America Online 2010 Annual Report Download - page 90

Table of Contents
AOL INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
• On September 29, 2010, the Company completed the acquisition of TechCrunch, Inc. ("TechCrunch"), a company that owns and operates a
network of websites dedicated to technology news, information and analysis. This business was acquired to enhance AOL's offerings of high-
quality, technology-oriented content.
• On December 15, 2010, the Company completed the acquisition of Pictela, Inc. ("Pictela"), a provider of rich media advertising formats used by
agencies and publishers. This business was acquired to further the Company's ability to provide high quality advertising content.
• On December 20, 2010, the Company completed the acquisition of About.me, Inc. ("About.me"), a company that provides a web service product
that empowers people to create a single personal profile page that presents their online identities together in one place, simplifying the social
experience across the web. This business was acquired to enhance the Company's ability to provide relevant and meaningful content to
consumers.
The aggregate purchase price of these acquisitions was $63.8 million, net of cash acquired. AOL recorded $55.7 million of goodwill (which is not
deductible for tax purposes) and $10.1 million of intangible assets related to these acquisitions.
The intangible assets associated with these acquisitions consist of acquired technology, trademarks, non-compete agreements and customer
relationships to be amortized on a straight-line basis over a weighted average period of approximately three years.
Additional Information on 2010 Acquisitions
In addition to the purchase prices paid for these businesses acquired in 2010, the Company agreed to pay up to $37.7 million in aggregate to certain
employees of the acquired companies over the next three years contingent on their future service to AOL. The payments of up to $37.7 million will be
recognized as compensation expense on an accelerated basis over a requisite service period of up to three years. For tax purposes, approximately 40% of the
incentive compensation is expected to be treated as additional basis in the acquired companies and a tax deduction will only be obtained upon disposition of
the related acquisitions. For the year ended December 31, 2010, AOL recorded compensation expense of $6.2 million related to incentive compensation
arrangements made in connection with the 2010 acquisitions listed above.
2008 Acquisitions
AOL completed the following acquisitions during 2008:
Bebo
On May 14, 2008, the Company completed the acquisition of Bebo, a global social media network, for $859.8 million, net of cash acquired, of which
$852.0 million was paid in cash in May 2008, and $7.8 million of which was paid by the Company in the first quarter of 2009. AOL recognized $765.8
million of goodwill (which is not deductible for tax purposes) and $86.5 million of intangible assets related to this acquisition.
Perfiliate Limited (doing business as buy.at)
On February 5, 2008, the Company completed the acquisition of Perfiliate Limited ("buy.at"), a company based in the United Kingdom which provides
performance-based advertising services to advertisers, for $125.2 million in cash, net of cash acquired. AOL recognized $99.3 million of goodwill (which is
not deductible for tax purposes) and $32.5 million of intangible assets related to this acquisition.
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