(11) Segment Reporting and Geographic Information

Operating segments are revenue-producing components of the enterprise for which separate financial information is produced internally for the Company’s management. In July 2013, the Company sold certain assets related to Archeo’s pay-per-click advertising services. As a result, the operating results related to these certain pay per click assets are shown as discontinued operations, net of tax in the consolidated statements of operations for all periods presented and are excluded from segment reporting. See Note 12. Discontinued Operations for further discussion.

The Company’s Call-driven segment comprises its performance-based advertising business focused on driving phone calls. The Archeo segment comprises the Company’s click-based advertising and Internet domain name businesses. Call-driven segment expenses include both direct costs incurred by the segment business as well as corporate overhead costs. Archeo segment expenses only include direct costs incurred by the segment. Segment expenses exclude the following: stock-based compensation, amortization of intangible assets from acquisitions, acquisition and separation related costs, and other income (expense).

 

A measure of segment assets is not currently provided to the Company’s chief operating decision maker and has therefore not been disclosed. The carrying amount of goodwill by operating segment at December 31, 2013 and 2014 was approximately $63.3 million and $2.4 million for Call-driven and Archeo, respectively.

Selected segment information (in thousands):

 

		Year ended December 31, 2014
		Call-driven				Archeo				Total
Revenue		$	168,051			$	14,593			$	182,644
Operating expenses			156,952				8,461				165,413
Segment profit		$	11,099			$	6,132			$	17,231
Less reconciling items:
Stock based compensation											11,903
Amortization of intangible assets from acquisitions											434
Acquisition and separation related costs											(68	)
Interest expense and other, net											62
Income from continuing operations before provision for income taxes										$	4,900

 

		Year ended December 31, 2013
		Call-driven				Archeo				Total
Revenue		$	135,126			$	17,424			$	152,550
Operating expenses			128,829				11,705				140,534
Gain on sales of intangible assets			—				3,774				3,774
Segment profit		$	6,297			$	9,493			$	15,790
Less reconciling items:
Stock based compensation											9,237
Amortization of intangible assets from acquisitions											2,926
Acquisition and separation related costs											878
Interest expense and other, net											37
Income from continuing operations before provision for income taxes										$	2,712

 

		Year ended December 31, 2012
		Call-driven				Archeo				Total
Revenue		$	111,886			$	20,908			$	132,794
Operating expenses			106,795				12,582				119,377
Gain on sales of intangible assets			—				6,296				6,296
Segment profit		$	5,091			$	14,622			$	19,713
Less reconciling items:
Stock based compensation											15,638
Impairment of goodwill											15,837
Amortization of intangible assets from acquisitions											4,728
Acquisition and separation related costs											753
Interest expense and other, net											449
Loss from continuing operations before provision for income taxes										$	(17,692	)

Revenues from advertisers by geographical areas are tracked on the basis of the location of the advertiser. The vast majority of the Company’s revenue and accounts receivable are derived from domestic sales to advertisers engaged in various mobile, online and other activities.

 

Revenues by geographic region are as follows:

 

		Years ended December 31,
		2012				2013				2014
United States			94	%			95	%			95	%
Canada			6	%			5	%			3	%
Other countries			*				*				2	%
			100	%			100	%			100	%

 

*	Less than 1% of revenue