Document and Entity Information	6 Months Ended
Document and Entity Information	Jun. 30, 2014	Aug. 05, 2014
Entity Information:
Entity Registrant Name	Tree.com, Inc.
Entity Central Index Key	0001434621
Document Type	10-Q
Document Period End Date	Jun. 30, 2014
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		11,308,431
Document Fiscal Year Focus	2014
Document Fiscal Period Focus	Q2

CONSOLIDATED STATEMENTS OF OPERATIONS (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Revenue	$ 42,144	$ 37,406	$ 82,180	$ 65,486
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	1,895	1,950	3,560	3,306
Selling and marketing expense	28,964	26,386	56,413	43,641
General and administrative expense	5,478	5,651	11,611	12,207
Product development	1,826	1,492	3,758	2,697
Depreciation	946	872	1,701	1,757
Amortization of intangibles	27	43	55	86
Restructuring and severance	23	148	225	146
Litigation settlements and contingencies	385	2,909	8,092	3,937
Total costs and expenses	39,544	39,451	85,415	67,777
Operating income (loss)	2,600	(2,045)	(3,235)	(2,291)
Other income (expense):
Interest expense	0	(7)	0	(14)
Income (loss) before income taxes	2,600	(2,052)	(3,235)	(2,305)
Income tax benefit (expense)	83	19	84	(1)
Net income (loss) from continuing operations	2,683	(2,033)	(3,151)	(2,306)
Gain from sale of discontinued operations, net of tax	0	10,003	0	10,101
Loss from operations of discontinued operations, net of tax	(2,931)	(891)	(3,505)	(3,433)
Income (loss) from discontinued operations	(2,931)	9,112	(3,505)	6,668
Net income (loss)	$ (248)	$ 7,079	$ (6,656)	$ 4,362
Weighted average shares outstanding:
Basic	11,214	11,133	11,178	11,050
Diluted	11,849	11,133	11,178	11,050
Net income (loss) per share from continuing operations:
Basic (in dollars per share)	$ 0.24	$ (0.18)	$ (0.28)	$ (0.21)
Diluted (in dollars per share)	$ 0.23	$ (0.18)	$ (0.28)	$ (0.21)
Net income (loss) per share from discontinued operations:
Basic (in dollars per share)	$ (0.26)	$ 0.82	$ (0.31)	$ 0.60
Diluted (in dollars per share)	$ (0.25)	$ 0.82	$ (0.31)	$ 0.60
Net income (loss) per share attributable to common shareholders:
Basic (in dollars per share)	$ (0.02)	$ 0.64	$ (0.60)	$ 0.39
Diluted (in dollars per share)	$ (0.02)	$ 0.64	$ (0.60)	$ 0.39

CONSOLIDATED BALANCE SHEETS (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
ASSETS:
Cash and cash equivalents	$ 87,618	$ 91,667
Restricted cash and cash equivalents	22,044	26,017
Accounts receivable (net of allowance of $474 and $408, respectively)	13,260	12,850
Prepaid and other current assets	1,518	1,689
Current assets of discontinued operations	715	521
Total current assets	125,155	132,744
Property and equipment (net of accumulated depreciation of $19,709 and $18,008, respectively)	5,602	5,344
Goodwill	3,632	3,632
Intangible assets, net	11,219	10,684
Other non-current assets	102	111
Non-current assets of discontinued operations	100	129
Total assets	145,810	152,644
LIABILITIES:
Accounts payable, trade	5,949	4,881
Accrued expenses and other current liabilities	23,505	23,314
Current liabilities of discontinued operations	32,620	32,004
Total current liabilities	62,074	60,199
Other non-current liabilities	67	334
Deferred income taxes	4,849	4,849
Non-current liabilities of discontinued operations	261	254
Total liabilities	67,251	65,636
Commitments and contingencies
SHAREHOLDERS' EQUITY:
Preferred stock $.01 par value; 5,000,000 shares authorized; none issued or outstanding	0	0
Common stock $.01 par value; 50,000,000 shares authorized; 12,771,101 and 12,619,835 shares issued, respectively, and 11,342,969 and 11,250,903 shares outstanding, respectively	128	126
Additional paid-in capital	906,866	907,148
Accumulated deficit	(814,189)	(807,533)
Treasury stock 1,428,132 and 1,368,932 shares, respectively	(14,246)	(12,733)
Total shareholders' equity	78,559	87,008
Total liabilities and shareholders' equity	$ 145,810	$ 152,644

CONSOLIDATED BALANCE SHEETS (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Statement of Financial Position [Abstract]
Accounts receivable, allowance (in dollars)	$ 474	$ 408
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment	$ 19,709	$ 18,008
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, authorized shares	5,000,000	5,000,000
Preferred stock, issued shares	0	0
Preferred stock, outstanding shares	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, authorized shares	50,000,000	50,000,000
Common stock, issued shares	12,771,101	12,619,835
Common stock, outstanding shares	11,342,969	11,250,903
Treasury stock, shares	1,428,132	1,368,932

CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (USD $) In Thousands, except Share data, unless otherwise specified	Total	Common Stock	Additional Paid-in Capital	Accumulated Deficit	Treasury Stock	Comprehensive Income (Loss)
Balance at Dec. 31, 2013	$ 87,008	$ 126	$ 907,148	$ (807,533)	$ (12,733)
Balance (in shares) at Dec. 31, 2013		12,620,000			1,369,000
Comprehensive loss:
Year-to-date net income (loss)	(6,656)			(6,656)		(6,656)
Comprehensive loss						(6,656)
Non-cash compensation	3,076		3,076
Purchase of treasury stock (in shares)	59,200				59,000
Purchase of treasury stock	(1,513)				(1,513)
Dividends	(12)		(12)
Issuance of restricted stock awards (in shares)		43,000
Issuance of restricted stock awards	0	1	(1)
Net-share settlement of stock-based compensation, net of issuance of common stock upon restricted stock unit vesting and stock option exercise	(3,344)	1	(3,345)
Net-share settlement of stock-based compensation, net of issuance of common stock upon stock option exercise (in shares)		108,000
Balance at Jun. 30, 2014	$ 78,559	$ 128	$ 906,866	$ (814,189)	$ (14,246)
Balance (in shares) at Jun. 30, 2014		12,771,000			1,428,000

CONSOLIDATED STATEMENTS OF CASH FLOWS (USD $) In Thousands, unless otherwise specified	6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013
Cash flows from operating activities attributable to continuing operations:
Net income (loss)	$ (6,656)	$ 4,362
Less: Loss (income) from discontinued operations	3,505	(6,668)
Net income (loss) from continuing operations	(3,151)	(2,306)
Adjustments to reconcile net loss from continuing operations to net cash provided by operating activities attributable to continuing operations:
Loss on disposal of fixed assets	52	24
Amortization of intangibles	55	86
Depreciation	1,701	1,757
Non-cash compensation expense	3,073	2,866
Deferred income taxes	(1)	0
Bad debt expense	143	73
Changes in current assets and liabilities:
Accounts receivable	(813)	(6,871)
Prepaid and other current assets	(399)	91
Accounts payable, accrued expenses and other current liabilities	1,107	6,241
Income taxes payable	576	(570)
Other, net	(161)	(321)
Net cash provided by operating activities attributable to continuing operations	2,182	1,070
Cash flows from investing activities attributable to continuing operations:
Capital expenditures	(2,039)	(1,217)
Acquisition of intangible assets	(530)	0
Decrease (increase) in restricted cash	3,973	(652)
Net cash provided by (used in) investing activities attributable to continuing operations	1,404	(1,869)
Cash flows from financing activities attributable to continuing operations:
Payments related to net-share settlement of stock-based compensation, net of proceeds from exercise of stock options	(3,237)	(1,473)
Purchase of treasury stock	(1,470)	(1,452)
Dividends	(140)	284
Net cash used in financing activities attributable to continuing operations	(4,847)	(2,641)
Total cash used in continuing operations	(1,261)	(3,440)
Net cash used in operating activities attributable to discontinued operations	(2,788)	(1,467)
Net cash provided by investing activities attributable to discontinued operations	0	10,000
Total cash provided by (used in) discontinued operations	(2,788)	8,533
Net increase (decrease) in cash and cash equivalents	(4,049)	5,093
Cash and cash equivalents at beginning of period	91,667	80,190
Cash and cash equivalents at end of period	$ 87,618	$ 85,283

ORGANIZATION	6 Months Ended
ORGANIZATION	Jun. 30, 2014
ORGANIZATION
ORGANIZATION	ORGANIZATION Company Overview Tree.com, Inc. ("Tree.com" or the "Company") is the parent of LendingTree, LLC, which owns several brands and businesses that provide information, tools, advice, products and services for critical transactions in consumers' lives. The family of brands includes: LendingTree®, GetSmart®, LendingTree Autos^SM, LendingTree Education^SM and LendingTree Home Pros^SM. Together, these brands serve as an ally for consumers who are looking to comparison-shop for loans, education programs, home services providers and other services from multiple businesses and professionals that will compete for their business. The consolidated financial statements include the accounts of Tree.com and all its wholly-owned entities. Intercompany transactions and accounts have been eliminated. Certain amounts from the prior consolidated financial statements have been reclassified to conform to the presentation adopted in the current year. Discontinued Operations The businesses of RealEstate.com, REALTORS® (which represents the former Real Estate segment) and LendingTree Loans are presented as discontinued operations in the accompanying consolidated balance sheets, consolidated statements of operations and consolidated cash flows for all periods presented. The notes accompanying these consolidated financial statements reflect the Company's continuing operations and, unless otherwise noted, exclude information related to the discontinued operations. LendingTree Loans On May 12, 2011, the Company entered into an asset purchase agreement with Discover Bank ("Discover"), a wholly-owned subsidiary of Discover Financial Services, as amended on February 7, 2012, for the sale of substantially all of the operating assets of its LendingTree Loans business. The sale was completed on June 6, 2012. The asset purchase agreement, as amended, provided for a purchase price of approximately $55.9 million in cash for the assets, subject to certain conditions. Of this total purchase price, $8.0 million was paid prior to the closing, $37.9 million was paid upon the closing and the contingent amount of $10.0 million was paid and recognized as a gain from sale of discontinued operations in the second quarter of 2013. Discover generally did not assume liabilities of the LendingTree Loans business that arose before the closing date, except for certain liabilities directly related to assets Discover acquired. Of the purchase price paid, as of June 30, 2014, $16.1 million is being held in escrow pending resolution of certain actual and/or contingent liabilities that remain with the Company following the sale. The escrowed amount is recorded as restricted cash as of June 30, 2014. Separate from the asset purchase agreement, Tree.com agreed to provide certain marketing-related services to Discover in connection with its mortgage origination business for approximately seventeen months following the closing, or such earlier point as the agreed-upon services are satisfactorily completed. The services were satisfactorily completed in the second quarter of 2013. Discover remains a network lender on the Company's mortgage exchange following completion of the services. Basis of Presentation The accompanying unaudited interim consolidated financial statements as of June 30, 2014 and for the three and six months ended June 30, 2014 and 2013, respectively, have been prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP") for interim financial information and pursuant to the rules and regulations of the U.S. Securities and Exchange Commission ("SEC"). In the opinion of management, the unaudited interim consolidated financial statements have been prepared on the same basis as the audited financial statements, and include all adjustments, consisting only of normal recurring adjustments, necessary for the fair presentation of the Company's financial position for the periods presented. The results for the three and six months ended June 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014, or any other period. The accompanying consolidated balance sheet as of December 31, 2013 was derived from audited financial statements included in the Company's annual report on Form 10-K for the year ended December 31, 2013 (the "2013 Annual Report"). These consolidated financial statements do not include all of the information and footnotes required by GAAP for annual financial statements. Accordingly, they should be read in conjunction with the audited financial statements and notes thereto included in the 2013 Annual Report.

SIGNIFICANT ACCOUNTING POLICIES	6 Months Ended
SIGNIFICANT ACCOUNTING POLICIES	Jun. 30, 2014
Accounting Policies [Abstract]
SIGNIFICANT ACCOUNTING POLICIES	SIGNIFICANT ACCOUNTING POLICIES Accounting Estimates Management is required to make certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. Significant estimates underlying the accompanying consolidated financial statements, including discontinued operations, include: loan loss obligations; the recoverability of long-lived assets, goodwill and intangible assets; the determination of income taxes payable and deferred income taxes, including related valuation allowances; restructuring reserves; various other allowances, reserves and accruals; and assumptions related to the determination of stock-based compensation. Certain Risks and Concentrations Tree.com's business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud. Financial instruments, which potentially subject the Company to concentration of credit risk at June 30, 2014, consist primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet. Cash and cash equivalents are in excess of Federal Deposit Insurance Corporation insurance limits, but are maintained with quality financial institutions of high credit. The Company generally requires certain network lenders to maintain security deposits with the Company, which in the event of non-payment, would be applied against any accounts receivable outstanding. Due to the nature of the mortgage lending industry, interest rate increases may negatively impact future revenue from the Company's lender network. Lenders participating on the Company's lender network can offer their products directly to consumers through brokers, mass marketing campaigns or through other traditional methods of credit distribution. These lenders can also offer their products online, either directly to prospective borrowers, through one or more online competitors, or both. If a significant number of potential consumers are able to obtain loans from participating lenders without utilizing the Company's service, its ability to generate revenue may be limited. Because the Company does not have exclusive relationships with the lenders whose loan offerings are offered on its online marketplace, consumers may obtain offers and loans from these lenders without using its service. The Company maintains operations solely in the United States. Litigation Settlements and Contingencies Litigation settlements and contingencies consists of expenses related to actual or anticipated litigation settlements, in addition to legal fees incurred in connection with various patent litigation claims the Company pursues against others. Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 related to revenue recognition. This ASU was initiated as a joint project between the FASB and the International Accounting Standards Board ("IASB") to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and IFRS. This guidance will supersede the existing revenue recognition requirements in Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition and is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted and the ASU can be applied (i) retrospectively to each prior period presented or (ii) retrospectively with the cumulative effect of initially adopting the ASU recognized at the date of initial application. The Company is evaluating the impact this ASU will have on its consolidated financial statements. There are no recently issued accounting pronouncements that were adopted during the quarter ended June 30, 2014.

- Definition

The entire disclosure for all significant accounting policies of the reporting entity.

+ References+ Details

RESTRICTED CASH RESTRICTED CASH

6 Months Ended

Jun. 30, 2014

Cash and Cash Equivalents [Abstract]

RESTRICTED CASH

Restricted cash and cash equivalents consists of the following (in thousands):



	June 30, 2014		December 31, 2013
Cash in escrow for surety bonds	$	2,453	$	2,453
Cash in escrow for corporate purchasing card program	400		400
Cash in escrow for sale of LendingTree Loans ^(a)	16,105		18,117
Cash in escrow for earnout related to an acquisition ^(b)	—		1,956
Cash restricted for loan loss obligations	3,051		3,051
Other	35		40
Total restricted cash and cash equivalents	$	22,044	$	26,017

(a)

Home Loan Center, Inc. ("HLC"), a subsidiary of the Company, continues to be liable for certain indemnification obligations, repurchase obligations and premium repayment obligations following the sale of substantially all of the operating assets of its LendingTree Loans business in the second quarter of 2012. During the second quarter of 2014, the Company reached and executed a settlement with one of its secondary market purchasers related to these contingent liabilities, upon which $2.0 million of cash previously held in escrow was released to the Company. This settlement had no impact on the results of operations for the three and six months ended June 30, 2014.


(b)	During the first quarter of 2014, the Company reached and executed a settlement with the disputing party on the earnout related to an acquisition, upon which $2.0 million of cash previously held in escrow was released, of which $1.0 million was paid out to the disputing party. This settlement had no impact on the results of operations for the three and six months ended June 30, 2014.

GOODWILL AND INTANGIBLE ASSETS

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

GOODWILL AND INTANGIBLE ASSETS

The balance of goodwill and intangible assets, net is as follows (in thousands):



	June 30, 2014			December 31, 2013
Goodwill	$	486,720		$	486,720
Accumulated impairment losses	(483,088		)	(483,088		)
Net goodwill	$	3,632		$	3,632

Intangible assets with indefinite lives	$	10,142		$	10,142
Intangible assets with definite lives, net	1,077			542
Total intangible assets, net	$	11,219		$	10,684

Goodwill and Indefinite-Lived Intangible Assets

The Company's goodwill is associated with its one reportable segment, lending. Intangible assets with indefinite lives relate to the Company's trademarks.

Intangible Assets with Definite Lives

On June 30, 2014, the Company acquired certain intangible assets to be used in its home services business for $0.6 million plus contingent consideration of $0 to $0.8 million. As of August 5, 2014, the Company has not completed its determination of the final purchase price or the allocation thereof to these intangible assets. Accordingly, reflected in the tables below, the Company has preliminarily recorded the $0.6 million paid on the acquisition date to customer lists and other intangible assets.

Intangible assets with definite lives relate to the following (in thousands):



	Cost		Accumulated Amortization			Net
Purchase agreements	$	236	$	(236	)	$	—
Technology	25,194		(25,194		)	—
Customer lists	7,222		(6,196		)	1,026
Other	1,567		(1,516		)	51
Balance at June 30, 2014	$	34,219	$	(33,142	)	$	1,077



	Cost		Accumulated Amortization			Net
Purchase agreements	$	236	$	(212	)	$	24
Technology	25,194		(25,194		)	—
Customer lists	6,682		(6,166		)	516
Other	1,517		(1,515		)	2
Balance at December 31, 2013	$	33,629	$	(33,087	)	$	542

Amortization of intangible assets with definite lives is computed on a straight-line basis and, based on balances as of June 30, 2014, future amortization is estimated to be as follows (in thousands):



	Amortization Expense
Remainder of current year	$	66
Year ending December 31, 2015	101
Year ending December 31, 2016	101
Year ending December 31, 2017	92
Year ending December 31, 2018	84
Thereafter	633
Total intangible assets with definite lives, net	$	1,077

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

+ References+ Details

SHAREHOLDERS' EQUITY

6 Months Ended

Jun. 30, 2014

Earnings Per Share [Abstract]

Earnings Per Share

SHAREHOLDERS' EQUITY

Basic and diluted loss per share was determined based on the following share data (in thousands):



	Three Months Ended June 30,		Six Months Ended June 30,
	2014	2013	2014	2013
Weighted average basic common shares	11,214	11,133	11,178	11,050
Effect of stock options	461	—	—	—
Effect of dilutive share awards	174	—	—	—
Weighted average diluted common shares	11,849	11,133	11,178	11,050

For the six months ended June 30, 2014 and the three and six months ended June 30, 2013, the Company had losses from continuing operations and, as a result, no potentially dilutive securities were included in the denominator for computing diluted loss per share, because the impact would have been anti-dilutive. Accordingly, the weighted average basic shares outstanding were used to compute loss per share amounts for these periods. For the three months ended June 30, 2013, approximately 0.6 million shares, and for the six months ended June 30, 2014 and 2013, approximately 0.7 million and 0.7 million shares, respectively, related to potentially dilutive securities were excluded from the calculation of diluted loss per share, because their inclusion would have been anti-dilutive. For the three months ended June 30, 2014, less than 0.1 million shares related to potentially dilutive securities were excluded from the calculation of diluted earnings per share, because their inclusion would have been anti-dilutive.

Common Stock Repurchases

On January 11, 2010, the board of directors authorized the repurchase of up to $10.0 million of Tree.com's common stock. On May 7, 2014, the board of directors authorized the repurchase of up to an additional $10.0 million of Tree.com's common stock. During the three and six months ended June 30, 2014, the Company purchased 59,200 shares of its common stock pursuant to this stock repurchase program. At June 30, 2014, approximately $8.6 million remains authorized for share repurchase.

- Definition

The entire disclosure for earnings per share.

+ References+ Details

STOCK-BASED COMPENSATION

6 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

STOCK-BASED COMPENSATION

Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated statements of operations (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Cost of revenue	$	7	$	3	$	13	$	5
Selling and marketing expense	226		306		459		523
General and administrative expense	928		879		1,989		1,909
Product development	260		244		576		429
Restructuring and severance	—		—		36		—
Total non-cash compensation	$	1,421	$	1,432	$	3,073	$	2,866

Stock Options

A summary of changes in outstanding stock options is as follows:



	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value^(a)
			(per option)		(in years)	(in thousands)
Options outstanding at January 1, 2014	1,038,999		$	8.98
Granted ^(b)	104,910		27.95
Exercised	(4,534	)	12.12
Forfeited	—		—
Expired	(669	)	13.46
Options outstanding at June 30, 2014	1,138,706		10.72		4.76	$	21,171
Options exercisable at June 30, 2014	983,795		$	9.04	4.12	$	19,771

(a)

The aggregate intrinsic value represents the total pre-tax intrinsic value (the difference between the Company's closing stock price of $29.14 on the last trading day of the quarter ended June 30, 2014 and the exercise price, multiplied by the number of shares covered by in-the-money options) that would have been received by the option holders had all option holders exercised their options on June 30, 2014. The intrinsic value changes based on the market value of the Company's common stock.

(b)

During the first six months ended June 30, 2014, the Company granted stock options to certain executives with weighted average grant date fair values per share ranging from $12.29 to $17.13 that vest over a period of three years from the grant date and to non-employee members of the board of directors with a weighted average grant date fair value per share of $13.08 that vest over a period of two years from the grant date. For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the stock options was estimated using the Black-Scholes option pricing model, which requires the use of various key assumptions. The weighted average assumptions used are as follows:



Expected term ⁽¹⁾	5.75 - 6.0 years
Expected dividend ⁽²⁾	—
Expected volatility ⁽³⁾	53% - 54%
Risk-free interest rate ⁽⁴⁾	1.85% - 1.97%


(1)	The expected term of stock options granted was calculated using the 'Simplified Method', which utilizes the midpoint between the weighted average time of vesting and the end of the contractual term. This method was utilized for the stock options due to a lack of historical exercise behavior by the Company's employees.


(2)	For all stock options granted in 2014, no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate.

(3)

The expected volatility rate is based on the historical volatility of the Company's common stock for the four years preceding the grant date, supplemented with the historical volatility of its peer group for the two years preceding the Company's historical volatility. A blended rate was used because the Company became a public company in 2008 and, therefore, does not have a historical volatility equal to the expected term of these awards.


(4)	The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date.

On August 6, 2014, the Company granted 1,000,000 stock options with an exercise price of $26.59 to certain executives, of which 25% and 75% vest over a period of 2.5 years and 3.5 years, respectively, from the grant date. The Company has not completed its determination of the grant date fair value per share of the stock options.

Restricted Stock Units and Restricted Stock

A summary of the changes in outstanding nonvested restricted stock units ("RSUs") and restricted stock is as follows:



	RSUs				RSUs Performance Condition
	Number of Units		Weighted Average Grant Date Fair Value		Number of Units	Weighted Average Grant Date Fair Value
			(per unit)			(per unit)
Nonvested at January 1, 2014	599,122		$	14.15	—	$	—
Granted	121,873		32.28		500	33.59
Vested	(209,507	)	13.36		—	—
Forfeited	(42,952	)	15.85		—	—
Nonvested at June 30, 2014	468,536		$	19.12	500	$	33.59



	Restricted Stock				Restricted Stock Market Condition
	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
			(per share)				(per share)
Nonvested at January 1, 2014	119,500		$	22.47	62,500		$	13.93
Granted	43,389		25.14		—		—
Vested	(20,833	)	17.49		(62,500	)	13.93
Forfeited	—		—		—		—
Nonvested at June 30, 2014	142,056		$	24.02	—		$	—

- Definition

The entire disclosure for compensation-related costs for equity-based compensation, which may include disclosure of policies, compensation plan details, allocation of equity compensation, incentive distributions, equity-based arrangements to obtain goods and services, deferred compensation arrangements, employee stock ownership plan details and employee stock purchase plan details.

+ References+ Details

INCOME TAXES

6 Months Ended

Jun. 30, 2014

Income Tax Disclosure [Abstract]

INCOME TAXES



	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
	(in thousands, except percentages)
Income tax benefit (provision)	$	83		$	19		$	84		$	(1	)
Effective tax rate	3.2		%	0.9		%	2.6		%	—		%

For the three and six months ended June 30, 2014, the effective tax rates varied from the statutory rate primarily due to the existence of a valuation allowance that has been provided to offset the Company's net deferred tax asset, after excluding deferred tax liabilities related to indefinite-lived intangible assets that are not going to provide a source of taxable income in the foreseeable future, and state tax refunds.

For the three and six months ended June 30, 2013, the effective income tax rates varied from the statutory rate due primarily to the impact of the valuation allowance, indefinite-lived intangible assets and state taxes.

Valuation Allowance

There have been no changes to the Company's valuation allowance assessment for the three and six months ended June 30, 2014.

- Definition

The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.

+ References+ Details

CONTINGENCIES	6 Months Ended
CONTINGENCIES	Jun. 30, 2014
Commitments and Contingencies Disclosure [Abstract]
CONTINGENCIES	CONTINGENCIES Overview Tree.com is involved in legal proceedings on an ongoing basis. In assessing the materiality of a legal proceeding, the Company evaluates, among other factors, the amount of monetary damages claimed, as well as the potential impact of non-monetary remedies sought by plaintiffs (e.g., injunctive relief) that may require it to change its business practices in ways that could have a material adverse impact on the business. With respect to the matters disclosed in this footnote, unless otherwise indicated, the Company is unable to estimate the possible loss or range of losses that could potentially result from the application of such non-monetary remedies. As of June 30, 2014 and December 31, 2013, the Company had a litigation settlement accrual for its continuing operations of $0.5 million. The litigation settlement accrual relates to litigation matters that were either settled or a firm offer for settlement was extended, thereby establishing an accrual amount that is both probable and reasonably estimable. Specific Matters Intellectual Property Litigation Zillow LendingTree v. Zillow, Inc., et al. Civil Action No. 3:10-cv-439. On September 8, 2010, the Company filed an action for patent infringement in the US District Court for the Western District of North Carolina against Zillow, Inc., Nextag, Inc., Quinstreet, Inc., Quinstreet Media, Inc. and Adchemy, Inc. The complaint was amended to include Leadpoint, Inc. d/b/a Securerights on September 24, 2010. The complaint alleges that each of the defendants infringe one or both of the Company's patents-U.S. Patent No. 6,385,594, entitled "Method and Computer Network for Co-Ordinating a Loan over the Internet," and U.S. Patent No. 6,611,816, entitled "Method and Computer Network for Co-Ordinating a Loan over the Internet." The defendants in this action asserted various defenses and counterclaims against the Company, including the assertion by certain of the defendants of counterclaims alleging illegal monopolization via our maintenance of the asserted patents. Defendant NexTag asserted a defense of laches. In July 2011, the Company reached a settlement agreement with Leadpoint, Inc., pursuant to which all claims against Leadpoint, Inc. and all counterclaims against the Company by Leadpoint, Inc. were dismissed. In November 2012, the Company reached a settlement agreement with Quinstreet, Inc. and Quinstreet Media, Inc. (collectively, the "Quinstreet Parties"), pursuant to which all claims against the Quinstreet Parties and all counterclaims against the Company by the Quinstreet Parties were dismissed. After an unsuccessful attempt to reach settlement through mediation with the remaining parties, this matter went to trial beginning in February 2014, and on March 12, 2014, the jury returned a verdict. The jury found that the defendants Zillow, Inc., Adchemy, Inc., and NexTag, Inc. did not infringe the two patents referenced above and determined that those patents are invalid due to an inventorship defect, and the court found that NexTag was entitled to a defense of laches. The jury found in the Company's favor on the defendants' counterclaims alleging inequitable conduct and antitrust violations. Judgment was entered on March 31, 2014. After the court entered judgment, on May 27, 2014, the Company reached a settlement agreement with defendant Adchemy, Inc., including an agreement to dismiss and withdraw all claims, counterclaims, and motions between the Company and Adchemy, Inc. As a result, a joint and voluntary dismissal was filed June 12, 2014. Certain matters remain pending with the court, including the Company's motions for a new trial and to correct the inventorship defect and restore the validity of the patents and the defendants' motions for sanctions and attorneys' fees. The Company believes it has strong grounds for appeal and filed a notice of appeal on April 22, 2014. The range of possible loss on the remaining motions for sanctions and awards of attorneys' fees is estimated to be between $0 to $7.3 million. The Company believes the defendants' motions for sanctions and attorneys' fees lack merit and intends to defend these motions vigorously. Internet Patents Corp. Internet Patents Corporation f/k/a InsWeb v. Tree.com, Inc., No. C-12-6505 (U.S. Dist. Ct., N.D. Cal.). In December 2012, the plaintiff filed a patent infringement lawsuit against the Company seeking a judgment that it had infringed a patent held by the plaintiff. Process was formally served with respect to this matter in April 2013. The plaintiff sought injunctive relief, damages, costs, expenses, pre- and post-judgment interest, punitive damages and attorneys' fees. The plaintiff alleged that the Company infringed upon U.S. Patent No. 7,707,505, entitled "Dynamic Tabs for a Graphical User Interface". On October 25, 2013, the court dismissed the suit based on the finding that the plaintiff's claims failed as a matter of law because the asserted patent is invalid for lack of patent-eligible subject matter. The plaintiff filed a notice of appeal on November 7, 2013. In December 2013, the Company's case was consolidated with three other pending appeals involving the asserted patents. The plaintiff filed its opening appellate brief in January 2014, and the Company filed a joint appellate response brief in April 2014. A hearing on the consolidated appeals is expected in August 2014. The Company believes the plaintiff's allegations lack merit and intends to defend against this action vigorously. Money Suite The Money Suite Company v. LendingTree, LLC, No. 1:13-ev-986 (U.S. Dist. Ct, D Del.). In June 2013, the plaintiff filed a patent infringement lawsuit against LendingTree, LLC ("LendingTree") seeking a judgment that it infringed a patent held by plaintiff. The plaintiff alleges that LendingTree infringes U.S. Patent No. 6,684,189 for "an apparatus and method using front-end network gateways and search criteria for efficient quoting at a remote location". The plaintiff seeks damages (including pre- and post- judgment interest thereon), costs and attorneys' fees. In December 2013, the court stayed this case pending review of the patent by the United States Patent and Trademark Office. The Company believes the plaintiff's allegations lack merit and intends to defend against this action vigorously. Other Litigation Boschma Boschma v. Home Loan Center, Inc., No. SACV7-613 (U.S. Dist. Ct., C.D. Cal.). On May 25, 2007, the plaintiffs filed a putative class action against HLC in the U.S. District Court for the Central District of California. The plaintiffs allege that HLC sold them an option "ARM" (adjustable-rate mortgage) loan but failed to disclose in a clear and conspicuous manner, among other things, that the interest rate was not fixed, that negative amortization could occur and that the loan had a prepayment penalty. Based upon these factual allegations, the plaintiffs asserted violations of the federal Truth in Lending Act, violations of the Unfair Competition Law, breach of contract, and breach of the covenant of good faith and fair dealing. The plaintiffs purport to represent a class of all individuals who, between June 1, 2003 and May 31, 2007, obtained option ARM loans through HLC on their primary residences located in California, and seek rescission, damages, attorneys' fees and injunctive relief. The plaintiffs have not yet filed a motion for class certification, but have filed a total of eight complaints in connection with this lawsuit. Each of the first seven complaints has been dismissed by the federal and state courts. The plaintiffs filed the eighth complaint (a "Second Amended Complaint") in Orange County (California) Superior Court on March 4, 2010 alleging only the fraud and Unfair Competition Law claims. As with each of the seven previous versions of plaintiffs' complaint, the Second Amended Complaint was dismissed in April 2010. The plaintiffs appealed the dismissal and on August 10, 2011, the appellate court reversed the trial court's dismissal and directed the trial court to overrule the demurrer. The case was remanded to superior court. During 2013, the parties agreed to a $450,000 settlement, which was approved in 2013. A nominal payment into the settlement fund was made in late 2013. The Company expects administration of the settlement to be completed by the fourth quarter of 2014. A provision for the remaining $435,000 is included in current liabilities of discontinued operations as of June 30, 2014. Subsequent to June 30, 2014, the settlement fund was fully funded. The impact of the settlement was not material. Dijkstra Lijkel Dijkstra v. Harry Carenbauer, Home Loan Center, Inc. et al., No. 5:11-cv-152-JPB (U.S. Dist. Ct., N.D.WV). On November 7, 2008, the plaintiffs filed a putative class action in Circuit Court of Ohio County, West Virginia against Harry Carenbauer, HLC, HLC Escrow, Inc. et al. The complaint alleges that HLC engaged in the unauthorized practice of law in West Virginia by permitting persons who were neither admitted to the practice of law in West Virginia nor under the direct supervision of a lawyer admitted to the practice of law in West Virginia to close mortgage loans. The plaintiffs assert claims for declaratory judgment, contempt, injunctive relief, conversion, unjust enrichment, breach of fiduciary duty, intentional misrepresentation or fraud, negligent misrepresentation, violation of the West Virginia Consumer Credit and Protection Act ("CCPA"), violation of the West Virginia Lender, Broker & Services Act, civil conspiracy, outrage and negligence. The claims against all defendants other than Mr. Carenbauer, HLC and HLC Escrow, Inc. have been dismissed. The case was removed to federal court in October 2011. On January 3, 2013, the court granted a conditional class certification only with respect to the declaratory judgment, contempt, unjust enrichment and CCPA claims. The conditional class includes consumers with mortgage loans in effect any time after November 8, 2007 who obtained such loans through HLC, and whose loans were closed by persons not admitted to the practice of law in West Virginia or by persons not under the direct supervision of a lawyer admitted to the practice of law in West Virginia. On February 26, 2014, the court granted and denied certain of each party's motions for summary judgment. With respect to the Class Claims, the court granted plaintiff's motions for summary judgment with respect to declaratory judgment, unjust enrichment and violation of the CCPA. The court granted HLC's motion for summary judgment with respect to contempt. In addition, the court denied HLC's motion to decertify the class. With respect to the claims applicable to the named plaintiff only (the "Individual Claims"), HLC's motions for summary judgment were granted with respect to conversion, breach of fiduciary duty, intentional misrepresentation, negligent misrepresentation and outrage. As of June 30, 2014, HLC and the plaintiff have reached a tentative settlement agreement with respect to the remaining Individual Claims. A reserve of $2.8 million has been established for this matter in the accompanying consolidated balance sheet as of June 30, 2014, of which some or all may be covered by insurance. Subsequent to June 30, 2014, the court awarded damages to plaintiffs in the amount of $2.8 million. HLC believes it has strong grounds for appeal. Massachusetts Division of Banks On February 11, 2011, the Massachusetts Division of Banks (the "Division") delivered a Report of Examination/Inspection to LendingTree, which identified various alleged violations of Massachusetts and federal laws, including the alleged insufficient delivery by LendingTree of various disclosures to its customers. On October 14, 2011, the Division provided a proposed Consent Agreement and Order to settle the Division's allegations, which the Division had shared with other state mortgage lending regulators. Thirty-four of such state mortgage lending regulators (the "Joining Regulators") indicated that if LendingTree would enter into the Consent Agreement and Order, they would agree not to pursue any analogous allegations that they otherwise might assert. As of August 7, 2014, none of the Joining Regulators have asserted any such allegations. The proposed Consent Agreement and Order calls for a fine to be allocated among the Division and the Joining Regulators and for LendingTree to adopt various new procedures and practices. The Company has commenced negotiations toward an acceptable Consent Agreement and Order. It does not believe its mortgage exchange business violated any federal or state mortgage lending laws; nor does it believe that any past operations of the mortgage business have resulted in a material violation of any such laws. Should the Division or any Joining Regulator bring any actions relating to the matters alleged in the February 2011 Report of Examination/Inspection, the Company intends to defend against such actions vigorously. The range of possible loss is estimated to be between $0.5 million and $6.5 million, and a reserve of $0.5 million has been established for this matter in the accompanying consolidated balance sheet as of June 30, 2014.

SEGMENT INFORMATION

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

SEGMENT INFORMATION

The Company has one reportable segment, its lending operating segment. Its additional operating segments—auto, education and home services—are included in the "Other" category in the reconciliation of segment information below.

The expenses presented below for the lending segment and the operating segments shown in the Other category include allocations of certain corporate expenses that are identifiable and directly benefit those segments. The unallocated expenses included in the "Corporate" category are those corporate overhead expenses that are not directly attributable to an operating segment and include: finance, legal, executive technology support and human resources.

Adjusted earnings before interest, taxes, depreciation and amortization ("Adjusted EBITDA"), a non-GAAP measure, is the primary metric by which the chief operating decision maker evaluates the performance of the Company's businesses, on which its marketing expenditures and internal budgets are based and by which management and many employees are compensated. Adjusted EBITDA is defined as operating income or loss (which excludes interest expense and taxes) adjusted to exclude amortization of intangibles and depreciation, and excludes (1) non-cash compensation expense, (2) non-cash intangible asset impairment charges, (3) gain/loss on disposal of assets, (4) restructuring and severance expenses, (5) litigation settlements and contingencies and legal fees for certain patent litigation, (6) adjustments for acquisitions or dispositions and (7) one-time items. For the periods presented in this report, there are no adjustments for one-time items, except for $0.9 million related to a discretionary cash bonus payment to employee stock option holders during the six months ended June 30, 2013.

Assets and other balance sheet information are not used by the chief operating decision maker.

Summarized information by segment and reconciliations to Adjusted EBITDA and income (loss) before income taxes is as follows (in thousands):



	Three Months Ended June 30, 2014
	Lending		Other			Corporate			Total
Revenue	$	39,049	$	3,095		$	—		$	42,144
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	1,773		122			—			1,895
Selling and marketing expense	26,952		2,012			—			28,964
General and administrative expense	1,247		615			3,616			5,478
Product development	1,474		352			—			1,826
Depreciation	400		441			105			946
Amortization of intangibles	—		27			—			27
Restructuring and severance	14		—			9			23
Litigation settlements and contingencies	—		—			385			385
Total costs and expenses	31,860		3,569			4,115			39,544
Operating income (loss)	7,189		(474		)	(4,115		)	2,600
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		27			—			27
Depreciation	400		441			105			946
Restructuring and severance	14		—			9			23
Loss on disposal of assets	—		27			17			44
Non-cash compensation	528		169			724			1,421
Acquisition expense	—		74			—			74
Litigation settlements and contingencies	—		—			385			385
Adjusted EBITDA	$	8,131	$	264		$	(2,875	)	$	5,520

Operating income									$	2,600
Interest expense									—
Income before income taxes									$	2,600



	Three Months Ended June 30, 2013 ^(a)
	Lending		Other			Corporate			Total
Revenue	$	33,781	$	3,003		$	622		$	37,406
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	1,395		163			392			1,950
Selling and marketing expense	24,119		2,262			5			26,386
General and administrative expense	874		420			4,357			5,651
Product development	1,226		266			—			1,492
Depreciation	345		426			101			872
Amortization of intangibles	—		43			—			43
Restructuring and severance	23		125			—			148
Litigation settlements and contingencies	—		—			2,909			2,909
Total costs and expenses	27,982		3,705			7,764			39,451
Operating income (loss)	5,799		(702		)	(7,142		)	(2,045		)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		43			—			43
Depreciation	345		426			101			872
Restructuring and severance	23		125			—			148
Loss on disposal of assets	—		—			—			—
Non-cash compensation	483		95			854			1,432
Litigation settlements and contingencies	—		—			2,909			2,909
Adjusted EBITDA	$	6,650	$	(13	)	$	(3,278	)	$	3,359

Operating loss									$	(2,045	)
Interest expense									(7		)
Loss before income taxes									$	(2,052	)


(a)	For comparative purposes, revenue from and expenses related to personal loan offerings have been recast from the "Other" category to the lending segment.



	Six Months Ended June 30, 2014
	Lending		Other			Corporate			Total
Revenue	$	75,977	$	6,203		$	—		$	82,180
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	3,318		242			—			3,560
Selling and marketing expense	52,571		3,842			—			56,413
General and administrative expense	2,493		1,397			7,721			11,611
Product development	3,097		661			—			3,758
Depreciation	763		734			204			1,701
Amortization of intangibles	—		55			—			55
Restructuring and severance	162		15			48			225
Litigation settlements and contingencies	—		—			8,092			8,092
Total costs and expenses	62,404		6,946			16,065			85,415
Operating income (loss)	13,573		(743		)	(16,065		)	(3,235		)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		55			—			55
Depreciation	763		734			204			1,701
Restructuring and severance	162		15			48			225
Loss on disposal of assets	—		35			17			52
Non-cash compensation	1,127		434			1,476			3,037
Acquisition expense	—		74			—			74
Litigation settlements and contingencies	—		—			8,092			8,092
Adjusted EBITDA	$	15,625	$	604		$	(6,228	)	$	10,001

Operating loss									(3,235		)
Interest expense									—
Loss before income taxes									$	(3,235	)



	Six Months Ended June 30, 2013 ^(a)
	Lending		Other			Corporate			Total
Revenue	$	59,454	$	5,410		$	622		$	65,486
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	2,550		337			419			3,306
Selling and marketing expense	39,279		4,357			5			43,641
General and administrative expense	1,852		930			9,425			12,207
Product development	2,176		521			—			2,697
Depreciation	719		843			195			1,757
Amortization of intangibles	—		86			—			86
Restructuring and severance	23		125			(2		)	146
Litigation settlements and contingencies	—		—			3,937			3,937
Total costs and expenses	46,599		7,199			13,979			67,777
Operating income (loss)	12,855		(1,789		)	(13,357		)	(2,291		)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		86			—			86
Depreciation	719		843			195			1,757
Restructuring and severance	23		125			(2		)	146
Loss on disposal of assets	—		—			24			24
Non-cash compensation	896		237			1,733			2,866
Discretionary cash bonus	—		—			920			920
Litigation settlements and contingencies	—		—			3,937			3,937
Adjusted EBITDA	$	14,493	$	(498	)	$	(6,550	)	$	7,445

Operating loss									(2,291		)
Interest expense									(14		)
Loss before income taxes									$	(2,305	)


(a)	For comparative purposes, revenue from and expenses related to personal loan offerings have been recast from the "Other" category to the lending segment.

- Definition

The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments.

+ References

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+ Details

RESTRUCTURING EXPENSE

6 Months Ended

Jun. 30, 2014

Restructuring and Related Activities [Abstract]

RESTRUCTURING EXPENSE

RESTRUCTURING

Accrued restructuring costs primarily relate to lease obligations for call center leases exited in 2010, which are expected to be completed by 2015. Restructuring expense and payments against liabilities are as follows (in thousands):



	Continuing Lease Obligations
Balance at December 31, 2013	$	462
Restructuring expense	8
Payments	(148		)
Balance at June 30, 2014	$	322

The Company does not expect to incur significant additional costs related to the restructuring noted above.

- Definition

The entire disclosure for restructuring and related activities. Description of restructuring activities such as exit and disposal activities, include facts and circumstances leading to the plan, the expected plan completion date, the major types of costs associated with the plan activities, total expected costs, the accrual balance at the end of the period, and the periods over which the remaining accrual will be settled.

+ References+ Details

DISCONTINUED OPERATIONS

6 Months Ended

Jun. 30, 2014

Discontinued Operations and Disposal Groups [Abstract]

DISCONTINUED OPERATIONS

On May 12, 2011, the Company entered into an asset purchase agreement, later amended on February 7, 2012, that provided for the sale of substantially all of the operating assets of its LendingTree Loans business to Discover. The sale was completed on June 6, 2012. Discover has participated as a network lender since the closing of the transaction. An evaluation of the facts and circumstances of the transaction and the applicable accounting guidance for discontinued operations indicates that the LendingTree Loans business should be reflected as discontinued operations in the accompanying consolidated financial statements for all periods presented. The continuing cash flows related to this transaction are not significant and, accordingly, are not deemed to be direct cash flows of the divested business.

The Company agreed to indemnify Discover for a breach or inaccuracy of any representation, warranty or covenant made by it in the asset purchase agreement, for any liability of LendingTree Loans that was not assumed, for any claims by its stockholders against Discover and for its failure to comply with any applicable bulk sales law, subject to certain limitations. Discover submitted a claim for indemnification relating to the sale prior to the closing of certain loans that were listed in the asset purchase agreement as to be conveyed to Discover at closing. In May 2013, this indemnification claim and other miscellaneous items were settled by agreeing to credit Discover for $1.3 million in future services. A majority of these credits were applied against services during the year ended December 31, 2013. The remaining credits were exhausted in the first quarter of 2014.

The revenue and net loss reported as discontinued operations in the accompanying consolidated statements of operations are as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenue	$	2		$	(292	)	$	4		$	(1,486	)

Income (loss) before income taxes	$	(2,930	)	$	(891	)	$	(3,501	)	$	(3,382	)
Income tax benefit (expense)	(1		)	—			(4		)	(51		)
Gain from sale of discontinued operations, net of tax	—			10,003			—			10,101
Net income (loss)	$	(2,931	)	$	9,112		$	(3,505	)	$	6,668

The assets and liabilities of discontinued operations in the accompanying consolidated balance sheets are as follows (in thousands):



	June 30, 2014			December 31, 2013
Current assets	$	715		$	521
Non-current assets	100			129
Current liabilities	(32,620		)	(32,004		)
Non-current liabilities	(261		)	(254		)
Net liabilities	$	(32,066	)	$	(31,608	)

Significant Assets and Liabilities of LendingTree Loans

Upon closing of the sale of substantially all of the operating assets of the LendingTree Loans business on June 6, 2012, LendingTree Loans ceased to originate consumer loans. The remaining operations are being wound down. These wind-down activities have included, among other things, selling the balance of loans held for sale to investors, paying off and then terminating the warehouse lines of credit and settling derivative obligations, all of which have been completed. Liability for losses on previously sold loans will remain with LendingTree Loans and are discussed below.

Loan Loss Obligations

LendingTree Loans sold loans it originated to investors on a servicing-released basis, so the risk of loss or default by the borrower was generally transferred to the investor. However, LendingTree Loans was required by these investors to make certain representations and warranties relating to credit information, loan documentation and collateral. These representations and warranties may extend through the contractual life of the loan. Subsequent to the loan sale, if underwriting deficiencies, borrower fraud or documentation defects are discovered in individual loans, LendingTree Loans may be obligated to repurchase the respective loan or indemnify the investors for any losses from borrower defaults if such deficiency or defect cannot be cured within the specified period following discovery. In the case of early loan payoffs and early defaults on certain loans, LendingTree Loans may be required to repay all or a portion of the premium initially paid by the investor.

HLC, a subsidiary of the Company, continues to be liable for these indemnification obligations, repurchase obligations and premium repayment obligations following the sale of substantially all of the operating assets of its LendingTree Loans business in the second quarter of 2012. As of June 30, 2014, approximately $19.2 million is being held in escrow pending resolution of certain of these contingent liabilities. The Company has been negotiating with certain secondary market purchasers to settle any existing and future contingent liabilities, but it may not be able to complete such negotiations on acceptable terms, or at all. Because LendingTree Loans does not service the loans it sold, it does not maintain nor generally have access to the current balances and loan performance data with respect to the individual loans previously sold to investors. Accordingly, LendingTree Loans is unable to determine, with precision, its maximum exposure for breaches of the representations and warranties it made to the investors that purchased such loans.

During the fourth quarter of 2013, the Company revised its estimation process for evaluating the adequacy of the reserve for loan losses to use a settlement discount framework. This model estimates the lifetime losses on the population of remaining loans originated and sold by LendingTree Loans using actual defaults for loans with similar characteristics and projected future defaults. It also considers the likelihood of claims expected due to alleged breaches of representations and warranties made by LendingTree Loans and the percentage of those claims investors estimate LendingTree Loans may agree to repurchase. A settlement discount factor is then applied to the result of the foregoing to reflect publicly announced bulk settlements for similar loan types and vintages, as well as LendingTree Loans' non-operating status, in order to estimate a range of potential obligation.

The estimated range of remaining loan losses using this settlement discount framework was determined to be $15.9 million to $28.8 million as of June 30, 2014. The reserve balance recorded as of June 30, 2014 was $28.4 million. Management has considered both objective and subjective factors in the estimation process, but given current general industry trends in mortgage loans as well as housing prices and market expectations, actual losses related to LendingTree Loans' obligations could vary significantly from the obligation recorded as of the balance sheet date or the range estimated above.

Additionally, Tree.com has guaranteed certain loans sold to two investors in the event that LendingTree Loans is unable to satisfy its repurchase and warranty obligations related to such loans.

The following table represents the loans sold for the periods shown and the aggregate loan losses through June 30, 2014:



	June 30, 2014
Period of Loan Sales	Number of Loans Sold	Original Principal Balance		Number of Loans with Losses	Original Principal Balance of Loans with Losses		Amount of Aggregate Losses
		(in billions)			(in millions)		(in millions)
2014	—	$	—	—	$	—	$	—
2013	—	—		—	—		—
2012	9,200	1.9		—	—		—
2011	12,500	2.7		1	0.3		0.1
2010	12,400	2.8		4	1.1		0.1
2009	12,800	2.8		5	1.2		0.2
2008	11,000	2.2		33	6.9		2.2
2007	36,300	6.1		160	22.1		8.2
2006	55,000	7.9		207	24.5		13.4
2005 and prior years	86,700	13.0		89	12.3		5.0
Total	235,900	$	39.4	499	$	68.4	$	29.2

In the second quarter of 2014, LendingTree Loans completed settlements with two buyers of previously purchased loans. The settlement amounts were included in charge-offs to the reserve in the second quarter of 2014. The settlement amounts for these settlements were not determined on an individual loan basis and are, therefore, not included in the loss amounts disclosed above for the years such loans were sold.

Based on historical experience, it is anticipated that LendingTree Loans will continue to receive repurchase requests and incur losses on loans sold in prior years.

The activity related to loss reserves on previously sold loans is as follows (in thousands):



	Three Months Ended June 30,					Six Months Ended June 30,
	2014			2013		2014			2013
Loan loss reserve, beginning of period	$	28,543		$	28,379	$	28,543		$	27,182
Provisions	—			296		—			1,493
Charge-offs to reserves	(153		)	—		(153		)	—
Loan loss reserve, end of period	$	28,390		$	28,675	$	28,390		$	28,675

The liability for losses on previously sold loans is presented as current liabilities of discontinued operations in the accompanying consolidated balance sheet as of June 30, 2014 and December 31, 2013.

- Definition

The entire disclosure for the facts and circumstances leading to the completed or expected disposal, manner and timing of disposal, the gain (loss) recognized in the income statement and the income statement caption that includes that gain (loss), amounts of revenues and pretax profit or loss reported in discontinued operations, the segment in which the disposal group was reported, and the classification (whether sold or classified as held for sale) and carrying value of the assets and liabilities comprising the disposal group. Includes all disposal groups, including those classified as components of the entity (discontinued operations).

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

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-Name Accounting Standards Codification

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-Topic 205

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-Paragraph 2

-URI http://asc.fasb.org/extlink&oid=6360339&loc=d3e1436-107760

+ Details

SIGNIFICANT ACCOUNTING POLICIES (Policies)	6 Months Ended
SIGNIFICANT ACCOUNTING POLICIES (Policies)	Jun. 30, 2014
Accounting Policies [Abstract]
Accounting Estimates	Accounting Estimates Management is required to make certain estimates and assumptions during the preparation of the consolidated financial statements in accordance with GAAP. These estimates and assumptions impact the reported amount of assets and liabilities and disclosures of contingent assets and liabilities as of the date of the consolidated financial statements. They also impact the reported amount of net earnings during any period. Actual results could differ from those estimates. Significant estimates underlying the accompanying consolidated financial statements, including discontinued operations, include: loan loss obligations; the recoverability of long-lived assets, goodwill and intangible assets; the determination of income taxes payable and deferred income taxes, including related valuation allowances; restructuring reserves; various other allowances, reserves and accruals; and assumptions related to the determination of stock-based compensation.
Certain Risks and Concentrations	Certain Risks and Concentrations Tree.com's business is subject to certain risks and concentrations including dependence on third-party technology providers, exposure to risks associated with online commerce security and credit card fraud. Financial instruments, which potentially subject the Company to concentration of credit risk at June 30, 2014, consist primarily of cash and cash equivalents and accounts receivable, as disclosed in the consolidated balance sheet. Cash and cash equivalents are in excess of Federal Deposit Insurance Corporation insurance limits, but are maintained with quality financial institutions of high credit. The Company generally requires certain network lenders to maintain security deposits with the Company, which in the event of non-payment, would be applied against any accounts receivable outstanding. Due to the nature of the mortgage lending industry, interest rate increases may negatively impact future revenue from the Company's lender network. Lenders participating on the Company's lender network can offer their products directly to consumers through brokers, mass marketing campaigns or through other traditional methods of credit distribution. These lenders can also offer their products online, either directly to prospective borrowers, through one or more online competitors, or both. If a significant number of potential consumers are able to obtain loans from participating lenders without utilizing the Company's service, its ability to generate revenue may be limited. Because the Company does not have exclusive relationships with the lenders whose loan offerings are offered on its online marketplace, consumers may obtain offers and loans from these lenders without using its service. The Company maintains operations solely in the United States.
Litigation Settlements and Contingencies	Litigation Settlements and Contingencies Litigation settlements and contingencies consists of expenses related to actual or anticipated litigation settlements, in addition to legal fees incurred in connection with various patent litigation claims the Company pursues against others.
Recent Accounting Pronouncements	Recent Accounting Pronouncements In May 2014, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU") 2014-09 related to revenue recognition. This ASU was initiated as a joint project between the FASB and the International Accounting Standards Board ("IASB") to clarify the principles for recognizing revenue and to develop a common revenue standard for GAAP and IFRS. This guidance will supersede the existing revenue recognition requirements in Accounting Standards Codification ("ASC") Topic 605, Revenue Recognition and is effective for annual reporting periods beginning after December 15, 2016. Early adoption is not permitted and the ASU can be applied (i) retrospectively to each prior period presented or (ii) retrospectively with the cumulative effect of initially adopting the ASU recognized at the date of initial application. The Company is evaluating the impact this ASU will have on its consolidated financial statements. There are no recently issued accounting pronouncements that were adopted during the quarter ended June 30, 2014.

- Definition

Disclosure of accounting policy for credit risk.

+ References+ Details

RESTRICTED CASH RESTRICTED CASH (Tables)

6 Months Ended

Jun. 30, 2014

Cash and Cash Equivalents [Abstract]

Schedule of Restricted Cash and Cash Equivalents

Restricted cash and cash equivalents consists of the following (in thousands):



	June 30, 2014		December 31, 2013
Cash in escrow for surety bonds	$	2,453	$	2,453
Cash in escrow for corporate purchasing card program	400		400
Cash in escrow for sale of LendingTree Loans ^(a)	16,105		18,117
Cash in escrow for earnout related to an acquisition ^(b)	—		1,956
Cash restricted for loan loss obligations	3,051		3,051
Other	35		40
Total restricted cash and cash equivalents	$	22,044	$	26,017

(a)


(b)	During the first quarter of 2014, the Company reached and executed a settlement with the disputing party on the earnout related to an acquisition, upon which $2.0 million of cash previously held in escrow was released, of which $1.0 million was paid out to the disputing party. This settlement had no impact on the results of operations for the three and six months ended June 30, 2014.

GOODWILL AND INTANGIBLE ASSETS (Tables)

6 Months Ended

Jun. 30, 2014

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of balance of goodwill and intangible assets, net

The balance of goodwill and intangible assets, net is as follows (in thousands):



	June 30, 2014			December 31, 2013
Goodwill	$	486,720		$	486,720
Accumulated impairment losses	(483,088		)	(483,088		)
Net goodwill	$	3,632		$	3,632

Intangible assets with indefinite lives	$	10,142		$	10,142
Intangible assets with definite lives, net	1,077			542
Total intangible assets, net	$	11,219		$	10,684

Schedule of intangible assets with definite lives

Intangible assets with definite lives relate to the following (in thousands):



	Cost		Accumulated Amortization			Net
Purchase agreements	$	236	$	(236	)	$	—
Technology	25,194		(25,194		)	—
Customer lists	7,222		(6,196		)	1,026
Other	1,567		(1,516		)	51
Balance at June 30, 2014	$	34,219	$	(33,142	)	$	1,077



	Cost		Accumulated Amortization			Net
Purchase agreements	$	236	$	(212	)	$	24
Technology	25,194		(25,194		)	—
Customer lists	6,682		(6,166		)	516
Other	1,517		(1,515		)	2
Balance at December 31, 2013	$	33,629	$	(33,087	)	$	542

Schedule of amortization of intangible assets with definite lives for the next five years



	Amortization Expense
Remainder of current year	$	66
Year ending December 31, 2015	101
Year ending December 31, 2016	101
Year ending December 31, 2017	92
Year ending December 31, 2018	84
Thereafter	633
Total intangible assets with definite lives, net	$	1,077

STOCK-BASED COMPENSATION (Tables)

6 Months Ended

Jun. 30, 2014

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Schedule of non-cash compensation expense related to equity awards

Non-cash compensation related to equity awards is included in the following line items in the accompanying consolidated statements of operations (in thousands):



	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2013		2014		2013
Cost of revenue	$	7	$	3	$	13	$	5
Selling and marketing expense	226		306		459		523
General and administrative expense	928		879		1,989		1,909
Product development	260		244		576		429
Restructuring and severance	—		—		36		—
Total non-cash compensation	$	1,421	$	1,432	$	3,073	$	2,866

Summary of changes in outstanding stock options

A summary of changes in outstanding stock options is as follows:



	Number of Options		Weighted Average Exercise Price		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value^(a)
			(per option)		(in years)	(in thousands)
Options outstanding at January 1, 2014	1,038,999		$	8.98
Granted ^(b)	104,910		27.95
Exercised	(4,534	)	12.12
Forfeited	—		—
Expired	(669	)	13.46
Options outstanding at June 30, 2014	1,138,706		10.72		4.76	$	21,171
Options exercisable at June 30, 2014	983,795		$	9.04	4.12	$	19,771

(a)

(b)

Schedule of stock option valuation assumptions

For purposes of determining stock-based compensation expense, the weighted average grant date fair value per share of the stock options was estimated using the Black-Scholes option pricing model, which requires the use of various key assumptions. The weighted average assumptions used are as follows:



Expected term ⁽¹⁾	5.75 - 6.0 years
Expected dividend ⁽²⁾	—
Expected volatility ⁽³⁾	53% - 54%
Risk-free interest rate ⁽⁴⁾	1.85% - 1.97%


(1)	The expected term of stock options granted was calculated using the 'Simplified Method', which utilizes the midpoint between the weighted average time of vesting and the end of the contractual term. This method was utilized for the stock options due to a lack of historical exercise behavior by the Company's employees.


(2)	For all stock options granted in 2014, no dividends are expected to be paid over the contractual term of the stock options, resulting in a zero expected dividend rate.

(3)


(4)	The risk-free interest rate is specific to the date of grant. The risk-free interest rate is based on U.S. Treasury yields for notes with comparable expected terms as the awards, in effect at the grant date.

Schedule of non-vested RSUs, RSUs with a market condition, restricted stock and restricted stock with a market condition as at the end of the period and changes during the reporting period

A summary of the changes in outstanding nonvested restricted stock units ("RSUs") and restricted stock is as follows:



	RSUs				RSUs Performance Condition
	Number of Units		Weighted Average Grant Date Fair Value		Number of Units	Weighted Average Grant Date Fair Value
			(per unit)			(per unit)
Nonvested at January 1, 2014	599,122		$	14.15	—	$	—
Granted	121,873		32.28		500	33.59
Vested	(209,507	)	13.36		—	—
Forfeited	(42,952	)	15.85		—	—
Nonvested at June 30, 2014	468,536		$	19.12	500	$	33.59



	Restricted Stock				Restricted Stock Market Condition
	Number of Shares		Weighted Average Grant Date Fair Value		Number of Shares		Weighted Average Grant Date Fair Value
			(per share)				(per share)
Nonvested at January 1, 2014	119,500		$	22.47	62,500		$	13.93
Granted	43,389		25.14		—		—
Vested	(20,833	)	17.49		(62,500	)	13.93
Forfeited	—		—		—		—
Nonvested at June 30, 2014	142,056		$	24.02	—		$	—

SEGMENT INFORMATION (Tables)

6 Months Ended

Jun. 30, 2014

Segment Reporting [Abstract]

Summary of information by segment and reconciliations to Adjusted EBITDA and income (loss) before income taxes

Summarized information by segment and reconciliations to Adjusted EBITDA and income (loss) before income taxes is as follows (in thousands):



	Three Months Ended June 30, 2014
	Lending		Other			Corporate			Total
Revenue	$	39,049	$	3,095		$	—		$	42,144
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	1,773		122			—			1,895
Selling and marketing expense	26,952		2,012			—			28,964
General and administrative expense	1,247		615			3,616			5,478
Product development	1,474		352			—			1,826
Depreciation	400		441			105			946
Amortization of intangibles	—		27			—			27
Restructuring and severance	14		—			9			23
Litigation settlements and contingencies	—		—			385			385
Total costs and expenses	31,860		3,569			4,115			39,544
Operating income (loss)	7,189		(474		)	(4,115		)	2,600
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		27			—			27
Depreciation	400		441			105			946
Restructuring and severance	14		—			9			23
Loss on disposal of assets	—		27			17			44
Non-cash compensation	528		169			724			1,421
Acquisition expense	—		74			—			74
Litigation settlements and contingencies	—		—			385			385
Adjusted EBITDA	$	8,131	$	264		$	(2,875	)	$	5,520

Operating income									$	2,600
Interest expense									—
Income before income taxes									$	2,600



	Three Months Ended June 30, 2013 ^(a)
	Lending		Other			Corporate			Total
Revenue	$	33,781	$	3,003		$	622		$	37,406
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	1,395		163			392			1,950
Selling and marketing expense	24,119		2,262			5			26,386
General and administrative expense	874		420			4,357			5,651
Product development	1,226		266			—			1,492
Depreciation	345		426			101			872
Amortization of intangibles	—		43			—			43
Restructuring and severance	23		125			—			148
Litigation settlements and contingencies	—		—			2,909			2,909
Total costs and expenses	27,982		3,705			7,764			39,451
Operating income (loss)	5,799		(702		)	(7,142		)	(2,045		)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		43			—			43
Depreciation	345		426			101			872
Restructuring and severance	23		125			—			148
Loss on disposal of assets	—		—			—			—
Non-cash compensation	483		95			854			1,432
Litigation settlements and contingencies	—		—			2,909			2,909
Adjusted EBITDA	$	6,650	$	(13	)	$	(3,278	)	$	3,359

Operating loss									$	(2,045	)
Interest expense									(7		)
Loss before income taxes									$	(2,052	)


(a)	For comparative purposes, revenue from and expenses related to personal loan offerings have been recast from the "Other" category to the lending segment.



	Six Months Ended June 30, 2014
	Lending		Other			Corporate			Total
Revenue	$	75,977	$	6,203		$	—		$	82,180
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	3,318		242			—			3,560
Selling and marketing expense	52,571		3,842			—			56,413
General and administrative expense	2,493		1,397			7,721			11,611
Product development	3,097		661			—			3,758
Depreciation	763		734			204			1,701
Amortization of intangibles	—		55			—			55
Restructuring and severance	162		15			48			225
Litigation settlements and contingencies	—		—			8,092			8,092
Total costs and expenses	62,404		6,946			16,065			85,415
Operating income (loss)	13,573		(743		)	(16,065		)	(3,235		)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		55			—			55
Depreciation	763		734			204			1,701
Restructuring and severance	162		15			48			225
Loss on disposal of assets	—		35			17			52
Non-cash compensation	1,127		434			1,476			3,037
Acquisition expense	—		74			—			74
Litigation settlements and contingencies	—		—			8,092			8,092
Adjusted EBITDA	$	15,625	$	604		$	(6,228	)	$	10,001

Operating loss									(3,235		)
Interest expense									—
Loss before income taxes									$	(3,235	)



	Six Months Ended June 30, 2013 ^(a)
	Lending		Other			Corporate			Total
Revenue	$	59,454	$	5,410		$	622		$	65,486
Costs and expenses:
Cost of revenue (exclusive of depreciation shown separately below)	2,550		337			419			3,306
Selling and marketing expense	39,279		4,357			5			43,641
General and administrative expense	1,852		930			9,425			12,207
Product development	2,176		521			—			2,697
Depreciation	719		843			195			1,757
Amortization of intangibles	—		86			—			86
Restructuring and severance	23		125			(2		)	146
Litigation settlements and contingencies	—		—			3,937			3,937
Total costs and expenses	46,599		7,199			13,979			67,777
Operating income (loss)	12,855		(1,789		)	(13,357		)	(2,291		)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	—		86			—			86
Depreciation	719		843			195			1,757
Restructuring and severance	23		125			(2		)	146
Loss on disposal of assets	—		—			24			24
Non-cash compensation	896		237			1,733			2,866
Discretionary cash bonus	—		—			920			920
Litigation settlements and contingencies	—		—			3,937			3,937
Adjusted EBITDA	$	14,493	$	(498	)	$	(6,550	)	$	7,445

Operating loss									(2,291		)
Interest expense									(14		)
Loss before income taxes									$	(2,305	)


(a)	For comparative purposes, revenue from and expenses related to personal loan offerings have been recast from the "Other" category to the lending segment.

- Definition

Tabular disclosure of the profit or loss and total assets for each reportable segment. An entity discloses certain information on each reportable segment if the amounts (a) are included in the measure of segment profit or loss reviewed by the chief operating decision maker or (b) are otherwise regularly provided to the chief operating decision maker, even if not included in that measure of segment profit or loss.

+ References+ Details

RESTRUCTURING EXPENSE (Tables)

6 Months Ended

Jun. 30, 2014

Restructuring and Related Activities [Abstract]

Schedule of restructuring expense and payments against liabilities

Restructuring expense and payments against liabilities are as follows (in thousands):



	Continuing Lease Obligations
Balance at December 31, 2013	$	462
Restructuring expense	8
Payments	(148		)
Balance at June 30, 2014	$	322

DISCONTINUED OPERATIONS (Tables)

6 Months Ended

Jun. 30, 2014

DISCONTINUED OPERATIONS

Schedule of revenue and net income (loss) of the discontinued operations

The revenue and net loss reported as discontinued operations in the accompanying consolidated statements of operations are as follows (in thousands):



	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2013			2014			2013
Revenue	$	2		$	(292	)	$	4		$	(1,486	)

Income (loss) before income taxes	$	(2,930	)	$	(891	)	$	(3,501	)	$	(3,382	)
Income tax benefit (expense)	(1		)	—			(4		)	(51		)
Gain from sale of discontinued operations, net of tax	—			10,003			—			10,101
Net income (loss)	$	(2,931	)	$	9,112		$	(3,505	)	$	6,668

Schedule of assets and liabilities of the discontinued operations

The assets and liabilities of discontinued operations in the accompanying consolidated balance sheets are as follows (in thousands):



	June 30, 2014			December 31, 2013
Current assets	$	715		$	521
Non-current assets	100			129
Current liabilities	(32,620		)	(32,004		)
Non-current liabilities	(261		)	(254		)
Net liabilities	$	(32,066	)	$	(31,608	)

Lending Tree Loans

DISCONTINUED OPERATIONS

Schedule of loans sold for the period and the aggregate loan losses

The following table represents the loans sold for the periods shown and the aggregate loan losses through June 30, 2014:



	June 30, 2014
Period of Loan Sales	Number of Loans Sold	Original Principal Balance		Number of Loans with Losses	Original Principal Balance of Loans with Losses		Amount of Aggregate Losses
		(in billions)			(in millions)		(in millions)
2014	—	$	—	—	$	—	$	—
2013	—	—		—	—		—
2012	9,200	1.9		—	—		—
2011	12,500	2.7		1	0.3		0.1
2010	12,400	2.8		4	1.1		0.1
2009	12,800	2.8		5	1.2		0.2
2008	11,000	2.2		33	6.9		2.2
2007	36,300	6.1		160	22.1		8.2
2006	55,000	7.9		207	24.5		13.4
2005 and prior years	86,700	13.0		89	12.3		5.0
Total	235,900	$	39.4	499	$	68.4	$	29.2

Schedule of activity related to loss reserves on previously sold loans



	Three Months Ended June 30,					Six Months Ended June 30,
	2014			2013		2014			2013
Loan loss reserve, beginning of period	$	28,543		$	28,379	$	28,543		$	27,182
Provisions	—			296		—			1,493
Charge-offs to reserves	(153		)	—		(153		)	—
Loan loss reserve, end of period	$	28,390		$	28,675	$	28,390		$	28,675

ORGANIZATION (Details - Disc Ops) (USD $)	3 Months Ended		6 Months Ended					3 Months Ended	6 Months Ended
ORGANIZATION (Details - Disc Ops) (USD $)	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014 Cash in escrow for sale of LendingTree Loans	Dec. 31, 2013 Cash in escrow for sale of LendingTree Loans	Jun. 30, 2013 Lending Tree Loans Discover Bank	Jun. 30, 2014 Lending Tree Loans Discover Bank	Feb. 07, 2012 Lending Tree Loans Discover Bank
Organization - Discontinued Operations
Total proceeds from the sale										$ 55,900,000
Amount received from sale of assets prior to closing										8,000,000
Amount received from sale of assets on the closing										37,900,000
Amount received from the sale on the first anniversary of the closing										10,000,000
Gain from sale of discontinued operations, net of tax	0	10,003,000	0	10,101,000				10,000,000
Restricted cash and cash equivalents	$ 22,044,000		$ 22,044,000		$ 26,017,000	$ 16,105,000	$ 18,117,000		$ 19,200,000
Period for which marketing related services are to be provided									17 months

- Definition

The carrying amounts of cash and cash equivalent items which are restricted as to withdrawal or usage. Restrictions may include legally restricted deposits held as compensating balances against short-term borrowing arrangements, contracts entered into with others, or entity statements of intention with regard to particular deposits; however, time deposits and short-term certificates of deposit are not generally included in legally restricted deposits. Excludes compensating balance arrangements that are not agreements which legally restrict the use of cash amounts shown on the balance sheet. For a classified balance sheet represents the current portion only (the noncurrent portion has a separate concept); there is a separate and distinct element for unclassified presentations.

+ References+ Details

RESTRICTED CASH RESTRICTED CASH (Details - Balance Sheet) (USD $)	6 Months Ended							3 Months Ended		3 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	Jun. 30, 2014 Escrow Deposit for Surety Bonds	Dec. 31, 2013 Escrow Deposit for Surety Bonds	Jun. 30, 2014 Escrow Deposit for Corporate Purchasing Card Program	Dec. 31, 2013 Escrow Deposit for Corporate Purchasing Card Program	Jun. 30, 2014 Cash in escrow for sale of LendingTree Loans	Dec. 31, 2013 Cash in escrow for sale of LendingTree Loans	Mar. 31, 2014 Escrow Deposit for Earnout Related to Acquisition	Jun. 30, 2014 Escrow Deposit for Earnout Related to Acquisition	Dec. 31, 2013 Escrow Deposit for Earnout Related to Acquisition	Jun. 30, 2014 Escrow Deposit for Loan Loss Obligations	Dec. 31, 2013 Escrow Deposit for Loan Loss Obligations	Jun. 30, 2014 Other Restricted Cash and Cash Equivalents	Dec. 31, 2013 Other Restricted Cash and Cash Equivalents
Restricted Cash and Cash Equivalents
Restricted cash and cash equivalents	$ 22,044,000		$ 26,017,000	$ 2,453,000	$ 2,453,000	$ 400,000	$ 400,000	$ 16,105,000	$ 18,117,000		$ 0	$ 1,956,000	$ 3,051,000	$ 3,051,000	$ 35,000	$ 40,000
Decrease (increase) in Restricted Cash	3,973,000	(652,000)						2,000,000		2,000,000
Payment made from restricted cash on loss contingency										$ 1,000,000

- Definition

+ References+ Details

GOODWILL AND INTANGIBLE ASSETS (Details - Balance Sheet) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]
Goodwill	$ 486,720	$ 486,720
Accumulated impairment losses	(483,088)	(483,088)
Net goodwill	3,632	3,632
Intangible assets with indefinite lives	10,142	10,142
Intangible assets with definite lives, net	1,077	542
Total intangible assets, net	$ 11,219	$ 10,684

GOODWILL AND INTANGIBLE ASSETS (Details - Definite Lived Intangibles) (USD $)	0 Months Ended
	Jun. 30, 2014	Dec. 31, 2013
Intangible assets with definite lives
Initial purchase price of intangible assets	$ 600,000
Contingent purchase price of intangible assets, minimum	0
Contingent purchase price of intangible assets, maximum	800,000
Intangible assets acquired	600,000
Cost	34,219,000	33,629,000
Accumulated amortization	(33,142,000)	(33,087,000)
Total intangible assets with definite lives, net	1,077,000	542,000
Purchase agreements
Intangible assets with definite lives
Cost	236,000	236,000
Accumulated amortization	(236,000)	(212,000)
Total intangible assets with definite lives, net	0	24,000
Technology
Intangible assets with definite lives
Cost	25,194,000	25,194,000
Accumulated amortization	(25,194,000)	(25,194,000)
Total intangible assets with definite lives, net	0	0
Customer lists
Intangible assets with definite lives
Cost	7,222,000	6,682,000
Accumulated amortization	(6,196,000)	(6,166,000)
Total intangible assets with definite lives, net	1,026,000	516,000
Other
Intangible assets with definite lives
Cost	1,567,000	1,517,000
Accumulated amortization	(1,516,000)	(1,515,000)
Total intangible assets with definite lives, net	$ 51,000	$ 2,000

GOODWILL AND INTANGIBLE ASSETS (Details - 5yr Definite Lived Intangibles Amortization) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Amortization of intangible assets with definite lives computed on a straight-line basis
Remainder of current year	$ 66
2015	101
2016	101
2017	92
2018	84
Thereafter	633
Total intangible assets with definite lives, net	$ 1,077	$ 542

ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (Details - Balance Sheet) (USD $) In Thousands, unless otherwise specified	Jun. 30, 2014	Dec. 31, 2013
Accrued expenses and other current liabilities
Accrued litigation liability	$ 500	$ 500
Accrued advertising expense	11,501	8,837
Accrued compensation and benefits	2,614	3,378
Accrued professional fees	823	1,806
Accrued restructuring costs	295	284
Customer deposits and escrows	4,424	4,279
Deferred rent	271	245
Other	3,077	3,985
Total accrued expenses and other current liabilities	$ 23,505	$ 23,314

SHAREHOLDERS' EQUITY (Details) (USD $)	0 Months Ended		3 Months Ended		6 Months Ended
SHAREHOLDERS' EQUITY (Details) (USD $)	May 07, 2014	Jan. 11, 2010	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Calculation of weighted average common shares
Basic			11,214,000	11,133,000	11,178,000	11,050,000
Effect of dilutive securities
Effect of stock options (in shares)			461,000	0	0	0
Effect of dilutive share awards (in shares)			174,000	0	0	0
Weighted average common shares, diluted			11,849,000	11,133,000	11,178,000	11,050,000
Anti-dilutive securities excluded from calculation of diluted earnings per share (in shares)			100,000	600,000	700,000	700,000
Common stock repurchases
Value of common stock authorized to be repurchased	$ 10,000,000	$ 10,000,000
Purchase of treasury stock (in shares)			59,200		59,200
Remaining authorized repurchase amount					$ 8,600,000

STOCK-BASED COMPENSATION (Details - P&L Impact) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Non-cash compensation expense related to equity awards
Total non-cash compensation	$ 1,421	$ 1,432	$ 3,073	$ 2,866
Cost of revenue
Non-cash compensation expense related to equity awards
Total non-cash compensation	7	3	13	5
Selling and marketing expense
Non-cash compensation expense related to equity awards
Total non-cash compensation	226	306	459	523
General and administrative expense
Non-cash compensation expense related to equity awards
Total non-cash compensation	928	879	1,989	1,909
Product development
Non-cash compensation expense related to equity awards
Total non-cash compensation	260	244	576	429
Restructuring and severance
Non-cash compensation expense related to equity awards
Total non-cash compensation	$ 0	$ 0	$ 36	$ 0

STOCK-BASED COMPENSATION (Details - Stock Options Rollforward) (USD $)		6 Months Ended					0 Months Ended
	Jun. 30, 2014	Jun. 30, 2014 Stock options	Jun. 30, 2014 Director stock options	Jun. 30, 2014 Minimum Stock options	Jun. 30, 2014 Maximum Stock options	Aug. 06, 2014 Subsequent Event [Member]	Aug. 06, 2014 Subsequent Event [Member] Stock options	Aug. 06, 2014 Subsequent Event [Member] Tranche1 Stock options	Aug. 06, 2014 Subsequent Event [Member] Tranche2 Stock options
STOCK-BASED COMPENSATION
Share Price	$ 29.14					$ 26.59
Award vesting rights percentage								25.00%	75.00%
Stock options, Shares
Outstanding at the beginning of the period (in shares)		1,038,999
Granted (in shares)		104,910					1,000,000
Exercised (in shares)		(4,534)
Forfeited (in shares)		0
Expired (in shares)		(669)
Outstanding at the end of the period (in shares)		1,138,706
Options exercisable at the end of the period (in shares)		983,795
Stock options, Weighted Average Exercise Price
Outstanding at the beginning of the period (in dollars per share)		$ 8.98
Granted (in dollars per share)		$ 27.95
Exercised (in dollars per share)		$ 12.12
Forfeited (in dollars per share)		$ 0.00
Expired (in dollars per share)		$ 13.46
Outstanding at the end of the period (in dollars per share)		$ 10.72
Options exercisable at the end of the period (in dollars per share)		$ 9.04
Stock options, Weighted Average Remaining Contractual Term
Outstanding at the end of the period		4 years 9 months 5 days
Options exercisable at the end of the period		4 years 1 month 15 days
Stock options, Aggregate Intrinsic Value
Outstanding at the end of the period		$ 21,171,000
Options exercisable at the end of the period		19,771,000
Stock options, Grant Date Fair Value Valuation
Grant date fair value			$ 13.08	$ 12.29	$ 17.13
Expected term				P5Y9M	P6Y
Vesting period		3 years	2 years				2 years 6 months		3 years 6 months
Expected dividends		$ 0
Expected dividend rate		0.00%
Expected volatility, minimum		53.00%
Expected volatility, maximum		54.00%
Risk-free interest rate, minimum		1.85%
Risk-free interest rate, maximum		1.97%

STOCK-BASED COMPENSATION (Details - RSA & RSU Rollforwards) (USD $)	6 Months Ended
	Jun. 30, 2014
RSUs
Nonvested RSUs, RSUs with a Market Condition, Restricted Stock and Restricted Stock with a Market Condition, Number of Shares
Nonvested at the beginning of the period (in shares)	599,122
Granted (in shares)	121,873
Vested (in shares)	(209,507)
Forfeited (in shares)	(42,952)
Nonvested at the end of the period (in shares)	468,536
Nonvested RSUs, RSUs with a Market Condition, Restricted Stock and Restricted Stock with a Market Condition, Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 14.15
Granted (in dollars per share)	$ 32.28
Vested (in dollars per share)	$ 13.36
Forfeited (in dollars per share)	$ 15.85
Nonvested at the end of the period (in dollars per share)	$ 19.12
RSUs with a market condition
Nonvested RSUs, RSUs with a Market Condition, Restricted Stock and Restricted Stock with a Market Condition, Number of Shares
Nonvested at the beginning of the period (in shares)	0
Granted (in shares)	500
Nonvested at the end of the period (in shares)	500
Nonvested RSUs, RSUs with a Market Condition, Restricted Stock and Restricted Stock with a Market Condition, Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 0.00
Granted (in dollars per share)	$ 33.59
Nonvested at the end of the period (in dollars per share)	$ 33.59
Restricted stock
Nonvested RSUs, RSUs with a Market Condition, Restricted Stock and Restricted Stock with a Market Condition, Number of Shares
Nonvested at the beginning of the period (in shares)	119,500
Granted (in shares)	43,389
Vested (in shares)	(20,833)
Nonvested at the end of the period (in shares)	142,056
Nonvested RSUs, RSUs with a Market Condition, Restricted Stock and Restricted Stock with a Market Condition, Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 22.47
Granted (in dollars per share)	$ 25.14
Vested (in dollars per share)	$ 17.49
Nonvested at the end of the period (in dollars per share)	$ 24.02
Restricted stock with a market condition
Nonvested RSUs, RSUs with a Market Condition, Restricted Stock and Restricted Stock with a Market Condition, Number of Shares
Nonvested at the beginning of the period (in shares)	62,500
Vested (in shares)	(62,500)
Nonvested at the end of the period (in shares)	0
Nonvested RSUs, RSUs with a Market Condition, Restricted Stock and Restricted Stock with a Market Condition, Weighted Average Grant Date Fair Value
Nonvested at the beginning of the period (in dollars per share)	$ 13.93
Vested (in dollars per share)	$ 13.93
Nonvested at the end of the period (in dollars per share)	$ 0.00

INCOME TAXES (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013
Income Tax Disclosure [Abstract]
Income tax benefit (expense)	$ 83	$ 19	$ 84	$ (1)
Effective tax rates (as a percent)	3.20%	0.90%	2.60%	0.00%

CONTINGENCIES (Details) (USD $)			0 Months Ended			0 Months Ended		1 Months Ended	12 Months Ended		0 Months Ended
CONTINGENCIES (Details) (USD $)	Jun. 30, 2014	Dec. 31, 2013	May 25, 2007 Violation of various laws and breach of contracts and covenants complaint	Oct. 14, 2011 Unfavorable regulatory action regulator	Jun. 30, 2014 Unfavorable regulatory action	Aug. 07, 2014 Unfavorable regulatory action Subsequent Event [Member] regulator	Jun. 30, 2014 Lijkel Dijkstra v. Harry Carenbauer, Home Loan Center, Inc	Jul. 31, 2014 Lijkel Dijkstra v. Harry Carenbauer, Home Loan Center, Inc Subsequent Event [Member]	Dec. 31, 2013 Boschma v. Home Loan Center, Inc.	Jun. 30, 2014 Boschma v. Home Loan Center, Inc.	Sep. 08, 2010 Lending Tree v. Zillow, Inc. patent	Jun. 30, 2014 Lending Tree v. Zillow, Inc.	Mar. 12, 2014 Lending Tree v. Zillow, Inc. patent
Contingencies
Accrued litigation liability	$ 500,000	$ 500,000
Litigation settlement, gross								2,800,000	450,000
Range of possible loss, minimum					500,000							0
Range of possible loss, maximum					6,500,000							7,300,000
Amount of reserve for contingencies					$ 500,000		$ 2,800,000			$ 435,000
Number of patents alleged infringement upon, maximum											2
Number of patents found not infringed upon													2
Number of total complaints filed			8
Number of complaints dismissed by federal and state courts			7
Number of Joining Regulators				34		0

SEGMENT INFORMATION (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014 segment	Jun. 30, 2013
SEGMENT INFORMATION
Number of reportable operating segments			1
Revenue	$ 42,144	$ 37,406	$ 82,180	$ 65,486
Cost of revenue (exclusive of depreciation shown separately below)	1,895	1,950	3,560	3,306
Selling and marketing expense	28,964	26,386	56,413	43,641
General and administrative expense	5,478	5,651	11,611	12,207
Product development	1,826	1,492	3,758	2,697
Depreciation	946	872	1,701	1,757
Amortization of intangibles	27	43	55	86
Restructuring and severance	23	148	225	146
Litigation settlements and contingencies	385	2,909	8,092	3,937
Total costs and expenses	39,544	39,451	85,415	67,777
Operating income (loss)	2,600	(2,045)	(3,235)	(2,291)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	27	43	55	86
Depreciation	946	872	1,701	1,757
Restructuring and severance	23	148	225	146
Loss (gain) on disposal of assets	44	0	52	24
Non-cash compensation	1,421	1,432	3,037	2,866
Acquisition expense	74		74
Discretionary cash bonus				920
Litigation settlements and contingencies	385	2,909	8,092	3,937
Adjusted EBITDA	5,520	3,359	10,001	7,445
Adjustments to reconcile to Income before taxes:
Operating income (loss)	2,600	(2,045)	(3,235)	(2,291)
Interest expense	0	(7)	0	(14)
Income (loss) before income taxes	2,600	(2,052)	(3,235)	(2,305)
Lending
SEGMENT INFORMATION
Revenue	39,049	33,781	75,977	59,454
Cost of revenue (exclusive of depreciation shown separately below)	1,773	1,395	3,318	2,550
Selling and marketing expense	26,952	24,119	52,571	39,279
General and administrative expense	1,247	874	2,493	1,852
Product development	1,474	1,226	3,097	2,176
Depreciation	400	345	763	719
Amortization of intangibles	0	0	0	0
Restructuring and severance	14	23	162	23
Litigation settlements and contingencies	0	0	0	0
Total costs and expenses	31,860	27,982	62,404	46,599
Operating income (loss)	7,189	5,799	13,573	12,855
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	0	0	0	0
Depreciation	400	345	763	719
Restructuring and severance	14	23	162	23
Loss (gain) on disposal of assets	0	0	0	0
Non-cash compensation	528	483	1,127	896
Acquisition expense	0		0
Discretionary cash bonus				0
Litigation settlements and contingencies	0	0	0	0
Adjusted EBITDA	8,131	6,650	15,625	14,493
Adjustments to reconcile to Income before taxes:
Operating income (loss)	7,189	5,799	13,573	12,855
Other
SEGMENT INFORMATION
Revenue	3,095	3,003	6,203	5,410
Cost of revenue (exclusive of depreciation shown separately below)	122	163	242	337
Selling and marketing expense	2,012	2,262	3,842	4,357
General and administrative expense	615	420	1,397	930
Product development	352	266	661	521
Depreciation	441	426	734	843
Amortization of intangibles	27	43	55	86
Restructuring and severance	0	125	15	125
Litigation settlements and contingencies	0	0	0	0
Total costs and expenses	3,569	3,705	6,946	7,199
Operating income (loss)	(474)	(702)	(743)	(1,789)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	27	43	55	86
Depreciation	441	426	734	843
Restructuring and severance	0	125	15	125
Loss (gain) on disposal of assets	27	0	35	0
Non-cash compensation	169	95	434	237
Acquisition expense	74		74
Discretionary cash bonus				0
Litigation settlements and contingencies	0	0	0	0
Adjusted EBITDA	264	(13)	604	(498)
Adjustments to reconcile to Income before taxes:
Operating income (loss)	(474)	(702)	(743)	(1,789)
Corporate
SEGMENT INFORMATION
Revenue	0	622	0	622
Cost of revenue (exclusive of depreciation shown separately below)	0	392	0	419
Selling and marketing expense	0	5	0	5
General and administrative expense	3,616	4,357	7,721	9,425
Product development	0	0	0	0
Depreciation	105	101	204	195
Amortization of intangibles	0	0	0	0
Restructuring and severance	9	0	48	(2)
Litigation settlements and contingencies	385	2,909	8,092	3,937
Total costs and expenses	4,115	7,764	16,065	13,979
Operating income (loss)	(4,115)	(7,142)	(16,065)	(13,357)
Adjustments to reconcile to Adjusted EBITDA:
Amortization of intangibles	0	0	0	0
Depreciation	105	101	204	195
Restructuring and severance	9	0	48	(2)
Loss (gain) on disposal of assets	17	0	17	24
Non-cash compensation	724	854	1,476	1,733
Acquisition expense	0		0
Discretionary cash bonus				920
Litigation settlements and contingencies	385	2,909	8,092	3,937
Adjusted EBITDA	(2,875)	(3,278)	(6,228)	(6,550)
Adjustments to reconcile to Income before taxes:
Operating income (loss)	$ (4,115)	$ (7,142)	$ (16,065)	$ (13,357)

RESTRUCTURING EXPENSE (Details) (USD $) In Thousands, unless otherwise specified			6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Continuing Lease Obligations
Changes in restructuring expenses
December 31, 2013			$ 462
Restructuring expense			8
Payments			(148)
June 30, 2014			322
Restructuring liabilities
Restructuring liabilities included in accrued expense and other current liabilities	$ 295	$ 284

- Definition

Amount of expenses associated with exit or disposal activities pursuant to an authorized plan. Includes, but is not limited to, one-time termination benefits, termination of an operating lease or other contract, consolidating or closing facilities, and relocating employees, and termination benefits associated with an ongoing benefit arrangement. Excludes expenses associated with special or contractual termination benefits, a discontinued operation or an asset retirement obligation.

+ References+ Details

DISCONTINUED OPERATIONS (Details-Disposal Groups) (USD $)	3 Months Ended		6 Months Ended			1 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Jun. 30, 2013	Jun. 30, 2014	Jun. 30, 2013	Dec. 31, 2013	May 31, 2013 Discover	Jun. 30, 2014 Lending Tree Loans	Jun. 30, 2013 Lending Tree Loans	Jun. 30, 2014 Lending Tree Loans	Jun. 30, 2013 Lending Tree Loans	Dec. 31, 2013 Lending Tree Loans
DISCONTINUED OPERATIONS
Settlement value of indemnification claim and other miscellaneous items						$ 1,300,000
Revenue and net income (loss) of discontinued operations
Revenue							2,000	(292,000)	4,000	(1,486,000)
Income (loss) before income taxes							(2,930,000)	(891,000)	(3,501,000)	(3,382,000)
Income tax benefit (expense)							(1,000)	0	(4,000)	(51,000)
Gain from sale of discontinued operations, net of tax							0	10,003,000	0	10,101,000
Income (loss) from discontinued operations	(2,931,000)	9,112,000	(3,505,000)	6,668,000			(2,931,000)	9,112,000	(3,505,000)	6,668,000
Assets and liabilities of facilities reported as discontinued operations
Current assets	715,000		715,000		521,000		715,000		715,000		521,000
Non-current assets	100,000		100,000		129,000		100,000		100,000		129,000
Current liabilities	(32,620,000)		(32,620,000)		(32,004,000)		(32,620,000)		(32,620,000)		(32,004,000)
Non-current liabilities	(261,000)		(261,000)		(254,000)		(261,000)		(261,000)		(254,000)
Net liabilities							$ (32,066,000)		$ (32,066,000)		$ (31,608,000)

DISCONTINUED OPERATIONS (Details - Loan Loss Reserve) (USD $)			6 Months Ended	3 Months Ended		6 Months Ended
	Jun. 30, 2014	Dec. 31, 2013	Jun. 30, 2014 Lending Tree Loans Discontinued operations investor	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations loan	Jun. 30, 2013 Loan loss obligations Lending Tree Loans Discontinued operations	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations loan	Jun. 30, 2013 Loan loss obligations Lending Tree Loans Discontinued operations	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations 2014 loan	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations 2013 loan	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations 2012 loan	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations 2011 loan	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations 2010 loan	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations 2009 loan	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations 2008 loan	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations 2007 loan	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations 2006 loan	Jun. 30, 2014 Loan loss obligations Lending Tree Loans Discontinued operations 2005 and prior years loan	Jun. 30, 2014 Discover Bank Lending Tree Loans
Loan Loss Obligations
Restricted cash and cash equivalents	$ 22,044,000	$ 26,017,000																$ 19,200,000
Loan loss reserve, at carrying value				28,390,000	28,675,000	28,390,000	28,675,000
Estimated range of remaining possible losses due to loan losses, minimum				15,900,000		15,900,000
Estimated range of remaining possible losses due to loan losses, maximum				28,800,000		28,800,000
Number of investors to whom loans are guaranteed			2
Number of loans sold				235,900		235,900		0	0	9,200	12,500	12,400	12,800	11,000	36,300	55,000	86,700
Original principal balance of loans sold				39,400,000,000		39,400,000,000		0	0	1,900,000,000	2,700,000,000	2,800,000,000	2,800,000,000	2,200,000,000	6,100,000,000	7,900,000,000	13,000,000,000
Number of loans sold with losses				499		499		0	0	0	1	4	5	33	160	207	89
Original principal balance of loans sold with losses				68,400,000		68,400,000		0	0	0	300,000	1,100,000	1,200,000	6,900,000	22,100,000	24,500,000	12,300,000
Amount of aggregate losses				29,200,000		29,200,000		0	0	0	100,000	100,000	200,000	2,200,000	8,200,000	13,400,000	5,000,000
Activity related to loss reserves on previously sold loans
Loan loss reserve, beginning of period				28,543,000	28,379,000	28,543,000	27,182,000
Provisions				0	296,000	0	1,493,000
Charge-offs to reserves				(153,000)	0	(153,000)	0
Loan loss reserve, end of period				$ 28,390,000	$ 28,675,000	$ 28,390,000	$ 28,675,000