Digital River (DRIV) 10-Q 9 May 14 2014 Q1 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	3 Months Ended
	Mar. 31, 2014	Apr. 01, 2014
Document and Entity Information	'	'
Entity Registrant Name	'DIGITAL RIVER INC /DE	'
Entity Central Index Key	'0001062530	'
Document Type	'10-Q	'
Document Period End Date	31-Mar-14	'
Amendment Flag	'false	'
Current Fiscal Year End Date	'--12-31	'
Entity Current Reporting Status	'Yes	'
Entity Filer Category	'Large Accelerated Filer	'
Entity Common Stock, Shares Outstanding	'	32,653,574
Document Fiscal Year Focus	'2014	'
Document Fiscal Period Focus	'Q1	'

CONSOLIDATED_BALANCE_SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
CURRENT ASSETS	'	'
Cash and cash equivalents	$309,717	$483,868
Short-term investments	82,156	115,652
Accounts receivable, net of allowance of $3,417 and $3,206	66,746	70,865
Deferred tax assets	1,518	1,479
Prepaid expenses and other	23,199	27,878
Total current assets	483,336	699,742
Property and equipment, net	51,480	53,770
Goodwill	137,766	139,318
Intangible assets, net	26,441	29,217
Long-term investments	57,580	56,023
Deferred income taxes	1,169	1,037
Other assets	1,212	2,067
TOTAL ASSETS	758,984	981,174
CURRENT LIABILITIES	'	'
Accounts payable	167,857	187,635
Accrued payroll	12,714	20,058
Deferred revenue	4,945	6,904
Other current liabilities	44,968	55,899
Total current liabilities	230,484	270,496
NON-CURRENT LIABILITIES	'	'
Senior convertible notes	135,225	295,795
Other liabilities	21,532	21,452
Total non-current liabilities	156,757	317,247
TOTAL LIABILITIES	387,241	587,743
STOCKHOLDERS' EQUITY	'	'
Preferred stock, $.01 par value; 5,000,000 shares authorized; no shares issued or outstanding	'	'
Common stock, $.01 par value; 120,000,000 shares authorized; 50,603,707 and 50,074,977 shares issued	506	501
Treasury stock at cost; 17,950,133 and 16,910,883 shares	-442,400	-424,416
Additional paid-in capital	765,543	761,560
Retained earnings	45,670	51,254
Accumulated other comprehensive income (loss)	2,424	4,532
Total stockholders' equity	371,743	393,431
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$758,984	$981,174

CONSOLIDATED_BALANCE_SHEETS_Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, except Share data, unless otherwise specified
CONSOLIDATED BALANCE SHEETS	'	'
Allowance for accounts receivable (in dollars)	$3,417	$3,206
Preferred stock, par value (in dollars per share)	$0.01	$0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common stock, par value (in dollars per share)	$0.01	$0.01
Common stock, shares authorized	120,000,000	120,000,000
Common stock, shares issued	50,603,707	50,074,977
Treasury stock, shares	17,950,133	16,910,883

CONSOLIDATED_STATEMENTS_OF_OPE

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
CONSOLIDATED STATEMENTS OF OPERATIONS	'	'
Revenue	$97,807	$111,021
Costs and expenses (exclusive of depreciation and amortization expense shown separately below):	'	'
Direct cost of services	18,152	22,006
Network and infrastructure	14,079	15,075
Sales and marketing	24,302	29,456
Product research and development	18,273	17,248
General and administrative	12,319	18,347
Goodwill impairment	'	21,249
Depreciation and amortization	6,358	5,000
Amortization of acquisition-related intangibles	2,171	1,928
Total costs and expenses	95,654	130,309
Income (loss) from operations	2,153	-19,288
Interest income	619	596
Interest expense	-1,607	-1,979
Other income (expense), net	-323	10,905
Loss on extinguishment of debt	-5,605	'
Income (loss) from continuing operations before income taxes	-4,763	-9,766
Income tax expense (benefit)	954	921
Income (loss) from continuing operations	-5,717	-10,687
Income (loss) from discontinued operations, net of tax	133	-678
Net income (loss)	($5,584)	($11,365)
Income (loss) per share - basic:	'	'
Income (loss) from continuing operations (in dollars per share)	($0.19)	($0.33)
Income (loss) from discontinued operations (in dollars per share)	$0.01	($0.02)
Net income (loss) per share - basic (in dollars per share)	($0.18)	($0.35)
Income (loss) per share - diluted:	'	'
Income (loss) from continuing operations (in dollars per share)	($0.19)	($0.33)
Income (loss) from discontinued operations (in dollars per share)	$0.01	($0.02)
Net income (loss) per share - diluted (in dollars per share)	($0.18)	($0.35)
Shares used in per-share calculation - basic (in shares)	30,734	32,877
Shares used in per-share calculation - diluted (in shares)	30,734	32,877

CONSOLIDATED_STATEMENTS_OF_COM

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)	'	'
Net income (loss)	($5,584)	($11,365)
Other comprehensive income (loss):	'	'
Unrealized foreign exchange gain (loss) on the revaluation of investments in foreign subsidiaries	-2,444	-8,205
Unrealized gain (loss) on investments	549	3,503
Tax benefit (expense)	-213	'
Other comprehensive income (loss)	-2,108	-4,702
Comprehensive income (loss)	($7,692)	($16,067)

CONSOLIDATED_STATEMENTS_OF_CAS

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
OPERATING ACTIVITIES	'	'
Net income (loss)	($5,584)	($11,365)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:	'	'
Loss (gain) on disposal of discontinued operations	-212	'
Amortization of acquisition-related intangibles	2,171	1,928
Provision for doubtful accounts	179	327
Depreciation and amortization	6,358	5,030
Impairment of goodwill	'	21,249
Debt issuance cost amortization	346	430
Amortization of investment premiums	473	697
Loss (gain) on disposal of equipment	-472	73
Gain on sale of investment	'	-11,067
Loss on extinguishment of debt	5,605	'
Stock-based compensation expense	3,988	5,575
Deferred and other income taxes	-228	-633
Change in operating assets and liabilities, net of acquisitions:	'	'
Accounts receivable	4,151	-13,774
Prepaid and other assets	2,245	2,172
Accounts payable	-19,060	-1,197
Deferred revenue	-2,174	-1,646
Income tax payable	850	716
Other current liabilities	-9,060	-8,764
Net cash provided by (used in) operating activities	-10,424	-10,249
INVESTING ACTIVITIES	'	'
Purchases of investments	-11,102	-20,285
Sales of investments	44,060	37,783
Cash received (paid) for cost method investments	-658	33,177
Cash paid for acquisitions, net of cash received	'	-55,847
Proceeds from sale of equipment	472	'
Purchases of equipment and capitalized software	-4,135	-6,983
Net cash provided by (used in) investing activities	28,637	-12,155
FINANCING ACTIVITIES	'	'
Repurchase of senior convertible notes	-173,253	-1,335
Exercise of stock options	'	1,273
Repurchase of common stock	-14,024	-11,181
Repurchase of restricted stock to satisfy tax withholding obligation	-3,960	-3,961
Net cash provided by (used in) financing activities	-191,237	-15,204
EFFECT OF EXCHANGE RATE CHANGES ON CASH	-1,127	-4,501
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS	-174,151	-42,109
CASH AND CASH EQUIVALENTS, beginning of period	483,868	542,851
CASH AND CASH EQUIVALENTS, end of period	309,717	500,742
SUPPLEMENTAL DISCLOSURES	'	'
Cash paid for interest on senior convertible notes	1,157	55
Cash paid for income taxes	$1,657	$974

BASIS_OF_PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2014
BASIS OF PRESENTATION	'
BASIS OF PRESENTATION	'
	1. BASIS OF PRESENTATION
	The unaudited consolidated financial statements of Digital River, Inc. and our wholly owned subsidiaries (we, our Digital River, or the Company) included herein have been prepared in accordance with U.S. generally accepted accounting principles (U.S. GAAP) for interim financial information, and, accordingly, do not include all financial information and footnotes normally required for a complete set of financial statements.  These consolidated financial statements should be read in conjunction with our audited consolidated financial statements included in our Form 10-K for the year ended December 31, 2013, as filed with the Securities and Exchange Commission.
	The unaudited consolidated statements reflect all adjustments, including normal recurring adjustments, which in our opinion are necessary to fairly state our consolidated financial position, results of operations and cash flows for the periods presented.  The results of operations for the three months ended March 31, 2014 are not necessarily indicative of the results to be expected for any subsequent quarter or for the entire fiscal year ending December 31, 2014 due to seasonality and other factors.  The December 31, 2013 information was derived from audited financial statements, but does not include all disclosures required by U.S. GAAP.
	Summary of Significant Accounting Policies
	A detailed description of our significant accounting policies can be found in our most recent Annual Report filed on Form 10-K for the fiscal year ended December 31, 2013.  There were no material changes in significant accounting policies during the quarter ended March 31, 2014.
	Recent Accounting Pronouncements
	ASU 2013-11 - Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists:  In July 2013, the FASB issued ASU 2013-11, which requires an entity to present unrecognized tax benefits as a reduction of the deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, if net settlement is required or expected. To the extent that net settlement is not required or expected, the unrecognized tax benefit must be presented as a liability. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. ASU No. 2013-11 is effective for reporting periods beginning after December 15, 2013, and should be applied prospectively to all unrecognized tax benefits that exist at the effective date. We adopted the new guidance in ASU 2013-11 as of the period ended March 31, 2014, and its adoption did not have a material impact on our Consolidated Financial Statements.
	We have determined that all other recently issued accounting standards will not have a material impact on our Consolidated Financial Statements, or do not apply to our operations.
	Reclassifications
	The results of the operations of CustomCD, Inc. (CustomCD) and Digital River Education Services, Inc. (DRES), which were sold on September 30, 2013 and October 1, 2013, respectively, have been classified within Discontinued Operations in our Consolidated Statements of Operations for the three months ended March 31, 2014.  The operations of these entities in the corresponding three months ended March 31, 2013 have been reclassified into Discontinued Operations to conform with the current period presentation.

NET_INCOME_LOSS_PER_SHARE

NET INCOME (LOSS) PER SHARE	3 Months Ended
	Mar. 31, 2014
NET INCOME (LOSS) PER SHARE	'
NET INCOME (LOSS) PER SHARE	'
	2. NET INCOME (LOSS) PER SHARE
	The following table summarizes the computation of basic and diluted net income (loss) per share from continuing operations (in thousands, except per share amounts):
		Three Months Ended
		March 31,
		2014			2013
	Income (loss) from continuing operations per share - basic
	Income (loss) from continuing operations - basic	$	(5,717	)	$	(10,687	)
	Weighted average shares outstanding - basic	30,734			32,877
	Income (loss) from continuing operations per share - basic	$	(0.19	)	$	(0.33	)
	Income (loss) from continuing operations per share - diluted
	Income (loss) from continuing operations - basic	$	(5,717	)	$	(10,687	)
	Exclude: Interest expense and amortized financing cost of convertible senior notes, net of tax benefit	—			—
	Income (loss) from continuing operations - diluted	$	(5,717	)	$	(10,687	)
	Weighted average shares outstanding - basic	30,734			32,877
	Dilutive impact of non-vested stock and options outstanding	—			—
	Dilutive impact of 2004 senior convertible notes	—			—
	Weighted average shares outstanding - diluted	30,734			32,877
	Income (loss) from continuing operations per share - diluted	$	(0.19	)	$	(0.33	)
	For the three months ended March 31, 2014 and 2013, 682,387 and 573,291 incremental shares, respectively, related to dilutive securities were not included in the diluted net income (loss) per share calculation because the Company reported a loss for this period.  Incremental shares related to dilutive securities have an anti-dilutive impact on net income (loss) per share when a net loss is reported and therefore are not included in the calculation.
	Options to purchase 455,422 and 1,429,109 shares for the three months ended March 31, 2014 and 2013, respectively, were not included in the computation of diluted net income (loss) per share because their effect on diluted net income (loss) per share would have been anti-dilutive.
	The unissued shares underlying our 2004 senior convertible notes, 1,021 and 199,828 weighted average shares for the three months ended March 31, 2014 and 2013, respectively, and the unissued shares underlying our 2010 senior convertible notes, 5,021,960 and 6,116,842 weighted average shares for the three months ended March 31, 2014 and 2013, respectively, were excluded for the purposes of calculating GAAP diluted net income (loss) per share, because their effect on diluted net income (loss) per share would have been anti-dilutive.

ACCUMULATED_OTHER_COMPREHENSIV

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	3 Months Ended
	Mar. 31, 2014
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	'
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	'
	3. ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
	Comprehensive income (loss) includes revenues, expenses, and gains and losses that are excluded from net earnings under GAAP. Items of comprehensive income (loss) are unrealized gains and losses on investments and foreign currency translation adjustments which are added to net income (loss) to compute comprehensive income (loss). Comprehensive income (loss) related to cumulative translation adjustments has no tax expense or benefit as these funds are indefinitely invested.
	The following table summarizes the changes in accumulated other comprehensive income (loss), net of tax, by component for the period ended March 31, 2014 and 2013, (in thousands):
		Foreign currency			Unrealized gain			Total
		translation			(loss) on
		adjustment			investments
	Balance as of December 31, 2013	$	3,720		$	812		$	4,532
	Other comprehensive income (loss) before reclassifications	(2,444		)	332			(2,112		)
	Reclassified adjustment for net loss included in net income (loss)	—			4			4
	Net current period other comprehensive income (loss)	(2,444		)	336			(2,108		)
	Balance as of March 31, 2014	$	1,276		$	1,148		$	2,424
	Balance as of December 31, 2012	$	2,565		$	(5,735	)	$	(3,170	)
	Other comprehensive income (loss) before reclassifications	(8,205		)	3,505			(4,700		)
	Reclassified adjustment for net gain included in net income (loss)	—			(2		)	(2		)
	Net current period other comprehensive income (loss)	(8,205		)	3,503			(4,702		)
	Balance as of March 31, 2013	$	(5,640	)	$	(2,232	)	$	(7,872	)
	The following table summarizes the reclassifications out of accumulated other comprehensive income (loss) for the period ended March 31, 2014 (in thousands):
	Reclassification out of accumulated other	Amount reclassified			Affected line item in the
	comprehensive income	from accumulated other			Consolidated Statement of
		comprehensive income			Operations
	Realized gains (losses) on investments
		$	(7	)	Other income (expense), net
		3			Income tax benefit (expense)
		$	(4	)	Net income (loss)

FAIR_VALUE_MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	Mar. 31, 2014
FAIR VALUE MEASUREMENTS	'
FAIR VALUE MEASUREMENTS	'
	4. FAIR VALUE MEASUREMENTS
	Financial assets and liabilities that are remeasured and reported at fair value at each reporting period are classified and disclosed in one of the following three categories:
	Level 1 — Observable inputs such as quoted prices in active markets;
	Level 2 — Other observable inputs available at the measurement date, other than quoted prices included in Level 1,   either directly or indirectly, including:
	·                  Quoted prices for similar assets or liabilities in active markets;
	·                  Quoted prices for identical or similar assets in less active markets than Level 1 investments;
	·                  Inputs other than quoted prices that are observable for assets or liabilities; and
	·                  Inputs that are derived principally from or corroborated by other observable market data.
	Level 3 — Unobservable inputs that cannot be corroborated by observable market data and reflect the use of significant management judgment.  These values are generally determined using pricing models for which the assumptions utilize management’s estimate of market participant assumptions.
	Assets and Liabilities that are Measured at Fair Value on a Recurring Basis
	The following table sets forth by level within the fair value hierarchy, our financial assets that were accounted for at fair value on a recurring basis at March 31, 2014 and December 31, 2013, (in thousands):
		Fair Value Measurements
		Total			Level 1		Level 2		Level 3
	Balance as of March 31, 2014
	Cash and cash equivalents	$	309,717		$	309,717	$	—	$	—
	Restricted cash	3,606			3,606		—		—
	U.S. government sponsored entities	1,993			—		1,993		—
	Corporate bonds	80,163			80,163		—		—
	Market basis equity investments	3,207			3,207		—		—
	Auction rate securities	42,943			—		—		42,943
	Total assets measured at fair value	$	441,629		$	396,693	$	1,993	$	42,943
	Balance as of December 31, 2013
	Cash and cash equivalents	$	483,868		$	483,868	$	—	$	—
	Restricted cash	3,560			3,560		—		—
	Commerical paper	9,992			9,992		—		—
	U.S. government sponsored entities	4,000			—		4,000		—
	Corporate bonds	101,660			101,660		—		—
	Market basis equity investments	3,549			3,549		—		—
	Auction rate securities	41,993			—		—		41,993
	Total assets measured at fair value	$	648,622		$	602,629	$	4,000	$	41,993
	There were no transfers of assets between levels of the hierarchy during the periods ended March 31, 2014 and December 31, 2013.
	The following table is a reconciliation of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3 inputs) (in thousands):
		Fair Value Measurements Using
		Significant Unobservable Inputs
		(Level 3)
		Auction rate securities
	Balance as of December 31, 2012	$	37,001
	Total unrealized gains (losses) included in other comprehensive income	5,092
	Settlements	(100		)
	Balance as of December 31, 2013	$	41,993
	Total unrealized gains (losses) included in other comprehensive income	950
	Settlements	—
	Balance as of March 31, 2014	$	42,943
	The following methods and assumptions were used to estimate the fair value of each class of financial instrument. There have been no changes in the valuation techniques used by the Company to fair value our financial instruments:
	Cash and Cash equivalents.  Consist of cash on hand in bank deposits, highly liquid investments and money market accounts. The fair value was measured using quoted market prices and is classified as Level 1.  The carrying amount approximates fair value.
	Restricted Cash.  Consist of cash and cash equivalents that are held in escrow accounts and restricted by agreements with third parties for a particular purpose.  The carrying amount approximates fair value and is classified as Level 1.
	Commercial Paper. Consist of primarily high grade commercial paper.  The fair value of these investments was measured using quoted market prices and is classified as Level 1.  As of December 31, 2013, the contractual maturities of these investments were within one year.
	U.S government sponsored entities.  Consist of Fannie Mae, Freddie Mac and Federal Home Loan Bank investment grade bonds that are traded in less active markets than Level 1 investments.  The fair value of these bonds is classified as Level 2.  The contractual maturities of these investments are within four years.
	Corporate Bonds.  Consist of investment grade corporate bonds that trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis.  The fair value of these bonds was measured using quoted market prices and is classified as Level 1. The contractual maturities of these investments are within three years.
	Market Basis Equity Investments. Consist of available-for-sale equity securities that trade with sufficient frequency and volume to enable us to obtain pricing information on an ongoing basis.  The fair value of these investments was measured using quoted market prices and is classified as Level 1.
	Auction Rate Securities.  As of March 31, 2014, we held $45.7 million of auction rate securities (ARS) at par value which we have recorded at $42.9 million fair value.  As of December 31, 2013, we held $45.7 million of ARS at par value which was recorded at $42.0 million fair value.  As of March 31, 2014 the ARS are 107— 140% over-collateralized and the underlying student loans are guaranteed by the U.S. government.
	Due to the illiquid market conditions, the fair value of our ARS is $2.8 million, 6.1%, less than par value as of March 31, 2014.  This reduction from par value is considered temporary and is recorded in “Accumulated other comprehensive income (loss)”.  The temporary reduction from par value recorded in “Accumulated other comprehensive income (loss)” was $3.7 million, 8.2%, as of December 31, 2013.  For the periods ended March 31, 2014 and 2013, unrealized gains on our ARS of $0.9 million and $3.1 million, respectively, are recorded in “Unrealized gain (loss) on investments” in our Consolidated Statements of Comprehensive Income (Loss).
	In evaluating our ARS portfolio, we note sustained performance of our securities, strong parity levels, observed market redemption activity, continued receipt of interest and penalty payments, and an increase in fair value at March 31, 2014 compared to December 31, 2013. As we expect to receive all contractual cash flows, we do not believe the unrealized losses to be credit related.  We continue to believe that we will be able to liquidate at par over time. We also anticipate we will have sufficient cash flow from operations to execute our business strategy and fund our operational needs.  We do not intend to sell, or believe we will be required to sell, these investments prior to recovery of their amortized cost basis.  Accordingly, we treated the fair value decline as temporary.
	The discounted cash flow model we used to value these securities included the following assumptions:
		March 31,		December 31,
		2014		2013
	Unobservable inputs
	Redemption period (in years)	6		7
	Credit ratings	BB+ to AAA		BB+ to AAA
	Penalty coupon rate	1.0% to 1.5%		1.0% to 1.5%
	Weighted average annualized yield	1.50%		1.60%
	Risk adjusted discount rate	4.3% to 6.0%		4.7% to 7.8%
	Management makes estimates and assumptions about the ARS, which can be sensitive to changes and effect the determination of fair value.  An increase in the length of redemption period or an increase in the discount rate assumption would decrease our fair value.  Also, a decrease in the securities’ credit ratings would decrease our fair value.  In the first quarter of 2014 we decreased the redemption period from 7 years to 6 years to align the valuation model with our internal expectations regarding holding period and prevailing pricing in secondary markets for our ARS.  This change resulted in a $0.7 million increase in the fair value of our ARS.
The portfolio had a weighted average maturity of 29.6 years and 29.8 years as of March 31, 2014 and December 31, 2013, respectively.
We classify our ARS as Level 3 long-term investments until we receive a call or partial call on the securities.  As of March 31, 2014 and December 31, 2013, our entire ARS portfolio was classified as Level 3 long-term investments. In the three months ended March 31, 2014, no ARS were liquidated.  During the year ended December 31, 2013, we liquidated $0.1 million of ARS due to a partial call at par. The amount of Level 3 assets as a percentage of total assets measured at fair value on a recurring basis was 9.7% and 6.5% as of March 31, 2014 and December 31, 2013, respectively.
Assets and Liabilities that are Measured at Fair Value on a Nonrecurring Basis
Certain assets and liabilities are measured at fair value on a nonrecurring basis; that is, they are not measured at fair value on an ongoing basis but are subject to fair value adjustments only in certain circumstances like evidence of impairment.  For the quarters ended March 31, 2014 and 2013, other than the goodwill impairment recorded during the quarter ended March 31, 2013, as further discussed in Note 6 — Goodwill, we had no significant fair value adjustments of assets or liabilities on a nonrecurring basis subsequent to their initial recognition.  The inputs used in goodwill impairment fair value calculations fall within Level 3 inputs due to the significant unobservable inputs used to determine fair value.

INVESTMENTS

INVESTMENTS	3 Months Ended
	Mar. 31, 2014
INVESTMENTS	'
INVESTMENTS	'
	5.  INVESTMENTS
	As of March 31, 2014 and December 31, 2013, our available-for-sale securities consisted of the following (in thousands):
						Gross Unrealized Losses								Maturities/Reset Dates
				Gross Unrealized		Less than 12			Greater than 12					Less than 12		Greater than 12
		Cost		Gains		Months			Months			Fair Value		Months		Months
	Balance as of March 31, 2014
	U.S. government sponsored entities	$	2,000	$	—	$	(7	)	$	—		$	1,993	$	997	$	996
	Corporate bonds	79,950		224		(11		)	—			80,163		66,423		13,740
	Market basis equity investments	3,207		—		—			—			3,207		—		3,207
	Auction rate securities	45,725		—		—			(2,782		)	42,943		—		42,943
	Total available-for-sale securities	$	130,882	$	224	$	(18	)	$	(2,782	)	$	128,306	$	67,420	$	60,886
	Balance as of December 31, 2013
	Commercial paper	$	9,992	$	—	$	—		$	—		$	9,992	$	9,992	$	—
	U.S. government sponsored entities	4,000		—		—			—			4,000		—		4,000
	Corporate bonds	101,400		281		(21		)	—			101,660		58,280		43,380
	Market basis equity investments	1,668		1,881		—			—			3,549		—		3,549
	Auction rate securities	45,725		—		—			(3,732		)	41,993		—		41,993
	Total available-for-sale securities	$	162,785	$	2,162	$	(21	)	$	(3,732	)	$	161,194	$	68,272	$	92,922
	We consider the fair value decline of our investments in U.S. government sponsored entities, corporate bonds and ARS to be temporary, as we do not intend to sell the investments and it is not likely that we will be required to sell the investments before recovery of their amortized cost basis.  See Note 4 — Fair Value Measurements, for further discussion regarding the fair value of ARS.  Temporary, unrealized, gains and losses on available for sale securities are recorded in “Accumulated other comprehensive income (loss)”.
	Realized gains or losses on investments are recorded in our Consolidated Statements of Operations within “Other income (expense), net”.  Upon the sale of a security classified as available for sale, the amount reclassified out of “Accumulated other comprehensive income (loss)” into earnings is based on the specific identification method.
	As of March 31, 2014 and December 31, 2013, the balance of our cost method equity investment was $11.4 million and $10.5 million, respectively, which is included under “Long-term investments” in our Consolidated Balance Sheets.  During the first quarter of 2014, we invested an additional $0.6 million and converted a note receivable of $0.3 million into shares in our cost method equity investment.  During the first quarter of 2013, we sold a cost method equity investment to a third party and recorded a gain of $11.1 million. During the second quarter of 2013, we received additional funds based on our sales agreement and as a result we recorded a gain of $6.5 million.  All gains related to this cost basis investment were recorded in “Other income (expense), net” in our Consolidated Statements of Operations.  Based on future events, we may receive up to $3.1 million of additional sale proceeds.  We have concluded that these additional funds represent contingent gains and have not accounted for them in our consolidated financial statements in accordance with U.S. GAAP.
	We have not estimated the fair value of our cost method equity investment as of March 31, 2014 as we are not aware of any facts or circumstances that would indicate a decline in the fair value of this investment below its carrying value.

GOODWILL

GOODWILL	3 Months Ended
	Mar. 31, 2014
GOODWILL	'
GOODWILL	'
	6.  GOODWILL
	In the fourth quarter 2012, we determined our goodwill was impaired and recorded a preliminary non-cash pretax goodwill impairment charge.  During the first quarter of 2013, we completed our goodwill impairment analysis and recorded an additional non-cash pretax goodwill impairment charge of $21.2 million relating to our single reporting unit. The tax benefit associated with the first quarter impairment was offset by our current period tax valuation allowance.  As previously disclosed, a blended income and market approach was used to determine the applicable impairment changes.  The application of goodwill impairment tests is a level 3 fair value measurement and requires management judgment for many of the inputs.  Goodwill impairment charges are included as a separate operating expense line item, “Goodwill impairment” within Continuing Operations in our Consolidated Statements of Operations.

STOCKBASED_COMPENSATION

STOCK-BASED COMPENSATION	3 Months Ended
	Mar. 31, 2014
STOCK-BASED COMPENSATION	'
STOCK-BASED COMPENSATION	'
	7.  STOCK-BASED COMPENSATION
	The following table summarizes stock-based compensation expense related to employee stock options, restricted and performance stock awards and employee stock purchases recognized (in thousands):
		Three Months Ended
		March 31,
		2014		2013
	Costs and expenses
	Direct cost of services	$	44	$	42
	Network and infrastructure	382		415
	Sales and marketing	1,002		1,832
	Product research and development	912		925
	General and administrative	1,648		2,361
	Stock-based compensation included in costs and expenses	$	3,988	$	5,575

INCOME_TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2014
INCOME TAXES	'
INCOME TAXES	'
	8. INCOME TAXES
	The provision (benefit) for income taxes from continuing operations is composed of the following (in thousands):
		Three Months Ended
		March 31,
		2014			2013
	Current tax expense (benefit):
	United States	$	260		$	1,538
	International	694			(617		)
	Total current provision for income taxes	$	954		$	921
	Tax Rate	(20.1		)%	(9.4		)%
	As of March 31, 2014, and before consideration of current losses, we had U.S. federal tax loss carryforwards of approximately $13.1 million and state tax loss carryforwards of $50.4 million to offset future taxable income before considering 2014 activity. The tax losses consist of U.S. federal net operating losses of $10.9 million and acquired U.S. federal net operating losses of $2.2 million as well as state net operating losses of $23.8 million and acquired state net operating losses of $26.6 million. The U.S. federal tax loss carryforwards expire in the years 2025 through 2032, while the state tax loss carryforwards expire in the years 2014 through 2033. As of March 31, 2014, we also had foreign tax loss carryforwards of approximately $10.8 million. The foreign tax loss carryforwards do not expire under current law.
	On a quarterly basis, we assess whether a valuation allowance for net operating loss carryforwards and other deferred tax assets is needed.  We concluded during the first quarter of 2014 evaluation that we are required to maintain a valuation allowance against our net U.S. tax assets.  As of March 31, 2014, the Company had a valuation allowance on approximately $8.1 million of U.S. deferred tax assets related to operating losses before considering 2014 activity and $21.8 million of deferred tax assets related to other U.S. tax attributes. We also have a valuation allowance on all of our foreign net operating losses of approximately $2.2 million. Any future release of this valuation allowance will reduce expense.
	As of March 31, 2014, we had $10.4 million of unrecognized tax benefits, excluding related interest.  $9.7 million of these unrecognized tax benefits would affect our effective tax rate if recognized.  As of March 31, 2014, we had approximately $1.7 million of accrued interest related to uncertain tax positions.  Due to the potential resolution of examinations currently being performed by taxing authorities and the expiration of various statutes of limitation, it is reasonably possible that the balance of our gross unrecognized tax benefits may change within the next twelve months by a range of zero to $8.9 million.

COMMITMENTS_AND_CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2014
COMMITMENTS AND CONTINGENCIES	'
COMMITMENTS AND CONTINGENCIES	'
	9. COMMITMENTS AND CONTINGENCIES
	Litigation
	We are subject to legal proceedings, claims and litigation, and other disputes or regulatory inquires arising in the ordinary course of business.  In addition, third parties have from time-to-time claimed, and others may claim in the future, that we have infringed their intellectual property rights. We have been notified of several potential patent disputes, and expect that we will increasingly be subject to patent infringement claims as our services expand in scope and complexity.  While the final outcome of these matters is currently not determinable, we believe there is no ordinary course litigation or other matters that are currently pending against us that is likely to have, individually or in the aggregate, a material effect on our consolidated financial position, results of operations, stockholders’ equity or cash flows. Because of the uncertainty inherent in litigation, disputes, and intellectual property matters, it is possible that unfavorable resolutions of these lawsuits, proceedings and claims could exceed the amount we have currently reserved for these matters.
	On April 4, 2014, we settled two intellectual property lawsuits with DDR Holdings, LLC, each of which was dismissed with prejudice.  As of the period ended March 31, 2014, we have accrued for the full settlement amount within the “Other accrued liabilities” line of the Consolidated Balance Sheets.
	On March 31, 2014, the U.S. District Court for the District of Minnesota certified a class action against the Company of all persons in the United States who purchased Extended Download Service for Norton Products between January 24, 2005, and October 26, 2009.  The plaintiffs have sued Symantec Corporation and the Company.  The claims against the Company are for alleged violation of the Minnesota Consumer Fraud and False Statement in Advertising Acts and unjust enrichment, based on the Company’s sale of Extended Download Service to purchasers of Norton products.  We intend to continue to vigorously defend this matter, but cannot predict the timing or ultimate outcome, nor estimate a range of loss, if any, for this matter.
	Indemnification Provisions
	In the ordinary course of business we have included limited indemnification provisions in certain of our agreements with parties with whom we have commercial relations. Under these contracts, we generally indemnify, hold harmless and agree to reimburse the indemnified party for losses suffered or incurred by the indemnified party in connection with claims by any third party with respect to our domain names, trademarks, logos and other branding elements to the extent that such marks are applicable to our performance under the subject agreement. In certain agreements, including both agreements under which we have developed technology for certain commercial parties and agreements with our clients, we have provided an indemnity for other types of third-party claims.
	In addition, we are required by our credit card processors to comply with credit card association operating rules, and we have agreed to indemnify our processors for any fines they are assessed by credit card associations as a result of processing payments for us. The credit card associations and their member banks set and interpret the credit card rules. Visa, MasterCard, American Express or Discover could adopt new operating rules or re-interpret existing rules that we or our credit card processors might find difficult to follow. We also could be subject to fines or increased fees from MasterCard and Visa.
	To date, no significant costs have been incurred, either individually or collectively, in connection with our indemnification provisions
	Commitments and Guarantees
	At certain times, we enter into agreements where a letter of credit is required to ensure payment of future obligations by counterparties, such as our credit card processors and international taxing jurisdictions.  Upon withdrawal, we are obligated to fund the executor bank on demand.  We have not set aside specific funds to cover this potential obligation as we can generally recover these costs from our clients.  If drawn upon, we expect to fund this commitment with cash and cash equivalents.  There were $0.6 million in undrawn letters of credit as of March 31, 2014 and December 31, 2013.

DEBT

DEBT	3 Months Ended
	Mar. 31, 2014
DEBT	'
DEBT	'
	10. DEBT
	2010 Senior Convertible Notes
	For the three months ended March 31, 2014, we repurchased $160.6 million of our 2.00% senior convertible notes (2010 Notes) in the open market for $164.5 million, excluding accrued interest.  For the three months ended March 31, 2014, the loss on extinguishment of debt, including the premium on repurchase and acceleration of the recognition of deferred financing fees was $5.5 million.  For the three months ended March 31, 2013, we repurchased $1.4 million of the 2010 Notes in the open market for $1.3 million, excluding accrued interest. For the three months ended March 31, 2013, the net gain on extinguishment of debt, which is the net of the gain on sale and the loss on acceleration of the recognition of deferred financing fees, was immaterial.  Notes repurchased are deemed to be extinguished for accounting purposes.
	As of March 31, 2014, the carrying value of our 2010 Notes was $135.2 million and the fair value was $135.5 million.  As of December 31, 2013, the carrying value of our 2010 Notes was $295.8 million and the fair value was $298.3 million.  Fair values are based on the quoted fair market values of the debt.  Debt is classified as a level 3 fair value measurement.  We determine fair value based on the market approach.
	2004 Senior Convertible Notes
	On January 1, 2014, holders of $8.7 million of our 1.25% senior convertible notes (2004 Notes) exercised the option to require us to repurchase those Notes at par.  The acceleration of the recognition of deferred financing fees related to the repurchased 2004 Notes resulted in a $0.1 million charge to the quarter ended March 31, 2014.  The repurchased 2004 Notes have been classified as current in “Other current liabilities” in our December 31, 2013, Consolidated Balance Sheet due to the subsequent repurchase on January 1, 2014.
	As of March 31, 2014, the carrying value and fair value of our remaining 2004 notes was $0.1 million.  As of December 31, 2013, the carrying value of our 2004 Notes was $8.8 million and the fair value was $8.9 million.  Fair values are based on the quoted fair market values of the debt.  Debt is classified as a level 3 fair value measurement.  We determine fair value based on the market approach.

DISCONTINUED_OPERATIONS_AND_DI

DISCONTINUED OPERATIONS AND DISPOSALS	3 Months Ended
	Mar. 31, 2014
DISCONTINUED OPERATIONS AND DISPOSALS	'
DISCONTINUED OPERATIONS AND DISPOSALS	'
	11. DISCONTINUED OPERATIONS AND DISPOSALS
	On September 30, 2013, we sold CustomCD, Inc., which was based in Portland, Oregon in a stock sale to a former employee.  On October 1, 2013, we sold Digital River Education Services, Inc., which was based in Plano, Texas in a stock sale to two former employees.  The results of operations of these entities, including the income (losses) on their respective sales, have been excluded from the results of continuing operations and are reported as discontinued operations.  We do not allocate interest income or interest expense to discontinued operations.  The operating results of the discontinued operations included in our Consolidated Statements of Operations, including adjustments to loss on the respective sales, for the three months ended March 31, 2014 and 2013, were as follows (in thousands):
		Three Months Ended
		March 31,
		2014		2013
	Revenue	$	—	$	2,672
	Income (loss) on discontinued operations before taxes and loss on sales	—		(678		)
	Income (loss) on disposal of discontinued businesses before taxes	212		—
	Provision (benefit) for income taxes	79		—
	Income (loss) on discontinued operations, net of tax	$	133	$	(678	)

BASIS_OF_PRESENTATION_Policies

BASIS OF PRESENTATION (Policies)	3 Months Ended
	Mar. 31, 2014
BASIS OF PRESENTATION	'
Recent Accounting Pronouncements	'
	Recent Accounting Pronouncements
	ASU 2013-11 - Presentation of an Unrecognized Tax Benefit When a Net Operating Loss Carryforward, a Similar Tax Loss, or a Tax Credit Carryforward Exists:  In July 2013, the FASB issued ASU 2013-11, which requires an entity to present unrecognized tax benefits as a reduction of the deferred tax asset for a net operating loss carryforward, a similar tax loss, or a tax credit carryforward, if net settlement is required or expected. To the extent that net settlement is not required or expected, the unrecognized tax benefit must be presented as a liability. The assessment of whether a deferred tax asset is available is based on the unrecognized tax benefit and deferred tax asset that exist at the reporting date and should be made presuming disallowance of the tax position at the reporting date. ASU No. 2013-11 is effective for reporting periods beginning after December 15, 2013, and should be applied prospectively to all unrecognized tax benefits that exist at the effective date. We adopted the new guidance in ASU 2013-11 as of the period ended March 31, 2014, and its adoption did not have a material impact on our Consolidated Financial Statements.
	We have determined that all other recently issued accounting standards will not have a material impact on our Consolidated Financial Statements, or do not apply to our operations.
Reclassifications	'
	Reclassifications
	The results of the operations of CustomCD, Inc. (CustomCD) and Digital River Education Services, Inc. (DRES), which were sold on September 30, 2013 and October 1, 2013, respectively, have been classified within Discontinued Operations in our Consolidated Statements of Operations for the three months ended March 31, 2014.  The operations of these entities in the corresponding three months ended March 31, 2013 have been reclassified into Discontinued Operations to conform with the current period presentation.

NET_INCOME_LOSS_PER_SHARE_Tabl

NET INCOME (LOSS) PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2014
NET INCOME (LOSS) PER SHARE	'
Computation of basic and diluted net income (loss) per share from continuing operations	'
	The following table summarizes the computation of basic and diluted net income (loss) per share from continuing operations (in thousands, except per share amounts):
		Three Months Ended
		March 31,
		2014			2013
	Income (loss) from continuing operations per share - basic
	Income (loss) from continuing operations - basic	$	(5,717	)	$	(10,687	)
	Weighted average shares outstanding - basic	30,734			32,877
	Income (loss) from continuing operations per share - basic	$	(0.19	)	$	(0.33	)
	Income (loss) from continuing operations per share - diluted
	Income (loss) from continuing operations - basic	$	(5,717	)	$	(10,687	)
	Exclude: Interest expense and amortized financing cost of convertible senior notes, net of tax benefit	—			—
	Income (loss) from continuing operations - diluted	$	(5,717	)	$	(10,687	)
	Weighted average shares outstanding - basic	30,734			32,877
	Dilutive impact of non-vested stock and options outstanding	—			—
	Dilutive impact of 2004 senior convertible notes	—			—
	Weighted average shares outstanding - diluted	30,734			32,877
	Income (loss) from continuing operations per share - diluted	$	(0.19	)	$	(0.33	)

ACCUMULATED_OTHER_COMPREHENSIV1

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Tables)	3 Months Ended
	Mar. 31, 2014
ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)	'
Summary of changes in accumulated other comprehensive income (loss), net of tax	'
	The following table summarizes the changes in accumulated other comprehensive income (loss), net of tax, by component for the period ended March 31, 2014 and 2013, (in thousands):
		Foreign currency			Unrealized gain			Total
		translation			(loss) on
		adjustment			investments
	Balance as of December 31, 2013	$	3,720		$	812		$	4,532
	Other comprehensive income (loss) before reclassifications	(2,444		)	332			(2,112		)
	Reclassified adjustment for net loss included in net income (loss)	—			4			4
	Net current period other comprehensive income (loss)	(2,444		)	336			(2,108		)
	Balance as of March 31, 2014	$	1,276		$	1,148		$	2,424
	Balance as of December 31, 2012	$	2,565		$	(5,735	)	$	(3,170	)
	Other comprehensive income (loss) before reclassifications	(8,205		)	3,505			(4,700		)
	Reclassified adjustment for net gain included in net income (loss)	—			(2		)	(2		)
	Net current period other comprehensive income (loss)	(8,205		)	3,503			(4,702		)
	Balance as of March 31, 2013	$	(5,640	)	$	(2,232	)	$	(7,872	)
Summary of reclassifications out of accumulated other comprehensive income (loss)	'
	The following table summarizes the reclassifications out of accumulated other comprehensive income (loss) for the period ended March 31, 2014 (in thousands):
	Reclassification out of accumulated other	Amount reclassified			Affected line item in the
	comprehensive income	from accumulated other			Consolidated Statement of
		comprehensive income			Operations
	Realized gains (losses) on investments
		$	(7	)	Other income (expense), net
		3			Income tax benefit (expense)
		$	(4	)	Net income (loss)

FAIR_VALUE_MEASUREMENTS_Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
	Mar. 31, 2014
FAIR VALUE MEASUREMENTS	'
Financial assets accounted for at fair value on recurring basis	'
	The following table sets forth by level within the fair value hierarchy, our financial assets that were accounted for at fair value on a recurring basis at March 31, 2014 and December 31, 2013, (in thousands):
		Fair Value Measurements
		Total			Level 1		Level 2		Level 3
	Balance as of March 31, 2014
	Cash and cash equivalents	$	309,717		$	309,717	$	—	$	—
	Restricted cash	3,606			3,606		—		—
	U.S. government sponsored entities	1,993			—		1,993		—
	Corporate bonds	80,163			80,163		—		—
	Market basis equity investments	3,207			3,207		—		—
	Auction rate securities	42,943			—		—		42,943
	Total assets measured at fair value	$	441,629		$	396,693	$	1,993	$	42,943
	Balance as of December 31, 2013
	Cash and cash equivalents	$	483,868		$	483,868	$	—	$	—
	Restricted cash	3,560			3,560		—		—
	Commerical paper	9,992			9,992		—		—
	U.S. government sponsored entities	4,000			—		4,000		—
	Corporate bonds	101,660			101,660		—		—
	Market basis equity investments	3,549			3,549		—		—
	Auction rate securities	41,993			—		—		41,993
	Total assets measured at fair value	$	648,622		$	602,629	$	4,000	$	41,993
Reconciliation of assets measured at fair value on recurring basis using significant unobservable inputs (Level 3 inputs)	'
	The following table is a reconciliation of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3 inputs) (in thousands):
		Fair Value Measurements Using
		Significant Unobservable Inputs
		(Level 3)
		Auction rate securities
	Balance as of December 31, 2012	$	37,001
	Total unrealized gains (losses) included in other comprehensive income	5,092
	Settlements	(100		)
	Balance as of December 31, 2013	$	41,993
	Total unrealized gains (losses) included in other comprehensive income	950
	Settlements	—
	Balance as of March 31, 2014	$	42,943
Discounted cash flow model assumptions used to value securities	'
	The discounted cash flow model we used to value these securities included the following assumptions:
		March 31,		December 31,
		2014		2013
	Unobservable inputs
	Redemption period (in years)	6		7
	Credit ratings	BB+ to AAA		BB+ to AAA
	Penalty coupon rate	1.0% to 1.5%		1.0% to 1.5%
	Weighted average annualized yield	1.50%		1.60%
	Risk adjusted discount rate	4.3% to 6.0%		4.7% to 7.8%

INVESTMENTS_Tables

INVESTMENTS (Tables)	3 Months Ended
	Mar. 31, 2014
INVESTMENTS	'
Schedule of components of available-for-sale securities	'
	As of March 31, 2014 and December 31, 2013, our available-for-sale securities consisted of the following (in thousands):
						Gross Unrealized Losses								Maturities/Reset Dates
				Gross Unrealized		Less than 12			Greater than 12					Less than 12		Greater than 12
		Cost		Gains		Months			Months			Fair Value		Months		Months
	Balance as of March 31, 2014
	U.S. government sponsored entities	$	2,000	$	—	$	(7	)	$	—		$	1,993	$	997	$	996
	Corporate bonds	79,950		224		(11		)	—			80,163		66,423		13,740
	Market basis equity investments	3,207		—		—			—			3,207		—		3,207
	Auction rate securities	45,725		—		—			(2,782		)	42,943		—		42,943
	Total available-for-sale securities	$	130,882	$	224	$	(18	)	$	(2,782	)	$	128,306	$	67,420	$	60,886
	Balance as of December 31, 2013
	Commercial paper	$	9,992	$	—	$	—		$	—		$	9,992	$	9,992	$	—
	U.S. government sponsored entities	4,000		—		—			—			4,000		—		4,000
	Corporate bonds	101,400		281		(21		)	—			101,660		58,280		43,380
	Market basis equity investments	1,668		1,881		—			—			3,549		—		3,549
	Auction rate securities	45,725		—		—			(3,732		)	41,993		—		41,993
	Total available-for-sale securities	$	162,785	$	2,162	$	(21	)	$	(3,732	)	$	161,194	$	68,272	$	92,922

STOCKBASED_COMPENSATION_Tables

STOCK-BASED COMPENSATION (Tables)	3 Months Ended
	Mar. 31, 2014
STOCK-BASED COMPENSATION	'
Summary of stock-based compensation expense	'
	The following table summarizes stock-based compensation expense related to employee stock options, restricted and performance stock awards and employee stock purchases recognized (in thousands):
		Three Months Ended
		March 31,
		2014		2013
	Costs and expenses
	Direct cost of services	$	44	$	42
	Network and infrastructure	382		415
	Sales and marketing	1,002		1,832
	Product research and development	912		925
	General and administrative	1,648		2,361
	Stock-based compensation included in costs and expenses	$	3,988	$	5,575

INCOME_TAXES_Tables

INCOME TAXES (Tables)	3 Months Ended
	Mar. 31, 2014
INCOME TAXES	'
Schedule of components of provision (benefit) for income taxes from continuing operations	'
	The provision (benefit) for income taxes from continuing operations is composed of the following (in thousands):
		Three Months Ended
		March 31,
		2014			2013
	Current tax expense (benefit):
	United States	$	260		$	1,538
	International	694			(617		)
	Total current provision for income taxes	$	954		$	921
	Tax Rate	(20.1		)%	(9.4		)%

DISCONTINUED_OPERATIONS_AND_DI1

DISCONTINUED OPERATIONS AND DISPOSALS (Tables)	3 Months Ended
	Mar. 31, 2014
DISCONTINUED OPERATIONS AND DISPOSALS	'
Schedule of operating results of the discontinued operations included in the Company's Consolidated Statements of Operations, including adjustments to loss on the respective disposals	'
	The operating results of the discontinued operations included in our Consolidated Statements of Operations, including adjustments to loss on the respective sales, for the three months ended March 31, 2014 and 2013, were as follows (in thousands):
		Three Months Ended
		March 31,
		2014		2013
	Revenue	$	—	$	2,672
	Income (loss) on discontinued operations before taxes and loss on sales	—		(678		)
	Income (loss) on disposal of discontinued businesses before taxes	212		—
	Provision (benefit) for income taxes	79		—
	Income (loss) on discontinued operations, net of tax	$	133	$	(678	)

NET_INCOME_LOSS_PER_SHARE_Deta

NET INCOME (LOSS) PER SHARE (Details) (USD $)	3 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Income (loss) from continuing operations per share - basic	'	'
Income (loss) from continuing operations - basic (in dollars)	($5,717)	($10,687)
Weighted average shares outstanding - basic (in shares)	30,734	32,877
Income (loss) from continuing operations per share - basic (in dollars per share)	($0.19)	($0.33)
Income (loss) from continuing operations per share - diluted	'	'
Income (loss) from continuing operations - basic (in dollars)	-5,717	-10,687
Income (loss) from continuing operations - diluted (in dollars)	($5,717)	($10,687)
Weighted average shares outstanding - basic (in shares)	30,734	32,877
Weighted average shares outstanding - diluted (in shares)	30,734	32,877
Income (loss) from continuing operations per share - diluted (in dollars per share)	($0.19)	($0.33)

NET_INCOME_LOSS_PER_SHARE_Deta1

NET INCOME (LOSS) PER SHARE (Details 2)	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2013
Incremental shares related to dilutive securities	'	'
Antidilutive securities	'	'
Number of anti-dilutive shares excluded from the computation of diluted net income (loss) per share	682,387	573,291
Stock Options	'	'
Antidilutive securities	'	'
Number of anti-dilutive shares excluded from the computation of diluted net income (loss) per share	455,422	1,429,109
Convertible debt securities | Convertible debt | 2004 Senior Convertible Notes	'	'
Antidilutive securities	'	'
Number of anti-dilutive shares excluded from the computation of diluted net income (loss) per share	1,021	199,828
Convertible debt securities | Convertible debt | 2010 Senior Convertible Notes	'	'
Antidilutive securities	'	'
Number of anti-dilutive shares excluded from the computation of diluted net income (loss) per share	5,021,960	6,116,842

ACCUMULATED_OTHER_COMPREHENSIV2

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Changes in accumulated other comprehensive income (loss), net of tax, by component	'	'
Beginning balance	$4,532	($3,170)
Other comprehensive income (loss) before reclassifications	-2,112	-4,700
Reclassified adjustment for net loss (gain) included in net income (loss)	4	-2
Other comprehensive income (loss)	-2,108	-4,702
Ending balance	2,424	-7,872
Foreign currency translation adjustment	'	'
Changes in accumulated other comprehensive income (loss), net of tax, by component	'	'
Beginning balance	3,720	2,565
Other comprehensive income (loss) before reclassifications	-2,444	-8,205
Other comprehensive income (loss)	-2,444	-8,205
Ending balance	1,276	-5,640
Unrealized gain (loss) on investments	'	'
Changes in accumulated other comprehensive income (loss), net of tax, by component	'	'
Beginning balance	812	-5,735
Other comprehensive income (loss) before reclassifications	332	3,505
Reclassified adjustment for net loss (gain) included in net income (loss)	4	-2
Other comprehensive income (loss)	336	3,503
Ending balance	$1,148	($2,232)

ACCUMULATED_OTHER_COMPREHENSIV3

ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS) (Details 2) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Amounts Reclassified from AOCI	'	'
Other income (expense), net	($323)	$10,905
Income tax benefit (expense)	-954	-921
Net income (loss)	-5,584	-11,365
Realized gains (losses) on investments | Reclassification out of accumulated other comprehensive income	'	'
Amounts Reclassified from AOCI	'	'
Other income (expense), net	-7	'
Income tax benefit (expense)	3	'
Net income (loss)	($4)	'

FAIR_VALUE_MEASUREMENTS_Detail

FAIR VALUE MEASUREMENTS (Details) (USD $)	Mar. 31, 2014	Dec. 31, 2013
In Thousands, unless otherwise specified
FAIR VALUE MEASUREMENTS	'	'
Transfers of assets between levels of the hierarchy	$0	$0
Transfers of assets between levels of the hierarchy	0	0
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	128,306	161,194
Commercial paper	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	'	9,992
U.S. government sponsored entities	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	1,993	4,000
Corporate bonds	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	80,163	101,660
Market basis equity investments	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	3,207	3,549
Auction rate securities	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	42,943	41,993
Recurring | Total	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Cash and cash equivalents	309,717	483,868
Restricted cash	3,606	3,560
Assets measured at fair value	441,629	648,622
Recurring | Total | Commercial paper	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	'	9,992
Recurring | Total | U.S. government sponsored entities	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	1,993	4,000
Recurring | Total | Corporate bonds	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	80,163	101,660
Recurring | Total | Market basis equity investments	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	3,207	3,549
Recurring | Total | Auction rate securities	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	42,943	41,993
Recurring | Level 1	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Cash and cash equivalents	309,717	483,868
Restricted cash	3,606	3,560
Assets measured at fair value	396,693	602,629
Recurring | Level 1 | Commercial paper	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	'	9,992
Recurring | Level 1 | Corporate bonds	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	80,163	101,660
Recurring | Level 1 | Market basis equity investments	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	3,207	3,549
Recurring | Level 2	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Assets measured at fair value	1,993	4,000
Recurring | Level 2 | U.S. government sponsored entities	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	1,993	4,000
Recurring | Level 3	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Assets measured at fair value	42,943	41,993
Recurring | Level 3 | Auction rate securities	'	'
Assets and Liabilities Measured at Fair Value on a Recurring Basis	'	'
Available-for-sale securities, fair value	$42,943	$41,993

FAIR_VALUE_MEASUREMENTS_Detail1

FAIR VALUE MEASUREMENTS (Details 2) (Auction rate securities, USD $)	3 Months Ended	12 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Auction rate securities	'	'
Reconciliation of assets measured at fair value on a recurring basis using significant unobservable inputs (Level 3 inputs)	'	'
Beginning Balance	$41,993	$37,001
Total unrealized gains (losses) included in other comprehensive income	950	5,092
Settlements	'	-100
Ending Balance	$42,943	$41,993

FAIR_VALUE_MEASUREMENTS_Detail2

FAIR VALUE MEASUREMENTS (Details 3) (USD $)	3 Months Ended		12 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013
Methods and assumptions used to estimate the fair value of each class of financial instrument	'	'	'
Fair value adjustment, assets	$0.70	'	'
Commercial paper | Maximum	'	'	'
Methods and assumptions used to estimate the fair value of each class of financial instrument	'	'	'
Investment, contractual maturity	'1 year	'	'
U.S. government sponsored entities | Maximum	'	'	'
Methods and assumptions used to estimate the fair value of each class of financial instrument	'	'	'
Investment, contractual maturity	'4 years	'	'
Corporate bonds | Maximum	'	'	'
Methods and assumptions used to estimate the fair value of each class of financial instrument	'	'	'
Investment, contractual maturity	'3 years	'	'
Auction rate securities	'	'	'
Methods and assumptions used to estimate the fair value of each class of financial instrument	'	'	'
Par value	45.7	'	45.7
Fair value	42.9	'	42
Temporary fair value reduction recorded under "Accumulated other comprehensive income (loss)"	2.8	'	3.7
Temporary fair value reduction (as a percent)	6.10%	'	8.20%
Unrealized gains (losses) on ARS	0.9	3.1	'
Weighted average maturity	'29 years 7 months 6 days	'	'29 years 9 months 18 days
Liquidated due to partial calls at par	0	'	0.1
Auction rate securities | Minimum	'	'	'
Methods and assumptions used to estimate the fair value of each class of financial instrument	'	'	'
Over-collateralized percentage	107.00%	'	'
Auction rate securities | Maximum	'	'	'
Methods and assumptions used to estimate the fair value of each class of financial instrument	'	'	'
Over-collateralized percentage	140.00%	'	'
Recurring | Auction rate securities	'	'	'
Methods and assumptions used to estimate the fair value of each class of financial instrument	'	'	'
Level 3 assets to total assets measured at fair value (as a percent)	9.70%	'	6.50%
Nonrecurring	'	'	'
Methods and assumptions used to estimate the fair value of each class of financial instrument	'	'	'
Fair value adjustment, assets	0	'	0
Fair value adjustment, liabilities	$0	'	$0

FAIR_VALUE_MEASUREMENTS_Detail3

FAIR VALUE MEASUREMENTS (Details 4) (USD $)	3 Months Ended	12 Months Ended
In Millions, unless otherwise specified	Mar. 31, 2014	Dec. 31, 2013
Assumptions used to value securities	'	'
Increase in fair value	0.7	'
Auction rate securities	'	'
Assumptions used to value securities	'	'
Redemption period	'6 years	'7 years
Auction rate securities | Minimum	'	'
Assumptions used to value securities	'	'
Penalty coupon rate (as a percent)	1.00%	1.00%
Risk adjusted discount rate (as a percent)	4.30%	4.70%
Auction rate securities | Maximum	'	'
Assumptions used to value securities	'	'
Penalty coupon rate (as a percent)	1.50%	1.50%
Risk adjusted discount rate (as a percent)	6.00%	7.80%
Auction rate securities | Weighted average	'	'
Assumptions used to value securities	'	'
Weighted average annualized yield (as a percent)	1.50%	1.60%

INVESTMENTS_Details

INVESTMENTS (Details) (USD $)	3 Months Ended
	Mar. 31, 2014	Jun. 30, 2013	Mar. 31, 2013	Dec. 31, 2013
INVESTMENTS	'	'	'	'
Cost	$130,882,000	'	'	$162,785,000
Gross Unrealized Gains	224,000	'	'	2,162,000
Gross Unrealized Losses Less than 12 Months	-18,000	'	'	-21,000
Gross Unrealized Losses Greater than 12 Months	-2,782,000	'	'	-3,732,000
Fair Value	128,306,000	'	'	161,194,000
Maturities/Reset Dates Less than 12 Months	67,420,000	'	'	68,272,000
Maturities/Reset Dates Greater than 12 Months	60,886,000	'	'	92,922,000
Aggregate carrying value of cost method equity investments	11,400,000	'	'	10,500,000
Additional amount invested under cost method investment	600,000	'	'	'
Amount of note receivable converted into shares	300,000	'	'	'
Gain recorded under cost method equity investments	'	6,500,000	11,100,000	'
Contingent gain under cost method equity investments	3,100,000	'	'	'
Commercial paper	'	'	'	'
INVESTMENTS	'	'	'	'
Cost	'	'	'	9,992,000
Fair Value	'	'	'	9,992,000
Maturities/Reset Dates Less than 12 Months	'	'	'	9,992,000
U.S. government sponsored entities	'	'	'	'
INVESTMENTS	'	'	'	'
Cost	2,000,000	'	'	4,000,000
Gross Unrealized Losses Less than 12 Months	-7,000	'	'	'
Fair Value	1,993,000	'	'	4,000,000
Maturities/Reset Dates Less than 12 Months	997,000	'	'	'
Maturities/Reset Dates Greater than 12 Months	996,000	'	'	4,000,000
Corporate bonds	'	'	'	'
INVESTMENTS	'	'	'	'
Cost	79,950,000	'	'	101,400,000
Gross Unrealized Gains	224,000	'	'	281,000
Gross Unrealized Losses Less than 12 Months	-11,000	'	'	-21,000
Fair Value	80,163,000	'	'	101,660,000
Maturities/Reset Dates Less than 12 Months	66,423,000	'	'	58,280,000
Maturities/Reset Dates Greater than 12 Months	13,740,000	'	'	43,380,000
Market basis equity investments	'	'	'	'
INVESTMENTS	'	'	'	'
Cost	3,207,000	'	'	1,668,000
Gross Unrealized Gains	'	'	'	1,881,000
Fair Value	3,207,000	'	'	3,549,000
Maturities/Reset Dates Greater than 12 Months	3,207,000	'	'	3,549,000
Auction Rate Securities	'	'	'	'
INVESTMENTS	'	'	'	'
Cost	45,725,000	'	'	45,725,000
Gross Unrealized Losses Greater than 12 Months	-2,782,000	'	'	-3,732,000
Fair Value	42,943,000	'	'	41,993,000
Maturities/Reset Dates Greater than 12 Months	$42,943,000	'	'	$41,993,000

GOODWILL_Details

GOODWILL (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2013
GOODWILL	'
Goodwill impairment	$21,249

STOCKBASED_COMPENSATION_Detail

STOCK-BASED COMPENSATION (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
STOCK-BASED COMPENSATION	'	'
Stock-based compensation included in costs and expenses	$3,988	$5,575
Direct cost of services	'	'
STOCK-BASED COMPENSATION	'	'
Stock-based compensation included in costs and expenses	44	42
Network and infrastructure	'	'
STOCK-BASED COMPENSATION	'	'
Stock-based compensation included in costs and expenses	382	415
Sales and marketing	'	'
STOCK-BASED COMPENSATION	'	'
Stock-based compensation included in costs and expenses	1,002	1,832
Product research and development	'	'
STOCK-BASED COMPENSATION	'	'
Stock-based compensation included in costs and expenses	912	925
General and administrative	'	'
STOCK-BASED COMPENSATION	'	'
Stock-based compensation included in costs and expenses	$1,648	$2,361

INCOME_TAXES_Details

INCOME TAXES (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013
Current tax expense (benefit):	'	'
United States	$260	$1,538
International	694	-617
Total current provision for income taxes	$954	$921
Tax Rate (as a percent)	-20.10%	-9.40%

INCOME_TAXES_Details_2

INCOME TAXES (Details 2) (USD $)	Mar. 31, 2014
In Millions, unless otherwise specified
Unrecognized tax benefits	'
Unrecognized tax benefits, excluding related interest	$10.40
Unrecognized tax benefits that would affect effective tax rate if recognized	9.7
Accrued interest related to uncertain tax positions	1.7
Gross unrecognized tax benefits change within the next twelve months, minimum	0
Gross unrecognized tax benefits change within the next twelve months, maximum	8.9
U.S. federal tax	'
Tax loss carryforward	'
Tax loss carryforwards	13.1
Net operating losses	10.9
Acquired net operating losses	2.2
U.S. federal tax | Operating losses	'
Tax loss carryforward	'
Deferred tax assets reserved	8.1
U.S. federal tax | Other tax attributes	'
Tax loss carryforward	'
Deferred tax assets reserved	21.8
State tax	'
Tax loss carryforward	'
Tax loss carryforwards	50.4
Net operating losses	23.8
Acquired net operating losses	26.6
Foreign tax	'
Tax loss carryforward	'
Tax loss carryforwards	10.8
Foreign tax | Operating losses	'
Tax loss carryforward	'
Deferred tax assets reserved	$2.20

COMMITMENTS_AND_CONTINGENCIES_

COMMITMENTS AND CONTINGENCIES (Details) (USD $)	3 Months Ended		0 Months Ended
	Mar. 31, 2014	Dec. 31, 2013	Apr. 04, 2014
	item		Subsequent event
			item
COMMITMENTS AND CONTINGENCIES	'	'	'
Number of pending litigation	0	'	'
COMMITMENTS AND CONTINGENCIES	'	'	'
Number of settled and dismissed litigations	'	'	2
Amount of significant costs incurred individually or collectively, in connection with indemnification provisions	$0	'	'
Undrawn letters of credit	$600,000	$600,000	'

DEBT_Details

DEBT (Details) (USD $)	3 Months Ended				0 Months Ended	3 Months Ended
	Mar. 31, 2014	Mar. 31, 2014	Mar. 31, 2013	Dec. 31, 2013	Jan. 02, 2014	Mar. 31, 2014	Dec. 31, 2013
		Convertible debt	Convertible debt	Convertible debt	Convertible debt	Convertible debt	Convertible debt
		2010 Senior Convertible Notes	2010 Senior Convertible Notes	2010 Senior Convertible Notes	2004 Senior Convertible Notes	2004 Senior Convertible Notes	2004 Senior Convertible Notes
DEBT	'	'	'	'	'	'	'
Interest rate (as a percent)	'	2.00%	'	'	'	1.25%	'
Principal amount of debt repurchased	'	$160,600,000	$1,400,000	'	$8,700,000	'	'
Debt repurchased amount	'	164,500,000	1,300,000	'	'	'	'
Loss on extinguishment of debt	5,605,000	5,500,000	'	'	'	100,000	'
Carrying value of debt	'	135,200,000	'	295,800,000	'	100,000	8,800,000
Fair value of debt	'	$135,500,000	'	$298,300,000	'	$100,000	$8,900,000

DISCONTINUED_OPERATIONS_AND_DI2

DISCONTINUED OPERATIONS AND DISPOSALS (Details) (USD $)	3 Months Ended
In Thousands, unless otherwise specified	Mar. 31, 2014	Mar. 31, 2013	Oct. 01, 2013
			Digital River Education Services, Inc.
			item
Discontinued operations	'	'	'
Number of former employees to whom net assets are sold by the entity	'	'	2
Operating results of the discontinued operations	'	'	'
Revenue	'	$2,672	'
Income (loss) on discontinued operations before taxes and loss on sales	'	-678	'
Income (loss) on disposal of discontinued businesses before taxes	-212	'	'
Provision (benefit) for income taxes	79	'	'
Income (loss) on discontinued operations, net of tax	$133	($678)	'