SYNACOR, INC., 10-Q filed on 8/13/2013
Quarterly Report
Document and Entity Information
6 Months Ended
Jun. 30, 2013
Jul. 31, 2013
Document and Entity Information [Abstract]
 
 
Entity Registrant Name
Synacor, Inc. 
 
Entity Central Index Key
0001408278 
 
Document Type
10-Q 
 
Document Period End Date
Jun. 30, 2013 
 
Amendment Flag
false 
 
Document Fiscal Year Focus
2013 
 
Document Fiscal Period Focus
Q2 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Non-accelerated Filer 
 
Entity Common Stock, Shares Outstanding
 
27,329,886 
Condensed Consolidated Balance Sheets (Unaudited) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
CURRENT ASSETS:
 
 
Cash and cash equivalents
$ 37,742 
$ 41,944 
Accounts receivable—net of allowance of $25 and $46
15,346 
15,624 
Deferred income taxes
945 
1,999 
Prepaid expenses and other current assets
1,936 
1,831 
Total current assets
55,969 
61,398 
PROPERTY AND EQUIPMENT—Net
11,836 
11,043 
DEFERRED INCOME TAXES, NON-CURRENT
3,779 
2,527 
OTHER LONG-TERM ASSETS
560 
543 
GOODWILL
819 
819 
TOTAL ASSETS
72,963 
76,330 
CURRENT LIABILITIES:
 
 
Accounts payable
12,793 
14,204 
Accrued expenses and other current liabilities
5,866 
7,328 
Current portion of capital lease obligations
1,905 
2,127 
Total current liabilities
20,564 
23,659 
LONG-TERM PORTION OF CAPITAL LEASE OBLIGATIONS
795 
1,712 
OTHER LONG-TERM LIABILITIES
177 
148 
Total liabilities
21,536 
25,519 
COMMITMENTS AND CONTINGENCIES (Note 5)
   
   
STOCKHOLDERS’ EQUITY:
 
 
Preferred stock, $0.01 par value—10,000,000 shares authorized, no shares issued and outstanding at December 31, 2012 and June 30, 2013
0 
0 
Common stock, $0.01 par value—100,000,000 shares authorized, 27,517,665 issued and 27,198,165 outstanding at December 31, 2012, and 100,000,000 authorized, 27,641,886 issued and 27,322,386 shares outstanding at June 30, 2013
276 
275 
Treasury stock—at cost, 319,500 shares at December 31, 2012 and June 30, 2013
(569)
(569)
Additional paid-in capital
100,764 
99,449 
Accumulated deficit
(48,948)
(48,338)
Accumulated other comprehensive income (loss)
1 
(6)
Total Synacor, Inc. stockholders’ equity
51,524 
50,811 
Noncontrolling interests
(97)
0 
Total equity
51,427 
50,811 
TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY
$ 72,963 
$ 76,330 
Condensed Consolidated Balance Sheets (Parenthetical) (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Statement of Financial Position [Abstract]
 
 
Allowance for doubtful accounts
$ 46 
$ 25 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, shares issued
0 
0 
Preferred stock, shares outstanding
0 
0 
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
27,641,886 
27,517,665 
Common stock, shares outstanding
27,322,386 
27,198,165 
Treasury stock, shares
319,500 
319,500 
Condensed Consolidated Statements of Operations (Unaudited) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Income Statement [Abstract]
 
 
 
 
REVENUE
$ 26,708 
$ 30,807 
$ 55,851 
$ 61,477 
COSTS AND OPERATING EXPENSES:
 
 
 
 
Cost of revenue (exclusive of depreciation shown separately below)
14,017 
16,876 
29,781 
33,640 
Research and development (exclusive of depreciation shown separately below)
7,336 
6,123 
14,201 
12,411 
Sales and marketing
2,147 
2,399 
4,277 
4,776 
General and administrative (exclusive of depreciation shown separately below)
2,957 
2,868 
6,101 
5,708 
Depreciation
1,138 
934 
2,268 
1,715 
Total costs and operating expenses
27,595 
29,200 
56,628 
58,250 
INCOME (LOSS) FROM OPERATIONS
(887)
1,607 
(777)
3,227 
OTHER EXPENSE
(8)
(18)
(15)
(18)
INTEREST EXPENSE
(43)
(89)
(101)
(136)
INCOME (LOSS) BEFORE INCOME TAXES
(938)
1,500 
(893)
3,073 
PROVISION (BENEFIT) FOR INCOME TAXES
(204)
301 
(186)
700 
NET INCOME (LOSS)
(734)
1,199 
(707)
2,373 
Net loss attributable to noncontrolling interests
97 
0 
97 
0 
NET INCOME (LOSS) ATTRIBUTABLE TO SYNACOR, INC.
$ (637)
$ 1,199 
$ (610)
$ 2,373 
NET INCOME (LOSS) ATTRIBUTABLE TO SYNACOR, INC. PER SHARE:
 
 
 
 
Basic (in dollars per share)
$ (0.02)
$ 0.04 
$ (0.02)
$ 0.11 
Diluted (in dollars per share)
$ (0.02)
$ 0.04 
$ (0.02)
$ 0.08 
WEIGHTED AVERAGE SHARES USED TO COMPUTE NET INCOME (LOSS) PER SHARE:
 
 
 
 
Basic (in shares)
27,311,892 
27,212,105 
27,273,671 
21,907,842 
Diluted (in shares)
27,311,892 
29,592,108 
27,273,671 
28,261,882 
Condensed Consolidated Statements of Comprehensive Income (Unaudited) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Statement of Other Comprehensive Income [Abstract]
 
 
 
 
Net income (loss)
$ (734)
$ 1,199 
$ (707)
$ 2,373 
Other comprehensive income:
 
 
 
 
Change in foreign currency translation adjustment
1 
9 
7 
9 
Comprehensive income (loss)
(733)
1,208 
(700)
2,382 
Less: comprehensive loss attributable to noncontrolling interests
97 
0 
97 
0 
Comprehensive income (loss) attributable to Synacor, Inc.
$ (636)
$ 1,208 
$ (603)
$ 2,382 
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $)
In Thousands, unless otherwise specified
6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net income (loss)
$ (707)
$ 2,373 
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
 
 
Depreciation
2,268 
1,715 
Stock-based compensation expense
1,179 
983 
Deferred income taxes
(198)
616 
Change in assets and liabilities, net of effect of acquisition:
 
 
Accounts receivable, net
278 
(1,171)
Prepaid expenses and other current assets
(105)
(528)
Other long-term assets
(17)
120 
Accounts payable
(1,657)
782 
Accrued expenses and other current liabilities
(1,269)
(155)
Other long-term liabilities
29 
64 
Net cash provided by (used in) operating activities
(199)
4,799 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Purchases of property and equipment
(2,502)
(2,040)
Cash paid for business acquisition
(500)
(600)
Net cash used in investing activities
(3,002)
(2,640)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Repayment on bank financing
0 
(250)
Repayments on capital lease obligations
(1,139)
(1,035)
Proceeds from exercise of common stock options
131 
639 
Proceeds from initial public offering
0 
25,364 
Initial public offering costs
0 
(2,753)
Net cash provided by (used in) financing activities
(1,008)
21,965 
Effect of exchange rate changes on cash and cash equivalents
7 
 
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS
(4,202)
24,133 
CASH AND CASH EQUIVALENTS—Beginning of period
41,944 
10,925 
CASH AND CASH EQUIVALENTS—End of period
37,742 
35,058 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 
 
Cash paid for interest
91 
121 
Cash paid for income taxes
138 
83 
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:
 
 
Property and equipment acquired under capital lease obligations
0 
2,484 
Accrued business acquisition consideration
0 
500 
Accrued property and equipment expenditures
$ 822 
$ 152 
The Company and Summary of Significant Accounting Policies
The Company and Summary of Significant Accounting Policies
The Company and Summary of Significant Accounting Policies
Synacor, Inc., together with its consolidated subsidiaries (the “Company”), is a leading provider of startpages, TV Everywhere solutions, Identity Management (IDM) and various cloud-based services across multiple devices for cable, satellite, telecom and consumer electronics companies. The Company is also a leading provider of authentication and aggregation solutions for delivery of personalized online content. The Company's technology allows its customers to package a wide array of personalized content and cloud-based services with their high-speed Internet, communications, television and other offerings. The Company's customers offer the Company's services under their own brands on Internet-enabled devices such as PCs, tablets, smartphones and connected TVs.
Initial Public Offering — In February 2012, the Company completed its initial public offering whereby 6,818,170 shares of common stock were sold to the public at a price of $5.00 per share. The Company sold 5,454,545 common shares and selling stockholders sold 1,363,625 common shares. The Company received aggregate proceeds of $25,364 from the initial public offering, net of underwriters’ discounts and commissions but before deducting offering expenses of $3,016.
In connection with the initial public offering in February 2012, the Board of Directors of the Company approved a 1-for-2 reverse stock split of the Company’s common stock. All common shares, stock options, and per share information presented in these condensed consolidated financial statements reflect the reverse stock split on a retroactive basis for all periods presented. There was no change in the par value of the Company’s common stock. The ratio by which shares of preferred stock were convertible into shares of common stock was adjusted to reflect the effects of the reverse stock split. In addition, in accordance with their rights and consistent with the conversion rates discussed in Note 6, Equity, all shares of the Company’s outstanding preferred stock were converted into common stock upon the closing of the initial public offering.
Basis of Presentation — The interim unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly-owned or otherwise controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the interim unaudited condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position for the periods presented. These interim unaudited condensed consolidated financial statements are not necessarily indicative of the results expected for the full fiscal year or for any subsequent period and should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
Accounting Estimates — The preparation of financial statements in conformity with GAAP in the U.S. requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, actual results may differ from estimated amounts.
Concentrations of Risk — As of December 31, 2012 and June 30, 2013, and for the three and six months ended June 30, 2012 and 2013, the Company had concentrations equal to or exceeding 10% of the Company’s accounts receivable and revenue as follows:
 
Accounts Receivable
 
December 31,
2012
 
June 30,
2013
Google
40
%
 
30
%
Customer A
N/A

 
16

    
 
Revenue
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2012
 
2013
 
2012
 
2013
Google
56
%
 
51
%
 
59
%
 
53
%

For the three and six months ended June 30, 2012 and 2013, the following customers received revenue-share payments equal to or exceeding 10% of the Company’s cost of revenue. The costs represent revenue share paid to them for their supply of Internet traffic on the Company's startpages.
 
 
Cost of Revenue
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2012
 
2013
 
2012
 
2013
Customer A
20
%
 
20
%
 
20
%
 
20
%
Customer B
17

 
13

 
17

 
14

Customer C
13

 
10

 
13

 
12

Customer D
12

 
11

 
12

 
12


Fair Value Measurements — The provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures, establish a framework for measuring the fair value in accounting principles generally accepted in the U.S. and establish a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value as follows:
Level 1 — Level 1 inputs are defined as observable inputs such as quoted prices in active markets.
Level 2 — Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
Level 3 — Level 3 inputs are unobservable inputs that reflect the Company’s determination of assumptions that market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including the Company’s own data.
Acquisition — In January 2012, the Company acquired the assets of Carbyn, Inc., or Carbyn, an Ontario, Canada-based company. The assets acquired are principally comprised of mobile device software and technology and other intellectual property, which the Company expects to enhance its efforts in the development of next generation web applications for
mobile devices. The aggregate purchase price was up to $1,100 for the acquired assets, of which $600 was paid upon consummation of the acquisition and the remaining $500 was paid in April 2013. In addition, the Company hired seven employees from Carbyn who have accepted employment with Synacor Canada, Inc., a newly-formed and wholly-owned subsidiary of the Company. The acquisition and its impact on the consolidated financial statements are not material. The purchase price was allocated to the assets acquired based on their respective fair values as of the acquisition date, with the amount exceeding the fair value recorded as goodwill of $819.
Joint Venture—In March 2013, the Company entered into a Joint Venture Agreement, pursuant to which it will initially own 50% of the newly formed Synacor China, Ltd, or the JV Company. In July 2013 the Company provided $400 in initial funding and has agreed to provide up to $1,600 in additional funding to the JV Company over the next two years. Subject to the completion of customary regulatory requirements, the JV Company will, through a wholly foreign-owned subsidiary in the People's Republic of China (the “PRC”), supply authentication and aggregation solutions for the delivery of online content and services to customers in the PRC.
The noncontrolling interests in the condensed consolidated financial statements represent the noncontrolling holders' percentage share of income or losses of the JV Company.
    
Subsequent Event—In July 2013 the Company made a $1,000 investment (in the form of a convertible promissory note) in a privately held Delaware corporation called Blazer and Flip Flops, Inc., or B&FF (doing business as The Experience Engine). B&FF is a professional services company whose principals have experience integrating its customers systems with their consumers' devices, including smartphones and tablets. B&FF has customers in the U.S., Europe and Asia.
Property and Equipment - Net
Property and Equipment - Net
Property and Equipment—Net
Property and equipment, net consisted of the following (in thousands):
 
December 31,
2012
 
June 30,
2013
Computer equipment (1)
$
17,630

 
$
18,167

Computer software
3,715

 
4,248

Furniture and fixtures
1,050

 
1,071

Leasehold improvements
732

 
737

Work in process (2)
226

 
2,072

Other
173

 
173

 
23,526

 
26,468

Less accumulated depreciation (3)
(12,483
)
 
(14,632
)
Total property and equipment—net
$
11,043

 
$
11,836

Notes:
(1)
Includes equipment under capital lease obligations of approximately $5,882 and $5,229 as of December 31, 2012 and June 30, 2013, respectively.
(2)
Includes internal-use software development costs of $40 and $1,865 as of December 31, 2012 and June 30, 2013, respectively.
(3)
Includes $1,834 and $1,990 of accumulated depreciation of equipment under capital leases as of December 31, 2012 and June 30, 2013, respectively.
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
 
December 31,
2012
 
June 30,
2013
Accrued compensation
$
4,265

 
$
2,515

Accrued content fees
555

 
953

Accrued property and equipment expenditures
132

 
439

Accrued business acquisition consideration
500

 
—

Unearned revenue on contracts
297

 
554

Other
1,579

 
1,405

Total
$
7,328

 
$
5,866

Information About Segment and Geographic Areas
Information About Segment and Geographic Areas
Information About Segment and Geographic Areas
The Company considers operating segments to be components of the Company in which separate financial information is available that is evaluated regularly by the Company’s chief operating decision maker in deciding how to allocate resources and in assessing performance. The chief operating decision maker for the Company is the Chief Executive Officer. The Chief Executive Officer reviews financial information presented on a total Company basis, accompanied by information about revenue by major service line for purposes of allocating resources and evaluating financial performance. The Company has one business activity and there are no segment managers who are held accountable for operations, operating results or plans for levels or components below the Company level. Accordingly, the Company has determined that it has a single reporting segment and operating unit structure.
The following table sets forth revenue and long-lived tangible assets by geographic area (in thousands):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2012
 
2013
 
2012
 
2013
Revenue
 
 
 
 
 
 
 
United States
$
30,641

 
$
26,531

 
$
61,155

 
$
55,497

United Kingdom
166

 
177

 
322

 
354

Total revenue
$
30,807

 
$
26,708

 
$
61,477

 
$
55,851

 
December 31,
2012
 
June 30,
2013
Long-lived tangible assets
 
 
 
United States
$
10,638

 
$
11,532

Netherlands
405

 
304

Total long-lived tangible assets
$
11,043

 
$
11,836

Commitments and Contingencies
Commitments and Contingencies
Commitments and Contingencies
Litigation —From time to time, the Company is a party to legal actions. In the opinion of management, the outcome of these matters is not expected to have a material impact on the consolidated financial statements of the Company.
Contract Commitments —The Company is obligated to make payments under various contracts with vendors and other business partners, principally for revenue-share and content arrangements. Contract commitments as of June 30, 2013 are summarized as follows (in thousands):
Year ending December 31:
 
2013 (remaining six months)
$
2,462

2014
1,419

2015
1,080

2016
1,080

2017
360

Due after 5 years
—

Total contract commitments
$
6,401

Equity
Equity
Equity
Common Stock — Effective on February 15, 2012, the Company’s board of directors and stockholders approved the Fifth Amended and Restated Certificate of Incorporation. The total number of common shares that the Company is authorized to issue is 100 million with a par value of $0.01 per share.
Preferred Stock — Effective on February 15, 2012, the Company’s board of directors and stockholders approved the Fifth Amended and Restated Certificate of Incorporation. The total number of preferred shares that the Company is authorized to issue is 10 million with a par value of $0.01 per share. None have been issued to date.
Conversion — Prior to the Company's initial public offering, each share of Series A, A-1, B, and C preferred stock was convertible at the option of the holder at any time into common stock. The conversion rate was the quotient obtained by dividing the original issue price of the Series A, A-1, B, or C by the conversion price. Subsequent to the Second Certificate of Amendment to the Fourth Amended and Restated Certificate of Incorporation, the conversion price was adjusted to effect a conversion of one preferred share into one and one-half common shares, as explained in Note 1, The Company and Summary of Significant Accounting Policies. The conversion price was subject to adjustment as set forth in the Restated Certificate of Incorporation for certain dilutive issuances, splits, and combinations, as therein defined. Conversion was automatic upon either the consent of the holders of 66% of the outstanding shares of preferred stock or the effective date of a firm commitment underwritten public offering of the Company’s common stock in which the post-offering valuation on a fully diluted basis was at least $150 million and the proceeds were not less than $25 million. All shares of the Company’s outstanding preferred stock were converted into common stock in February 2012 in connection with the Company’s initial public offering.
Stock-based Compensation
Stock-based Compensation
Stock-based Compensation
The Company recorded $425 and $617 of stock-based compensation expense for the three months ended June 30, 2012 and 2013, respectively. Stock-based compensation expense for the six months ended June 30, 2012 and 2013, was $983 and $1,179, respectively. No income tax deduction is allowed for incentive stock options, or ISOs. Accordingly, no deferred income tax asset is recorded for the expense related to these options. Stock option grants of non-qualified stock options, or NQSOs, result in the creation of a deferred tax asset, which is a temporary difference, until the time that the option is exercised.
Total stock-based compensation expense included in the accompanying condensed consolidated statements of operations for the periods presented, is as follows (in thousands):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2012
 
2013
 
2012
 
2013
Research and development
$
120

 
$
281

 
$
227

 
$
542

Sales and marketing
99

 
76

 
173

 
152

General and administrative
206

 
260

 
583

 
485

Total stock-based compensation expense
$
425

 
$
617

 
$
983

 
$
1,179


Stock Option Activity —A summary of the stock option activity for the six months ended June 30, 2013 is presented below:
 
Number of
Stock
Options
 
Weighted
Average
Exercise
Price
 
Aggregate
Intrinsic Value
(in thousands)
 
Weighted Average Remaining contractual Term (in years)
Outstanding—January 1, 2013
4,510,807

 
$
4.06

 
 
 
 
Granted
1,091,750

 
3.67

 
 
 
 
Exercised
(124,221
)
 
1.07

 
 
 
 
Forfeited
(73,702
)
 
8.39

 
 
 
 
Outstanding—June 30, 2013
5,404,634

 
3.95

 
$
1,914

 
7.63
Vested and expected to vest—June 30, 2013
4,943,064

 
3.87

 
$
2,047

 
7.50
Vested and exercisable—June 30, 2013
2,327,257

 
2.82

 
$
2,800

 
5.82

Aggregate intrinsic value represents the difference between the Company’s closing stock price of its common stock and the exercise price of outstanding, in-the-money options. The Company’s closing stock price as reported on the NASDAQ as of June 30, 2013 was $3.10. The total intrinsic value of options exercised was approximately $30 and $252 for the three and six months ended June 30, 2013, respectively.
The per-share fair value of each stock option was determined on the date of grant using the Black-Scholes option pricing model using the following assumptions:
Grant Date
Options
Granted
 
Weighted-
Average
Exercise Price
 
Expected
Life of
Options
(In years)
 
Risk-Free
Interest
Rate
 
Expected
Volatility
 
Expected
Dividend
Yield
February 3, 2013
44,500

 
$
5.55

 
6.25
 
1.43
%
 
61
%
 
—
%
March 11, 2013
50,500

 
$
3.12

 
6.25
 
1.43
%
 
60
%
 
—
%
April 29, 2013
62,500

 
$
2.88

 
6.25
 
1.10
%
 
60
%
 
—
%
May 16, 2013
889,250

 
$
3.68

 
6.25
 
1.25
%
 
60
%
 
—
%
June 17, 2013
45,000

 
$
3.23

 
6.25
 
1.57
%
 
60
%
 
—
%

As of June 30, 2013, the unrecognized compensation cost related to non-vested options granted, for which vesting is probable, under the plan was approximately $6,483. This cost is expected to be recognized over a weighted-average period of 3.0 years. The total fair value of shares vested was $419 and $696 for the three and six months ended June 30, 2013, respectively.

RSU Activity—A summary of RSU activity for the six months ended June 30, 2013, is as follows:
 
Number of
Shares
 
Weighted-Average
Grant Date Fair
Value
Unvested - January 1, 2013
50,000

 
$
5.82

Granted
7,500

 
3.86

Released
—

 
—

Forfeited
—

 
—

Unvested - June 30, 2013
57,500

 
$
5.54

Expected to vest—June 30, 2013
48,875

 
$
5.54


As of June 30, 2013, total unrecognized compensation cost, adjusted for estimated forfeitures, related to RSUs was approximately $239, which is expected to be recognized over the next 3.51 years.

Net Income Per Common Share Data
Net Income Per Common Share Data
Net Income (Loss) Per Common Share Data
Basic net income (loss) per share is computed using the weighted-average number of common shares outstanding during the period. Diluted net income (loss) per share is computed using the weighted-average number of common shares and, if dilutive, potential common shares outstanding during the period. The Company’s potential common shares consist of the incremental common shares issuable upon the exercise of stock options, and to a lesser extent, shares issuable upon the release of RSUs. In addition, for the six months ended June 30, 2012, the potential common shares included the conversion of preferred stock on an as if converted basis prior to the Company's initial public offering in February 2012. The dilutive effect of these potential common shares is reflected in diluted earnings per share by application of the treasury stock method.
The following table presents the calculation of basic and diluted net income (loss) per share for the three and six month periods ended June 30, 2012 and 2013 (in thousands, except share and per share amounts):
 
Three Months Ended,
June 30,
 
Six Months Ended,
June 30,
 
2012
 
2013
 
2012
 
2013
Basic net income (loss) per share:


 


 
 
 
 
  Numerator:


 


 
 
 
 
        Net income (loss)
$
1,199

 
$
(637
)
 
$
2,373

 
$
(610
)
  Denominator:
 
 
 
 
 
 
 
        Weighted-average common shares outstanding
27,212,105

 
27,311,892

 
21,907,842

 
27,273,671

Basic net income (loss) per share
$
0.04

 
$
(0.02
)
 
$
0.11

 
$
(0.02
)
 
 
 
 
 
 
 
 
Diluted net income (loss) per share:
 
 
 
 
 
 
 
  Numerator:
 
 
 
 
 
 
 
        Net income (loss)
$
1,199

 
$
(637
)
 
$
2,373

 
$
(610
)
  Denominator:
 
 
 
 
 
 
 
        Number of shares used in basic calculation
27,212,105

 
27,311,892

 
21,907,842

 
27,273,671

        Add weighted-average effect of dilutive securities:
 
 
 
 
 
 
 
        Conversion of preferred stock (as if converted basis)
—

 
—

 
3,918,684

 
—

        Employee stock options and RSUs
2,380,003

 
—

 
2,435,356

 
—

  Number of shares used in diluted calculation
29,592,108

 
27,311,892

 
28,261,882

 
27,273,671

Diluted net income (loss) per share
$
0.04

 
$
(0.02
)
 
$
0.08

 
$
(0.02
)

The following equivalent shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented:
 
Three Months Ended,
June 30,
 
Six Months Ended,
June 30,
  
2012
 
2013
 
2012
 
2013
Antidilutive equity awards:
 
 
 
 
 
 
 
Stock options and RSUs
86,500

 
5,462,134

 
86,500

 
5,462,134


* * * * * *
The Company and Summary of Significant Accounting Policies (Policies)
Initial Public Offering 
Initial Public Offering — In February 2012, the Company completed its initial public offering whereby 6,818,170 shares of common stock were sold to the public at a price of $5.00 per share. The Company sold 5,454,545 common shares and selling stockholders sold 1,363,625 common shares. The Company received aggregate proceeds of $25,364 from the initial public offering, net of underwriters’ discounts and commissions but before deducting offering expenses of $3,016.
In connection with the initial public offering in February 2012, the Board of Directors of the Company approved a 1-for-2 reverse stock split of the Company’s common stock. All common shares, stock options, and per share information presented in these condensed consolidated financial statements reflect the reverse stock split on a retroactive basis for all periods presented. There was no change in the par value of the Company’s common stock. The ratio by which shares of preferred stock were convertible into shares of common stock was adjusted to reflect the effects of the reverse stock split. In addition, in accordance with their rights and consistent with the conversion rates discussed in Note 6, Equity, all shares of the Company’s outstanding preferred stock were converted into common stock upon the closing of the initial public offering.
Basis of Presentation 
Basis of Presentation — The interim unaudited condensed consolidated financial statements and accompanying notes have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) and include the accounts of the Company and its wholly-owned or otherwise controlled subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. In the opinion of the Company’s management, the interim unaudited condensed consolidated financial statements include all adjustments, which include only normal recurring adjustments, necessary for the fair presentation of the Company’s financial position for the periods presented. These interim unaudited condensed consolidated financial statements are not necessarily indicative of the results expected for the full fiscal year or for any subsequent period and should be read in conjunction with the audited consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the fiscal year ended December 31, 2012.
Accounting Estimates 
Accounting Estimates — The preparation of financial statements in conformity with GAAP in the U.S. requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. We base our estimates on historical experience and on various other assumptions that are believed to be reasonable, the results of which form the basis for making judgments about the carrying values of assets and liabilities. Such estimates primarily relate to unsettled transactions and events as of the date of the financial statements. Accordingly, actual results may differ from estimated amounts.
Concentrations of Risk 
Concentrations of Risk — As of December 31, 2012 and June 30, 2013, and for the three and six months ended June 30, 2012 and 2013, the Company had concentrations equal to or exceeding 10% of the Company’s accounts receivable and revenue as follows:
 
Accounts Receivable
 
December 31,
2012
 
June 30,
2013
Google
40
%
 
30
%
Customer A
N/A

 
16

    
 
Revenue
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2012
 
2013
 
2012
 
2013
Google
56
%
 
51
%
 
59
%
 
53
%

For the three and six months ended June 30, 2012 and 2013, the following customers received revenue-share payments equal to or exceeding 10% of the Company’s cost of revenue. The costs represent revenue share paid to them for their supply of Internet traffic on the Company's startpages.
 
 
Cost of Revenue
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2012
 
2013
 
2012
 
2013
Customer A
20
%
 
20
%
 
20
%
 
20
%
Customer B
17

 
13

 
17

 
14

Customer C
13

 
10

 
13

 
12

Customer D
12

 
11

 
12

 
12


Fair Value Measurements 
Fair Value Measurements — The provisions of the Financial Accounting Standards Board (“FASB”) Accounting Standard Codification (“ASC”) 820, Fair Value Measurements and Disclosures, establish a framework for measuring the fair value in accounting principles generally accepted in the U.S. and establish a hierarchy that categorizes and prioritizes the sources to be used to estimate fair value as follows:
Level 1 — Level 1 inputs are defined as observable inputs such as quoted prices in active markets.
Level 2 — Level 2 inputs include quoted prices for similar assets and liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the asset or liability (interest rates, yield curves, etc.), and inputs that are derived principally from or corroborated by observable market data by correlation or other means (market corroborated inputs).
Level 3 — Level 3 inputs are unobservable inputs that reflect the Company’s determination of assumptions that market participants would use in pricing the asset or liability. These inputs are developed based on the best information available, including the Company’s own data.
Acquisition 
Acquisition — In January 2012, the Company acquired the assets of Carbyn, Inc., or Carbyn, an Ontario, Canada-based company. The assets acquired are principally comprised of mobile device software and technology and other intellectual property, which the Company expects to enhance its efforts in the development of next generation web applications for
mobile devices. The aggregate purchase price was up to $1,100 for the acquired assets, of which $600 was paid upon consummation of the acquisition and the remaining $500 was paid in April 2013. In addition, the Company hired seven employees from Carbyn who have accepted employment with Synacor Canada, Inc., a newly-formed and wholly-owned subsidiary of the Company. The acquisition and its impact on the consolidated financial statements are not material. The purchase price was allocated to the assets acquired based on their respective fair values as of the acquisition date, with the amount exceeding the fair value recorded as goodwill of $819.
Joint Venture 
Joint Venture—In March 2013, the Company entered into a Joint Venture Agreement, pursuant to which it will initially own 50% of the newly formed Synacor China, Ltd, or the JV Company. In July 2013 the Company provided $400 in initial funding and has agreed to provide up to $1,600 in additional funding to the JV Company over the next two years. Subject to the completion of customary regulatory requirements, the JV Company will, through a wholly foreign-owned subsidiary in the People's Republic of China (the “PRC”), supply authentication and aggregation solutions for the delivery of online content and services to customers in the PRC.
The noncontrolling interests in the condensed consolidated financial statements represent the noncontrolling holders' percentage share of income or losses of the JV Company.
The Company and Summary of Significant Accounting Policies (Tables)
Schedule of concentrations equal to or exceeding 10% of the Company's accounts receivable and revenue 
As of December 31, 2012 and June 30, 2013, and for the three and six months ended June 30, 2012 and 2013, the Company had concentrations equal to or exceeding 10% of the Company’s accounts receivable and revenue as follows:
 
Accounts Receivable
 
December 31,
2012
 
June 30,
2013
Google
40
%
 
30
%
Customer A
N/A

 
16

    
 
Revenue
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2012
 
2013
 
2012
 
2013
Google
56
%
 
51
%
 
59
%
 
53
%
Schedule of platform customers received revenue-share payments equal to or exceeding 10% of the Company's cost of revenue 
For the three and six months ended June 30, 2012 and 2013, the following customers received revenue-share payments equal to or exceeding 10% of the Company’s cost of revenue. The costs represent revenue share paid to them for their supply of Internet traffic on the Company's startpages.
 
 
Cost of Revenue
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2012
 
2013
 
2012
 
2013
Customer A
20
%
 
20
%
 
20
%
 
20
%
Customer B
17

 
13

 
17

 
14

Customer C
13

 
10

 
13

 
12

Customer D
12

 
11

 
12

 
12


Property and Equipment - Net (Tables)
Schedule of property and equipment
Property and equipment, net consisted of the following (in thousands):
 
December 31,
2012
 
June 30,
2013
Computer equipment (1)
$
17,630

 
$
18,167

Computer software
3,715

 
4,248

Furniture and fixtures
1,050

 
1,071

Leasehold improvements
732

 
737

Work in process (2)
226

 
2,072

Other
173

 
173

 
23,526

 
26,468

Less accumulated depreciation (3)
(12,483
)
 
(14,632
)
Total property and equipment—net
$
11,043

 
$
11,836

Notes:
(1)
Includes equipment under capital lease obligations of approximately $5,882 and $5,229 as of December 31, 2012 and June 30, 2013, respectively.
(2)
Includes internal-use software development costs of $40 and $1,865 as of December 31, 2012 and June 30, 2013, respectively.
(3)
Includes $1,834 and $1,990 of accumulated depreciation of equipment under capital leases as of December 31, 2012 and June 30, 2013, respectively.
Accrued Expenses and Other Current Liabilities (Tables)
Schedule of accrued expenses and other current liabilities
Accrued expenses and other current liabilities consisted of the following (in thousands):
 
December 31,
2012
 
June 30,
2013
Accrued compensation
$
4,265

 
$
2,515

Accrued content fees
555

 
953

Accrued property and equipment expenditures
132

 
439

Accrued business acquisition consideration
500

 
—

Unearned revenue on contracts
297

 
554

Other
1,579

 
1,405

Total
$
7,328

 
$
5,866

Information About Segment and Geographic Areas (Tables)
Schedule of revenue and long-lived tangible assets by geographic area
The following table sets forth revenue and long-lived tangible assets by geographic area (in thousands):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2012
 
2013
 
2012
 
2013
Revenue
 
 
 
 
 
 
 
United States
$
30,641

 
$
26,531

 
$
61,155

 
$
55,497

United Kingdom
166

 
177

 
322

 
354

Total revenue
$
30,807

 
$
26,708

 
$
61,477

 
$
55,851

 
December 31,
2012
 
June 30,
2013
Long-lived tangible assets
 
 
 
United States
$
10,638

 
$
11,532

Netherlands
405

 
304

Total long-lived tangible assets
$
11,043

 
$
11,836

Commitments and Contingencies (Tables)
Schedule of ontract commitments
Contract commitments as of June 30, 2013 are summarized as follows (in thousands):
Year ending December 31:
 
2013 (remaining six months)
$
2,462

2014
1,419

2015
1,080

2016
1,080

2017
360

Due after 5 years
—

Total contract commitments
$
6,401

Stock-based Compensation (Tables)
Schedule of total stock-based compensation expense 
Total stock-based compensation expense included in the accompanying condensed consolidated statements of operations for the periods presented, is as follows (in thousands):
 
Three Months Ended
June 30,
 
Six Months Ended
June 30,
 
2012
 
2013
 
2012
 
2013
Research and development
$
120

 
$
281

 
$
227

 
$
542

Sales and marketing
99

 
76

 
173

 
152

General and administrative
206

 
260

 
583

 
485

Total stock-based compensation expense
$
425

 
$
617

 
$
983

 
$
1,179

Summary of the status of options granted under all options 
A summary of the stock option activity for the six months ended June 30, 2013 is presented below:
 
Number of
Stock
Options
 
Weighted
Average
Exercise
Price
 
Aggregate
Intrinsic Value
(in thousands)
 
Weighted Average Remaining contractual Term (in years)
Outstanding—January 1, 2013
4,510,807

 
$
4.06

 
 
 
 
Granted
1,091,750

 
3.67

 
 
 
 
Exercised
(124,221
)
 
1.07

 
 
 
 
Forfeited
(73,702
)
 
8.39

 
 
 
 
Outstanding—June 30, 2013
5,404,634

 
3.95

 
$
1,914

 
7.63
Vested and expected to vest—June 30, 2013
4,943,064

 
3.87

 
$
2,047

 
7.50
Vested and exercisable—June 30, 2013
2,327,257

 
2.82

 
$
2,800

 
5.82
Summary of the option grants and assumptions used in the Black-Scholes option pricing model to value the options 
The per-share fair value of each stock option was determined on the date of grant using the Black-Scholes option pricing model using the following assumptions:
Grant Date
Options
Granted
 
Weighted-
Average
Exercise Price
 
Expected
Life of
Options
(In years)
 
Risk-Free
Interest
Rate
 
Expected
Volatility
 
Expected
Dividend
Yield
February 3, 2013
44,500

 
$
5.55

 
6.25
 
1.43
%
 
61
%
 
—
%
March 11, 2013
50,500

 
$
3.12

 
6.25
 
1.43
%
 
60
%
 
—
%
April 29, 2013
62,500

 
$
2.88

 
6.25
 
1.10
%
 
60
%
 
—
%
May 16, 2013
889,250

 
$
3.68

 
6.25
 
1.25
%
 
60
%
 
—
%
June 17, 2013
45,000

 
$
3.23

 
6.25
 
1.57
%
 
60
%
 
—
%
Summary of RSU activity 
A summary of RSU activity for the six months ended June 30, 2013, is as follows:
 
Number of
Shares
 
Weighted-Average
Grant Date Fair
Value
Unvested - January 1, 2013
50,000

 
$
5.82

Granted
7,500

 
3.86

Released
—

 
—

Forfeited
—

 
—

Unvested - June 30, 2013
57,500

 
$
5.54

Expected to vest—June 30, 2013
48,875

 
$
5.54

Net Income Per Common Share Data (Tables)
Schedule of basic and diluted net income per share 
The following table presents the calculation of basic and diluted net income (loss) per share for the three and six month periods ended June 30, 2012 and 2013 (in thousands, except share and per share amounts):
 
Three Months Ended,
June 30,
 
Six Months Ended,
June 30,
 
2012
 
2013
 
2012
 
2013
Basic net income (loss) per share:


 


 
 
 
 
  Numerator:


 


 
 
 
 
        Net income (loss)
$
1,199

 
$
(637
)
 
$
2,373

 
$
(610
)
  Denominator:
 
 
 
 
 
 
 
        Weighted-average common shares outstanding
27,212,105

 
27,311,892

 
21,907,842

 
27,273,671

Basic net income (loss) per share
$
0.04

 
$
(0.02
)
 
$
0.11

 
$
(0.02
)
 
 
 
 
 
 
 
 
Diluted net income (loss) per share:
 
 
 
 
 
 
 
  Numerator:
 
 
 
 
 
 
 
        Net income (loss)
$
1,199

 
$
(637
)
 
$
2,373

 
$
(610
)
  Denominator:
 
 
 
 
 
 
 
        Number of shares used in basic calculation
27,212,105

 
27,311,892

 
21,907,842

 
27,273,671

        Add weighted-average effect of dilutive securities:
 
 
 
 
 
 
 
        Conversion of preferred stock (as if converted basis)
—

 
—

 
3,918,684

 
—

        Employee stock options and RSUs
2,380,003

 
—

 
2,435,356

 
—

  Number of shares used in diluted calculation
29,592,108

 
27,311,892

 
28,261,882

 
27,273,671

Diluted net income (loss) per share
$
0.04

 
$
(0.02
)
 
$
0.08

 
$
(0.02
)
Schedule of equivalent shares that were excluded from the calculation of diluted net income per share because their effect would have been anti-dilutive 
The following equivalent shares were excluded from the calculation of diluted net income (loss) per share because their effect would have been anti-dilutive for the periods presented:
 
Three Months Ended,
June 30,
 
Six Months Ended,
June 30,
  
2012
 
2013
 
2012
 
2013
Antidilutive equity awards:
 
 
 
 
 
 
 
Stock options and RSUs
86,500

 
5,462,134

 
86,500

 
5,462,134

The Company and Summary of Significant Accounting Policies - Initial Public Offering (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
6 Months Ended 1 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Feb. 29, 2012
IPO [Member]
Subsidiary, Sale of Stock [Line Items]
 
 
 
Number of common stock sold to the public
 
 
6,818,170 
Sale of stock, price per share
 
 
$ 5.00 
Shares sold by company
 
 
5,454,545 
Shares sold by selling stockholders
 
 
1,363,625 
Proceeds from initial public offering
$ 0 
$ 25,364 
$ 25,364 
Offering expenses
 
 
$ 3,016 
Reverse stock split conversion ratio
 
 
0.5 
The Company and Summary of Significant Accounting Policies - Concentrations of Risk (Details) (Customer Concentration Risk [Member])
6 Months Ended 12 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended 3 Months Ended 6 Months Ended
Jun. 30, 2013
Accounts Receivable [Member]
Google [Member]
Dec. 31, 2012
Accounts Receivable [Member]
Google [Member]
Jun. 30, 2013
Accounts Receivable [Member]
Customer A [Member]
Jun. 30, 2013
Revenue [Member]
Google [Member]
Jun. 30, 2012
Revenue [Member]
Google [Member]
Jun. 30, 2013
Revenue [Member]
Google [Member]
Jun. 30, 2012
Revenue [Member]
Google [Member]
Jun. 30, 2013
Cost of Revenue [Member]
Customer A [Member]
Jun. 30, 2012
Cost of Revenue [Member]
Customer A [Member]
Jun. 30, 2013
Cost of Revenue [Member]
Customer A [Member]
Jun. 30, 2012
Cost of Revenue [Member]
Customer A [Member]
Jun. 30, 2013
Cost of Revenue [Member]
Customer B [Member]
Jun. 30, 2012
Cost of Revenue [Member]
Customer B [Member]
Jun. 30, 2013
Cost of Revenue [Member]
Customer B [Member]
Jun. 30, 2012
Cost of Revenue [Member]
Customer B [Member]
Jun. 30, 2013
Cost of Revenue [Member]
Customer C [Member]
Jun. 30, 2012
Cost of Revenue [Member]
Customer C [Member]
Jun. 30, 2013
Cost of Revenue [Member]
Customer C [Member]
Jun. 30, 2012
Cost of Revenue [Member]
Customer C [Member]
Jun. 30, 2013
Cost of Revenue [Member]
Customer D [Member]
Jun. 30, 2012
Cost of Revenue [Member]
Customer D [Member]
Jun. 30, 2013
Cost of Revenue [Member]
Customer D [Member]
Jun. 30, 2012
Cost of Revenue [Member]
Customer D [Member]
Schedule of concentrations equal to or exceeding 10% of the Company's accounts receivable and revenue
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Concentration risk, percentage
30.00% 
40.00% 
16.00% 
51.00% 
56.00% 
53.00% 
59.00% 
20.00% 
20.00% 
20.00% 
20.00% 
13.00% 
17.00% 
14.00% 
17.00% 
10.00% 
13.00% 
12.00% 
13.00% 
11.00% 
12.00% 
12.00% 
12.00% 
The Company and Summary of Significant Accounting Policies - Acquisition (Details) (Carbyn Inc [Member], USD $)
In Thousands, unless otherwise specified
1 Months Ended
Jan. 31, 2012
person
Carbyn Inc [Member]
 
Business Acquisition [Line Items]
 
Aggregate purchase price for the acquired assets
$ 1,100 
Amount paid upon consummation of the acquisition
600 
Payment remaining, due in April 2013
500 
Employees hired from Carbyn
7 
Amount exceeding the fair value recorded as goodwill
$ 819 
The Company and Summary of Significant Accounting Policies - Joint Venture (Details) (Synacor China, Ltd [Member], USD $)
In Thousands, unless otherwise specified
1 Months Ended
Mar. 31, 2013
Jul. 31, 2013
Subsequent Event [Member]
Jul. 31, 2013
Subsequent Event [Member]
Maximum [Member]
Schedule of Equity Method Investments [Line Items]
 
 
 
Ownership percentage
50.00% 
 
 
Initial funding
 
$ 400 
 
Additional funding
 
 
$ 1,600 
Term of funding (in years)
 
2 years 
 
The Company and Summary of Significant Accounting Policies - Subsequent Event (Details) (Subsequent Event [Member], USD $)
In Thousands, unless otherwise specified
1 Months Ended
Jul. 31, 2013
Subsequent Event [Member]
 
Subsequent Event [Line Items]
 
Payments to acquire investment
$ 1,000 
Property and Equipment - Net (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Schedule of property and equipment
 
 
Property and equipment-gross
$ 26,468 
$ 23,526 
Less accumulated depreciation
(14,632)1
(12,483)1
Total property and equipment-net
11,836 
11,043 
Computer equipment [Member]
 
 
Schedule of property and equipment
 
 
Property and equipment-gross
18,167 2
17,630 2
Computer software [Member]
 
 
Schedule of property and equipment
 
 
Property and equipment-gross
4,248 
3,715 
Furniture and fixtures [Member]
 
 
Schedule of property and equipment
 
 
Property and equipment-gross
1,071 
1,050 
Leasehold improvements [Member]
 
 
Schedule of property and equipment
 
 
Property and equipment-gross
737 
732 
Work in process [Member]
 
 
Schedule of property and equipment
 
 
Property and equipment-gross
2,072 3
226 3
Other [Member]
 
 
Schedule of property and equipment
 
 
Property and equipment-gross
$ 173 
$ 173 
Property and Equipment - Net - Additional Disclosures (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Property and Equipment - Net (Textual) [Abstract]
 
 
Property and equipment-gross
$ 26,468 
$ 23,526 
Accumulated depreciation of equipment under capital leases
14,632 1
12,483 1
Capital lease obligations [Member]
 
 
Property and Equipment - Net (Textual) [Abstract]
 
 
Accumulated depreciation of equipment under capital leases
1,990 
1,834 
Computer equipment [Member]
 
 
Property and Equipment - Net (Textual) [Abstract]
 
 
Property and equipment-gross
18,167 2
17,630 2
Computer equipment [Member] |
Capital lease obligations [Member]
 
 
Property and Equipment - Net (Textual) [Abstract]
 
 
Property and equipment-gross
5,229 
5,882 
Work in process [Member]
 
 
Property and Equipment - Net (Textual) [Abstract]
 
 
Property and equipment-gross
2,072 3
226 3
Software Development [Member]
 
 
Property and Equipment - Net (Textual) [Abstract]
 
 
Property and equipment-gross
$ 1,865 
$ 40 
Accrued Expenses and Other Current Liabilities (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Dec. 31, 2012
Schedule of accrued expenses and other current liabilities
 
 
Accrued compensation
$ 2,515 
$ 4,265 
Accrued content fees
953 
555 
Accrued property and equipment expenditures
439 
132 
Accrued business acquisition consideration
0 
500 
Unearned revenue on contracts
554 
297 
Other
1,405 
1,579 
Total
$ 5,866 
$ 7,328 
Information About Segment and Geographic Areas (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Dec. 31, 2012
Schedule of revenue and long-lived tangible assets by geographic area
 
 
 
 
 
Revenue
$ 26,708 
$ 30,807 
$ 55,851 
$ 61,477 
 
Long-lived tangible assets
11,836 
 
11,836 
 
11,043 
United States [Member]
 
 
 
 
 
Schedule of revenue and long-lived tangible assets by geographic area
 
 
 
 
 
Revenue
26,531 
30,641 
55,497 
61,155 
 
Long-lived tangible assets
11,532 
 
11,532 
 
10,638 
United Kingdom [Member]
 
 
 
 
 
Schedule of revenue and long-lived tangible assets by geographic area
 
 
 
 
 
Revenue
177 
166 
354 
322 
 
Netherlands [Member]
 
 
 
 
 
Schedule of revenue and long-lived tangible assets by geographic area
 
 
 
 
 
Long-lived tangible assets
$ 304 
 
$ 304 
 
$ 405 
Commitments and Contingencies (Details) (USD $)
In Thousands, unless otherwise specified
Jun. 30, 2013
Schedule of contract commitments
 
2013 (remaining six months)
$ 2,462 
2013
1,419 
2014
1,080 
2015
1,080 
2016
360 
Due after 5 years
0 
Total contract commitments
$ 6,401 
Equity (Details) (USD $)
6 Months Ended
Jun. 30, 2013
Dec. 31, 2012
Feb. 15, 2012
Conversion of Stock
 
 
 
Conversion price adjustment
one preferred share into one and one-half common shares 
 
 
Equity (Textual)
 
 
 
Common stock, shares authorized
100,000,000 
100,000,000 
100,000,000 
Common stock, par value
$ 0.01 
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
10,000,000 
10,000,000 
10,000,000 
Preferred stock, par value
$ 0.01 
$ 0.01 
$ 0.01 
Preferred stock, shares issued
0 
0 
 
Automatic Conversion of Shares [Member]
 
 
 
Conversion of Stock
 
 
 
Percentage of outstanding shares of preferred stockholders required for conversion
66.00% 
 
 
Minimum post-offering valuation on a fully diluted basis required
$ 150,000,000 
 
 
Minimum proceeds required
$ 25,000,000 
 
 
Common Stock [Member]
 
 
 
Conversion of Stock
 
 
 
Number of common stock shares issued upon conversion of one convertible preferred stock
1.5 
 
 
Stock-based Compensation - Allocation of Stock-based Compensation Expense (Details) (USD $)
In Thousands, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Schedule of total stock-based compensation expense
 
 
 
 
Total stock-based compensation expense
$ 617 
$ 425 
$ 1,179 
$ 983 
Research and development [Member]
 
 
 
 
Schedule of total stock-based compensation expense
 
 
 
 
Total stock-based compensation expense
281 
120 
542 
227 
Sales and marketing [Member]
 
 
 
 
Schedule of total stock-based compensation expense
 
 
 
 
Total stock-based compensation expense
76 
99 
152 
173 
General and administrative [Member]
 
 
 
 
Schedule of total stock-based compensation expense
 
 
 
 
Total stock-based compensation expense
$ 260 
$ 206 
$ 485 
$ 583 
Stock-based Compensation - Stock Option Activity (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
6 Months Ended
Jun. 30, 2013
Summary of the status of options granted under all options
 
Outstanding number of stock options beginning balance
4,510,807 
Number of stock options granted
1,091,750 
Number of stock options exercised
(124,221)
Number of stock options forfeited
(73,702)
Outstanding number of stock options ending balance
5,404,634 
Outstanding number of stock options expected to vest
4,943,064 
Outstanding number of stock options vested and exercisable
2,327,257 
Weighted Average Exercise Price
 
Outstanding, Weighted Average Exercise Price, Beginning
$ 4.06 
Weighted Average Exercise Price Granted
$ 3.67 
Weighted Average Exercise Price Exercised
$ 1.07 
Weighted Average Exercise Price Forfeited
$ 8.39 
Outstanding, Weighted Average Exercise Price, Ending Balance
$ 3.95 
Expected to vest, Weighted Average Exercise Price Ending Balance
$ 3.87 
Vested and exercisable, Weighted Average Exercise Price Ending Balance
$ 2.82 
Aggregate intrinsic value, outstanding
$ 1,914 
Aggregate intrinsic value, vested and expected to vest
2,047 
Aggregate intrinsic value, vested and exercisable
$ 2,800 
Weighted Average Remaining Contractual Term (in years), outstanding
7 years 7 months 17 days 
Weighted Average Remaining Contractual Term (in years), vested and expected to vest
7 years 6 months 
Weighted Average Remaining Contractual Term (in years), vested and exercisable
5 years 9 months 26 days 
Stock-based Compensation - Weighted Average Assumptions (Details) (Stock options [Member], USD $)
6 Months Ended
Jun. 30, 2013
February 3, 2013 [Member]
 
Summary of the option grants and assumptions used in the Black-Scholes option pricing model to value the options
 
Grant Date
Feb. 03, 2013 
Options Granted
44,500 
Weighted-Average Fair Value
$ 5.55 
Expected Life of Options (In years)
6 years 3 months 
Risk-Free Interest Rate
1.43% 
Expected Volatility
61.00% 
Expected Dividend Yield
0.00% 
March 11, 2013 [Member]
 
Summary of the option grants and assumptions used in the Black-Scholes option pricing model to value the options
 
Grant Date
Mar. 11, 2013 
Options Granted
50,500 
Weighted-Average Fair Value
$ 3.12 
Expected Life of Options (In years)
6 years 3 months 
Risk-Free Interest Rate
1.43% 
Expected Volatility
60.00% 
Expected Dividend Yield
0.00% 
April 29, 2013 [Member]
 
Summary of the option grants and assumptions used in the Black-Scholes option pricing model to value the options
 
Grant Date
Apr. 29, 2013 
Options Granted
62,500 
Weighted-Average Fair Value
$ 2.88 
Expected Life of Options (In years)
6 years 3 months 
Risk-Free Interest Rate
1.10% 
Expected Volatility
60.00% 
Expected Dividend Yield
0.00% 
May 16, 2013 [Member]
 
Summary of the option grants and assumptions used in the Black-Scholes option pricing model to value the options
 
Grant Date
May 16, 2013 
Options Granted
889,250 
Weighted-Average Fair Value
$ 3.68 
Expected Life of Options (In years)
6 years 3 months 
Risk-Free Interest Rate
1.25% 
Expected Volatility
60.00% 
Expected Dividend Yield
0.00% 
June 17, 2013 [Member]
 
Summary of the option grants and assumptions used in the Black-Scholes option pricing model to value the options
 
Grant Date
Jun. 17, 2013 
Options Granted
45,000 
Weighted-Average Fair Value
$ 3.23 
Expected Life of Options (In years)
6 years 3 months 
Risk-Free Interest Rate
1.57% 
Expected Volatility
60.00% 
Expected Dividend Yield
0.00% 
Stock-based Compensation - RSU Activity (Details) (Restricted Stock Units (RSUs) [Member], USD $)
6 Months Ended
Jun. 30, 2013
Restricted Stock Units (RSUs) [Member]
 
Number of Shares
 
Unvested - January 1, 2013
50,000 
Granted
7,500 
Released
0 
Forfeited
0 
Unvested - June 30, 2013
57,500 
Expected to vest—June 30, 2013
48,875 
Weighted-Average Grant Date Fair Value
 
Unvested - January 1, 2013
$ 5.82 
Granted
$ 3.86 
Released
$ 0.00 
Forfeited
$ 0.00 
Unvested - June 30, 2013
$ 5.54 
Expected to vest—June 30, 2013
$ 5.54 
Stock-based Compensation - Additional Disclosures (Details) (USD $)
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Stock-based compensation expense
$ 617,000 
$ 425,000 
$ 1,179,000 
$ 983,000 
Tax deduction allowed for incentive stock options
 
 
0 
 
Deferred income tax asset for the expense related to options
0 
 
0 
 
Closing stock price as reported on the NASDAQ
$ 3.10 
 
$ 3.10 
 
Total intrinsic value of options exercised
30,000 
 
252,000 
 
Unrecognized compensation cost related to non-vested options granted
6,483,000 
 
6,483,000 
 
Total fair value of shares vested
419,000 
 
696,000 
 
Stock Options [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Expected weighted-average period to recognize unrecognized compensation cost
 
 
3 years 
 
Restricted Stock Units (RSUs) [Member]
 
 
 
 
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
 
 
 
 
Unrecognized compensation cost related to RSUs
$ 239,000 
 
$ 239,000 
 
Expected weighted-average period to recognize unrecognized compensation cost
 
 
3 years 6 months 4 days 
 
Net Income Per Common Share Data - Calculation of Basic and Diluted Net Income Per Share (Details) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Numerator:
 
 
 
 
Net income (loss)
$ (637)
$ 1,199 
$ (610)
$ 2,373 
Denominator:
 
 
 
 
Weighted-average common shares outstanding
27,311,892 
27,212,105 
27,273,671 
21,907,842 
Basic net income (loss) per share
$ (0.02)
$ 0.04 
$ (0.02)
$ 0.11 
Numerator:
 
 
 
 
Net income (loss)
$ (637)
$ 1,199 
$ (610)
$ 2,373 
Denominator:
 
 
 
 
Weighted-average common shares outstanding
27,311,892 
27,212,105 
27,273,671 
21,907,842 
Add weighted-average effect of dilutive securities
 
 
 
 
Conversion of preferred stock (as if converted basis)
0 
0 
0 
3,918,684 
Employee stock options and RSUs
0 
2,380,003 
0 
2,435,356 
Number of shares used in diluted calculation
27,311,892 
29,592,108 
27,273,671 
28,261,882 
Diluted net income (loss) per share
$ (0.02)
$ 0.04 
$ (0.02)
$ 0.08 
Net Income Per Common Share Data - Antidilutive Securities Excluded (Details) (Stock Options and RSUs [Member])
3 Months Ended 6 Months Ended
Jun. 30, 2013
Jun. 30, 2012
Jun. 30, 2013
Jun. 30, 2012
Stock Options and RSUs [Member]
 
 
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
 
 
Antidilutive equity awards
5,462,134 
86,500 
5,462,134 
86,500