Table of Contents
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Years Ended December 31, 2001, 2000 and 1999
Union Street.com, Inc.:
On October 14, 1999, the Company acquired all of the common stock of Union Street.com, a privately held
company, for a purchase consideration of 1,746,588 shares and acquisition expenses of $396,000. The valuation of shares issued of $11.75 per
share was based on the seven day stock price average for the period including October 14, 1999 and the three days before and after that date.
The Company assumed 49,724 options in this acquisition. The acquisition was accounted for as a purchase. The Company recorded $15.5
million of goodwill, $5.3 million for purchased technology which includes $3.3 million of in process research and development, $160,000 of
assembled workforce and acquired net liabilities of $107,219. The $2.0 million of capitalized technology represents the purchase of core
technology and existing products which are being amortized over an estimated useful life of five years. The Company is amortizing the
goodwill over an estimated useful life of five years.
On October 14, 1999, the Company completed the merger with INEX Corporation, a privately held company that
developed and marketed Internet commerce applications to deliver solutions designed for small and medium sized merchants to build, manage
and promote online storefronts. Under the terms of the merger, which was accounted for as a pooling of interests, the Company exchanged
3,600,000 shares of common stock for (1) directly to those INEX shareholders who elected to receive the Company's common stock in
exchange for their INEX shares at the closing of the combination, (2) upon the exchange or redemption of the exchangeable shares of
InfoSpace.com Canada Holdings Inc., an indirect subsidiary of the Company, which exchangeable shares were issued to those INEX
shareholders who elected to receive exchangeable shares, or who did not make an election to receive shares of the Company's common stock at
the closing, and (3) upon the exercise of outstanding warrants and options to purchase INEX common shares, which the Company assumed and
which will become exercisable for shares of InfoSpace common stock. The consolidated balance sheet as of December 31, 1999 and the
consolidated statements of operations, statements of cash flow and statements of stockholders' equity for the year ended December 31, 1999
are presented as if INEX was a wholly owned subsidiary since inception.
On August 4, 1999, Go2Net acquired Dogpile, LLC in exchange for 1,241,524 shares of common stock and $15 million
in cash. Total consideration was valued at approximately $52 million. The acquisition was accounted for as a purchase. The purchase
agreement also provided for additional payments of up to $15 million over the eighteen months following the closing of the transaction
contingent on future revenue of Dogpile. During the year ended December 31, 2000, 262,388 additional shares were issued with a total
estimated value of $10.0 million in 2000 and a $5.0 million cash payment was paid out in 2001. The valuation of shares issued was based on
the Go2Net seven day stock price average for the period including August 4, 1999 and the three days before and after that date. The Go2Net
valuation price was $54.31 per share. Based on the stock conversion ratio in the pooling of interests merger with Go2Net, the converted
InfoSpace valuation price is $29.84 per share. An impairment of $45,000 for workforce related to this acquisition was recorded in the year
ended December 31, 2000 (Note 5).
On July 1, 1999, Go2Net acquired Authorize.Net Corp in exchange for 1,645,076 shares of common stock and
$13.5 million in cash. Total consideration was valued at approximately $98.6 million. The purchase price also included the value of
outstanding stock options that were converted to options to purchase 187,317 of common stock. The valuation of shares issued was based on
the Go2Net seven day stock price average for the period including July 1, 1999 and the three days before and after that date. The Go2Net
valuation price was $84.56 per share. Based on the stock conversion ratio in the pooling of interests merger with Go2Net, the converted
InfoSpace valuation price is $46.46 per share.
On June 30, 1999 the Company acquired the MyAgent technology and related assets from Active Voice
Corporation for $18 million dollars and incurred $83,000 in acquisition costs. The