Table of Contents 

In June 2001, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards (SFAS) No. 142 

Goodwill 

and Other Intangible Assets, 

which requires use of a non amortization approach to account for purchased goodwill and certain intangibles, 

effective January 1, 2002. Under this non amortization approach, goodwill and certain intangibles will not be amortized into results of 

operations, but instead will be reviewed annually for impairment and written down and charged to results of operations only in the periods in 

which the recorded value of goodwill and certain intangibles is more than its fair value. We expect the adoption of this accounting standard will 

have the impact of significantly reducing our amortization of goodwill and intangibles commencing January 1, 2002. As we have previously 

disclosed, we expect to incur a non cash charge estimated to range from $100 million to $200 million, which will be recorded in the first 

quarter of 2002 for the cumulative effect of adopting SFAS No. 142. We have retained an independent valuation firm to conduct the valuation 

analysis pursuant to SFAS 142 and we expect to receive the results of their analysis by the end of April 2002. There can be no assurance that 

the results of the analysis by this independent valuation firm will not result in a non cash charge less than or in excess, perhaps substantially, of 

the amount previously estimated and disclosed by us.  

Acquisition and Other Related Charges. 

    Acquisition and other related charges consist of in process research and development and other 

charges related directly to acquisitions, such as professional fees for transactions accounted for as pooling of interests, prior to the adoption of 

Statement of Financial Accounting Standards No. 141 

Business Combinations 

. During the third quarter of 2001, a reduction of acquisition 

costs accrued in 2000 was negotiated. The acquisition and related charges for the year ended December 31, 2001 included this acquisition 

accrual adjustment, $600,000 of in process research and development charges in the purchase acquisition of Locus Dialogue, $200,000 of 

severance pay to the former chief executive officer of Locus Dialogue and $300,000 of legal, accounting and other fees related to acquisitions. 

Acquisition and related charges for the year ended December 31, 2000 of $124.0 million included $80.1 million of in process research and 

development charges in the purchase acquisitions of Saraide, Millet Software and IQorder. Also included were costs incurred in the 

acquisitions of Prio and Go2Net, which were accounted for as poolings of interests. Total acquisition and related charges in 1999 were $13.6 

million. The acquisition and related charges in 1999 included $9.2 million of in process research and development charges in the purchase 

acquisitions of eComLive, Union Street and the MyAgent technology. Also included were costs incurred in the acquisition of INEX, which 

was accounted for as a pooling of interests.  

Other Charges.     

Other charges consist of one time costs and/or charges that are not directly associated with other operating expense 

classifications. Other charges for the year ended December 31, 2001 include a charge of $10.6 million in allowance for notes receivable and 

employee loans, $2.4 million for settlement charges on litigation matters and $848,000 for the write off of a prepaid license for software that is 

no longer being utilized. These amounts are offset by a reduction in the estimated liability for overtime wages accrual for past overtime worked 

due of $2.4 million.  

We were audited by the Department of Labor in February 2001. The Department of Labor determined that numerous employees, primarily 

former employees of Go2Net, were improperly classified as exempt and should have been classified as non exempt. As a result, in the year 

ended December 31, 2000, we recorded an estimated accrual in the amount of $3.0 million for the past wages due for overtime worked. Based 

on the overtime questionnaires we have received from the applicable employees and a revision to the methodology used to calculate overtime 

pay approved by the Department of Labor, we have revised our estimate for this liability to be $629,000, of which $507,000 has been paid 

through December 31, 2001.  

Other charges for the year ended December 31, 2000 includes settlement charges on two litigation matters of $1.7 million and $3.0 million 

for an estimated liability for past overtime worked. Other charges for the year ended December 31, 1999 consist of charges associated with 

litigation settlements.  

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