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future, some of our content providers may demand a greater portion of advertising revenues or increase the fees that they charge us for their 

content thus having a negative impact on our net earnings. If we fail to enter into and maintain satisfactory arrangements with content providers 

our ability to provide a variety of products and services to our customers would be severely limited, thus harming our business reputation and 

operating results.  

Due to unfavorable economic conditions some of our customers may be unable to pay us or otherwise satisfy their obligations to us, 

thus harming our financial results and potentially our provision of services to other customers. 

As a result of generally unfavorable economic conditions including difficulties with raising necessary equity and debt financing, some of 

our customers may lack sufficient capital to support their long term operations. As a result, these customers may not be able to pay us some or 

all of the fees they are required to pay us under their existing agreements. These conditions may also prevent potential customers from entering 

into contractual relationships or other strategic business relationships with us.  

Bad debt expense was 2.7% of revenues for the year ended December 31, 2001, 3.4% of revenues for fiscal year 2000 and 1.8% of 

revenues for fiscal year 1999. Management regularly reviews all receivables for collectibility. We generally provide allowances for all accounts 

sixty days or more past due and also allow for an amount based on revenues and the accounts receivable balance for accounts not specifically 

identified. We have a credit review process and, when circumstances warrant, require payment in advance from customers. As a result, we may 

have to forego business from customers who do not agree to our payment terms.  

Our operating results have been, and may continue to be, negatively impacted by our recognition of losses on investments in other 

companies. 

We hold a number of investments in third parties. The majority of the companies we have invested in are engaged in Internet, networking, 

e commerce, telecommunications and wireless technologies. These investments involve a high level of risk for a number of reasons, including:  

the companies in which we have invested are generally development stage companies which are likely to continue to generate losses in 

the foreseeable future and may not be profitable for a long time, if at all; 

during the past twelve to eighteen months, companies in the Internet and e commerce industries have experienced difficulties in 

raising capital to fund expansion or continue operations; and, if available at all, financing is often on unfavorable terms which may 

impair the value of our investments; 

some of our investments are in businesses based on new technologies or products that may not be widely adopted in the evolving 

Internet and wireless technology industries; and 

most of our investments are in privately held companies, and if public markets for their securities do not develop, it may be difficult to 

sell those securities. 

We regularly review all of our investments in public and private companies for other than temporary declines in fair value. When we 

determine that the decline in fair value of an investment below our accounting basis is other than temporary, we reduce the carrying value of 

the securities we hold and record a loss in the amount of any such decline. During the year ended December 31, 2001, we determined that the 

declines in value of twenty two of our investments were other than temporary and we recognized losses totaling $100.9 million, which 

represented 20% of the net loss for the period, to record these investments at their current fair values as of December 31, 2001. We also 

recorded losses of $20.4 million for other than temporary declines in the fair value of certain investments during the year ended December 31, 

2000. With the current economic environment, it is difficult to accurately predict the amount of exposure to future investment impairment. As 

of December 31, 2001, our other investments were carried at $47.1 million.  

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