On November 11, 2009, the Company completed its acquisition of Certifica, a leading analyst of Internet traffic measurement in Latin America (the "Certifica Acquisition"). The Company acquired all of the outstanding common stock of Certifica in a cash transaction.

The Certifica Acquisition resulted in goodwill of approximately $1.9 million. This amount represents the residual amount of the total purchase price after allocation to net assets and identifiable intangible assets acquired. Included in the total net assets acquired was approximately $0.7 million in liabilities related to uncertain tax positions. The amount recorded for goodwill is consistent with the Company's intentions for the acquisition of Certifica. The Company acquired Certifica to strengthen its presence in the Latin America region and enable the Company to offer hybrid measurement as part of its Media Metrix 360 initiative using the same state-of-the-art measurement technologies the Company uses elsewhere in the world.

Definite-lived intangible assets of $1.2 million consist of the value assigned to Certifica's customer relationships, trade name and its core technology of $0.9 million, $0.2 million and $0.1 million respectively. The useful lives range from two to seven years (see Note 2).

The Company has finalized its purchase accounting for Certifica. The Company has included the financial results of Certifica in its consolidated financial statements beginning November 11, 2009. Included in revenue for the period from November 11, 2009 to December 31, 2009 was $0.2 million related to Certifica.

2010 Acquisitions

ARSgroup

On February 19, 2010, the Company completed its acquisition of ARSgroup ("ARS"), a leading technology-driven market research firm that measures the persuasion of advertising on TV and multi-media platforms(the "ARS Acquisition"). The Company acquired all of the outstanding common stock of ARS in a cash transaction.

The ARS Acquisition resulted in goodwill of approximately $8.1 million. This amount represents the residual amount of the total purchase price of $17.7 million after allocation to net assets and identifiable intangible assets acquired. The amount recorded for goodwill is consistent with the Company's intentions for the acquisition of ARS. The Company acquired ARS to provide it with technology-driven market research capabilities for measuring the effectiveness of advertising creative content. The additional resources will allow the Company to create new products and tools for designing and measuring more effective advertising on TV, online, and cross media campaigns.

Definite-lived intangible assets of $9.5 million consist of the value assigned to ARS's methodology and database, customer relationships and trade name of $4.1 million, $4.1 million and $1.3 million, respectively. The useful lives range from two to ten years (see Note 2).

ARS made an Internal Revenue Code section 338(h)(10) election with respect to the acquisition transaction. With such an election, the Company has fair market value basis in the ARS assets and liabilities for both income tax and financial reporting purposes and no opening deferred tax balances. The Company finalized the accounting for the ARS Acquisition in the first quarter of 2011. The Company has included the financial results of ARS in its consolidated financial statements beginning February 19, 2010. Included in revenue for the period February 19, 2010 to December 31, 2010 was $18.1 million related to ARS.

Nexius, Inc.

On July 1, 2010, the Company completed its acquisition of Nexius, a leading a provider of carrier-grade mobile network analysis and intelligence solutions (the "Nexius Acquisition").

The aggregate amount of the consideration paid by the Company upon the closing of the transaction was $20.9 million, of which approximately $3.0 million was paid in cash to satisfy certain of Nexius's existing debt obligations. Following payment of transaction expenses, the remaining estimated merger consideration of $15.3 million in cash and an aggregate of 158,070 shares of the Company's common stock valued at $2.6 million was paid to the Nexius shareholders and holders of certain Nexius equity rights.

The Nexius Acquisition resulted in a preliminary estimate of goodwill of approximately $14.0 million. This amount represents the residual amount of the total purchase price after allocation to net assets and identifiable intangible assets acquired. The amount recorded for goodwill is consistent with the Company's intentions for the acquisition of Nexius. The Company finalized the accounting for the Nexius Acquisition in the second quarter of 2011. An additional $0.7 million was recorded to goodwill related to the final calculation of opening working capital and tax adjustments of Nexius, Inc. The Company acquired Nexius to solidify it as a leader in the mobile category. The Company has included the financial results of Nexius in its consolidated financial statements beginning July 1, 2010. Included in revenue for the period from July 1, 2010 to December 31, 2010 was $3.4 million related to Nexius.

Definite-lived intangible assets of $17.1 million consist of the value assigned to Nexius's customer relationships, core technology and trade name of $14.5 million, $1.6 million and $1.0 million respectively. The useful lives range from two to twelve years (see Note 2).

In connection with the purchase price allocation, the estimated fair value of the deferred revenue assumed from Nexius in connection with the Nexius Acquisition was determined utilizing a cost build-up approach. The present value of the sum of the costs and operating profit approximates the amount that the Company would be required to pay a third party to assume the obligations. The estimated costs to fulfill the obligation were based on the historical direct costs related to providing the services.

Nedstat B.V.

On August 31, 2010, the Company completed its acquisition of Nedstat, a leading provider of technology that helps web sites, particularly publishers and video companies, analyze the behavior of their users with powerful analytic tools (the "Nedstat Acquisition").

The aggregate amount of the consideration paid by the Company upon the closing of the transaction was approximately $34.4 million in cash and an aggregate of 58,045 shares of the Company's common stock valued at $1.1 million was issued to two key shareholders of Nedstat.

The Nedstat Acquisition resulted in a preliminary estimate of goodwill of approximately $21.0 million. This amount represents the residual amount of the total purchase price after allocation to net assets and identifiable intangible assets acquired. The amount recorded for goodwill is consistent with the Company's intentions for the acquisition of Nedstat. During the second quarter of 2011 the Company recorded an additional $0.1 million in goodwill associated with an adjustment to the fair value of acquired deferred revenue related to the acquisition of Nedstat B.V. During the third quarter of 2011, the Company finalized its purchase accounting for the acquisition of Nedstat B.V., and no additional adjustments were recorded.

The Company acquired Nedstat to help transform the Company into a broad based "Digital Business Analytics company" and solidify its Unified Digital Measurement platform. The Company has included the financial results of Nedstat in its consolidated financial statements beginning September 1, 2010. Included in revenue for the period from August 31, 2010 to December 31, 2010 was $3.6 million related to Nedstat.

Definite-lived intangible assets of $18.7 million consist of the value assigned to Nedstat's customer relationships, core technology and trade name of $15.3 million, $1.9 million and $1.5 million, respectively. The useful lives range from two to seven years (see Note 2).

In connection with the purchase price allocation, the estimated fair value of the deferred revenue assumed from Nedstat in connection with the Nedstat Acquisition was determined utilizing a cost build-up approach. The cost build-up approach determines fair value by estimating the costs relating to fulfilling the assumed contractual obligations plus a market profit margin. The present value of the sum of the costs and operating profit approximates the amount that the Company would be required to pay a third party to assume the obligations. The estimated costs to fulfill the obligation were based on the historical direct costs related to providing the services.

2011 Acquisitions

AdXpose, Inc.

On August 11, 2011, the Company completed its acquisition of AdXpose, Inc. ("AdXpose"). AdXpose provides advertisers and publishers with greater transparency in the quality, safety, and performance of their digital advertising campaigns by allowing them to verify and optimize billions of campaign data points captured in real-time. The aggregate amount of the consideration paid by the Company upon the closing of the transaction was $19.4 million. Of the $19.4 million, $4.4 million was paid in cash and an aggregate of 982,285 shares of the Company's common stock with a fair value of $15.0 million on the acquisition date was issued to the AdXpose stockholders.

The acquisition of AdXpose resulted in a preliminary estimate of goodwill of approximately $16.0 million, none of which is deductible for tax purposes. This amount represents the residual amount of the total purchase price after allocation to net assets and identifiable intangible assets acquired. The amount recorded as goodwill is consistent with the Company's intentions for the acquisition of AdXpose. The Company acquired AdXpose to enhance its capabilities in the marketplace for highly effective advertising campaign measurement.

Definite-lived intangible assets of $0.9 million consist of the value assigned to AdXpose's developed technology, customer relationships, and trade name of $0.7 million, $0.1 million and $0.1 million, respectively. These intangible assets have been assigned useful lives of five, three and one and a half years, respectively.

The Company is in the process of evaluating the opening balance sheet for deferred tax related items and may continue to adjust the preliminary purchase price allocation after obtaining more information about deferred tax assets acquired and deferred tax liabilities assumed. The Company has included the financial results of AdXpose in its consolidated financial statements beginning August 11, 2011. Included in revenue for the period from August 11, 2011 to December 31, 2011 was $1.5 million related to AdXpose.

The preliminary purchase price is allocated as follows (in thousands):


Cash and cash equivalents	$	515
Accounts Receivables, net		442
Prepaid expenses and other current assets		72
Property and equipment, net		164
Deferred tax asset		2,265
Accounts Payable		(46	)
Accrued expenses		(578	)
Deferred tax liability		(365	)

Net tangible assets acquired		2,469
Definite-lived intangible assets acquired		925
Goodwill		16,027

Total estimated purchase price	$	19,421

Pro Forma Adjusted Summary

The results of AdXpose, Nexius and Nedstat's operations have been included in the Consolidated Financial Statements subsequent to the acquisition dates.

The unaudited financial information provided below summarizes the combined results of operations of the Company and AdXpose, Nexius and Nedstat on a pro forma basis, as though the companies had been combined as of the beginning of the periods presented. The unaudited pro forma adjusted summary combines the historical results for the Company for the periods presented with the historical results for AdXpose, Nexius and Nedstat over the same periods. The pro forma financial information is presented for informational purposes only and does not purport to be indicative of the Company's financial position or results of operations, which would actually have been obtained had such transaction been completed as of the date or for the periods presented, or of the financial position or results of operations that may be obtained in the future.


	Year Ended December 31,
	2011			2010
	(Unaudited)
	(In thousands, except per share data)
Revenues	$	234,095		$	189,704
Net loss	$	(17,468	)	$	(12,504	)
Basic loss per share to common stockholders	$	(0.53	)	$	(0.39	)
Diluted loss per share to common stockholders	$	(0.53	)	$	(0.39	)