Table of Contents 

INFOSPACE, INC. 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued) 

Years Ended December 31, 2001, 2000 and 1999 

Advertising costs: 

    Costs for print advertising are recorded as expense when the advertisement appears. Advertising costs related to 

electronic impressions are recorded as expense as impressions are provided. Cash advertising expense totaled approximately $645,000, $5.8 

million and $5.1 million for the years ended December 31, 2001, 2000 and 1999, respectively. In addition, the Company recorded 

approximately $13.2 million, $8.7 million, and $878,000 in non cash advertising expense relating to barter arrangements for the years ended 

December 31, 2001, 2000 and 1999, respectively.  

Acquisition and other related charges: 

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

acquisitions accounted for under the purchase method and one time charges related directly to the acquisitions, such as investment banking, 

legal and accounting fees for acquisitions accounted for under the pooling method prior to July 1, 2001.  

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 of $11.6 million, includes an allowance for notes receivable and employee 

loans in the amount of $10.6 million, settlement charges on seven litigation matters of $2.4 million, and $848,000 for prepaid licensing fees for 

software no longer being utilized. These amounts are partially offset by a reduction of $2.4 million to the estimated liability for past overtime 

worked (Note 8). Other charges for the year ended December 31, 2000 includes settlement charges on two litigation matters of $1.7 million 

(Note 8) and $3.0 million for an estimated liability for past overtime worked (Note 8). Other charges for the year ended December 31, 1999 

consist of charges associated with litigation settlements.  

Restructuring charges: 

    Restructuring charges reflect actual and estimated costs associated with the reductions in workforce and costs 

associated with the closures of certain Company facilities (Note 10).  

Loss on Investments: 

    Loss on investments consists of recognized gains and losses on investment in accordance with SFAS No. 133 

Accounting for Derivative Instruments and Hedging Activities, 

recognized gains and losses on investments marked to fair value in the Venture 

Fund, which was active from January 1, 2000 through March 31, 2001, realized gains and losses on investments and impairment on 

investments.  

Minority interest: 

    The minority interest reflected on the balance sheet and the statement of operations consists of the employee owned 

portion of the Venture Fund (Note 4).  

Cumulative effects of change in accounting principles 

:    On January 1, 2001, the Company adopted SFAS No. 133, 

Accounting for 

Derivative Instruments and Hedging Activities. 

SFAS No. 133 establishes accounting and reporting standards for derivative instruments, 

including certain derivative instruments embedded in other contracts. All derivatives, whether designated in hedging relationships or not, are 

required to be recorded on the balance sheet at fair value and changes in fair value are recognized in earnings unless certain hedge criteria are 

met. As a result of adopting SFAS No. 133, the Company recorded a charge of $3.2 million to record warrants held to purchase stock in other 

companies at their fair value as of January 1, 2001. This amount was recorded as a cumulative effect of change in accounting principle. As of 

December 31, 2000, warrants to purchase stock in public companies were held at fair value, with unrealized gains and losses included in 

accumulated other comprehensive loss, and warrants to purchase stock in private companies were held at cost. If SFAS No. 133 had not been 

adopted on January 1, 2001, the Company's 2001 net loss would not have been materially different from the reported 2001 net loss.  

On January 1, 2000, the Company adopted SAB No. 101, 

Revenue Recognition in Financial Statements 

. Prior to January 1, 2000, the 

Company recorded revenues from customers for development fees, implementation  

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