SYNACOR, INC., 10-Q filed on 5/16/2016
Quarterly Report
Document and Entity Information
3 Months Ended
Mar. 31, 2016
May 13, 2016
Document And Entity Information [Abstract]
 
 
Document Type
10-Q 
 
Amendment Flag
false 
 
Document Period End Date
Mar. 31, 2016 
 
Document Fiscal Year Focus
2016 
 
Document Fiscal Period Focus
Q1 
 
Trading Symbol
SYNC 
 
Entity Registrant Name
Synacor, Inc. 
 
Entity Central Index Key
0001408278 
 
Current Fiscal Year End Date
--12-31 
 
Entity Filer Category
Smaller Reporting Company 
 
Entity Common Stock, Shares Outstanding
 
30,022,369 
Condensed Consolidated Balance Sheets - Unaudited (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
CURRENT ASSETS:
 
 
Cash and cash equivalents
$ 15,748 
$ 15,697 
Accounts receivable, net of allowance of $447 and $372, respectively
22,423 
24,341 
Prepaid expenses and other current assets
4,350 
3,290 
Total current assets
42,521 
43,328 
PROPERTY AND EQUIPMENT, net
13,919 
14,377 
GOODWILL
15,949 
15,187 
INTANGIBLE ASSETS, net
16,445 
14,798 
INVESTMENT
1,000 
1,000 
OTHER LONG-TERM ASSETS
315 
336 
Total assets
90,149 
89,026 
CURRENT LIABILITIES:
 
 
Accounts payable
12,108 
9,004 
Accrued expenses and other current liabilities
9,529 
9,765 
Current portion of deferred revenue
10,298 
11,295 
Current portion of capital lease obligations
1,481 
1,574 
Total current liabilities
33,416 
31,638 
LONG-TERM PORTION OF CAPITAL LEASE OBLIGATIONS
779 
1,007 
LONG-TERM DEBT
5,000 
5,000 
DEFERRED REVENUE
4,470 
3,225 
OTHER LONG-TERM LIABILITIES
1,112 
2,052 
Total liabilities
44,777 
42,922 
COMMITMENTS AND CONTINGENCIES (Note 8)
   
   
STOCKHOLDERS' EQUITY:
 
 
Preferred stock - par value $0.01 per share; authorized 10,000,000 shares; none issued
   
   
Common stock - par value $0.01 per share; authorized 100,000,000 shares; 30,652,054 shares issued and 29,999,006 shares outstanding at March 31, 2016 and 30,636,327 shares issued and 29,983,279 shares outstanding at December 31, 2015
307 
306 
Treasury stock - at cost, 653,048 shares at March 31, 2016 and December 31, 2015
(1,332)
(1,332)
Additional paid-in capital
114,014 
113,238 
Accumulated deficit
(67,675)
(66,110)
Accumulated other comprehensive income
58 
Total stockholders' equity
45,372 
46,104 
Total liabilities and stockholders' equity
$ 90,149 
$ 89,026 
Condensed Consolidated Balance Sheets - Unaudited (Parenthetical) (USD $)
In Thousands, except Share data, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Statement of Financial Position [Abstract]
 
 
Allowance for doubtful accounts
$ 447 
$ 372 
Preferred stock, par value
$ 0.01 
$ 0.01 
Preferred stock, shares authorized
10,000,000 
10,000,000 
Preferred stock, shares issued
Common stock, par value
$ 0.01 
$ 0.01 
Common stock, shares authorized
100,000,000 
100,000,000 
Common stock, shares issued
30,652,054 
30,636,327 
Common stock, shares outstanding
29,999,006 
29,983,279 
Treasury stock, shares
653,048 
653,048 
Condensed Consolidated Statements of Operations - Unaudited (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Income Statement [Abstract]
 
 
REVENUE
$ 30,260 
$ 26,730 
COSTS AND OPERATING EXPENSES:
 
 
Cost of revenue (exclusive of depreciation and amortization shown separately below)
12,972 
14,403 
Technology and development (exclusive of depreciation and amortization shown separately below)
5,873 
4,866 
Sales and marketing
5,650 
3,562 
General and administrative (exclusive of depreciation and amortization shown separately below)
5,022 
3,374 
Depreciation and amortization
2,098 
1,496 
Total costs and operating expenses
31,615 
27,701 
LOSS FROM OPERATIONS
(1,355)
(971)
OTHER INCOME (EXPENSE)
(16)
INTEREST EXPENSE
(68)
(50)
LOSS BEFORE INCOME TAXES AND EQUITY INTEREST
(1,421)
(1,037)
INCOME TAX PROVISION
144 
LOSS IN EQUITY INTEREST
 
(32)
NET LOSS
$ (1,565)
$ (1,073)
NET LOSS PER SHARE:
 
 
Basic
$ (0.05)
$ (0.04)
Diluted
$ (0.05)
$ (0.04)
WEIGHTED AVERAGE SHARES USED TO COMPUTE NET LOSS PER SHARE:
 
 
Basic
29,992,248 
27,407,147 
Diluted
29,992,248 
27,407,147 
Condensed Consolidated Statements of Comprehensive Loss - Unaudited (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Statement of Comprehensive Income [Abstract]
 
 
Net loss
$ (1,565)
$ (1,073)
Other comprehensive income:
 
 
Changes in foreign currency translation adjustment
56 
Comprehensive loss
$ (1,509)
$ (1,064)
Condensed Consolidated Statements of Cash Flows - Unaudited (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
CASH FLOWS FROM OPERATING ACTIVITIES:
 
 
Net loss
$ (1,565)
$ (1,073)
Adjustments to reconcile net loss to net cash provided by operating activities
 
 
Depreciation and amortization
2,098 
1,496 
Stock-based compensation expense
737 
742 
Loss in equity investment
 
32 
Changes in operating assets and liabilities, net of effect of acquisition:
 
 
Accounts receivable, net
2,883 
1,203 
Prepaid expenses and other current assets
(1,060)
(23)
Other long-term assets
21 
27 
Accounts payable
2,252 
995 
Accrued expenses and other current liabilities
(826)
(1,186)
Deferred revenue
248 
 
Other long-term liabilities
(940)
(48)
Net cash provided by operating activities
3,848 
2,165 
CASH FLOWS FROM INVESTING ACTIVITIES:
 
 
Acquisition
(2,500)
 
Purchases of property and equipment
(937)
(600)
Net cash used in investing activities
(3,437)
(600)
CASH FLOWS FROM FINANCING ACTIVITIES:
 
 
Repayments on capital lease obligations
(386)
(392)
Proceeds from exercise of common stock options
10 
Net cash used in financing activities
(376)
(387)
Effect of exchange rate changes on cash and cash equivalents
16 
(28)
NET INCREASE IN CASH AND CASH EQUIVALENTS
51 
1,150 
Cash and cash equivalents, beginning of period
15,697 
25,600 
Cash and cash equivalents, end of period
15,748 
26,750 
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
 
 
Cash paid for interest
68 
50 
Cash paid for income taxes
 
30 
SUPPLEMENTAL DISCLOSURES OF NON-CASH INVESTING AND FINANCING TRANSACTIONS:
 
 
Liability for estimated additional acquisition consideration
567 
 
Property, equipment and service center contracts financed under capital lease
52 
396 
Accrued property and equipment expenditures
41 
 
Stock-based compensation capitalized to property and equipment
30 
53 
Treasury stock received to satisfy minimum withholding liabilities
 
$ 71 
The Company and Summary of Significant Accounting Principles
The Company and Summary of Significant Accounting Principles
1. The Company and Summary of Significant Accounting Principles

Synacor, Inc., together with its consolidated subsidiaries (collectively, the “Company” or “Synacor”), is the trusted technology development, multiplatform services and revenue partner for video, internet and communications providers, device manufacturers, and enterprises. Synacor delivers engaging, multiscreen experiences and advertising to their consumers that require scale, actionable data and sophisticated implementation.

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 (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned 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.

The accompanying condensed consolidated balance sheet as of December 31, 2015 was derived from the audited financial statements as of that date, but does not include all the information and footnotes required by U.S. GAAP. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Accounting Estimates

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. The Company bases its 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 March 31, 2016 and December 31, 2015, and for the three months ended March 31, 2016 and 2015, the Company had concentrations equal to or exceeding 10% of the Company’s revenue and accounts receivable as follows:

 

     Revenue  
     Three Months Ended March 31,  
     2016     2015  

Google

     17     36

 

     Accounts Receivable  
         March 31,    
2016
    December 31,
2015
 

Google

     12     14

For the three months ended March 31, 2016 and 2015, 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 customers for their supply of Internet traffic on the Company’s start experiences:

 

     Cost of Revenue  
     Three Months Ended March 31,  
     2016             2015          

Customer A

     29     24

Customer B

     12     10

Customer C

     Less than 10     10

Recent Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)” and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, with earlier application permitted as of annual reporting periods beginning after December 15, 2016. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), to clarify the implementation guidance on principal versus agent. The Company is currently assessing the financial impact of adopting these ASUs and the methods of adoption; however, given the scope of the new standard, the Company is currently unable to provide a reasonable estimate regarding the financial impact or which method of adoption will be elected. The Company is currently in the process of evaluating the impact of adoption of ASU 2014-09 will have on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods and is to be applied utilizing a modified retrospective approach. Early adoption is permitted. The Company is in the process of assessing the impact of the adoption of this ASU on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The objective of this update is to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company is in the process of assessing the impact of the adoption of this ASU on its consolidated financial statements.

Acquisition
Acquisition
2. Acquisition

On February 19, 2016, the Company entered into an Asset Purchase Agreement to acquire substantially all of the assets of Technorati, Inc. (“Technorati”), an advertising technology company, for $3.0 million in cash (the “Purchase Price”). The Company completed the acquisition on February 26, 2016 (the “Closing”). The Company expects the acquisition of Technorati to drive additional advertising demand, to accelerate its content and advertising syndication strategy providing access to over 1,000 new publishers, and to add new tools for publishers to its existing platform. The Company expects to realize synergies and economies of scale by combining Technorati’s publisher network, proprietary SmartWrapper solution and other advertising technology with its existing network of Managed Portals and Advertising solutions.

The assets acquired include Technorati’s intellectual property and advertising technology platforms, customer and publisher relationships, accounts receivable and equipment. The Company also assumed certain obligations of Technorati, including post-closing obligations under contracts assigned to the Company and the payment of outstanding liabilities to its publishers. Ten of Technorati’s employees commenced employment with Synacor.

 

The Company paid $2.5 million of the Purchase Price at the Closing, withheld $0.5 million of the purchase price to secure Technorati’s indemnification obligations under the Asset Purchase Agreement, and owes Technorati approximately $0.1 million in post-closing working capital adjustments. Pursuant to the terms of the Asset Purchase Agreement, Technorati shall indemnify the Company for breaches of its representations and warranties, breaches of covenants and certain other matters. The representations and warranties set forth in the Asset Purchase Agreement generally survive for 12 months following the Closing, with longer survival periods for certain fundamental representations and warranties.

Consideration and Allocation of Purchase Price –

The transaction was accounted for as a purchase of a business in accordance with FASB Accounting Standards Codification (“ASC”) Topic 805, Business Combinations. Under this guidance, the fair value of the consideration was determined and the assets acquired and liabilities assumed have been recorded at their estimated fair values as of the date of acquisition. The excess of the consideration over the estimated fair values has been recorded as goodwill.

The estimated transaction consideration, as well as the preliminary allocation of the purchase price to the assets acquired and liabilities assumed as of the date of the acquisition are presented in the table below. Management is responsible for determining, as of the Closing, the fair value of tangible and identifiable intangible assets acquired and liabilities assumed, and the estimated useful lives for any depreciable and amortizable assets. Management considered a number of factors, including reference to a valuation analysis performed solely for the purpose of this allocation in accordance with ASC Topic 805. The Company’s estimates are based on assumptions believed to be reasonable, but which are inherently uncertain and unpredictable. This analysis required the use of management’s assumptions, which would not reflect unanticipated events and circumstances that may occur.

Consideration (in thousands):

 

Cash consideration

   $ 2,500   

Fair value of indemnification holdback

     500   

Fair value of post-closing working capital adjustment

     67   
  

 

 

 

Total consideration

   $ 3,067   
  

 

 

 

Purchase price allocation (in thousands):

 

Assets acquired:

  

Accounts receivable

   $ 965   

Property and equipment

     96   

Customer and publisher relationships

     1,380   

Technology

     730   

Goodwill

     751   
  

 

 

 

Total assets acquired

     3,922   

Liabilities assumed:

  

Accounts payable and accrued expenses

     855   
  

 

 

 

Net assets acquired

   $ 3,067   
  

 

 

 

While the Company has used its best estimates and assumptions to value the assets acquired and liabilities assumed, the purchase price allocation is preliminary and could change during the measurement period, not to exceed one year, if new information is obtained about the facts and circumstances that existed as of the Closing, that if known would have resulted in the recognition of additional assets or liabilities or resulted in changes in the recorded values of assets and liabilities. It is not expected that acquired goodwill will be deductible for United States tax purposes. We will amortize technology and customer relationships over estimated useful lives of five years.

 

Acquisition costs of $0.1 million were incurred during the first quarter of 2016 and charged to general and administrative expense.

Fair Value Measurements
Fair Value Measurements
3. Fair Value Measurements

In August 2015, the Company and Zimbra, Inc. (now known as “TZ Holdings”) entered into an agreement under which the Company acquired certain assets relating to TZ Holdings’ email/collaboration products and services business, including certain of its foreign subsidiaries, for cash consideration of $17.3 million, 2.4 million shares of common stock and warrants to purchase 480,000 shares of common stock (collectively valued at $3.2 million). The Company also held back an additional 600,000 shares of common stock and warrants to purchase an additional 120,000 shares of common stock (collectively valued at $0.8 million) to secure TZ Holdings’ indemnification claims including pending claims.

Additionally, TZ Holdings is eligible to receive cash consideration of up to $2.0 million (the “Earn-Out Consideration”) upon the satisfaction of certain business performance milestones following the closing of the transaction, subject to and contingent upon any reduction to satisfy indemnification claims including pending claims. Should the business performance milestones be met, any payment under this arrangement will be due in the third quarter of 2016. The fair value of the Earn-Out Consideration was determined to be $1.6 million.

The provisions of ASC Topic 820, Fair Value Measurements and Disclosures, establish a framework for measuring the fair value in accordance with U.S. GAAP 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.

The Company classifies the Earn-Out Consideration within Level 3 because it is valued using unobservable inputs. There was no change to the Company’s estimate of the fair value of the Earn-Out Consideration during the three months ended March 31, 2016.

Goodwill and Other Intangible Assets
Goodwill and Other Intangible Assets
4. Goodwill and Other Intangible Assets

The change in goodwill is as follows for the three months ended March 31, 2016 and 2015 (in thousands):

 

     Three Months Ended March 31,  
     2016      2015  

Balance – beginning of period

   $ 15,187       $ 1,565   

Acquisition of Technorati

     751         —     

Effect of foreign currency translation

     11         —     
  

 

 

    

 

 

 

Balance – end of period

   $ 15,949       $ 1,565   
  

 

 

    

 

 

 

 

Intangible assets consisted of the following (in thousands):

 

     March 31,
2016
     December 31,
2015
 

Customer and publisher relationships

   $ 14,780       $ 13,400   

Technology

     2,330         1,600   

Trademark

     300         300   
  

 

 

    

 

 

 
     17,410         15,300   

Less accumulated amortization

     (965      (502
  

 

 

    

 

 

 

Intangible assets, net

   $ 16,445       $ 14,798   
  

 

 

    

 

 

 

Amortization of intangible assets totaled $0.5 million for the three months ended March 31, 2016, and zero for the three months ended March 31, 2015.

Property and Equipment - Net
Property and Equipment - Net
5. Property and Equipment – Net

Property and equipment, net consisted of the following (in thousands):

 

     March 31,
2016
     December 31,
2015
 

Computer equipment (1)

   $ 22,196       $ 23,324   

Computer software

     12,763         12,748   

Furniture and fixtures

     1,959         1,945   

Leasehold improvements

     1,552         1,532   

Work in process (primarily software development costs)

     2,984         2,065   

Other

     241         252   
  

 

 

    

 

 

 
     41,695         41,866   

Less accumulated depreciation (2)

     (27,776      (27,489
  

 

 

    

 

 

 

Property and equipment, net

   $ 13,919       $ 14,377   
  

 

 

    

 

 

 

Depreciation expense for the three months ended March 31, 2016 and 2015 was $1.6 million and $1.5 million, respectively.

Notes:

 

(1) Includes equipment and software held under capital leases of $4.2 million and $4.1 million as of March 31, 2016 and December 31, 2015, respectively.
(2) Includes $2.2 million and $1.8 million of accumulated depreciation of equipment under capital leases as of March 31, 2016 and December 31, 2015, respectively.
Accrued Expenses and Other Current Liabilities
Accrued Expenses and Other Current Liabilities
6. Accrued Expenses and Other Current Liabilities

Accrued expenses and other current liabilities consisted of the following (in thousands):

 

     March 31,
2016
     December 31,
2015
 

Accrued compensation

   $ 3,518       $ 6,112   

Accrued content fees

     2,436         1,964   

Current portion of contingent consideration

     826         —     

Accrued business acquisition consideration

     567         —     

Other

     2,182         1,689   
  

 

 

    

 

 

 

Total

   $ 9,529       $ 9,765   
  

 

 

    

 

 

 

Information About Segment and Geographic Areas
Information About Segment and Geographic Areas
7. Information About Segment and Geographic Areas

Operating segments are 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. Profitability measures by service line are not prepared or used. 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  
     March 31,
2016
     March 31,
2015
 

Revenue:

     

United States

   $ 26,464       $ 26,530   

International

     3,796         200   
  

 

 

    

 

 

 

Total revenue

   $ 30,260       $ 26,730   
  

 

 

    

 

 

 
     March 31,
2016
     December 31,
2015
 

Long-lived tangible assets:

     

United States

   $ 12,044       $ 12,909   

Canada

     732         726   

Other international

     1,143         742   
  

 

 

    

 

 

 

Total long-lived tangible assets

   $ 13,919       $ 14,377   
  

 

 

    

 

 

 

 

Commitments and Contingencies
Commitments and Contingencies
8. Commitments and Contingencies

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 March 31, 2016 are summarized as follows (in thousands):

 

Year ending December 31,

  

2016 (remaining nine months)

   $ 4,140   

2017

     2,020   

2018

     660   
  

 

 

 

Total

   $ 6,820   
  

 

 

 

Contingent Consideration 

In connection with the Company’s acquisition of certain email/collaboration assets from TZ Holdings in September 2015 (see Note 3), TZ Holdings is eligible to receive up to an additional $2.0 million in cash upon the satisfaction of certain business performance milestones following the closing of the transaction, subject to and contingent upon any reduction to satisfy indemnification claims including pending claims. This liability is valued at $1.6 million, of which $0.8 million is included in accrued expenses and other current liabilities and $0.8 million is included in other long-term liabilities at March 31, 2016. Additionally, the Company also held back an additional 600,000 shares of common stock and warrants to purchase an additional 120,000 shares of common stock (collectively valued at $0.8 million) to secure TZ Holdings’ indemnification claims including pending claims.

In connection with the Company’s acquisition of the Technorati assets (see Note 2), the Company withheld $0.5 million of the purchase price to secure Technorati’s indemnification obligations under the Asset Purchase Agreement, with payment under this arrangement due in the first quarter of 2017. Additionally, the Company owes approximately $0.1 million in post-closing working capital adjustments. This amount is included in accrued expenses and other current liabilities at March 31, 2016.

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.

Stock-based Compensation
Stock-based Compensation
9. Stock-based Compensation

The Company has stock-based employee compensation plans for which compensation cost is recognized in its financial statements. The cost is measured at the grant date, based on the fair value of the award, determined using the Black-Scholes option pricing model, and is recognized as an expense over the employee’s requisite service period (generally the vesting period of the equity award).

No income tax deduction is allowed for incentive stock options (“ISOs”). Accordingly, no deferred income tax asset is recorded for the potential tax deduction related to these options. Expense related to stock option grants of non-qualified stock options (“NSOs”) results in a temporary difference, which gives rise to a deferred tax asset.

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  
     March 31,
2016
     March 31,
2015
 

Technology and development

   $ 241       $ 217   

Sales and marketing

     223         241   

General and administrative

     273         284   
  

 

 

    

 

 

 

Total stock-based compensation expense

   $ 737       $ 742   
  

 

 

    

 

 

 

 

Stock Option Activity – A summary of the stock option activity for the three months ended March 31, 2016 is presented below:

 

     Number of
Shares
     Weighted
Average
Exercise
Price
     Weighted
Average
Remaining
Contractual
Term (years)
     Aggregate
Intrinsic
Value (in
thousands)
 

Outstanding at January 1, 2016

     8,695,918       $ 2.57         

Granted

     893,500       $ 1.66         

Exercised

     (10,500    $ 0.93         

Forfeited or expired

     (51,562    $ 2.19         
  

 

 

          

Outstanding at March 31, 2016

     9,527,356       $ 2.49         7.33       $ 126   
  

 

 

          

Vested and expected to vest at March 31, 2016

     9,006,987       $ 2.52         7.23       $ 125   
  

 

 

          

Vested and exercisable at March 31, 2016

     4,489,297       $ 3.02         5.52       $ 119   
  

 

 

          

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 March 31, 2016 was $1.40 per share. The total intrinsic value of options exercised for the three months ended March 31, 2016 was minor. The weighted average fair value of options issued during the three months ended March 31, 2016 amounted to $0.74 per option share.

As of March 31, 2016, the unrecognized compensation cost related to non-vested options granted, for which vesting is probable, was approximately $5.1 million. This cost is expected to be recognized over a weighted-average period of 2.7 years. The total fair value of shares vested was $0.7 million for the three months ended March 31, 2016.

 

Net Income (Loss) Per Common Share Data
Net Income (Loss) Per Common Share Data
10. 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. The dilutive effect of these potential common shares is reflected in diluted earnings per share by application of the treasury stock method.

Stock options, warrants and Restricted Stock Units are not included in the calculation of diluted net loss per share for the three months ended March 31, 2016 and 2015 because the Company had a net loss for those periods. The inclusion of these equity awards would have had an antidilutive effect on the calculation of diluted loss per share. As such, the Company’s calculations of basic and diluted net loss per share are identical.

 

The following table presents the calculation of basic and diluted net loss per share for the three months ended March 31, 2016 and 2015:

 

     Three Months Ended  
     March 31,
2016
     March 31,
2015
 

Basic and diluted net loss per share:

     

Numerator:

     

Net loss (in thousands)

   $ (1,565    $ (1,073
  

 

 

    

 

 

 

Denominator:

     

Weighted average common shares outstanding

     29,992,248         27,407,147   
  

 

 

    

 

 

 

Basic and diluted net loss per share

   $ (0.05    $ (0.04
  

 

 

    

 

 

 

The following equivalent shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented:

 

     Three Months Ended  
     March 31,
2016
     March 31,
2015
 

Anti-dilutive equity awards:

     

Stock options and Restricted Stock Units

     9,910,649         8,316,190   

Warrants

     480,000         —     

 

Subsequent Event
Subsequent Event
11. Subsequent Event

On May 4, 2016, the Company announced it had entered into a three-year agreement with AT&T Services, Inc. (or “AT&T”) to provide Managed Portals and Advertising solutions for use by AT&T’s consumers. The Company expects that certain products will be deployed under this contract in the second quarter of 2016, with full deployment expected in early 2017. The Company expects that revenue attributable to AT&T will account for a substantial portion of its revenue beginning in 2017.

The Company and Summary of Significant Accounting Principles (Policies)

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 (“U.S. GAAP”) and include the accounts of the Company and its wholly-owned 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.

The accompanying condensed consolidated balance sheet as of December 31, 2015 was derived from the audited financial statements as of that date, but does not include all the information and footnotes required by U.S. GAAP. These financial statements should be read in conjunction with the consolidated financial statements and related notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2015.

Accounting Estimates —

The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the amounts reported and disclosed in the financial statements and the accompanying notes. The Company bases its 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 March 31, 2016 and December 31, 2015, and for the three months ended March 31, 2016 and 2015, the Company had concentrations equal to or exceeding 10% of the Company’s revenue and accounts receivable as follows:

 

     Revenue  
     Three Months Ended March 31,  
     2016     2015  

Google

     17     36

 

     Accounts Receivable  
     March 31,
2016
    December 31,
2015
 

Google

     12     14

For the three months ended March 31, 2016 and 2015, 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 customers for their supply of Internet traffic on the Company’s start experiences:

 

     Cost of Revenue  
     Three Months Ended March 31,  
     2016     2015  

Customer A

     29     24

Customer B

     12     10

Customer C

     Less than 10     10

Recent Accounting Pronouncements —

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2014-09 (ASU 2014-09), Revenue from Contracts with Customers. ASU 2014-09 supersedes the revenue recognition requirements in “Revenue Recognition (Topic 605)” and requires entities to recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which the entity expects to be entitled to in exchange for those goods or services. In August 2015, the FASB issued ASU 2015-14 Revenue from Contracts with Customers: Deferral of the Effective Date, which deferred the effective date of ASU 2014-09 to annual reporting periods beginning after December 15, 2017, with earlier application permitted as of annual reporting periods beginning after December 15, 2016. In March 2016, the FASB issued ASU 2016-08, Revenue from Contracts with Customers (Topic 606): Principal versus Agent Considerations (Reporting Revenue Gross versus Net), to clarify the implementation guidance on principal versus agent. The Company is currently assessing the financial impact of adopting these ASUs and the methods of adoption; however, given the scope of the new standard, the Company is currently unable to provide a reasonable estimate regarding the financial impact or which method of adoption will be elected. The Company is currently in the process of evaluating the impact of adoption of ASU 2014-09 will have on its consolidated financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (Topic 842). The objective of this update is to increase transparency and comparability among organizations by recognizing lease assets and lease liabilities on the balance sheet and disclosing key information about leasing arrangements. This ASU is effective for fiscal years beginning after December 15, 2018, including interim periods within those annual periods and is to be applied utilizing a modified retrospective approach. Early adoption is permitted. The Company is in the process of assessing the impact of the adoption of this ASU on its consolidated financial statements.

In March 2016, the FASB issued ASU 2016-09, Stock Compensation (Topic 718): Improvements to Employee Share-Based Payment Accounting. The objective of this update is to simplify several aspects of the accounting for employee share-based payment transactions, including the income tax consequences, classification of awards as either equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, including interim periods within those fiscal years. Early adoption is permitted. The Company is in the process of assessing the impact of the adoption of this ASU on its consolidated financial statements.

The Company and Summary of Significant Accounting Principles (Tables)
Schedule of Concentrations Equal to or Exceeding 10% of Company's Accounts Receivable, Revenue, and Cost of Revenue

As of March 31, 2016 and December 31, 2015, and for the three months ended March 31, 2016 and 2015, the Company had concentrations equal to or exceeding 10% of the Company’s revenue and accounts receivable as follows:

 

     Revenue  
     Three Months Ended March 31,  
     2016     2015  

Google

     17     36

 

     Accounts Receivable  
         March 31,    
2016
    December 31,
2015
 

Google

     12     14

For the three months ended March 31, 2016 and 2015, 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 customers for their supply of Internet traffic on the Company’s start experiences:

 

     Cost of Revenue  
     Three Months Ended March 31,  
     2016             2015          

Customer A

     29     24

Customer B

     12     10

Customer C

     Less than 10     10
Acquisition (Tables)

Consideration (in thousands):

 

Cash consideration

   $ 2,500   

Fair value of indemnification holdback

     500   

Fair value of post-closing working capital adjustment

     67   
  

 

 

 

Total consideration

   $ 3,067   
  

 

 

 

Purchase price allocation (in thousands):

 

Assets acquired:

  

Accounts receivable

   $ 965   

Property and equipment

     96   

Customer and publisher relationships

     1,380   

Technology

     730   

Goodwill

     751   
  

 

 

 

Total assets acquired

     3,922   

Liabilities assumed:

  

Accounts payable and accrued expenses

     855   
  

 

 

 

Net assets acquired

   $ 3,067   
  

 

 

 
Goodwill and Other Intangible Assets (Tables)

The change in goodwill is as follows for the three months ended March 31, 2016 and 2015 (in thousands):

 

     Three Months Ended March 31,  
     2016      2015  

Balance – beginning of period

   $ 15,187       $ 1,565   

Acquisition of Technorati

     751         —     

Effect of foreign currency translation

     11         —     
  

 

 

    

 

 

 

Balance – end of period

   $ 15,949       $ 1,565   
  

 

 

    

 

 

 

Intangible assets consisted of the following (in thousands):

 

     March 31,
2016
     December 31,
2015
 

Customer and publisher relationships

   $ 14,780       $ 13,400   

Technology

     2,330         1,600   

Trademark

     300         300   
  

 

 

    

 

 

 
     17,410         15,300   

Less accumulated amortization

     (965      (502
  

 

 

    

 

 

 

Intangible assets, net

   $ 16,445       $ 14,798   
  

 

 

    

 

 

 
Property and Equipment - Net (Tables)
Schedule of Property and Equipment

Property and equipment, net consisted of the following (in thousands):

 

     March 31,
2016
     December 31,
2015
 

Computer equipment (1)

   $ 22,196       $ 23,324   

Computer software

     12,763         12,748   

Furniture and fixtures

     1,959         1,945   

Leasehold improvements

     1,552         1,532   

Work in process (primarily software development costs)

     2,984         2,065   

Other

     241         252   
  

 

 

    

 

 

 
     41,695         41,866   

Less accumulated depreciation (2)

     (27,776      (27,489
  

 

 

    

 

 

 

Property and equipment, net

   $ 13,919       $ 14,377   
  

 

 

    

 

 

 

 

Notes:

 

(1) Includes equipment and software held under capital leases of $4.2 million and $4.1 million as of March 31, 2016 and December 31, 2015, respectively.
(2) Includes $2.2 million and $1.8 million of accumulated depreciation of equipment under capital leases as of March 31, 2016 and December 31, 2015, 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):

 

     March 31,
2016
     December 31,
2015
 

Accrued compensation

   $ 3,518       $ 6,112   

Accrued content fees

     2,436         1,964   

Current portion of contingent consideration

     826         —     

Accrued business acquisition consideration

     567         —     

Other

     2,182         1,689   
  

 

 

    

 

 

 

Total

   $ 9,529       $ 9,765   
  

 

 

    

 

 

 

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  
     March 31,
2016
     March 31,
2015
 

Revenue:

     

United States

   $ 26,464       $ 26,530   

International

     3,796         200   
  

 

 

    

 

 

 

Total revenue

   $ 30,260       $ 26,730   
  

 

 

    

 

 

 
     March 31,
2016
     December 31,
2015
 

Long-lived tangible assets:

     

United States

   $ 12,044       $ 12,909   

Canada

     732         726   

Other international

     1,143         742   
  

 

 

    

 

 

 

Total long-lived tangible assets

   $ 13,919       $ 14,377   
  

 

 

    

 

 

 

 

Commitments and Contingencies (Tables)
Schedule of Contract Commitments

Contract commitments as of March 31, 2016 are summarized as follows (in thousands):

 

Year ending December 31,

  

2016 (remaining nine months)

   $ 4,140   

2017

     2,020   

2018

     660   
  

 

 

 

Total

   $ 6,820   
  

 

 

 
Stock-based Compensation (Tables)

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  
     March 31,
2016
     March 31,
2015
 

Technology and development

   $ 241       $ 217   

Sales and marketing

     223         241   

General and administrative

     273         284   
  

 

 

    

 

 

 

Total stock-based compensation expense

   $ 737       $ 742   
  

 

 

    

 

 

 

Stock Option Activity – A summary of the stock option activity for the three months ended March 31, 2016 is presented below:

 

     Number of
Shares
     Weighted
Average
Exercise
Price
     Weighted
Average
Remaining
Contractual
Term (years)
     Aggregate
Intrinsic
Value (in
thousands)
 

Outstanding at January 1, 2016

     8,695,918       $ 2.57         

Granted

     893,500       $ 1.66         

Exercised

     (10,500    $ 0.93         

Forfeited or expired

     (51,562    $ 2.19         
  

 

 

          

Outstanding at March 31, 2016

     9,527,356       $ 2.49         7.33       $ 126   
  

 

 

          

Vested and expected to vest at March 31, 2016

     9,006,987       $ 2.52         7.23       $ 125   
  

 

 

          

Vested and exercisable at March 31, 2016

     4,489,297       $ 3.02         5.52       $ 119   
  

 

 

          

Net Income (Loss) Per Common Share Data (Tables)

The following table presents the calculation of basic and diluted net loss per share for the three months ended March 31, 2016 and 2015:

 

     Three Months Ended  
     March 31,
2016
     March 31,
2015
 

Basic and diluted net loss per share:

     

Numerator:

     

Net loss (in thousands)

   $ (1,565    $ (1,073
  

 

 

    

 

 

 

Denominator:

     

Weighted average common shares outstanding

     29,992,248         27,407,147   
  

 

 

    

 

 

 

Basic and diluted net loss per share

   $ (0.05    $ (0.04
  

 

 

    

 

 

The following equivalent shares were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive for the periods presented:

 

     Three Months Ended  
     March 31,
2016
     March 31,
2015
 

Anti-dilutive equity awards:

     

Stock options and Restricted Stock Units

     9,910,649         8,316,190   

Warrants

     480,000         —     

 

The Company and Summary of Significant Accounting Principles - Schedule of Concentrations Equal to or Exceeding 10% of Company's Accounts Receivable, Revenue, and Cost of Revenue (Detail) (Customer Concentration Risk [Member])
3 Months Ended 12 Months Ended 3 Months Ended
Mar. 31, 2016
Revenue [Member]
Google [Member]
Mar. 31, 2015
Revenue [Member]
Google [Member]
Mar. 31, 2016
Accounts Receivable [Member]
Google [Member]
Dec. 31, 2015
Accounts Receivable [Member]
Google [Member]
Mar. 31, 2016
Cost of Revenue [Member]
Customer A [Member]
Mar. 31, 2015
Cost of Revenue [Member]
Customer A [Member]
Mar. 31, 2016
Cost of Revenue [Member]
Customer B [Member]
Mar. 31, 2015
Cost of Revenue [Member]
Customer B [Member]
Mar. 31, 2015
Cost of Revenue [Member]
Customer C [Member]
Mar. 31, 2016
Cost of Revenue [Member]
Maximum [Member]
Customer C [Member]
Concentration Risk [Line Items]
 
 
 
 
 
 
 
 
 
 
Concentration risk, percentage
17.00% 
36.00% 
12.00% 
14.00% 
29.00% 
24.00% 
12.00% 
10.00% 
10.00% 
10.00% 
Acquisition - Additional Information (Detail) (USD $)
3 Months Ended 1 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended 0 Months Ended
Mar. 31, 2016
Customer Relationships [Member]
Mar. 31, 2016
Technology [Member]
Aug. 31, 2015
TZ Holdings, Inc [Member]
Mar. 31, 2016
TZ Holdings, Inc [Member]
General and Administrative [Member]
Feb. 19, 2016
Technorati [Member]
Mar. 31, 2016
Technorati [Member]
Employees
Feb. 19, 2016
Technorati [Member]
Feb. 19, 2016
Technorati [Member]
Minimum [Member]
Publishers
Business Acquisition [Line Items]
 
 
 
 
 
 
 
 
Business acquisition purchase price
 
 
 
 
$ 3,000,000 
 
 
 
Acquisition completion date
 
 
 
 
Feb. 26, 2016 
 
 
 
Number of business new publishers
 
 
 
 
 
 
 
1,000 
Number of employees employed by acquiree
 
 
 
 
 
10 
 
 
Cash consideration
 
 
17,300,000 
 
2,500,000 
2,500,000 
 
 
Cash withheld to secure indemnification obligations
 
 
 
 
 
500,000 
500,000 
 
Post closing working capital adjustments
 
 
 
 
100,000 
100,000 
 
 
Finite lived intangible assets, useful life
5 years 
5 years 
 
 
 
 
 
 
Acquisition costs
 
 
 
$ 100,000 
 
 
 
 
Acquisition - Schedule of Consideration (Detail) (USD $)
In Thousands, unless otherwise specified
0 Months Ended 3 Months Ended
Feb. 19, 2016
Mar. 31, 2016
Business Acquisition, Contingent Consideration [Line Items]
 
 
Total consideration
 
$ 2,500 
Technorati [Member]
 
 
Business Acquisition, Contingent Consideration [Line Items]
 
 
Cash consideration
2,500 
2,500 
Fair value of indemnification holdback
 
500 
Fair value of post-closing working capital adjustment
 
67 
Total consideration
 
$ 3,067 
Acquisition - Summary of Assets Acquired and Liabilities Assumed (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Mar. 31, 2015
Dec. 31, 2014
Business Acquisition [Line Items]
 
 
 
 
GOODWILL
$ 15,949 
$ 15,187 
$ 1,565 
$ 1,565 
Technorati [Member]
 
 
 
 
Business Acquisition [Line Items]
 
 
 
 
Accounts receivable
965 
 
 
 
Property and equipment
96 
 
 
 
Customer and publisher relationships
1,380 
 
 
 
Technology
730 
 
 
 
GOODWILL
751 
 
 
 
Total assets acquired
3,922 
 
 
 
Accounts payable and accrued expenses
855 
 
 
 
Net assets acquired
$ 3,067 
 
 
 
Fair Value Measurements - Additional Information (Detail) (TZ Holdings, Inc [Member], USD $)
1 Months Ended 3 Months Ended
Aug. 31, 2015
Mar. 31, 2016
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Cash consideration
$ 17,300,000 
 
Maximum additional consideration
2,000,000 
2,000,000 
Contingent consideration at fair value
1,600,000 
 
Change in fair value of contingent consideration
 
Business acquisition hold back, value
800,000 
800,000 
Common Stock [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Business acquisition equity Interest Issued, number of Shares
2,400,000 
 
Business acquisition equity Interest Issued, value
$ 3,200,000 
 
Number of shares held back
600,000 
600,000 
Warrants [Member]
 
 
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
 
 
Business acquisition equity Interest Issued, number of Shares
480,000 
 
Number of shares held back
120,000 
120,000 
Goodwill and Other Intangible Assets - Schedule of Change in Goodwill (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Goodwill and Intangible Assets Disclosure [Abstract]
 
 
Balance - beginning of period
$ 15,187 
$ 1,565 
Acquisition of Technorati
751 
Effect of foreign currency translation
11 
Balance - end of period
$ 15,949 
$ 1,565 
Goodwill and Other Intangible Assets - Schedule of Intangible Assets (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Finite-Lived Intangible Assets [Line Items]
 
 
Total gross amortizable intangible assets
$ 17,410 
$ 15,300 
Less accumulated amortization
(965)
(502)
Intangible assets, net
16,445 
14,798 
Customer and Publisher Relationships [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Total gross amortizable intangible assets
14,780 
13,400 
Technology [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Total gross amortizable intangible assets
2,330 
1,600 
Trademark [Member]
 
 
Finite-Lived Intangible Assets [Line Items]
 
 
Total gross amortizable intangible assets
$ 300 
$ 300 
Goodwill and Other Intangible Assets - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Intangible Liability Disclosure [Abstract]
 
 
Amortization of intangible assets
$ 0.5 
$ 0 
Property and Equipment-Net - Schedule of Property and Equipment (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Property, Plant and Equipment [Line Items]
 
 
Property and equipment gross
$ 41,695 
$ 41,866 
Less accumulated depreciation
(27,776)
(27,489)
Property and equipment, net
13,919 
14,377 
Computer Software [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment gross
12,763 
12,748 
Computer Equipment [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment gross
22,196 
23,324 
Furniture and Fixtures [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment gross
1,959 
1,945 
Leasehold Improvements [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment gross
1,552 
1,532 
Work in Process [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment gross
2,984 
2,065 
Other [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment gross
$ 241 
$ 252 
Property and Equipment-Net - Schedule of Property and Equipment (Parenthetical) (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Property, Plant and Equipment [Line Items]
 
 
Property and equipment gross
$ 41,695 
$ 41,866 
Accumulated depreciation of equipment under capital leases
27,776 
27,489 
Capital Lease Obligations [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Accumulated depreciation of equipment under capital leases
2,200 
1,800 
Computer Equipment and Software [Member] |
Capital Lease Obligations [Member]
 
 
Property, Plant and Equipment [Line Items]
 
 
Property and equipment gross
$ 4,200 
$ 4,100 
Property and Equipment-Net - Additional Information (Detail) (USD $)
In Millions, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Property, Plant and Equipment [Abstract]
 
 
Depreciation expense
$ 1.6 
$ 1.5 
Accrued Expenses and Other Current Liabilities - Schedule of Accrued Expenses and Other Current Liabilities (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Dec. 31, 2015
Accounts Payable and Accrued Liabilities, Current [Abstract]
 
 
Accrued compensation
$ 3,518 
$ 6,112 
Accrued content fees
2,436 
1,964 
Current portion of contingent consideration
826 
 
Accrued business acquisition consideration
567 
 
Other
2,182 
1,689 
Total
$ 9,529 
$ 9,765 
Information About Segment and Geographic Areas - Additional Information (Detail)
3 Months Ended
Mar. 31, 2016
Managers
Segment
Revenues From External Customers And Long Lived Assets [Abstract]
 
Number of reportable segments
Number of operating units
Number of segment managers accountable for operations below the Company level
Information About Segment and Geographic Areas - Schedule of Revenue and Long Lived Tangible Assets by Geographic Area (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Dec. 31, 2015
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
REVENUE
$ 30,260 
$ 26,730 
 
Long-lived tangible assets
13,919 
 
14,377 
United States [Member]
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
REVENUE
26,464 
26,530 
 
Long-lived tangible assets
12,044 
 
12,909 
Canada [Member]
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Long-lived tangible assets
732 
 
726 
Other International [Member]
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
Long-lived tangible assets
1,143 
 
742 
International [Member]
 
 
 
Revenues from External Customers and Long-Lived Assets [Line Items]
 
 
 
REVENUE
$ 3,796 
$ 200 
 
Commitments and Contingencies - Schedule of Contract Commitments (Detail) (USD $)
In Thousands, unless otherwise specified
Mar. 31, 2016
Contractual Obligation, Fiscal Year Maturity [Abstract]
 
2016 (remaining nine months)
$ 4,140 
2017
2,020 
2018
660 
Total
$ 6,820 
Commitments and Contingencies - Additional Information (Detail) (USD $)
3 Months Ended 1 Months Ended 3 Months Ended 1 Months Ended 3 Months Ended 0 Months Ended 3 Months Ended
Mar. 31, 2016
TZ Holdings, Inc [Member]
Aug. 31, 2015
TZ Holdings, Inc [Member]
Aug. 31, 2015
TZ Holdings, Inc [Member]
Common Stock [Member]
Mar. 31, 2016
TZ Holdings, Inc [Member]
Common Stock [Member]
Aug. 31, 2015
TZ Holdings, Inc [Member]
Warrants [Member]
Mar. 31, 2016
TZ Holdings, Inc [Member]
Warrants [Member]
Mar. 31, 2016
TZ Holdings, Inc [Member]
Accrued Expenses and Other Current Liabilities [Member]
Mar. 31, 2016
TZ Holdings, Inc [Member]
Other Long-term Liabilities [Member]
Feb. 19, 2016
Technorati [Member]
Mar. 31, 2016
Technorati [Member]
Feb. 19, 2016
Technorati [Member]
Commitments And Contingencies Disclosure [Line Items]
 
 
 
 
 
 
 
 
 
 
 
Maximum additional consideration
$ 2,000,000 
$ 2,000,000 
 
 
 
 
 
 
 
 
 
Business acquisition holdback, value
800,000 
800,000 
 
 
 
 
 
 
 
 
 
Number of shares held back
 
 
600,000 
600,000 
120,000 
120,000 
 
 
 
 
 
Business performance milestone payment description
Approximately half of this payment under this arrangement will be due in the fourth quarter of 2016, and half in the second quarter of 2017 
 
 
 
 
 
 
 
 
 
 
Contingent consideration at fair value
1,600,000 
 
 
 
 
 
 
 
 
 
 
Contingent consideration at fair value
 
 
 
 
 
 
800,000 
 
 
 
 
Contingent consideration at fair value
 
 
 
 
 
 
 
800,000 
 
 
 
Cash withheld to secure indemnification obligations
 
 
 
 
 
 
 
 
 
500,000 
500,000 
Business acquisition post-closing working capital adjustments
 
 
 
 
 
 
 
 
$ 100,000 
$ 100,000 
 
Stock-based Compensation - Schedule of Total Stock Based Compensation Expense (Detail) (USD $)
In Thousands, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
Total stock-based compensation expense
$ 737 
$ 742 
Technology and Development [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
Total stock-based compensation expense
241 
217 
Sales and Marketing [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
Total stock-based compensation expense
223 
241 
General and Administrative [Member]
 
 
Share-based Compensation Arrangement by Share-based Payment Award, Compensation Cost [Line Items]
 
 
Total stock-based compensation expense
$ 273 
$ 284 
Stock-based Compensation - Summary of Stock Option Activity (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
Outstanding number of stock options beginning balance
8,695,918 
Number of shares granted
893,500 
Number of shares exercised
(10,500)
Number of shares forfeited or expired
(51,562)
Outstanding number of shares ending balance
9,527,356 
Outstanding number of shares vested and expected to vest
9,006,987 
Outstanding number of shares vested and exercisable
4,489,297 
Outstanding, weighted average exercise price, beginning balance
$ 2.57 
Weighted average exercise price, granted
$ 1.66 
Weighted average exercise price, exercised
$ 0.93 
Weighted average exercise price, forfeited or expired
$ 2.19 
Outstanding, weighted average exercise price, ending balance
$ 2.49 
Vested and expected to vest, weighted average exercise price, ending balance
$ 2.52 
Vested and exercisable, weighted average exercise price, ending balance
$ 3.02 
Weighted average remaining contractual term (in years), outstanding
7 years 3 months 29 days 
Weighted average remaining contractual term (in years),vested and expected to vest
7 years 2 months 23 days 
Weighted average remaining contractual term (in years), vested and exercisable
5 years 6 months 7 days 
Aggregate intrinsic value, outstanding
$ 126 
Aggregate intrinsic value,vested and expected to vest
125 
Aggregate intrinsic value, vested and exercisable
$ 119 
Stock-based Compensation - Additional Information (Detail) (USD $)
In Millions, except Per Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]
 
Closing stock price as reported on the NASDAQ
$ 1.40 
Weighted average fair value of options issued
$ 0.74 
Unrecognized compensation cost related to non-vested options granted
$ 5.1 
Expected weighted average period to recognize total unrecognized compensation cost
2 years 8 months 12 days 
Total fair value of shares vested
$ 0.7 
Net Income (Loss) Per Common Share Data - Schedule of Basic and Diluted Net Loss Per Share (Detail) (USD $)
In Thousands, except Share data, unless otherwise specified
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Numerator:
 
 
Net loss (in thousands)
$ (1,565)
$ (1,073)
Denominator:
 
 
Weighted average common shares outstanding
29,992,248 
27,407,147 
Basic and diluted net loss per share
$ (0.05)
$ (0.04)
Net Income (Loss) Per Common Share Data - Schedule of Equivalent Shares Excluded from Calculation of Diluted Net Income (Loss) Per Share (Detail)
3 Months Ended
Mar. 31, 2016
Mar. 31, 2015
Stock Options and Restricted Stock Units [Member]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive equity awards
9,910,649 
8,316,190 
Warrants [Member]
 
 
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
 
 
Antidilutive equity awards
480,000