Segment Information

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Segment Information

Segment Information

The Company accounts for its segment information in accordance with the provisions of ASC 280-10, “Segment Reporting.” ASC 280-10 establishes annual and interim reporting standards for operating segments of a company. ASC 280-10 requires disclosures of selected segment-related financial information about products, major customers, and geographic areas based on the Company’s internal accounting methods. The Company is organized into two operating segments for purposes of making operating decisions and assessing performance. The Business segment facilitates real-time online interactions – chat, voice and content delivery across multiple channels and screens for global corporations of all sizes. The Consumer segment facilitates online transactions between Experts and Users and sells its services to consumers. Both segments currently generate their revenue primarily in the U.S. The chief operating decision makers evaluate performance, make operating decisions, and allocate resources based on the operating income of each segment. The reporting segments follow the same accounting polices used in the preparation of the Company’s condensed consolidated financial statements which are described in the summary of significant accounting policies. The Company allocates cost of revenue, sales and marketing and amortization of purchased intangibles to the segments, but it does not allocate product development expenses, general and administrative expenses and income tax expense because management does not use this information to measure performance of the operating segments. There are currently no inter-segment sales.

Summarized financial information by segment for the three months ended September 30, 2013, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision makers, follows (amounts in thousands):

	Consolidated			Corporate			Business		Consumer
Revenue:
Hosted services – Business	$	38,007		$	—		$	38,007	$	—
Hosted services – Consumer	3,828			—			—		3,828
Professional services	3,357			—			3,357		—
Total revenue	45,192			—			41,364		3,828
Cost of revenue	10,597			—			10,014		583
Sales and marketing	16,141			—			14,664		1,477
Amortization of purchased intangibles	224			—			224		—
Unallocated corporate expenses	19,531			19,531			—		—
Operating (loss) income	$	(1,301	)	$	(19,531	)	$	16,462	$	1,768

Summarized financial information by segment for the three months ended September 30, 2012, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision makers, follows (amounts in thousands):

	Consolidated		Corporate			Business		Consumer
Revenue:
Hosted services – Business	$	33,245	$	—		$	33,245	$	—
Hosted services – Consumer	3,577		—			—		3,577
Professional services	2,848		—			2,848		—
Total revenue	39,670		—			36,093		3,577
Cost of revenue	9,036		—			8,539		497
Sales and marketing	12,713		—			11,502		1,211
Amortization of purchased intangibles	11		—			11		—
Unallocated corporate expenses	15,321		15,321			—		—
Operating income (loss)	$	2,589	$	(15,321	)	$	16,041	$	1,869

Summarized financial information by segment for the nine months endedSeptember 30, 2013, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision makers, follows (amounts in thousands):

	Consolidated			Corporate			Business		Consumer
Revenue:
Hosted services – Business	$	110,785		$	—		$	110,785	$	—
Hosted services – Consumer	11,223			—			—		11,223
Professional services	8,909			—			8,909		—
Total revenue	130,917			—			119,694		11,223
Cost of revenue	31,342			—			29,524		1,818
Sales and marketing	46,118			—			42,113		4,005
Amortization of purchased intangibles	672			—			672		—
Unallocated corporate expenses	56,672			56,672			—		—
Operating (loss) income	$	(3,887	)	$	(56,672	)	$	47,385	$	5,400

Summarized financial information by segment for the nine months endedSeptember 30, 2012, based on the Company’s internal financial reporting system utilized by the Company’s chief operating decision makers, follows (amounts in thousands):

	Consolidated		Corporate			Business		Consumer
Revenue:
Hosted services – Business	$	96,634	$	—		$	96,634	$	—
Hosted services – Consumer	11,387		—			—		11,387
Professional services	6,913		—			6,913		—
Total revenue	114,934		—			103,547		11,387
Cost of revenue	25,450		—			23,845		1,605
Sales and marketing	36,820		—			32,616		4,204
Amortization of purchased intangibles	98		—			98		—
Unallocated corporate expenses	44,665		44,665			—		—
Operating income (loss)	$	7,901	$	(44,665	)	$	46,988	$	5,578

Geographic Information

The Company is domiciled in the United States and has international operations in the United Kingdom, Australia, Latin America and Western Europe, particularly France and Germany. The following table presents the Company's revenues attributable to domestic and foreign operations for the periods presented (amounts in thousands):

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2013		2012		2013		2012
United States	$	30,879	$	29,531	$	91,397	$	86,909
United Kingdom	8,554		5,898		22,501		16,017
Other countries	5,759		4,241		17,019		12,008
Total revenue	$	45,192	$	39,670	$	130,917	$	114,934

The following table presents the Company's long-lived assets by geographic region for the periods presented (amounts in thousands):

	September 30,		December 31,
	2013		2012
United States	$	36,042	$	35,711
Israel	23,790		23,750
Australia	10,124		10,361
United Kingdom	1,633		2,600
Netherlands	556		—
Total long-lived assets	$	72,145	$	72,422