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General and administrative

$ 50,496

$ 34,732

Expenses:

Service costs

^[1]

32,354

20,148

Sales and marketing

^[1]

3,382

2,644

Product development

7,560

6,808

5,361

4,797

Amortization of intangible assets from acquisitions

^[2]

403

1,055

Separation related costs

345

Total operating expenses

49,060

35,797

Gain on sales and disposals of intangible assets, net

1,362

Interest and line of credit expense

1,436

297

Other income (expense):

Interest income

(19)

Other

(1)

Total other income (expense)

(2)

(17)

Income from continuing operations before provision for income taxes

1,434

280

Income tax expense

588

164

Net income from continuing operations

846

116

Discontinued operations, net of tax

(31)

Net income

855

Dividends paid to participating securities

(36)

Net income applicable to common stockholders

$ 819

$ 85

Basic and diluted net income per share applicable to Class A and Class B common stockholders:

Continuing operations

$ 0.02

$ 0.00

Discontinued operations, net of tax

0.00

Basic and diluted net income applicable to Class A and Class B common stockholders

0.02

$ 0.00

Dividends paid per share

$ 0.02

Class A

Other income (expense):

Net income from continuing operations

$ 170

$ 30

Shares used to calculate basic net income per share applicable to common stockholders

Shares used to calculate basic net income per share applicable to common stockholders

7,741

9,570

Shares used to calculate diluted net income per share applicable to common stockholders

Shares used to calculate diluted net income per share applicable to common stockholders

7,741

9,570

Class B

Other income (expense):

Net income from continuing operations

$ 676

$ 86

Dividends paid to participating securities

$ (36)

Shares used to calculate basic net income per share applicable to common stockholders

Shares used to calculate basic net income per share applicable to common stockholders

29,035

25,585

Shares used to calculate diluted net income per share applicable to common stockholders

Shares used to calculate diluted net income per share applicable to common stockholders

39,761

35,550

[1]	Excludes amortization of intangible assets from acquisitions
[2]	Components of amortization of intangible assets from acquisitions:

Condensed Consolidated Statements of Operations (Parenthetical) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2014

Mar. 31, 2013

Service costs

$ 403

$ 748

Sales and marketing

307

Total

^[1]

$ 403

$ 1,055

[1]	Components of amortization of intangible assets from acquisitions:

Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Cash flows from operating activities:
Net income	$ 855	$ 85
Adjustments to reconcile net income to net cash provided by operating activities:
Amortization and depreciation	1,356	1,968
Gain on sales and disposals of intangible assets, net		(1,362)
Allowance for doubtful accounts and advertiser credits	701	373
Stock-based compensation	2,883	1,919
Deferred income taxes	576	(43)
Excess tax benefit related to stock-based compensation		(7)
Change in certain assets and liabilities:
Accounts receivable, net	(5,741)	(2,936)
Refundable taxes	12	(46)
Prepaid expenses, other current assets and other assets	187	(223)
Accounts payable	5,976	1,966
Accrued expenses and other current liabilities	1,135	381
Deferred revenue	243	(27)
Other non-current liabilities	(105)	93
Net cash provided by operating activities	8,078	2,141
Cash flows from investing activities:
Purchases of property and equipment	(672)	(810)
Proceeds from sales of intangible assets		1,362
Purchases of intangible assets and changes in other non-current assets	(135)	(40)
Net cash provided by (used in) investing activities	(807)	512
Cash flows from financing activities:
Excess tax benefit related to stock-based compensation		7
Deferred offering costs	(67)
Tax withholding related to restricted stock awards	(148)	(1,384)
Common stock dividend payments	(771)
Repurchase of Class B common stock		(119)
Proceeds from exercises of stock options and issuance of restricted stock to employees, net of repurchases of forfeited unvested restricted stock	1,329	2
Proceeds from employee stock purchase plan		11
Net cash provided by (used in) financing activities	343	(1,483)
Net increase in cash and cash equivalents	7,614	1,170
Cash and cash equivalents at beginning of period	30,912	15,930
Cash and cash equivalents at end of period	38,526	17,100
Supplemental disclosure of cash flow information:
Cash paid during the period for income taxes, net of refunds	$ 5	$ 43

Description of Business and Basis of Presentation

3 Months Ended

Mar. 31, 2014

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 and call advertising technology company. The Company provides products and services for businesses of all sizes that depend on consumer phone calls to drive sales. The Company’s technology platform delivers performance-based, pay-for-call advertising across numerous mobile and online publishers to connect high-intent consumers with business over the phone while its technology facilitates call quality, analyzes calls in real time and measures the outcomes of calls. The Company through its Archeo division enables the buying, selling and development of domain names. The Company also provides performance-based online advertising that connects advertisers with consumers across our owned web sites as well as third party web sites.

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 March 31, 2014 are not necessarily indicative of the results that may be expected for the year ending December 31, 2014, or for any other period. The balance sheet at December 31, 2013 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, 2013 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. The Company’s condensed consolidated financial statements presented include the condensed consolidated balance sheets as of December 31, 2013 and March 31, 2014, the condensed consolidated statements of operations for the three months ended March 31, 2013 and 2014 and the condensed consolidated statements of cash flows for the three months ended March 31, 2013 and 2014.

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).

The entire disclosure for organization, consolidation and basis of presentation of financial statements disclosure.

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Significant Accounting Policies

Significant Accounting Policies

3 Months Ended

Mar. 31, 2014

(2) Significant Accounting Policies

The preparation of financial statements in conformity with generally accepted accounting principles (“GAAP”) in the United States requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. These judgments are difficult as matters that are inherently uncertain directly impact their valuation and accounting. Actual results may vary from management’s estimates and assumptions.

On September 10, 2013, the Company launched its Domains Marketplace, which provides domain names available for sale and initiated plans to facilitate the active buying and transacting of domain names. Domain name sales occurring after this launch have been recognized as revenue in the condensed consolidated financial statements. Historically, the sale of domain names were not a core operation of the Company and were peripheral to the generation of advertising revenue from domain names held for use and as such domain name sales were reported as gains on sales and disposals of intangible assets, net in the condensed consolidated financial statements. Substantially all of the Company’s domain names that are available for sale are also used to generate advertising revenue. The Company also continues to maintain a portfolio of domain names which are solely held for use primarily to generate advertising revenue.

Adoption of New Accounting Pronouncement

In July 2013, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update No. 2013-11, Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists (ASU 2013-11). The amendments in this update require an unrecognized tax benefit, or a portion of an unrecognized tax benefit, to be presented in the financial statements as a reduction to a deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, except as follows. To the extent a net operating loss carryforward, a similar tax loss, or a tax credit carryforward is not available at the reporting date under the tax law of the applicable jurisdiction to settle any additional income taxes that would result from the disallowance of a tax position or the tax law of the applicable jurisdiction does not require the entity to use, and the entity does not intend to use, the deferred tax asset for such purpose, the unrecognized tax benefit should be presented in the financial statements as a liability and should not be combined with deferred tax assets. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. In the first quarter of 2014, the Company adopted ASU 2013-11on a prospective basis, which did not have a material impact on the Company’s financial statements.

Revenues

The following table presents the Company’s revenues by segment for the periods presented (in thousands):


	Three months ended March 31,
	2013		2014
Call-driven	$	31,108	$	45,492
Archeo		3,624		5,004

Total Revenue	$	34,732	$	50,496

Call-driven revenue consists of payments from advertisers for pay-for-call marketing services and for use of the Company’s Call Analytics technology. Call-driven revenue also consists of payments from our reseller partners for use of our technology platform and marketing services, which they offer to their small business customers, as well as payments from advertisers for cost-per-action marketing services. Archeo revenue includes revenue generated from advertisements on our network of owned and operated websites and third-party distribution, as well as from the sale of domain names occurring after the launch of the Company’s Domains Marketplace in September 2013. Prior to the launch of Domains Marketplace, the sale of domain names were reported as gains on sales and disposals of intangible assets, net in the condensed consolidated financial statements and totaled $1.4 million for the three months ended March 31, 2013 compared to $1.9 million of domain sales revenue for the three months ended March 31, 2014. See Note 6. Segment Reporting and Geographic Information for further discussion regarding the Company’s operating segments.

The following table presents the Company’s revenues, by revenue source, for the periods presented (in thousands):


	Three months ended March 31,
	2013		2014
Partner and Other Revenue Sources	$	32,841	$	46,870
Proprietary Web site Traffic Sources and Domain Names		1,891		3,626

Total Revenue	$	34,732	$	50,496

The Company’s partner network revenues are primarily generated using third party distribution networks to deliver the advertisers’ listings. The distribution network includes mobile and online search engines and applications, directories, destination sites, shopping engines, third party Internet domains or web sites, other targeted Web-based content, mobile carriers and other offline sources. The Company generates revenue upon delivery of qualified and reported phone calls or click-throughs to our advertisers or to advertising services providers’ listings. The Company pays a revenue share to the distribution partners to access their mobile, online, offline and other user traffic. Other revenues include the Company’s call provisioning and call tracking services, presence management services, and campaign management services.

The Company’s proprietary web site traffic revenues are generated from the Company’s portfolio of owned web sites which are monetized with pay-for-call or pay-per-click listings that are relevant to the web sites, and other forms of advertising, including banner advertising and sponsorships. When an online user navigates to one of the Company’s owned and operated web sites and calls or clicks on a particular listing or completes the specified action, the Company receives a fee. Other proprietary web site traffic revenues include domain name sales which were recognized as revenue with the launch of its Domains Marketplace in September 2013.

Stock-based Compensation Plans

3 Months Ended

Mar. 31, 2014

Stock-based Compensation Plans

(3) Stock-based Compensation Plans

Stock-based compensation expense has been included in the same lines as compensation paid to the same employees in the condensed consolidated statement of operations. Stock-based compensation expense was included in the following operating expense categories as follows (in thousands):


	Three months ended March 31,
	2013		2014
Service costs	$	180	$	282
Sales and marketing		60		204
Product development		372		659
General and administrative		1,295		1,738

Total stock-based compensation	$	1,907	$	2,883

Income tax benefit related to stock-based compensation included in net income from continuing operations	$	509	$	908

FASB ASC 718 requires the benefits of tax deductions in excess of the stock-based compensation cost to be classified as financing cash inflows and is shown as “Excess tax benefit related to stock-based compensation” on the consolidated statement of cash flows. In addition, a tax benefit and a credit to additional paid-in capital for the excess deductions are not recognized until that deduction reduces taxes payable. For the three months ended March 31, 2014, the Company incurred an excess tax deduction of $1.3 million for which the tax benefit was not recorded because the Company is in a cumulative loss carryforward position for income taxes.

The Company uses the Black-Scholes option pricing model to estimate the per share fair value of stock option grants with time-based vesting. The Black-Scholes model relies on a number of key assumptions to calculate estimated fair values. For the quarters ended March 31, 2013 and 2014, the expected life of each award granted was determined based on historical experience with similar awards, giving consideration to contractual terms, anticipated exercise patterns, vesting schedules and forfeitures. Expected volatility is based on historical volatility levels of the Company’s Class B common stock and the expected volatility of companies in similar industries that have similar vesting and contractual terms. The risk-free interest rate is based on the implied yield currently available on U.S. Treasury issues with terms approximately equal to the expected life of the option. The Company uses an expected annual dividend yield in consideration of the Company’s common stock dividend payments.

The following weighted average assumptions were used in determining the fair value of time-vested stock option grants for the periods presented:


	Three months ended March 31,
	2013		2014
Expected life (in years)		4.0		4.0
Risk-free interest rate		0.57%		1.32	%
Expected volatility		57%		55%-60	%
Expected dividend yield		2.33%		0.76	%

Stock option activity during the three months ended March 31, 2014 is summarized as follows:


	Shares			Weighted average exercise price		Weighted average remaining contractual term (in years)		Aggregate intrinsic value (in thousands)
Balance at December 31, 2013		7,707,713		$	7.48	$	6.99	$	17,148
Options granted		86,000			10.12
Options forfeited		(58,073	)		5.39
Options expired		(37,061	)		12.13
Options exercised		(206,811	)		6.65

Balance at March 31, 2014		7,491,768		$	7.52	$	6.81	$	27,477

The Company issues restricted stock awards and restricted stock units to employees for future services and/or in connection with acquisitions. Restricted stock units entitle the holder to receive one share of the Company’s Class B common stock upon satisfaction of certain vesting conditions. Restricted stock award and restricted stock unit grants are generally measured at fair value on the date of grant based on the number of awards granted and the quoted price of the Company’s common stock. Restricted shares issued are accounted for under FASB ASC 718 using the straight-line method net of estimated forfeitures.

Restricted stock awards and restricted stock units activity during the three months ended March 31, 2014 is summarized as follows:


	Shares/ Units			Weighted average grant date fair value
Unvested balance at December 31, 2013		2,709,443		$	5.41
Granted		10,000			9.86
Vested		(146,875	)		6.10
Forfeited		(25,750	)		3.89

Unvested balance at March 31, 2014		2,546,818		$	5.40

The Company repurchased 12,008 shares from certain executives for minimum withholding taxes on 41,000 restricted stock awards that vested during 2014. The number of shares repurchased was based on the value on the vesting date of the restricted stock awards equivalent to the value of the executives’ minimum withholding taxes of $148,000, which was remitted in cash to the appropriate taxing authorities. The payments are reflected as a financing activity within the condensed consolidated statement of cash flows when paid.

Net Income Per Share

3 Months Ended

Mar. 31, 2014

Net Income Per Share

(4) Net Income Per Share

The Company computes net income per share of Class A and Class B common stock using the two class method. Under the provisions of the two class method, basic net income per share is computed by dividing net income applicable to common stockholders by the weighted average number of common shares outstanding during the period. Diluted net income per share is computed by dividing net income applicable to common stockholders by the weighted average number of common and dilutive common equivalent shares outstanding during the period. The computation of the diluted net income per share of Class B common stock assumes the conversion of Class A common stock to Class B common stock, while the diluted net income per share of Class A common stock does not assume the conversion of those shares.

In accordance with the two class method, the undistributed earnings for each period are allocated based on the contractual participation rights of the Class A and Class B common shares and the restricted shares as if the earnings for the year had been distributed. Considering the terms of the Company’s charter which provides that, if and when dividends are declared on our common stock in accordance with Delaware General Corporation Law, equivalent dividends shall be paid with respect to the shares of Class A common stock and Class B common stock and that both classes of common stock have identical dividend rights and would share equally in our net assets in the event of liquidation, we have allocated undistributed losses on a proportionate basis. Additionally, the Company has paid dividends equally to both classes of common stock and the unvested restricted shares since it initiated a quarterly cash dividend in November 2006.

Instruments granted in unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents, whether paid or unpaid, are participating securities prior to vesting. As such, the Company’s restricted stock awards are considered participating securities for purposes of calculating earnings per share. Under the two class method, dividends paid on unvested restricted stock are allocated to these participating securities and therefore impacts the calculation of amounts allocated to common stock.

The following table calculates net income applicable to common stockholders used to compute basic net income per share for the periods ended (in thousands, except per share amounts):


	Three months ended March 31,
	2013						2014
	Class A			Class B			Class A		Class B
Numerator:
Net income from continuing operations	$	30		$	86		$	170	$	676
Dividends paid to participating securities		—			—			—		(36	)

Net income from continuing operations applicable to common stockholders	$	30		$	86		$	170	$	640
Discontinued operations, net of tax		(9	)		(22	)		2		7

Net income applicable to common stockholders	$	21		$	64		$	172	$	647

Denominator:
Weighted average number of shares outstanding used to calculate basic net income per share		9,570			25,585			7,741		29,035

Basic net income per share:
Net income from continuing operations applicable to common stockholders	$	0.00		$	0.00		$	0.02	$	0.02
Discontinued operations, net of tax		(0.00	)		(0.00	)		0.00		0.00

Basic net income per share applicable to common stockholders	$	0.00		$	0.00		$	0.02	$	0.02

The following table calculates net income to diluted net income applicable to common stockholders used to compute diluted net income per share for the periods ended (in thousands, except per share amounts):


	Three months ended March 31,
	2013						2014
	Class A			Class B			Class A		Class B
Numerator:
Net income from continuing operations	$	30		$	86		$	170	$	676
Dividends paid to participating securities		—			—			—		(36	)
Reallocation of net income for Class A shares as a result of conversion of Class A to Class B shares		—			30			—		170

Net income from continuing operations applicable to common stockholders	$	30		$	116		$	170	$	810
Discontinued operations, net of tax		(9	)		(22	)		2		7
Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares		—			(9	)		—		2

Discontinued operations, net of tax	$	(9	)	$	(31	)	$	2	$	9

Net income applicable to common stockholders	$	21		$	85		$	172	$	819

Denominator:
Weighted average number of shares outstanding used to calculate basic net income per share		9,570			25,585			7,741		29,035
Weighted average stock options and common shares subject to repurchase or cancellation		—			395			—		2,985
Conversion of Class A to Class B common shares outstanding		—			9,570			—		7,741

Weighted average number of shares outstanding used to calculate diluted net income per share		9,570			35,550			7,741		39,761

Diluted net income per share:
Net income from continuing operations applicable to common stockholders	$	0.00		$	0.00		$	0.02	$	0.02
Discontinued operations, net of tax		(0.00	)		(0.00	)		0.00		0.00

Diluted net income per share applicable to common stockholders	$	0.00		$	0.00		$	0.02	$	0.02

The weighted average number of shares used to calculate the diluted net income per share includes the weighted average number of shares from the assumed conversion of Class A common stock to Class B common stock.

The computation of diluted net income per share excludes the following because their effect would be anti-dilutive (in thousands):

•

For the three months ended March 31, 2013, outstanding options to acquire 6,665 shares of Class B common stock. For the three months ended March 31, 2014, outstanding options to acquire 1,998 shares of Class B common stock.

•

For the three months ended March 31, 2013 and 2014, 1,279 and 51 shares of unvested Class B restricted common shares, respectively, issued to employees and in connection with acquisitions. These shares were for future services that vest over periods ranging from one to six years.

•

For the three months ended March 31, 2013, 131 restricted stock units.

Concentrations

3 Months Ended

Mar. 31, 2014

Concentrations

(5) Concentrations

The Company maintains substantially all of its cash and cash equivalents with one financial institution.

A significant majority of the Company’s revenue earned from advertisers is generated through arrangements with distribution partners. The Company may not be successful in renewing any of these agreements, or if they are renewed, they may not be on terms as favorable as current agreements. The Company may not be successful in entering into agreements with new distribution partners or advertisers on commercially acceptable terms. In addition, several of these distribution partners or advertisers may be considered potential competitors. The Company’s largest distribution partner was paid less than 20% of consolidated revenue for the three months ended March 31, 2013 and 2014.

The advertisers representing more than 10% of consolidated revenue are as follows:


	Three months ended March 31,
	2013			2014
Advertiser A		26	%		21	%
Advertiser B		12	%		*
Advertiser C		10	%		34	%

Advertiser A is also a distribution partner.

The outstanding receivable balance for each advertiser representing more than 10% of accounts receivable is as follows:


	At December 31, 2013			At March 31, 2014
Advertiser A		41	%		29	%
Advertiser B		14	%		*
Advertiser C		13	%		33	%

*	Less than 10%

Segment Reporting and Geographic Information

3 Months Ended

Mar. 31, 2014

Segment Reporting and Geographic Information

(6) Segment Reporting and Geographic Information

Operating segments are revenue-producing components of the enterprise for which separate financial information is produced internally for the Company’s management. 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, net of tax in the condensed consolidated statements of operations for all periods presented and are excluded from segment reporting. See Note15. Discontinued Operations for further discussion.

The Company’s Call-driven segment comprises its performance-based advertising business focused on driving phone calls. The Archeo segment comprises the Company’s click-based advertising and Internet domain name businesses. Call-driven segment expenses include both direct costs incurred by the segment business as well as corporate overhead costs. Archeo segment expenses only include direct costs incurred by the segment. Segment expenses exclude the following: stock-based compensation, amortization of intangible assets from acquisitions, separation related costs, and other income (expense).

A measure of segment assets is not currently provided to the Company’s chief operating decision maker and has therefore not been disclosed. The carrying amount of goodwill by operating segment at March 31, 2014 was approximately $63.3 million and $2.4 million for Call-driven and Archeo, respectively.

Selected segment information (in thousands):


	Three months ended March 31, 2014
	Call-driven		Archeo		Total
Revenue	$	45,492	$	5,004	$	50,496
Operating expenses		43,081		2,693		45,774

Segment profit	$	2,411	$	2,311	$	4,722
Less reconciling items:
Stock based compensation						2,883
Amortization of intangible assets from acquisitions						403
Other expense (income)						2

Income from continuing operations before provision for income taxes					$	1,434


	Three months ended March 31, 2013
	Call-driven		Archeo		Total
Revenue	$	31,108	$	3,624	$	34,732
Operating expenses		29,737		2,753		32,490
Gain on sales of intangible assets, net		—		1,362		1,362

Segment profit	$	1,371	$	2,233	$	3,604
Less reconciling items:
Stock based compensation						1,907
Amortization of intangible assets from acquisitions						1,055
Separation related costs						345
Other expense (income)						17

Income from continuing operations before provision for income taxes					$	280

Revenues from advertisers by geographical areas are tracked on the basis of the location of the advertiser. The vast majority of the Company’s revenue and accounts receivable are derived from domestic sales to advertisers engaged in various mobile, online and other activities.

Revenues by geographic region are as follows (in percentages):


	Three months ended March 31,
	2013			2014
United States		94	%		96	%
Canada		6	%		4	%
Other countries		*			*

		100	%		100	%

*	Less than 1% of revenue.

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

Reference 1: http://www.xbrl.org/2003/role/presentationRef
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Intangible Assets from Acquisitions

Property and Equipment

3 Months Ended

Mar. 31, 2014

Property and Equipment

(7) Property and Equipment

Property and equipment consisted of the following (in thousands):


	At December 31, 2013			At March 31, 2014
Computer and other related equipment	$	17,794		$	18,550
Purchased and internally developed software		7,672			7,733
Furniture and fixtures		1,319			1,329
Leasehold improvements		1,829			1,834

	$	28,614		$	29,446
Less: accumulated depreciation and amortization		(23,174	)		(24,005	)

Property and equipment, net	$	5,440		$	5,441

The Company has capitalized certain costs of internally developed software for internal use. The estimated useful life of costs capitalized is evaluated for each specific project. Amortization begins in the period in which the software is ready for its intended use. The Company has not capitalized any internally developed costs for the three months ended March 31, 2013 and 2014.

Depreciation and amortization expense, related to property and equipment was approximately $844,000 and $865,000 for the three months ended March 31, 2013 and 2014, respectively.

Commitments

3 Months Ended

Mar. 31, 2014

Commitments

(8) Commitments

The Company has commitments for future payments related to office facilities leases and other contractual obligations. The Company leases its office facilities under operating lease agreements expiring through 2018. The Company recognizes rent expense under such agreements on a straight-line basis over the lease term with any lease incentive amortized as a reduction of rent expense over the lease term. The Company also has other contractual obligations expiring over varying time periods through 2016. Other contractual obligations primarily relate to minimum contractual payments due to distribution partners and other outside service providers. Future minimum payments are approximately as follows (in thousands):


(in thousands)	Facilities operating leases		Other contractual obligations		Total
2014	$	1,754	$	2,173	$	3,927
2015		2,271		1,500		3,771
2016		2,313		934		3,247
2017		2,372		—		2,372
2018		577		—		577

Total minimum payments	$	9,287	$	4,607	$	13,894

Rent expense incurred by the Company was approximately $465,000 and $462,000 for the three months ended March 31, 2013 and 2014, respectively.

Credit Agreement

3 Months Ended

Mar. 31, 2014

Credit Agreement

(9) Credit Agreement

In April 2008, the Company entered into a credit agreement providing for a senior secured $30 million revolving credit facility (“Credit Agreement”). In 2011, the Company signed an amendment to the Credit Agreement which extended the maturity period through to April 1, 2014. During the first quarter of 2014, the Company signed an amendment to the Credit Agreement which extended the maturity period to April 1, 2017. Interest on outstanding balances under the Credit Agreement will accrue at LIBOR plus an applicable margin rate, as determined under the agreement and has an unused commitment fee. The Credit Agreement contains certain customary representations and warranties, financial covenants, events of default and is secured by substantially all of the assets of the Company. During the three months ended March 31, 2013 and 2014, the Company had no borrowings under the Credit Agreement.

Contingencies and Taxes

3 Months Ended

Mar. 31, 2014

Contingencies and Taxes

(10) Contingencies and Taxes

(a) Contingencies

The Company is involved in legal and administrative proceedings and claims of various types from time to time. While any litigation contains an element of uncertainty, the Company is not aware of any legal proceedings or claims which are pending that the Company believes, based on current knowledge, will have, individually or taken together, a material adverse effect on the Company’s financial condition or results of operations or liquidity.

In some agreements to which we are a party, we have agreed to indemnification provisions of varying scope and terms with advertisers, vendors and other parties with respect to certain matters, including, but not limited to, losses arising out of the Company’s breach of agreements or representations and warranties made by the Company, services to be provided by the Company and intellectual property infringement claims made by third parties. As a result of these provisions, we may from time to time provide certain levels of financial support to our contract parties to seek to minimize the impact of any associated litigation in which they may be involved. To date, there have been no known events or circumstances that have resulted in any material costs related to these indemnification provisions and no liabilities therefore have been recorded in the accompanying unaudited condensed consolidated financial statements. However, the maximum potential amount of the future payments we could be required to make under these indemnification provisions could be material.

(b) Taxes

During the first quarter of 2014 the Company’s gross deferred tax assets decreased by approximately $1.1 million due primarily to taxable income generated during the three months ended March 31, 2014 and the reclass of uncertain tax positions of $534,000 from other non-current liabilities in the condensed consolidated balance sheet with the adoption of ASU 2011-13 in the first quarter of 2014.

From time to time, various state, federal and other jurisdictional tax authorities undertake audits of the Company and its filings. In evaluating the exposure associated with various tax filing positions, the Company on occasion accrues charges for uncertain positions. The Company adjusts these contingencies in light of changing facts and circumstances, such as the outcome of tax audits. The Company does not have any significant interest or penalty accruals. The provision for income taxes includes the impact of contingency provisions and changes to contingencies that are considered appropriate. The Company files U.S. federal, certain U.S. states, and certain foreign tax returns. Generally, U.S. federal, U.S. state, and foreign tax returns filed for years after 2009 are within the statute of limitations and are under examination or may be subject to examination.

Intangible Assets from Acquisitions

3 Months Ended

Mar. 31, 2014

(11) Intangible Assets from Acquisitions

Intangible assets from acquisitions consisted of the following (in thousands):


	As of December 31, 2013
	Gross Carrying Amount		Accumulated Amortization(1)			Net
Distribution partner relationship	$	4,830	$	(4,396	)	$	434


	As of March 31, 2014
	Gross Carrying Amount		Accumulated Amortization(1)			Net
Distribution partner relationship	$	4,830	$	(4,799	)	$	31

(1)	Excludes the original cost and accumulated amortization of fully-amortized intangible assets which were $87.7 million and $87.6 million at December 31, 2013 and March 31, 2014, respectively.

Amortizable intangible assets are amortized on a straight-line basis over their useful lives. Amortization expense incurred by the Company was approximately $1.1 million and $403,000 for the three months ended March 31, 2013 and 2014, respectively. Based upon the current amount of intangible assets subject to amortization, the estimated amortization expense for the next five years is as follows: $31,000 for the remainder of 2014, and $0 thereafter.

Goodwill

3 Months Ended

Mar. 31, 2014

Goodwill

(12) Goodwill

There was no change in goodwill during the three months ended March 31, 2014. The following table outlines our goodwill by segment (in thousands):


	December 31, 2013		March 31, 2014
Call-Driven	$	63,305	$	63,305
Archeo		2,374		2,374

Total	$	65,679	$	65,679

The Company reviews goodwill for impairment annually on November 30 and whenever events or changes in circumstances indicate the carrying value of goodwill may not be recoverable. When evaluating goodwill for impairment, we may first perform a qualitative assessment to determine if the fair value of the reporting unit is more likely than not greater than its carrying amount. The testing of goodwill and other intangible assets for impairment requires the Company to make significant estimates about its future performance and cash flows, as well as other assumptions. These estimates can be affected by numerous factors, including changes in economic, industry or market conditions, changes in business operations, changes in competition or changes in the share price of the Company’s common stock and market capitalization. Significant and sustained declines in the Company’s stock price and market capitalization, a significant decline in its expected future cash flows or a significant adverse change in the Company’s business climate, among other factors, could result in the need to perform an impairment analysis in future periods. The Company cannot accurately predict the amount and timing of any future impairment of goodwill or other intangible assets. Should the value of goodwill or other intangible assets become impaired, the Company would record an impairment charge, which could have an adverse effect on its financial condition and results of operations.

The current business environment is subject to evolving market conditions and requires significant management judgment to interpret the potential impact to our assumptions. To the extent that changes in the current business environment impact the Company’s ability to achieve levels of forecasted operating results and cash flows, or should other events occur indicating the remaining carrying value of its assets might be impaired, the Company would test its goodwill and intangible assets for impairment and may recognize an additional impairment loss.

Intangible and other assets, net

3 Months Ended

Mar. 31, 2014

Intangible and other assets, net

(13) Intangible and other assets, net

Intangible and other assets, net consisted of the following (in thousands):


	At December 31, 2013			At March 31, 2014
Internet domain names	$	14,514		$	14,598
Less accumulated amortization		(14,376	)		(14,414	)

Internet domain names, net		138			184
Other assets:
Registration fees, net		12			4
Other		334			1,252

Total intangibles and other assets, net	$	484		$	1,440

The Company capitalizes costs incurred to acquire domain names or URLs, which include the initial registration fees, to other intangible assets which excludes intangible assets acquired through business combinations. The capitalized costs are amortized over the expected useful life of the domain names on a straight-line basis.

The Company also capitalizes costs incurred to renew or extend the term of the domain names or URLs to prepaid expenses and other current assets or registration fees, net. The capitalized costs are amortized over the renewal or extended period on a straight-line basis. The total amount of costs incurred for the three months ended March 31, 2014 to renew or extend the term for domain names was $460,000. The weighted average renewal period for registration fees as of March 31, 2014 was approximately one year.

Amortization expense for internet domain names was approximately $69,000 and $88,000 for the three months ended March 31, 2013 and 2014, respectively. Based upon the current amount of domains subject to amortization, the estimated expense for the next five years is as follows: $121,000 for the remainder of 2014, $53,000 in 2015, $10,000 in 2016, and $0 thereafter.

Common Stock

3 Months Ended

Mar. 31, 2014

Common Stock

(14) Common Stock

In November 2006, the Company’s board of directors authorized a share repurchase program for the Company to repurchase up to 3 million shares of the Company’s Class B common stock as well as the initiation of a quarterly cash dividend for the holders of the Class A and Class B common stock. The Company’s board of directors has authorized increases to the share repurchase program for the Company to repurchase up to 13 million shares in the aggregate (less shares previously repurchased under the share repurchase program) of the Company’s Class B common stock. Under the share repurchase program, repurchases may take place in the open market and in privately negotiated transactions and at times and in such amounts as the Company deems appropriate. The timing and actual number of shares repurchased will depend on a variety of factors including price, corporate and regulatory requirements, capital availability, and other market conditions. This stock repurchase program does not have an expiration date and may be expanded, limited or terminated at any time without prior notice. During the three months ended March 31, 2014, the Company did not repurchase any shares of Class B common stock as part of the stock repurchase program.

During the three months ended March 31, 2014, the Company’s board of directors approved the retirement of approximately 174,808 shares of treasury stock.

The entire disclosure for shareholders' equity comprised of portions attributable to the parent entity and noncontrolling interest, including other comprehensive income. Includes, but is not limited to, balances of common stock, preferred stock, additional paid-in capital, other capital and retained earnings, accumulated balance for each classification of other comprehensive income and amount of comprehensive income.

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Discontinued Operations

3 Months Ended

Mar. 31, 2014

Discontinued Operations

(15) Discontinued Operations

On July 19, 2013, we completed the sale of certain pay-per-click advertising services to an unrelated third party. Accordingly, we have presented the results of operations of these certain pay-per-click assets in the condensed consolidated financial statements as discontinued operations, net of tax. The operating results for the discontinued operations were as follows:


	Three months ended March 31,
	2013			2014
Revenue	$	1,481		$	—
Income (loss) before provision for income taxes		(50	)		14
Income tax expense (benefit)		(19	)		5

Discontinued operations, net of tax	$	(31	)	$	9

The net cash proceeds from the sale were approximately $1.1 million. The net carrying value of liabilities assumed net of goodwill associated with the component sold was approximately $435,000 resulting in a net gain of $1.5 million from the sale. The sale includes contingent earn-out consideration payments that depend upon the achievement of certain thresholds and will be recognized as income when received.

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

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Adoption of New Accounting Pronouncement

Subsequent Events

3 Months Ended

Mar. 31, 2014

Subsequent Events

(16) Subsequent Events

In April 2014, the Company completed a follow-on public offering in which the Company sold an aggregate of 3.4 million shares of the Company’s Class B common stock, which includes the exercise of the underwriters’ option to purchase 514,100 additional shares, at a public offering price of $10.50 per share. In addition, another 3.2 million shares were sold by the selling stockholders, which includes the exercise of the underwriter’s option to purchase 343,000 additional shares. The Company received aggregate net proceeds of $32.5 million, after deducting underwriting discounts and commissions and estimated offering expenses. The Company did not receive any of the proceeds from the sales of shares by the selling stockholders.

In April 2014, the Company’s board of directors declared a regular quarterly dividend in the amount of $0.02 per share on the Company’s Class A and Class B common stock. The Company will pay these dividends on May 15, 2014 to the holders of record as of the close of business on May 5, 2014. The Company expects to pay approximately $845,000 for these quarterly dividends.

Significant Accounting Policies (Policies)

3 Months Ended

Mar. 31, 2014

Adoption of New Accounting Pronouncement

Revenues

Revenues

The following table presents the Company’s revenues by segment for the periods presented (in thousands):


	Three months ended March 31,
	2013		2014
Call-driven	$	31,108	$	45,492
Archeo		3,624		5,004

Total Revenue	$	34,732	$	50,496

The following table presents the Company’s revenues, by revenue source, for the periods presented (in thousands):


	Three months ended March 31,
	2013		2014
Partner and Other Revenue Sources	$	32,841	$	46,870
Proprietary Web site Traffic Sources and Domain Names		1,891		3,626

Total Revenue	$	34,732	$	50,496

Stock Based Compensation Expense by Operating Expense

Disclosure of accounting policy for revenue recognition. If the entity has different policies for different types of revenue transactions, the policy for each material type of transaction is generally disclosed. If a sales transaction has multiple element arrangements (for example, delivery of multiple products, services or the rights to use assets) the disclosure may indicate the accounting policy for each unit of accounting as well as how units of accounting are determined and valued. The disclosure may encompass important judgment as to appropriateness of principles related to recognition of revenue. The disclosure also may indicate the entity's treatment of any unearned or deferred revenue that arises from the transaction.

+ References + Details

Significant Accounting Policies (Tables)

3 Months Ended

Mar. 31, 2014

Revenues by Segment

The following table presents the Company’s revenues by segment for the periods presented (in thousands):


	Three months ended March 31,
	2013		2014
Call-driven	$	31,108	$	45,492
Archeo		3,624		5,004

Total Revenue	$	34,732	$	50,496

Revenues

The following table presents the Company’s revenues, by revenue source, for the periods presented (in thousands):


	Three months ended March 31,
	2013		2014
Partner and Other Revenue Sources	$	32,841	$	46,870
Proprietary Web site Traffic Sources and Domain Names		1,891		3,626

Total Revenue	$	34,732	$	50,496

Stock-based Compensation Plans (Tables)

3 Months Ended

Mar. 31, 2014

Stock-based compensation expense was included in the following operating expense categories as follows (in thousands):


	Three months ended March 31,
	2013		2014
Service costs	$	180	$	282
Sales and marketing		60		204
Product development		372		659
General and administrative		1,295		1,738

Total stock-based compensation	$	1,907	$	2,883

Income tax benefit related to stock-based compensation included in net income from continuing operations	$	509	$	908

Assumptions to Estimate Fair Value for Stock Options at Grant Date

The following weighted average assumptions were used in determining the fair value of time-vested stock option grants for the periods presented:


	Three months ended March 31,
	2013		2014
Expected life (in years)		4.0		4.0
Risk-free interest rate		0.57%		1.32	%
Expected volatility		57%		55%-60	%
Expected dividend yield		2.33%		0.76	%

Summary of Stock Option Activity

Stock option activity during the three months ended March 31, 2014 is summarized as follows:


	Shares			Weighted average exercise price		Weighted average remaining contractual term (in years)		Aggregate intrinsic value (in thousands)
Balance at December 31, 2013		7,707,713		$	7.48	$	6.99	$	17,148
Options granted		86,000			10.12
Options forfeited		(58,073	)		5.39
Options expired		(37,061	)		12.13
Options exercised		(206,811	)		6.65

Balance at March 31, 2014		7,491,768		$	7.52	$	6.81	$	27,477

Summary of Restricted Stock Awards and Restricted Stock Units

Restricted stock awards and restricted stock units activity during the three months ended March 31, 2014 is summarized as follows:


	Shares/ Units			Weighted average grant date fair value
Unvested balance at December 31, 2013		2,709,443		$	5.41
Granted		10,000			9.86
Vested		(146,875	)		6.10
Forfeited		(25,750	)		3.89

Unvested balance at March 31, 2014		2,546,818		$	5.40

Net Income Per Share (Tables)

3 Months Ended

Mar. 31, 2014

Computation of Net Income per Share Basic and Diluted

The following table calculates net income applicable to common stockholders used to compute basic net income per share for the periods ended (in thousands, except per share amounts):


	Three months ended March 31,
	2013						2014
	Class A			Class B			Class A		Class B
Numerator:
Net income from continuing operations	$	30		$	86		$	170	$	676
Dividends paid to participating securities		—			—			—		(36	)

Net income from continuing operations applicable to common stockholders	$	30		$	86		$	170	$	640
Discontinued operations, net of tax		(9	)		(22	)		2		7

Net income applicable to common stockholders	$	21		$	64		$	172	$	647

Denominator:
Weighted average number of shares outstanding used to calculate basic net income per share		9,570			25,585			7,741		29,035

Basic net income per share:
Net income from continuing operations applicable to common stockholders	$	0.00		$	0.00		$	0.02	$	0.02
Discontinued operations, net of tax		(0.00	)		(0.00	)		0.00		0.00

Basic net income per share applicable to common stockholders	$	0.00		$	0.00		$	0.02	$	0.02


	Three months ended March 31,
	2013						2014
	Class A			Class B			Class A		Class B
Numerator:
Net income from continuing operations	$	30		$	86		$	170	$	676
Dividends paid to participating securities		—			—			—		(36	)
Reallocation of net income for Class A shares as a result of conversion of Class A to Class B shares		—			30			—		170

Net income from continuing operations applicable to common stockholders	$	30		$	116		$	170	$	810
Discontinued operations, net of tax		(9	)		(22	)		2		7
Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares		—			(9	)		—		2

Discontinued operations, net of tax	$	(9	)	$	(31	)	$	2	$	9

Net income applicable to common stockholders	$	21		$	85		$	172	$	819

Denominator:
Weighted average number of shares outstanding used to calculate basic net income per share		9,570			25,585			7,741		29,035
Weighted average stock options and common shares subject to repurchase or cancellation		—			395			—		2,985
Conversion of Class A to Class B common shares outstanding		—			9,570			—		7,741

Weighted average number of shares outstanding used to calculate diluted net income per share		9,570			35,550			7,741		39,761

Diluted net income per share:
Net income from continuing operations applicable to common stockholders	$	0.00		$	0.00		$	0.02	$	0.02
Discontinued operations, net of tax		(0.00	)		(0.00	)		0.00		0.00

Diluted net income per share applicable to common stockholders	$	0.00		$	0.00		$	0.02	$	0.02

Concentrations (Tables)

3 Months Ended

Mar. 31, 2014

Schedules of Concentration of Risk Based on Consolidated Revenue

The advertisers representing more than 10% of consolidated revenue are as follows:


	Three months ended March 31,
	2013			2014
Advertiser A		26	%		21	%
Advertiser B		12	%		*
Advertiser C		10	%		34	%

Schedules of Concentration of Risk Based on Accounts Receivable

The outstanding receivable balance for each advertiser representing more than 10% of accounts receivable is as follows:


	At December 31, 2013			At March 31, 2014
Advertiser A		41	%		29	%
Advertiser B		14	%		*
Advertiser C		13	%		33	%

*	Less than 10%

Segment Reporting and Geographic Information (Tables)

3 Months Ended

Mar. 31, 2014

Segment Information

Selected segment information (in thousands):


	Three months ended March 31, 2014
	Call-driven		Archeo		Total
Revenue	$	45,492	$	5,004	$	50,496
Operating expenses		43,081		2,693		45,774

Segment profit	$	2,411	$	2,311	$	4,722
Less reconciling items:
Stock based compensation						2,883
Amortization of intangible assets from acquisitions						403
Other expense (income)						2

Income from continuing operations before provision for income taxes					$	1,434


	Three months ended March 31, 2013
	Call-driven		Archeo		Total
Revenue	$	31,108	$	3,624	$	34,732
Operating expenses		29,737		2,753		32,490
Gain on sales of intangible assets, net		—		1,362		1,362

Segment profit	$	1,371	$	2,233	$	3,604
Less reconciling items:
Stock based compensation						1,907
Amortization of intangible assets from acquisitions						1,055
Separation related costs						345
Other expense (income)						17

Income from continuing operations before provision for income taxes					$	280

Revenues by Geographic Region

Revenues by geographic region are as follows (in percentages):


	Three months ended March 31,
	2013			2014
United States		94	%		96	%
Canada		6	%		4	%
Other countries		*			*

		100	%		100	%

*	Less than 1% of revenue.

Property and Equipment (Tables)

3 Months Ended

Mar. 31, 2014

Property and Equipment

Property and equipment consisted of the following (in thousands):


	At December 31, 2013			At March 31, 2014
Computer and other related equipment	$	17,794		$	18,550
Purchased and internally developed software		7,672			7,733
Furniture and fixtures		1,319			1,329
Leasehold improvements		1,829			1,834

	$	28,614		$	29,446
Less: accumulated depreciation and amortization		(23,174	)		(24,005	)

Property and equipment, net	$	5,440		$	5,441

Commitments (Tables)

3 Months Ended

Mar. 31, 2014

Minimum Contractual Payments

Other contractual obligations primarily relate to minimum contractual payments due to distribution partners and other outside service providers. Future minimum payments are approximately as follows (in thousands):


(in thousands)	Facilities operating leases		Other contractual obligations		Total
2014	$	1,754	$	2,173	$	3,927
2015		2,271		1,500		3,771
2016		2,313		934		3,247
2017		2,372		—		2,372
2018		577		—		577

Total minimum payments	$	9,287	$	4,607	$	13,894

Intangible Assets from Acquisitions (Tables)

3 Months Ended

Mar. 31, 2014

Intangible Assets from Acquisitions

Intangible assets from acquisitions consisted of the following (in thousands):


	As of December 31, 2013
	Gross Carrying Amount		Accumulated Amortization(1)			Net
Distribution partner relationship	$	4,830	$	(4,396	)	$	434


	As of March 31, 2014
	Gross Carrying Amount		Accumulated Amortization(1)			Net
Distribution partner relationship	$	4,830	$	(4,799	)	$	31

(1)	Excludes the original cost and accumulated amortization of fully-amortized intangible assets which were $87.7 million and $87.6 million at December 31, 2013 and March 31, 2014, respectively.

Goodwill (Tables)

3 Months Ended

Mar. 31, 2014

Goodwill by Segment

The following table outlines our goodwill by segment (in thousands):


	December 31, 2013		March 31, 2014
Call-Driven	$	63,305	$	63,305
Archeo		2,374		2,374

Total	$	65,679	$	65,679

Intangible and other assets, net (Tables)

3 Months Ended

Mar. 31, 2014

Intangible and Other Assets, Net

Intangible and other assets, net consisted of the following (in thousands):


	At December 31, 2013			At March 31, 2014
Internet domain names	$	14,514		$	14,598
Less accumulated amortization		(14,376	)		(14,414	)

Internet domain names, net		138			184
Other assets:
Registration fees, net		12			4
Other		334			1,252

Total intangibles and other assets, net	$	484		$	1,440

Discontinued Operations (Tables)

3 Months Ended

Mar. 31, 2014

Operating Results for Discontinued Operations

The operating results for the discontinued operations were as follows:


	Three months ended March 31,
	2013			2014
Revenue	$	1,481		$	—
Income (loss) before provision for income taxes		(50	)		14
Income tax expense (benefit)		(19	)		5

Discontinued operations, net of tax	$	(31	)	$	9

Tabular disclosure of disposal groups, which may include the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the classification and carrying value of the assets and liabilities comprising the disposal group, and the segment in which the disposal group was reported. Also may include the amount of adjustments to amounts previously reported in discontinued operations such as resolution of contingencies arising from the disposal transaction or the operations of the component prior to disposal.

+ References + Details

Revenues by Segment (Detail) - USD ($) $ in Thousands	3 Months Ended
Revenues by Segment (Detail) - USD ($) $ in Thousands	Mar. 31, 2014	Mar. 31, 2013
Segment Reporting Information
Total Revenue	$ 50,496	$ 34,732
Call driven
Segment Reporting Information
Total Revenue	45,492	31,108
Archeo
Segment Reporting Information
Total Revenue	$ 5,004	$ 3,624

Significant Accounting Policies - Additional Information (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Significant Accounting Policies [Line Items]
Gain on sales and disposals of intangible assets, net		$ 1,362
Revenues	$ 50,496	$ 34,732
Domain Names
Significant Accounting Policies [Line Items]
Revenues	$ 1,900

Revenues by Revenue Sources (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Revenue [Line Items]
Total Revenue	$ 50,496	$ 34,732
Partner and Other Revenue Sources
Revenue [Line Items]
Total Revenue	46,870	32,841
Proprietary Web site Traffic Sources and Domain Names
Revenue [Line Items]
Total Revenue	$ 3,626	$ 1,891

Stock-Based Compensation Expense by Operating Expense (Detail) - USD ($) $ in Thousands	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	$ 2,883	$ 1,907
Income tax benefit related to stock-based compensation included in net income from continuing operations	908	509
Service Costs
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	282	180
Sales and Marketing
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	204	60
Product Development
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	659	372
General and Administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total stock-based compensation	$ 1,738	$ 1,295

Stock Based Compensation Plans - Additional Information (Detail)	3 Months Ended
	Mar. 31, 2014 USD ($) shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Excess tax benefit \| $	$ 1,300,000
Restricted Stock
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Shares received for withholding taxes \| shares	12,008
Equity awards vested \| shares	41,000
Minimum withholding tax \| $	$ 148,000

Assumptions to Estimate Fair Value for Stock Options at Grant Date (Detail) - Time Vested Stock Options	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Schedule of Weighted Average Assumptions for Fair Values of Stock Options[Line Items]
Expected life (in years)	4 years	4 years
Risk-free interest rate	1.32%	0.57%
Expected volatility		57.00%
Expected volatility, minimum	55.00%
Expected volatility, maximum	60.00%
Expected dividend yield	0.76%	2.33%

Summary of Stock Option Activity (Detail) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2014	Dec. 31, 2013
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares, Beginning Balance	7,707,713
Options granted, Shares	86,000
Options forfeited, Shares	(58,073)
Options expired, Shares	(37,061)
Options exercised, Shares	(206,811)
Number of shares, Ending Balance	7,491,768	7,707,713
Weighted average exercise price, Beginning Balance	$ 7.48
Options granted, Weighted average exercise price	10.12
Options forfeited, Weighted average exercise price	5.39
Options expired, Weighted average exercise price	12.13
Options exercised, Weighted average exercise price	6.65
Weighted average exercise price, Ending Balance	$ 7.52	$ 7.48
Weighted average remaining contractual term, End of the period	6 years 9 months 22 days	6 years 11 months 27 days
Aggregate intrinsic value, Outstanding Ending Balance	$ 27,477	$ 17,148

Summary of Restricted Stock Awards and Restricted Stock Units (Detail) - Restricted Stock and Restricted Stock Units	3 Months Ended
	Mar. 31, 2014 $ / shares shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unvested Shares, Beginning Balance \| shares	2,709,443
Granted, Shares \| shares	10,000
Vested, Shares \| shares	(146,875)
Forfeited, Shares \| shares	(25,750)
Unvested Shares, Ending Balance \| shares	2,546,818
Weighted average grant date fair value, Beginning Balance \| $ / shares	$ 5.41
Granted, Weighted average grant date fair value \| $ / shares	9.86
Vested, Weighted average grant date fair value \| $ / shares	6.10
Forfeited, Weighted average grant date fair value \| $ / shares	3.89
Weighted average grant date fair value, Ending Balance \| $ / shares	$ 5.40

Computation of Net Income Per Share Basic and Diluted (Detail) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Numerator:
Net income from continuing operations	$ 846	$ 116
Dividends paid to participating securities	(36)
Class A
Numerator:
Net income from continuing operations	170	30
Net income from continuing operations applicable to common stockholders	170	30
Discontinued operations, net of tax	2	(9)
Net income applicable to common stockholders	172	21
Net income from continuing operations	170	30
Net income from continuing operations applicable to common stockholders	170	30
Discontinued operations, net of tax	2	(9)
Discontinued operations, net of tax	2	(9)
Net income applicable to common stockholders	$ 172	$ 21
Denominator:
Weighted average number of shares outstanding used to calculate basic net income per share	7,741	9,570
Weighted average number of shares outstanding used to calculate diluted net income per share	7,741	9,570
Basic net income per share:
Net income from continuing operations applicable to common stockholders	$ 0.02	$ 0.00
Discontinued operations, net of tax	0.00	0.00
Basic net income per share applicable to common stockholders	0.02	0.00
Diluted net income per share:
Net income from continuing operations applicable to common stockholders	0.02	0.00
Discontinued operations, net of tax	0.00	0.00
Diluted net income per share applicable to common stockholders	$ 0.02	$ 0.00
Class B
Numerator:
Net income from continuing operations	$ 676	$ 86
Dividends paid to participating securities	(36)
Net income from continuing operations applicable to common stockholders	640	86
Discontinued operations, net of tax	7	(22)
Net income applicable to common stockholders	647	64
Net income from continuing operations	676	86
Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares	170	30
Net income from continuing operations applicable to common stockholders	810	116
Discontinued operations, net of tax	7	(22)
Discontinued operations, net of tax	9	(31)
Net income applicable to common stockholders	$ 819	$ 85
Denominator:
Weighted average number of shares outstanding used to calculate basic net income per share	29,035	25,585
Weighted average stock options and common shares subject to repurchase or cancellation	2,985	395
Conversion of Class A to Class B common shares outstanding	7,741	9,570
Weighted average number of shares outstanding used to calculate diluted net income per share	39,761	35,550
Basic net income per share:
Net income from continuing operations applicable to common stockholders	$ 0.02	$ 0.00
Discontinued operations, net of tax	0.00	0.00
Basic net income per share applicable to common stockholders	0.02	0.00
Diluted net income per share:
Net income from continuing operations applicable to common stockholders	0.02	0.00
Discontinued operations, net of tax	0.00	0.00
Diluted net income per share applicable to common stockholders	$ 0.02	$ 0.00
Class B \| Discontinued Operations
Numerator:
Reallocation of discontinued operations for Class A shares as a result of conversion of Class A to Class B shares	$ 2	$ (9)

Net Income Per Share - Additional Information (Detail) - shares shares in Thousands	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Stock Options \| Class B
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	1,998	6,665
Unvested Restricted Shares \| Class B
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares	51	1,279
Unvested Restricted Shares \| Class B \| Minimum
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares Vesting period	1 year
Unvested Restricted Shares \| Class B \| Maximum
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Shares Vesting period	6 years
Restricted Stock Units
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Anti-dilutive shares		131

Concentrations - Additional Information (Detail)	3 Months Ended
Concentrations - Additional Information (Detail)	Mar. 31, 2014	Mar. 31, 2013
Concentration Risk [Line Items]
Percentage of revenue as criteria for major distribution partners	20.00%	20.00%

Schedules of Concentration of Risk Based on Consolidated Revenue (Detail) - Consolidated Revenue

3 Months Ended

Mar. 31, 2014

Mar. 31, 2013

Advertiser A

21.00%

26.00%

Advertiser B

^[1]

12.00%

Advertiser C

34.00%

10.00%

[1]	Less than 10%

Schedules of Concentration of Risk Based on Accounts Receivable (Detail) - Accounts Receivable

3 Months Ended

12 Months Ended

Mar. 31, 2014

Dec. 31, 2013

Advertiser A

29.00%

41.00%

Advertiser B

^[1]

14.00%

Advertiser C

33.00%

13.00%

[1]	Less than 10%

Segment Reporting and Geographic Information - Additional Information (Detail) - USD ($) $ in Thousands	Mar. 31, 2014	Dec. 31, 2013
Segment Reporting Information
Goodwill	$ 65,679	$ 65,679
Call driven
Segment Reporting Information
Goodwill	63,305	63,305
Archeo
Segment Reporting Information
Goodwill	$ 2,374	$ 2,374

Segment Information (Detail) - USD ($)
$ in Thousands

3 Months Ended

Mar. 31, 2014

Mar. 31, 2013

$ 50,496

$ 34,732

Gain on sales of intangible assets, net

49,060

35,797

1,362

Amortization of intangible assets from acquisitions

1,436

297

Less reconciling items:

Stock based compensation

2,883

1,919

^[1]

403

1,055

Separation related costs

345

Income from continuing operations before provision for income taxes

1,434

280

Call driven

45,492

31,108

Archeo

5,004

3,624

Operating Segments

50,496

34,732

Gain on sales of intangible assets, net

45,774

32,490

1,362

Amortization of intangible assets from acquisitions

4,722

3,604

Less reconciling items:

Stock based compensation

2,883

1,907

403

1,055

Separation related costs

345

Other expense (income)

Income from continuing operations before provision for income taxes

1,434

280

Operating Segments | Call driven

45,492

31,108

43,081

29,737

Operating Segments | Archeo

2,411

1,371

5,004

3,624

Gain on sales of intangible assets, net

2,693

2,753

1,362

$ 2,311

$ 2,233

[1]	Components of amortization of intangible assets from acquisitions:

Revenues by Geographic Region (Detail)

3 Months Ended

Mar. 31, 2014

Mar. 31, 2013

100.00%

United States

96.00%

94.00%

Canada

4.00%

6.00%

Other Countries