Segment Information

3 Months Ended

Mar. 31, 2012

Segment Information [Abstract]

Segment Information

10. Segment Information

The Company changed its operational structure as a result of the January 2012 acquisition of the TaxACT business. The Search segment consists of the Company's search services operations and the Tax Preparation segment is the TaxACT business. The Company's chief executive officer is its chief operating decision maker and reviews financial information presented on a disaggregated basis. This information is used for purposes of allocating resources and evaluating financial performance.

The Company presents revenue and cost of sales for each of the two segments. Search segment cost of sales consists primarily of revenue sharing arrangements with the Company's distribution partners and usage-based content fees. Tax Preparation segment cost of sales consists primarily of royalties and payment processing fees for customer transactions.

The Company does not allocate certain general, administrative, and overhead costs, or stock-based compensation, depreciation, amortization of intangible assets, other loss (income), net, income tax expense, or results from discontinued operations to the reportable segments. Such amounts are reflected in the table below under the heading "Corporate." The Company does not account for, and does not report to management, its assets or capital expenditures by segment other than goodwill and intangible assets used for impairment analysis purposes.

Information on reportable segments currently presented to the Company's chief operating decision maker and a reconciliation to consolidated net income for the quarters ended March 31, 2012 and 2011 are presented below (in thousands):

	Quarters ended March 31,
	2012			2011
Search
Revenue	$	75,295		$	51,650
Cost of revenue		53,106			29,185
Operating expense		8,816			11,370
Search segment income		13,373			11,095
Search segment margin		18	%		22	%
Tax Preparation
Revenue		40,401			—
Cost of revenue		2,579			—
Operating expense		15,687			—
Tax Preparation segment income		22,135			—
Tax Preparation segment margin		55	%		—
Total Segment
Total segment revenue		115,696			51,650
Total segment cost of revenue		55,685			29,185
Total segment operating expenses		24,503			11,370
Total segment income		35,508			11,095
Total segment margin		31	%		22	%
Corporate
Operating expense		3,806			2,130
Stock-based compensation		6,708			2,033
Depreciation		951			1,451
Amortization of intangible assets		3,624			958
Other loss (income), net		1,555			(75	)
Income tax expense		7,458			1,702
Loss from discontinued operations, net of tax		—			1,573
Total corporate		24,102			9,772
Net income	$	11,406		$	1,323

Information on reportable segments and a reconciliation to consolidated net income for the year ended December 31, 2011 and each of the quarters ended June 30, September 30, and December 31, 2011, classified to conform to the current presentation, are as follows (in thousands):

	Quarters ended									Year ended
	June 30, 2011			September 30, 2011			December 31, 2011			December 31, 2011
Search
Revenue	$	54,292		$	56,257		$	66,614		$	228,813
Cost of sales		33,517			36,329			44,856			143,887
Operating expense		9,241			9,119			8,990			38,720
Search segment income		11,534			10,809			12,768			46,206
Search segment margin		21	%		19	%		19	%		20	%
Corporate
Operating expense		2,543			2,307			2,603			9,583
Stock-based compensation		1,338			3,049			1,268			7,688
Depreciation		1,376			1,115			919			4,861
Amortization of intangible assets		772			518			347			2,595
Other loss (income), net		(107	)		456			972			1,246

	Quarters ended								Year ended
	June 30, 2011			September 30, 2011		December 31, 2011			December 31, 2011
Income tax expense		1,936			1,289		(16,215	)		(11,288	)
Loss from discontinued operations, net of tax		8,354			—		—			9,927
Total corporate		16,212			8,734		(10,106	)		24,612
Net income	$	(4,678	)	$	2,075	$	22,874		$	21,594