Goodwill and Intangible Assets

12 Months Ended

Dec. 31, 2011

Goodwill and Intangible Assets [Abstract]

10. Goodwill and Intangible Assets

The Company has intangible assets relating to the acquisitions of its Jinan Broadband subsidiary, Shandong Media joint venture and Sinotop. The Company amortizes its intangible assets that have finite lives. The service agreement, publication rights, operating permits and charter/cooperation agreements are amortized over 20 years. Customer relationships, non-compete agreement, and software technology are amortized over 10 years, 2.5 years and 3 years, respectively. Software and licenses are amortized over 3 years and 5 years. As discussed in Note 5, the Company determined during 2011 that AdNet's remaining assets would no longer be used. As such, the Company recognized an impairment loss related to AdNet's software technology in the amount of $189,241 during the quarter ended June 30, 2011.

A roll forward of our intangible assets activity from December 31, 2010 to December 31, 2011 follows:

	Balance at										Foreign		Balance at
	December 31,				Amortization			Impairment			Currency		December 31,
	2010		Additions		Expense			Charge			Transl Adj		2011
Amortized intangible assets:
Service agreement	$	1,397,042	$	-	$	(86,150	)	$	-		$	-	$	1,310,892
Publication rights		425,253		-		(24,300	)		-			-		400,953
Customer relationships		88,359		-		(11,780	)		-			-		76,579
Operating permits		636,519		-		(36,372	)		-			-		600,147
Software technology		315,403		-		(126,162	)		(189,241	)		-		-
Charter / Cooperation agreements		2,698,408		-		(137,792	)		-			-		2,560,616
Noncompete agreement		3,031,260		-		(1,455,004	)		-			-		1,576,256
Software and licenses		12,555		268,412		(41,437	)		-			485		240,015
Website development		-		384,290		-			-			-		384,290
Total amortized intangible assets	$	8,604,799	$	652,702	$	(1,918,997	)	$	(189,241	)	$	485	$	7,149,748

Unamortized intangible assets:
Goodwill		6,105,478		-		-			-			-		6,105,478
Total unamortized intangible assets	$	6,105,478	$	-	$	-		$	-		$	-	$	6,105,478

In accordance with ASC 250, we recorded amortization expense related to our intangible assets of $1,918,997 and $1,102,645 during 2011 and 2010, respectively.

The following table outlines the amortization expense for the next five years and thereafter:

	Jinan		Shandong				Zhong Hai
Years ending December 31,	Broadband		Media		Sinotop		Video		Total
2012		85,961		76,388		1,592,796		199,344		1,954,489
2013		85,961		74,421		259,041		199,344		618,767
2014		85,961		72,454		137,791		215,575		511,781
2015		85,961		72,454		137,791		2,485		298,691
2016		85,961		72,454		137,791		1,656		297,862
Thereafter		881,088		715,408		1,871,662		-		3,468,158
Total amortization to be recognized	$	1,310,893	$	1,083,579	$	4,136,872	$	618,404	$	7,149,748

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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