America Online 2010 Annual Report Download - page 89

Table of Contents
AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
NOTE 4—BUSINESS ACQUISITIONS, DISPOSITIONS AND OTHER SIGNIFICANT TRANSACTIONS
The businesses acquired by the Company during the periods presented herein were all in their early stages of development. This fact, along with market
conditions at the time of acquisition, contributed to purchase prices that resulted in the allocation of a significant portion of such purchase prices to goodwill.
2010 Acquisitions
AOL completed the following acquisitions during 2010. Unaudited pro forma results of operations assuming these acquisitions had taken place at the
beginning of each period are not provided because the historical operating results of the acquired companies were not significant and pro forma results would
not be significantly different from reported results for the periods presented.
StudioNow, Inc.
On January 22, 2010, the Company completed the acquisition of StudioNow, Inc. ("StudioNow"), a provider of a proprietary digital platform that
allows clients to create, produce, manage and distribute professional quality videos at scale, for a purchase price of $32.1 million. Of the total consideration,
$14.1 million was paid through the issuance of 594,749 shares of AOL common stock valued as of the closing date. Of the remaining $18.0 million, $14.0
million was paid in cash at the closing date and $4.0 million reflects the present value of the cash consideration due two years after the closing date.
This business was acquired to attract and engage more Internet users and drive high volumes of video content production through StudioNow's
platform, which, along with market conditions at the time of acquisition, contributed to a purchase price that resulted in the allocation of a significant portion
of the purchase price to goodwill. AOL recognized $26.7 million of goodwill (which is not deductible for tax purposes) and $4.3 million of intangible assets
related to this acquisition. The intangible assets related to this acquisition consist of technology acquired, customer relationships, trade names and other assets
to be amortized on a straight-line basis over a period of three years.
5 Minutes Ltd.
On September 28, 2010, the Company completed the acquisition of 5 Minutes Ltd. ("5min Media"), a company that provides a syndication platform for
web-based videos, for a purchase price of $64.7 million, net of cash acquired. The acquisition offers AOL and partners significant web distribution, which,
along with market conditions at the time of acquisition, contributed to a purchase price that resulted in the allocation of a significant portion of the purchase
price to goodwill. The Company recorded $49.6 million of goodwill (which is not deductible for tax purposes) and $20.0 million of intangible assets related to
this acquisition. The intangible assets associated with this acquisition consist of technology, advertiser relationships and a trade name to be amortized on a
straight-line basis over a weighted average period of approximately five years.
Other 2010 Acquisitions
The Company also completed the following acquisitions during the year ended December 31, 2010.
• On September 28, 2010, the Company completed the acquisition of Thing Labs, Inc. ("Thing Labs"), a company that produces software to
simplify the creation and sharing of web content. This acquisition will allow the Company to continue its initiative to provide consumers with the
best venues to discover and share content.
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