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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, D.C. 20549
 
 FORM 10-K
 (Mark One)
 þ
    
    ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For Fiscal Year Ended December 31, 2008
 or
 o
    
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
 For the Transition Period from  to.
 Commission File Number 001-16249
 
 INTERNET CAPITAL GROUP, INC.
 (Exact Name of Registrant as Specified in Its Charter)
 Delaware
    
    23-2996071(State of Other Jurisdiction of
    
    (I.R.S. EmployerIncorporation or Organization)
    
    Identification Number)690 Lee Road, Suite 310, Wayne, PA
    
    19087(Address of Principal Executive Offices)
    
    (Zip Code)
 (610) 727-6900
(Registrants telephone number, including area code)
 Securities registered pursuant to Section 12(b) of the Act:
    
    The NASDAQ Stock Market LLCCommon stock, par value $.001 per share
    
    (The NASDAQ Global Market)(Title of Class)
    
    (Name of Each Exchange on Which Registered)
  Yes
o No þ
 o þ
 þ o
 þ
  Large accelerated filer o
    
    Accelerated filer þ
    
    Non-accelerated filer o
    

Smaller
reporting company o
 o þ
   DOCUMENTS INCORPORATED BY REFERENCE




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##### 



INTERNET CAPITAL GROUP, INC.
FORM 10-K
DECEMBER 31, 2008
INDEX
 PageNumberPART I
    
    
    4ITEM 1. Business
    
    
    4ITEM 1A. Risk Factors
    
    
    9ITEM 1B. Unresolved Staff Comments
    
    
    16ITEM 2. Properties
    
    
    16ITEM 3. Legal Proceedings
    
    
    17ITEM 4. Submission of Matters to a Vote of Security Holders
    
    
    17PART II
    
    
    18ITEM 5. Market for Registrants Common Equity, Related Stockholder
Matters and Issuer Purchases of Equity Securities
    
    
    18ITEM 6. Selected Financial Data
    
    
    20ITEM 7. Managements Discussion and Analysis of Financial Condition
and Results of Operations
    
    
    21ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
    
    
    32ITEM 8. Financial Statements and Supplementary Data
    
    
    33ITEM 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure
    
    
    71ITEM 9A. Controls and Procedures
    
    
    72ITEM 9B. Other Information
    
    
    74PART III
    
    
    75ITEM
10. Directors, Executive Officers and Corporate Governance
    
    
    75ITEM 11. Executive Compensation
    
    
    75ITEM 12. Security Ownership of Certain Beneficial Owners and
Management and Related Stockholder Matters
    
    
    75ITEM
13. Certain Relationships and Related Transactions, and Director
Independence
    
    
    75ITEM 14. Principal Accountant Fees and Services
    
    
    75PART IV
    
    
    76ITEM 15. Exhibits and Financial Statement Schedules
    
    
    76SIGNATURES
    
    
    83Exhibit 21.1Exhibit 23.1Exhibit 23.2Exhibit 31.1Exhibit 31.2Exhibit 32.1Exhibit 32.2Exhibit 99.1
   2




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Forward-Looking Statements
   
    
    economic conditions generally;
 
    
    capital spending by enterprises and customers;
 
    
    our partner companies collective ability to compete successfully against their
respective competitors;
 
    
    rapid technological developments in the respective markets in which our partner
companies operate and our partner companies collective ability to respond to such changes
in a timely and effective manner;
 
    
    our ability to deploy capital effectively and on acceptable terms;
 
    
    our ability to maximize value in connection with divestitures;
 
    
    our ability to retain key personnel; and
 
    
    our ability to effectively manage existing capital resources.
   3




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PART I
  
 ITEM 1. Business
 Overview
     4




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
    
    are delivered through a Web-enabled software platform (often characterized as a
software as an on-demand software, software as a service (SaaS), or application service provider (ASP)
model);
 
    
    automate complex workflow
processes, with focus on the white space between companies;
 
    
    are comprehensive, meaning that they include software, content data and transaction
capabilities (with content being a long-term differentiator);
 
    
    have the ability to generate recurring revenue streams and allow their providers to
retain fixed costs;
 
    
    are delivered to clients through long-term relationships; and
 
    
    have the potential to evolve into ecosystems.
   Our Partner Companies
  Channel Intelligence, Inc. (Channel Intelligence)
  Freeborders, Inc. (Freeborders)
   5




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ICG Commerce Holdings, Inc. (ICG Commerce)
  Investor Force Holdings, Inc. (Investor Force)
  Metastorm Inc. (Metastorm)
  StarCite, Inc. (StarCite)
  Vcommerce Corporation (Vcommerce)
  WhiteFence, Inc. (WhiteFence)
   6




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Anthem Ventures Fund, L.P. (Anthem)
  Captive Capital Corporation (Captive Capital)
  ClickEquations, Inc. (f/k/a Commerce360, Inc.) (ClickEquations)
  GoIndustry DoveBid plc (GoIndustry) (LSE.AIM:GOI)
  Jamcracker, Inc. (Jamcracker)
  Tibersoft Corporation (Tibersoft)
  Concentration of Customer Base and Credit Risk
   7




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Competition Facing Our Partner Companies
    Employees
  Financial Information About Geographic Areas
  Availability of Reports and Other Information
     8




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ITEM 1A. Risk Factors
  Numerous external forces, including the recent financial crisis, could negatively affect our and
our partner companies respective businesses, results of operations and financial condition.
  If we are not able to deploy capital effectively and on acceptable terms, we may not be able to
execute our business strategy.
  If our partner companies are unable to attract new customers or retain customers, including certain
significant customers, our and our partner companies respective businesses, results of operations
and financial conditions could be negatively affected.
   9




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The inability of our partner companies customers to pay their obligations to them in a timely
manner, or at all, could have an adverse effect on our partner companies.
  Our partner companies may not be able to compete successfully.
   We may compete with some of our partner companies, and our partner companies may compete with each
other, which could deter companies from partnering with us and may limit future business
opportunities.
  Our operations and growth and that of our partner companies could be impaired by limitations on our
and/or their ability to raise capital or borrow money on favorable terms.
  Adverse changes in economic conditions and reduced information technology spending may adversely impact our business. Our and our partner companies respective businesses depend on the overall demand for information technology, and in
particular for Internet software and services that improve the productivity of our customers businesses. In addition,
the acquisition of our partner companies Internet software and services is often discretionary and may require
customers to make significant initial contributions of capital and other resources. During the current global
financial crisis, business spending on technology infrastructure decreased dramatically. Continued weak economic
conditions, or a reduction in information technology spending even if general economic conditions improve, could
adversely impact our business and the businesses of our partner companies in a number of ways that negatively impact
our operating results and financial condition.  10




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Acquisitions by our partner companies could result in operating difficulties, dilution and other
harmful consequences.
  Our inability to maintain or be able to increase our ownership stakes in high growth partner
companies could negatively impact our ability to execute our strategy.
  If we do not participate in follow-on financings at our partner companies our stakes in such
companies will be diluted, which could materially reduce the value of such stakes.
   11




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We
may have to buy, sell or retain assets when we would otherwise choose
not to buy, sell or retain in order to avoid
registration under the Investment Company Act, which would impact our business strategy.
  Our partner companies could make financial or other business decisions that are not in our best
interests or that we do not agree with, which could impair the value of our partner company
interests.
  We may not be able to extract cash from those partner companies that achieve profitability and may
need to continue to rely on existing cash, liquidity events and additional capital raises to fund
our operations.
  If public capital markets are not favorable for initial public offerings, we may not be able to
capture stockholder value.
   12




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We may be unable to obtain maximum value in connection with the divesture of partner company and
marketable security interests.
  Our accounting estimates with respect to the ultimate recoverability of our basis in our partner
companies could change materially in the near term.
  Our stock price has been volatile in the past and may continue to be volatile in the future.
   
    
    general economic conditions, such as a recession or interest rate or currency rate
fluctuations;
 
    
    the reluctance of enterprises to increase spending on new products or services;
 
    
    actual or anticipated variations in our quarterly results and those of our partner
companies;
 
    
    changes in the market valuations of our partner companies and other similar
companies;
 
    
    conditions or trends related to Internet software and services companies;
 
    
    changes in our financial estimates and those of our partner companies by securities
analysts;
 
    
    new products or services offered by us, our partner companies and their
competitors;
 
    
    announcements by our partner companies and their competitors of technological
innovations;
 
    
    announcements by us, our partner companies or our competitors of significant
acquisitions, strategic partnerships or joint ventures;
 
    
    additional sales or repurchases of our securities; and
 
    
    additions to or departures of our key personnel or the key personnel of our partner
companies.
   13




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Fluctuations in our quarterly results may adversely affect our stock price.
  
    
    the acquisition of interests in partner companies;
 
    
    the operating results of our partner companies;
 
    
    sales of our ownership interests in our partner companies, which could cause us to
recognize gains or losses under applicable accounting rules;
 
    
    significant fluctuations in the financial results of Internet software and services
companies generally;
 
    
    changes in estimated quarterly equity losses or income;
 
    
    changes in our methods of accounting for our partner company interests, which may
result from changes in our ownership percentages of our partner companies;
 
    
    the pace of development or a decline in growth of the Internet software and
services markets; and
 
    
    competition for the goods and services offered by our partner companies.
  Fluctuations in the price of the common stock of our publicly-traded holdings may affect the price
of our Common Stock.
  We have had a general history of losses and expect continued losses in the foreseeable future.
  Certain of our partner companies have a limited operating history and may never be profitable.
   14




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The loss of our or our partner companies executive officers or other key personnel or our or our
partner companies inability to attract additional key personnel could disrupt our business and
operations.
  Our partner companies success depends on the integrity of their systems and infrastructure.
Interruptions in their information systems may adversely affect their businesses.
  We and our partner companies may be subject to litigation proceedings or government regulation that
could harm our respective businesses.
   Some of our partner companies may be unable to protect their proprietary rights and may be subject
to claims that they infringe on the proprietary rights of others.
   15




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We have implemented certain anti-takeover provisions that could make it more difficult for a third
party to acquire us.
  
 ITEM 1B. Unresolved Staff Comments
  
 ITEM 2. Properties
  Corporate Offices
  Partner Company Properties
   16




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ITEM 3. Legal Proceedings
  
 ITEM 4. Submission of Matters to a Vote of Security Holders
   17




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PART II
 
 ITEM 5. Market For Registrants Common Equity, Related Stockholder Matters and Issuer Purchases of
Equity Securities
 Market Information.
 2008
    
    
    2007March 31
    
    
    June 30
    
    
    Sept. 30
    
    
    Dec. 31
    
    
    March 31
    
    
    June 30
    
    
    Sept. 30
    
    
    Dec. 31(1st)
    
    
    (2nd)
    
    
    (3rd)
    
    
    (4th)
    
    
    (1st)
    
    
    (2nd)
    
    
    (3rd)
    
    
    (4th)High
    
    $
    11.82
    
    
    $
    11.35
    
    
    $
    9.84
    
    
    $
    8.00
    
    
    $
    12.54
    
    
    $
    12.53
    
    
    $
    13.30
    
    
    $
    13.94Low
    
    $
    7.66
    
    
    $
    7.71
    
    
    $
    6.79
    
    
    $
    3.04
    
    
    $
    9.81
    
    
    $
    10.50
    
    
    $
    10.15
    
    
    $
    10.51
 Holders
 Dividends
  18




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Stock Performance Graph
   COMPARISON OF CUMULATIVE TOTAL RETURN* SINCE DECEMBER 31, 2003
AMONG INTERNET CAPITAL GROUP, INC.,
THE NASDAQ COMPOSITE INDEX AND
THE GSTI INTERNET INDEX
 
 *
    
    $100 invested at closing prices on December 31, 2003 in ICGE shares or in a
stock index, including reinvestment of dividends. Issuer
Purchases of Equity Securities
  Total Number of
    
    
    Approximate DollarShares Purchased as
    
    
    Value That May YetPart of Publicly
    
    
    Be PurchasedTotal Number of
    
    
    Average Price Paid
    
    
    Announced
    
    
    Under theMonthly Period
    
    Shares Purchased(1)
    
    
    per Share(2)
    
    
    Program(1)
    
    
    Program7/25/08 to 7/31/08
    
    
    0
    
    
    
    
    
    
    
    0
    
    
    $
    20.0 million8/1/08 to 8/31/08
    
    
    0
    
    
    
    
    
    
    
    0
    
    
    $
    20.0 million9/1/08 to 9/30/08
    
    
    29,800
    
    
    $
    7.96
    
    
    
    29,800
    
    
    $
    19.8 million10/1/08 to 10/31/08
    
    
    468,993
    
    
    $
    6.36
    
    
    
    468,993
    
    
    $
    16.8 million11/1/08 to 11/30/08
    
    
    1,398,250
    
    
    $
    4.18
    
    
    
    1,398,250
    
    
    $
    10.9 million12/1/08 to 12/31/08
    
    
    51,115
    
    
    $
    3.82
    
    
    
    51,115
    
    
    $
    15.7 million1/1/09 to 1/31/09
    
    
    25,042
    
    
    $
    3.98
    
    
    
    25,042
    
    
    $
    15.6 million2/1/09 to 2/28/09
    
    
    67,200
    
    
    $
    3.96
    
    
    
    67,200
    
    
    $
    15.4 million3/1/09 to 3/16/09
    
    
    0
    
    
    
    
    
    
    
    0
    
    
    $
    15.4 millionTotal
    
    
    2,040,400
    
    
    $
    4.71
    
    
    
    2,040,400
    
    
    $
    15.4 million
 
 (1)
    
    All shares purchased in open market transactions.(2)
    
    Average price paid per share excludes commissions.  19




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ITEM 6. Selected Financial Data
  Year Ended December 31,2008
    
    
    2007
    
    
    2006
    
    
    2005
    
    
    2004(in thousands, except per share data)Consolidated Statements of Operations Data:Revenues
    
    $
    71,181
    
    
    $
    52,923
    
    
    $
    64,749
    
    
    $
    47,568
    
    
    $
    41,857Operating expensesCost of revenue
    
    
    46,400
    
    
    
    39,523
    
    
    
    42,439
    
    
    
    28,460
    
    
    
    21,464Selling, general and administrative
    
    
    36,165
    
    
    
    32,781
    
    
    
    42,108
    
    
    
    40,795
    
    
    
    31,239Research and development
    
    
    10,212
    
    
    
    6,033
    
    
    
    8,755
    
    
    
    12,276
    
    
    
    8,660Impairment related and other
    
    
    10,052
    
    
    
    188
    
    
    
    1,873
    
    
    
    5,571
    
    
    
    3,469Total operating expenses
    
    
    102,829
    
    
    
    78,525
    
    
    
    95,175
    
    
    
    87,102
    
    
    
    64,832(31,648
    )
    
    
    (25,602
    )
    
    
    (30,426
    )
    
    
    (39,534
    )
    
    
    (22,975
    )Other income (loss), net
    
    
    43,225
    
    
    
    (167
    )
    
    
    34,605
    
    
    
    135,489
    
    
    
    (106,178
    )Interest income (expense), net
    
    
    1,516
    
    
    
    5,038
    
    
    
    7,345
    
    
    
    523
    
    
    
    (3,630
    )Income (loss) before income taxes, minority
interest and equity loss
    
    
    13,093
    
    
    
    (20,731
    )
    
    
    11,524
    
    
    
    96,478
    
    
    
    (132,783
    )Income tax benefit (expense)
    
    
    (357
    )
    
    
    3,992
    
    
    
    40
    
    
    
    (18,640
    )
    
    
    Minority interest
    
    
    (1,960
    )
    
    
    (468
    )
    
    
    1,232
    
    
    
    2,513
    
    
    
    771Equity loss
    
    
    (33,702
    )
    
    
    (14,416
    )
    
    
    (5,461
    )
    
    
    (6,703
    )
    
    
    (5,893
    )Income (loss) from continuing operations
    
    
    (22,926
    )
    
    
    (31,623
    )
    
    
    7,335
    
    
    
    73,648
    
    
    
    (137,905
    )Income (loss) on discontinued operations
    
    
    
    
    
    
    995
    
    
    
    8,289
    
    
    
    (1,130
    )
    
    
    2,588Net income (loss)
    
    $
    (22,926
    )
    
    $
    (30,628
    )
    
    $
    15,624
    
    
    $
    72,518
    
    
    $
    (135,317
    )Basic Income (loss) Per Share:Income (loss) from continuing operations
    
    $
    (0.60
    )
    
    $
    (0.83
    )
    
    $
    0.20
    
    
    $
    1.98
    
    
    $
    (3.86
    )Income (loss) on discontinued operations
    
    
    
    
    
    
    0.02
    
    
    
    0.22
    
    
    
    (0.03
    )
    
    
    0.07Basic income (loss) per share
    
    $
    (0.60
    )
    
    $
    (0.81
    )
    
    $
    0.42
    
    
    $
    1.95
    
    
    $
    (3.79
    )Shares used in computation of basic income
(loss) per share
    
    
    38,106
    
    
    
    37,916
    
    
    
    37,570
    
    
    
    37,109
    
    
    
    35,713Diluted Income (loss) Per Share:Income (loss) from continuing operations
    
    $
    (0.60
    )
    
    $
    (0.83
    )
    
    $
    0.19
    
    
    $
    1.76
    
    
    $
    (3.86
    )Income (loss) on discontinued operations
    
    
    
    
    
    
    0.02
    
    
    
    0.22
    
    
    
    (0.03
    )
    
    
    0.07Diluted income (loss) per share
    
    $
    (0.60
    )
    
    $
    (0.81
    )
    
    $
    0.41
    
    
    $
    1.73
    
    
    $
    (3.79
    )Shares used in computation of diluted
income (loss) per share
    
    
    38,106
    
    
    
    37,916
    
    
    
    38,106
    
    
    
    43,670
    
    
    
    35,713Consolidated Balance Sheet Data:Cash, cash equivalents and short-term
investments
    
    $
    89,527
    
    
    $
    82,031
    
    
    $
    120,808
    
    
    $
    147,912
    
    
    $
    86,951Working capital
    
    $
    83,285
    
    
    $
    78,749
    
    
    $
    78,939
    
    
    $
    140,504
    
    
    $
    72,932Total assets
    
    $
    285,580
    
    
    $
    332,431
    
    
    $
    354,427
    
    
    $
    346,532
    
    
    $
    277,606Other long-term debt, net of current portion
    
    $
    3,916
    
    
    $
    191
    
    
    $
    544
    
    
    $
    4,407
    
    
    $
    11Senior convertible notes
    
    $
    
    
    
    $
    
    
    
    $
    26,590
    
    
    $
    37,000
    
    
    $
    60,000Total stockholders equity
    
    $
    247,509
    
    
    $
    304,658
    
    
    $
    298,538
    
    
    $
    256,245
    
    
    $
    165,107
  20




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ITEM 7. Managements Discussion and Analysis of Financial Condition and Results of Operations
 Introduction
    Executive Summary
     21




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Liquidity and Capital Resources
  December 31, 2008
    
    
    December 31, 2007Consolidated
    
    
    
    
    
    
    
    
    
    
    ConsolidatedCorporate
    
    
    Subsidiaries
    
    
    Total
    
    
    Corporate
    
    
    Subsidiaries
    
    
    Total(in thousands)Cash and cash equivalents
    
    $
    73,208
    
    
    $
    16,087
    
    
    $
    89,295
    
    
    $
    69,125
    
    
    $
    12,906
    
    
    $
    82,031Restricted Cash (1)
    
    
    
    
    
    
    232
    
    
    
    232
    
    
    
    
    
    
    
    5
    
    
    
    5$
    73,208
    
    
    $
    16,319
    
    
    $
    89,527
    
    
    $
    69,125
    
    
    $
    12,911
    
    
    $
    82,036Marketable securities (2)
    
    $
    63,918
    
    
    $
    
    
    
    $
    63,918
    
    
    $
    84,376
    
    
    $
    
    
    
    $
    84,376
 (1)
    
    Restricted cash at December 31, 2007 does not include $0.2 million of long-term
restricted cash included in Other assets on the Companys consolidated balance sheets.(2)
    
    Includes a contributing
asset of $6.5 million at December 31, 2008 and an offsetting
liability of $3.7 million at December 31, 2007 related to derivative instruments associated
with the Companys marketable securities.     22




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Summary of Statements of Cash Flows
 Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Cash used in operating activities
    
    $
    (12,385
    )
    
    $
    (16,174
    )
    
    $
    (7,325
    )Cash provided by (used in) investing activities
    
    $
    28,964
    
    
    $
    15,428
    
    
    $
    (7,019
    )Cash used in financing activities
    
    $
    (8,593
    )
    
    $
    (37,960
    )
    
    $
    (9,454
    )
     Contractual Cash Obligations and Commercial Commitments
  Payments due by periodLessthan 1
    
    
    1-3
    
    
    3-5
    
    
    More thanTotal
    
    
    year
    
    
    years
    
    
    years
    
    
    5 years(in thousands)Operating leases
    
    $
    12,164
    
    
    $
    2,224
    
    
    $
    3,703
    
    
    $
    2,318
    
    
    $
    3,919Capital leases
    
    
    153
    
    
    
    108
    
    
    
    45
    
    
    
    
    
    
    
    Other debt
    
    
    4,081
    
    
    
    210
    
    
    
    163
    
    
    
    3,708
    
    
    
    $
    16,398
    
    
    $
    2,542
    
    
    $
    3,911
    
    
    $
    6,026
    
    
    $
    3,919
 Off-Balance Sheet Arrangements
   23




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Our Partner Companies
  CORE PARTNER COMPANIES (%Voting Interest)Consolidated
    
    Equity
    
    CostICG Commerce (65%)
    
    Channel Intelligence (46%)
    
    (none)Investor Force (81%)
    
    Freeborders (31%)Vcommerce (53%)
    
    Metastorm (32%)StarCite (34%)WhiteFence (36%)
 OTHER HOLDINGS PARTNER COMPANIES (%Voting Interest)Consolidated
    
    Equity
    
    Cost(none)
    
    ClickEquations (30%)
    
    Anthem (9%)GoIndustry (29%)  (1)
    
    Captive Capital (5%)Jamcracker (2%)Tibersoft (5%)
 (1)
    
    As of December 31, 2008
and March 2, 2009, we owned 133,832,852
shares, or approximately 29% of the voting securities, of GoIndustry.
GoIndustrys common stock is traded on the AIM market of the London Stock
Exchange under ticker symbol GOI. See Note 3  Ownership Interests in
Partner Companies, Goodwill and Intangibles, net to Consolidated Financial
Statements. Results of Operations
    24




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##### Table of Contents



Segment Information(in thousands)Reconciling ItemsDiscontinuedOther
    
    
    Total
    
    
    Operations and
    
    
    
    
    
    
    
    
    
    
    ConsolidatedCore
    
    
    Holdings
    
    
    Segment
    
    
    Dispositions
    
    
    Corporate
    
    
    Other
    
    
    ResultsFor the Year Ended
December 31, 2008Revenues
    
    $
    71,181
    
    
    $
    
    
    
    $
    71,181
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    71,181Net income (loss)
    
    $
    (23,758
    )
    
    $
    (4,381
    )
    
    $
    (28,139
    )
    
    $
    
    
    
    $
    (18,966
    )
    
    $
    24,179
    
    
    $
    (22,926
    )For the Year Ended
December 31, 2007Revenues
    
    $
    52,923
    
    
    $
    
    
    
    $
    52,923
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    52,923Net income (loss)
    
    $
    (18,194
    )
    
    $
    (856
    )
    
    $
    (19,050
    )
    
    $
    1,849
    
    
    $
    (17,022
    )
    
    
    3,595
    
    
    $
    (30,628
    )For the Year Ended
December 31, 2006Revenues
    
    $
    64,749
    
    
    $
    
    
    
    $
    64,749
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    64,749Net income (loss)
    
    $
    (15,089
    )
    
    $
    592
    
    
    $
    (14,497
    )
    
    $
    7,824
    
    
    $
    (13,788
    )
    
    
    36,085
    
    
    $
    15,624
 For the Years Ended December 31, 2008, 2007 and 2006
 Results of Operations  Core Companies
  Year Ended December 31,Selected data:
    
    2008
    
    
    2007
    
    
    2006(in thousands)Revenues
    
    $
    71,181
    
    
    $
    52,923
    
    
    $
    64,749Cost of revenue
    
    
    (46,400
    )
    
    
    (39,523
    )
    
    
    (42,840
    )Selling, general and administrative
    
    
    (16,390
    )
    
    
    (11,101
    )
    
    
    (20,809
    )Research and development
    
    
    (10,212
    )
    
    
    (6,033
    )
    
    
    (8,779
    )Impairment related and other
    
    
    (994
    )
    
    
    (188
    )
    
    
    (1,873
    )Operating expenses
    
    $
    (73,996
    )
    
    
    (56,845
    )
    
    
    (74,301
    )Interest and other
    
    
    (1,139
    )
    
    
    451
    
    
    
    51Income taxes
    
    
    (687
    )
    
    
    (309
    )
    
    
    Equity loss
    
    
    (19,117
    )
    
    
    (14,414
    )
    
    
    (5,588
    )Net loss
    
    $
    (23,758
    )
    
    $
    (18,194
    )
    
    $
    (15,089
    )
 Revenues
    25




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##### Table of Contents



Operating Expenses
   Equity Loss
  Year Ended December 31,Selected data:
    
    2008
    
    
    2007
    
    
    2006(in thousands)Total revenues
    
    $
    193,498
    
    
    $
    161,486
    
    
    $
    69,088Total net loss
    
    $
    (46,505
    )
    
    $
    (40,208
    )
    
    $
    (17,767
    )Our share of total net loss (equity loss)
    
    $
    (19,117
    )
    
    $
    (14,414
    )
    
    $
    (5,588
    )
   Results of Operations  Other Holdings Companies
  Year Ended December 31,Selected data:
    
    2008
    
    
    2007
    
    
    2006(in thousands)Revenues
    
    $
    
    
    
    $
    
    
    
    $
    Operating expenses
    
    
    
    
    
    
    
    
    
    
    Interest and other
    
    
    
    
    
    
    
    
    
    
    Equity income (loss)
    
    
    (4,381
    )
    
    
    (856
    )
    
    
    592Net income (loss)
    
    $
    (4,381
    )
    
    $
    (856
    )
    
    $
    592
   26




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##### Table of Contents



Results of Operations  Reconciling Items
 Discontinued Operations and Dispositions
  Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Discontinued operations
    
    $
    
    
    
    $
    995
    
    
    $
    8,289Equity
income (loss) of partner companies sold/disposed of
    
    
    
    
    
    
    854
    
    
    
    (465
    )Net income
    
    $
    
    
    
    $
    1,849
    
    
    $
    7,824
    Corporate
 Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)General and administrative
    
    $
    (19,775
    )
    
    $
    (21,680
    )
    
    $
    (20,874
    )Impairment related and other
    
    
    (794
    )
    
    
    
    
    
    
    Interest income (expense), net
    
    
    1,603
    
    
    
    4,658
    
    
    
    7,086Net loss
    
    $
    (18,966
    )
    
    $
    (17,022
    )
    
    $
    (13,788
    )
 General and Administrative
   Impairment related and other
   27




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##### Table of Contents



Interest Income/Expense
   Other
 Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Other income (loss), net (excluding impairments of
cost method partner companies)
    
    $
    49,012
    
    
    $
    (238
    )
    
    $
    34,813Impairments of cost method partner companies (Note 3)
    
    
    (4,735
    )
    
    
    
    
    
    
    Other income (loss), net
    
    $
    44,277
    
    
    $
    (238
    )
    
    $
    34,813Impairment
of GoIndustry (Note 3)
    
    $
    (10,204
    )
    
    $
    
    
    
    $
    Impairment
of Vcommerce (Note 3)
    
    
    (8,264
    )
    
    
    
    
    
    
    Income tax benefit (expense)
    
    
    330
    
    
    
    4,301
    
    
    
    40Minority interest
    
    
    (1,960
    )
    
    
    (468
    )
    
    
    1,232Net income (loss)
    
    $
    24,179
    
    
    $
    3,595
    
    
    $
    36,085
 Other Income (Loss), Net
     Impairment Charges
  Income Tax
     28




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##### Table of Contents



Critical Accounting Policies
   Valuation of Goodwill, Intangible Assets and Ownership Interests in Partner Companies
  Revenue Recognition
  e-commerce
  Equity Income/Loss
   29




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##### Table of Contents



Deferred Income Taxes
  Commitments and Contingencies
  Recent Accounting Pronouncements
     30




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##### Table of Contents



31




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##### Table of Contents



ITEM 7A. Quantitative and Qualitative Disclosures About Market Risk
     32




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##### Table of Contents



ITEM 8. Financial Statements and Supplementary Data
  PageNumberReport of Independent Registered Public Accounting Firm
    
    
    34Consolidated Balance Sheets as of December 31, 2008 and 2007
    
    
    35Consolidated Statements of Operations for the years ended December 31, 2008, 2007 and 2006
    
    
    36Consolidated Statements of Stockholders Equity for the years ended December 31, 2008,
2007 and 2006
    
    
    37Consolidated Statements of Comprehensive Income (Loss) for the years ended December 31,
2008, 2007 and 2006
    
    
    38Consolidated Statements of Cash Flows for the years ended December 31, 2008, 2007 and 2006
    
    
    39Notes to Consolidated Financial Statements
    
    
    40
  33




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##### Table of Contents



REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
 
    Internal ControlIntegrated Framework
  
  34




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
 
 CONSOLIDATED BALANCE SHEETS
 December 31,
    
    
    December 31,2008
    
    
    2007(in thousands, except per share data)AssetsCurrent AssetsCash and cash equivalents
    
    $
    89,295
    
    
    $
    82,031Restricted cash
    
    
    232
    
    
    
    5Accounts receivable, net of allowance ($721-2008; $44-2007)
    
    
    14,526
    
    
    
    7,769Prepaid expenses and other current assets
    
    
    3,068
    
    
    
    6,883Total current assets
    
    
    107,121
    
    
    
    96,688Marketable securities
    
    
    57,367
    
    
    
    88,029Fixed assets, net
    
    
    1,783
    
    
    
    1,723Ownership interests in Partner Companies
    
    
    83,751
    
    
    
    127,888Goodwill
    
    
    26,658
    
    
    
    17,084Hedges of marketable securities
    
    
    6,551
    
    
    
    Other, net
    
    
    2,349
    
    
    
    1,019Total Assets
    
    $
    285,580
    
    
    $
    332,431Liabilities and Stockholders EquityCurrent LiabilitiesCurrent maturities of other long-term debt
    
    $
    318
    
    
    $
    613Accounts payable
    
    
    2,026
    
    
    
    1,624Accrued expenses
    
    
    4,461
    
    
    
    2,871Accrued compensation and benefits
    
    
    10,385
    
    
    
    9,554Deferred revenue
    
    
    6,646
    
    
    
    3,277Total current liabilities
    
    
    23,836
    
    
    
    17,939Other long-term debt
    
    
    3,916
    
    
    
    191Hedges of marketable securities
    
    
    
    
    
    
    3,653Other
    
    
    1,092
    
    
    
    756Deferred revenue
    
    
    1,910
    
    
    
    91Minority interests
    
    
    7,317
    
    
    
    5,14338,071
    
    
    
    27,773Stockholders EquityPreferred
stock, $0.01 par value; 10,000 shares authorized, none issued or outstanding
    
    
    
    
    
    
    Common stock, $0.001 par value; 2,000,000 shares authorized, 38,703 (2008) and 38,651 (2007) issued
    
    
    39
    
    
    
    39Additional paid-in capital
    
    
    3,573,146
    
    
    
    3,567,495Treasury stock, at cost, 1,948 shares (2008)
    
    
    (9,329
    )
    
    
    Accumulated deficit
    
    
    (3,370,649
    )
    
    
    (3,347,723
    )Accumulated other comprehensive income
    
    
    54,302
    
    
    
    84,847Total Stockholders Equity
    
    
    247,509
    
    
    
    304,658Total Liabilities and Stockholders Equity
    
    $
    285,580
    
    
    $
    332,431
   35




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
 
 CONSOLIDATED STATEMENTS OF OPERATIONS
 Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands, except per share data)Revenues
    
    $
    71,181
    
    
    $
    52,923
    
    
    $
    64,749Operating expensesCost of revenue
    
    
    46,400
    
    
    
    39,523
    
    
    
    42,439Selling, general and administrative
    
    
    36,165
    
    
    
    32,781
    
    
    
    42,108Research and development
    
    
    10,212
    
    
    
    6,033
    
    
    
    8,755Impairment related and other
    
    
    10,052
    
    
    
    188
    
    
    
    1,873Total operating expenses
    
    
    102,829
    
    
    
    78,525
    
    
    
    95,175(31,648
    )
    
    
    (25,602
    )
    
    
    (30,426
    )Other income (loss), net
    
    
    43,225
    
    
    
    (167
    )
    
    
    34,605Interest income
    
    
    1,850
    
    
    
    5,338
    
    
    
    9,519Interest expense
    
    
    (334
    )
    
    
    (300
    )
    
    
    (2,174
    )Income (loss) before income taxes,
minority interest and equity loss
    
    
    13,093
    
    
    
    (20,731
    )
    
    
    11,524Income tax benefit (expense)
    
    
    (357
    )
    
    
    3,992
    
    
    
    40Minority interest
    
    
    (1,960
    )
    
    
    (468
    )
    
    
    1,232Equity loss
    
    
    (33,702
    )
    
    
    (14,416
    )
    
    
    (5,461
    )Income (loss) from continuing operations
    
    
    (22,926
    )
    
    
    (31,623
    )
    
    
    7,335Income (loss) on discontinued operations
    
    
    
    
    
    
    995
    
    
    
    8,289Net income (loss)
    
    $
    (22,926
    )
    
    $
    (30,628
    )
    
    $
    15,624Basic income (loss) per share:Income (loss) from continuing operations
    
    $
    (0.60
    )
    
    $
    (0.83
    )
    
    $
    0.20Income (loss) on discontinued operations
    
    
    
    
    
    
    0.02
    
    
    
    0.22$
    (0.60
    )
    
    $
    (0.81
    )
    
    $
    0.42Shares used in computation of basic
income (loss) per share
    
    
    38,106
    
    
    
    37,916
    
    
    
    37,570Diluted income (loss) per share:Income (loss) from continuing operations
    
    $
    (0.60
    )
    
    $
    (0.83
    )
    
    $
    0.19Income (loss) on discontinued operations
    
    
    
    
    
    
    0.02
    
    
    
    0.22$
    (0.60
    )
    
    $
    (0.81
    )
    
    $
    0.41Shares used in computation of diluted
income (loss) per share
    
    
    38,106
    
    
    
    37,916
    
    
    
    38,106
   36




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
 
 CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY
 Additional
    
    
    
    
    
    
    Unamortized
    
    
    Notes
    
    
    Accumulated OtherCommon Stock
    
    
    Treasury Stock, at cost
    
    
    Paid-In
    
    
    Accumulated
    
    
    Deferred
    
    
    Receivable-
    
    
    ComprehensiveShares
    
    
    Amount
    
    
    Shares
    
    
    Amount
    
    
    Capital
    
    
    Deficit
    
    
    Compensation
    
    
    Stockholders
    
    
    Income
    
    
    Total(in thousands)Balance as of December 31, 2005
    
    
    39,314
    
    
    $
    39
    
    
    
    
    
    
    $
    
    
    
    $
    3,535,646
    
    
    $
    (3,332,719
    )
    
    $
    (6,684
    )
    
    $
    (300
    )
    
    $
    60,263
    
    
    $
    256,245Reclassification of unamortized deferred
compensation upon adoption of SFAS No. 123R
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6,684
    )
    
    
    
    
    
    
    6,684
    
    
    
    
    
    
    
    
    
    
    
    Share-based compensation expense related to
restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,559
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,559Impact of partner company equity
transactions (Note 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,169
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,169Issuance of restricted stock
    
    
    50
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeitures of restricted stock
    
    
    (37
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (129
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (129
    )Share-based compensation related to stock
appreciation rights and stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,716
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,716Issuance of deferred stock units to
Board of Directors
    
    
    56
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    674
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    674Repurchase of Common Stock from current and
former employees
    
    
    (785
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    128
    
    
    
    
    
    
    
    128Stockholder loans principal payments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    730
    
    
    
    
    
    
    
    
    
    
    
    125
    
    
    
    
    
    
    
    855Forgiveness of stockholder loans
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    47
    
    
    
    
    
    
    
    47Net unrealized appreciation in marketable securities
and reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,650
    
    
    
    2,650Net income
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,624
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    15,624Balance as of December 31, 2006
    
    
    38,598
    
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    3,552,681
    
    
    
    (3,317,095
    )
    
    
    
    
    
    
    
    
    
    
    62,913
    
    
    
    298,538Share-based compensation expense related to
restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,334
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    2,334Impact of partner company equity
transactions (Note 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,309
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    7,309Issuance of restricted stock
    
    
    15
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Forfeitures of restricted stock
    
    
    (36
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Share-based compensation related to stock
appreciation rights and stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,031
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,031Issuance of deferred stock units to
Board of Directors
    
    
    74
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    808
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    808Equity-based compensation tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    332
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    332Minority owners share of AOCI of consolidated
subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (19
    )
    
    
    (19
    )Net unrealized appreciation in marketable securities
and reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    21,953
    
    
    
    21,953Net income (loss)
    
    
    
    
    
    
    
    
    
    
    ______
    
    
    
    
    
    
    
    
    
    
    
    (30,628
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,628
    )Balance as of December 31, 2007
    
    
    38,651
    
    
    
    39
    
    
    
    
    
    
    
    
    
    
    
    3,567,495
    
    
    
    (3,347,723
    )
    
    
    
    
    
    
    
    
    
    
    84,847
    
    
    
    304,658Share-based compensation expense related to
restricted stock
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,577
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    1,577Impact of partner company equity
transactions (Note 3)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (629
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (629
    )Issuance of restricted stock
    
    
    36
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Surrenders of restricted stock
    
    
    (17
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (87
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (87
    )Share-based compensation related to stock
appreciation rights and stock options
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,167
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    4,167Exercise of stock appreciation rights, net of surrenders
    
    
    3
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (6
    )Issuance of deferred stock units to
Board of Directors
    
    
    30
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    616
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    616Equity-based compensation tax benefit
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    Repurchase of common stock
    
    
    
    
    
    
    
    
    
    
    (1,948
    )
    
    
    (9,329
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (9,329
    )Minority owners share of AOCI of consolidated
subsidiary
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    117
    
    
    
    1172008 LP capital contribution
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    13Net
unrealized depreciation in marketable securities and reclassification adjustments
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (30,662
    )
    
    
    (30,662
    )Net income (loss)
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,926
    )
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (22,926
    )Balance as of December 31, 2008
    
    
    38,703
    
    
    $
    39
    
    
    
    (1,948
    )
    
    $
    (9,329
    )
    
    $
    3,573,146
    
    
    $
    (3,370,649
    )
    
    $
    
    
    
    $
    
    
    
    $
    54,302
    
    
    $
    247,509
   37




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
 
 CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
 Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Net income (loss)
    
    $
    (22,926
    )
    
    $
    (30,628
    )
    
    $
    15,624Other comprehensive income (loss)Unrealized holding gains (losses) in marketable
securities
    
    
    (30,028
    )
    
    
    22,333
    
    
    
    7,674Reclassification adjustments/realized net
(gains) loss on marketable securities
    
    
    (634
    )
    
    
    (380
    )
    
    
    (5,024
    )Other accumulated other comprehensive income (loss)
    
    
    117
    
    
    
    (19
    )
    
    
    Sub-total
    
    
    (30,545
    )
    
    
    21,934
    
    
    
    2,650Comprehensive income (loss)
    
    $
    (53,471
    )
    
    $
    (8,694
    )
    
    $
    18,274
   38




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
 
 CONSOLIDATED STATEMENTS OF CASH FLOWS
 Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Operating ActivitiesNet income (loss)
    
    $
    (22,926
    )
    
    $
    (30,628
    )
    
    $
    15,624Adjustments to reconcile net loss to cash used in operating activities:(Income) loss from discontinued operations
    
    
    
    
    
    
    (995
    )
    
    
    (8,289
    )Depreciation and amortization
    
    
    1,858
    
    
    
    1,502
    
    
    
    3,395Impairment related and other
    
    
    9,392
    
    
    
    59
    
    
    
    373Equity-based compensation
    
    
    7,090
    
    
    
    7,781
    
    
    
    7,680Equity loss
    
    
    33,702
    
    
    
    14,416
    
    
    
    5,461Other (income) loss
    
    
    (43,225
    )
    
    
    167
    
    
    
    (34,605
    )Minority interest
    
    
    1,960
    
    
    
    468
    
    
    
    (1,232
    )Changes in assets and liabilities, net of effect of acquisitions:Accounts receivable, net
    
    
    (6,409
    )
    
    
    (1,452
    )
    
    
    (1,395
    )Prepaid expenses and other assets
    
    
    3,686
    
    
    
    (4,526
    )
    
    
    6,990Accounts payable
    
    
    618
    
    
    
    486
    
    
    
    (3,019
    )Accrued expenses
    
    
    (126
    )
    
    
    (1,247
    )
    
    
    1,075Deferred revenue
    
    
    1,672
    
    
    
    (2,153
    )
    
    
    (762
    )Other liabilities
    
    
    323
    
    
    
    (52
    )
    
    
    3,261Cash flows provided by (used in) operating activities of continuing operations
    
    
    (12,385
    )
    
    
    (16,174
    )
    
    
    (5,443
    )Cash flows from operating activities of discontinued operations operations
    
    
    
    
    
    
    
    
    
    
    (1,882
    )Cash used in operating activities
    
    
    (12,385
    )
    
    
    (16,174
    )
    
    
    (7,325
    )Investing ActivitiesCapital expenditures
    
    
    (1,192
    )
    
    
    (1,226
    )
    
    
    (2,265
    )Advanced deposits for acquisition of fixed assets
    
    
    (422
    )
    
    
    
    
    
    
    Proceeds from disposition of fixed assets
    
    
    30
    
    
    
    
    
    
    
    Changes in restricted cash
    
    
    (27
    )
    
    
    99
    
    
    
    122Proceeds of short-term investments
    
    
    
    
    
    
    
    
    
    
    5,000Proceeds from sales of marketable securities
    
    
    60,233
    
    
    
    24
    
    
    
    5,554Proceeds from sales of Partner Company ownership interests
    
    
    3,267
    
    
    
    34,725
    
    
    
    40,720Proceeds from sale of discontinued operations
    
    
    
    
    
    
    1,200
    
    
    
    9,125Acquisitions of ownership interests in Partner Companies
    
    
    (35,478
    )
    
    
    (19,394
    )
    
    
    (63,292
    )Other acquisitions, net
    
    
    
    
    
    
    
    
    
    
    (536
    )Increase in cash due to consolidation of Partner Companies
    
    
    2,553
    
    
    
    
    
    
    
    Reduction in cash due to deconsolidation of Partner Companies
    
    
    
    
    
    
    
    
    
    
    (1,447
    )Cash flows provided by (used in) investing activities of continuing operations
    
    
    28,964
    
    
    
    15,428
    
    
    
    (7,019
    )Cash flows from investing activities of discontinued operations
    
    
    
    
    
    
    
    
    
    
    Cash provided by (used in) investing activities
    
    
    28,964
    
    
    
    15,428
    
    
    
    (7,019
    )Financing ActivitiesRepurchase of senior convertible notes
    
    
    
    
    
    
    (37,087
    )
    
    
    (12,768
    )Borrowings of long-term debt
    
    
    1,500
    
    
    
    
    
    
    
    Long term debt and capital lease obligations, net
    
    
    (696
    )
    
    
    (873
    )
    
    
    (1,310
    )Line of credit repayments
    
    
    (68
    )
    
    
    
    
    
    
    Repayments of loans from employees
    
    
    
    
    
    
    
    
    
    
    4,624Share repurchases
    
    
    (9,329
    )
    
    
    
    
    
    
    Cash flows provided by (used in) financing activities of continuing operations
operations
    
    
    (8,593
    )
    
    
    (37,960
    )
    
    
    (9,454
    )Cash flows from financing activities of discontinued operations
    
    
    
    
    
    
    
    
    
    
    Cash provided by (used in) financing activities
    
    
    (8,593
    )
    
    
    (37,960
    )
    
    
    (9,454
    )Net increase (decrease) in Cash and Cash Equivalents
    
    
    7,986
    
    
    
    (38,706
    )
    
    
    (23,798
    )Effect of exchange rates on cash
    
    
    (722
    )
    
    
    (71
    )
    
    
    65Cash and Cash Equivalents at the beginning of year
    
    
    82,031
    
    
    
    120,808
    
    
    
    144,541Cash and Cash Equivalents at end of year
    
    
    89,295
    
    
    
    82,031
    
    
    
    120,808Less Cash and Cash Equivalents of discontinued operations at the end of year
    
    
    
    
    
    
    
    
    
    
    Cash and Cash Equivalents of continuing operations at the end of year
    
    $
    89,295
    
    
    $
    82,031
    
    
    $
    120,808
   39




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
 
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 1. The Company
 Description of the Company
   2. Significant Accounting Policies
 Basis of Presentation
  Year Ended December 31,2008
    
    2007
    
    2006ICG Commerce
    
    ICG Commerce
    
    ICG CommerceInvestor Force
    
    Investor Force
    
    Investor ForceVcommerce (1)
    
    
    
    StarCite (2)
  December 31,2008

    

    2007ICG Commerce
    
    
    
    ICG CommerceInvestor Force
    
    
    
    Investor ForceVcommerce (1)
 (1)
    
    On May 1, 2008, Vcommerce became a consolidated partner company when the Companys
voting interest increased to 53%. Vcommerces results of operations are included in the
Companys Consolidated Statements of Operations beginning May 1, 2008. See Note 3.(2)
    
    On December 29, 2006, StarCite completed a transaction in which it consolidated with
OnVantage, Inc. Beginning on December 29, 2006, the Companys ownership interest in the
combined entity is accounted for under the equity method of accounting. See Note 3.  40




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2. Significant Accounting Policies  (Continued)
 Principles of Accounting for Ownership Interests in Partner Companies
  Consolidation.
 Equity Method.
   41




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2. Significant Accounting Policies  (Continued)
 Cost Method.
   Ownership Interests in partner companies, Goodwill and Intangibles, net
     42




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2. Significant Accounting Policies  (Continued)
 Revenue Recognition
     Deferred Revenue
  Use of Estimates
   43




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2. Significant Accounting Policies  (Continued)
 Cash and Cash Equivalents
  Restricted Cash
  Marketable Securities
  Financial Instruments
  Research and Development
  Income Taxes
  Net Income (Loss) Per Share
   44




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2. Significant Accounting Policies  (Continued)
 Issuances of Stock by Partner Companies
  Escrowed Proceeds
  Concentration of Customer Base and Credit Risk
  Stock Based Compensation
   45




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2. Significant Accounting Policies  (Continued)
  Fair Value Measurements
   
    
    Level 1: Observable inputs, such as quoted prices in active markets for identical
assets or liabilities;
 
    
    Level 2: Inputs, other than the quoted prices in active markets, that are
observable either directly or indirectly; and
 
    
    Level 3: Unobservable inputs in which there is little or no market data, which
require the reporting entity to develop its own assumptions.
  Balance atDecember 31,2008
    
    
    Level 1
    
    
    Level 2
    
    
    Level 3Cash equivalents (money market accounts)
    
    $
    84.4
    
    
    $
    84.4
    
    
    $
    
    
    
    $
    Marketable securities (see Note 4)
    
    
    57.4
    
    
    
    57.4
    
    
    
    
    
    
    
    Hedges of marketable securities (see Note 4)
    
    
    6.6
    
    
    
    
    
    
    
    6.6
    (a)
    
    
    $
    148.4
    
    
    $
    141.8
    
    
    $
    6.6
    
    
    $
    
 (a)
    
    The Companys counterparty provides the Company with a quarterly statement of the market
value of the cashless collar contracts based on model-derived valuations in which all
significant inputs are observable or can be derived principally from or corroborated by
observable market data for substantially the full term of the assets or liabilities.  46




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2. Significant Accounting Policies  (Continued)
 Recent Accounting Pronouncements
         47




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 2. Significant Accounting Policies  (Continued)
 Comprehensive Income (Loss)
  3. Ownership Interests in Partner Companies, Goodwill and Intangibles, net
  December 31,
    
    
    December 31,2008
    
    
    2007(in thousands)Goodwill
    
    $
    26,658
    
    
    $
    17,084Intangibles, net
    
    $
    897
    
    
    $
    139Ownership interests in partner
companies  Equity Method
    
    $
    83,751
    
    
    $
    98,144Ownership interests in partner
companies  Cost Method
    
    
    
    
    
    
    29,744$
    83,751
    
    
    $
    127,888
   Goodwill at December 31, 2006
    
    $
    17,0842007 activity
    
    
    Goodwill at December 31, 2007
    
    
    17,084Additional acquisition of Vcommerce
    
    
    17,978Impairment
of Vcommerce
    
    
    (8,264
    )Reduction due to dilution of a consolidated partner companys ownership
    
    
    (140
    )Goodwill at December 31, 2008
    
    $
    26,658
    December 31, 2009
    
    $
    398December 31, 2010
    
    
    373December 31, 2011
    
    
    126Remaining amortization expense
    
    $
    897
  48




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 3. Ownership Interests in Partner Companies, Goodwill and Intangibles, net  (Continued)
 Acquisitions  Consolidated Companies
  Vcommerce
    
    
    Investor Force
    
    
    ICG CommerceNet Assets Acquired:Goodwill
    
    $
    17,978
    
    
    $
    695
    
    
    $
    697Technology
    
    
    918
    
    
    
    
    
    
    
    Other net assets (liabilities)
    
    
    (3,651
    )
    
    
    (695
    )
    
    
    233$
    15,245
    
    
    $
    
    
    
    $
    930
  Impairments
  Statement of Operations
    
    
    Year ended December 31,Presentation
    
    
    2008
    
    
    2007
    
    
    2006Consolidation Method
    
    Impairment related and other
    
    $
    8,264
    
    
    $
    
    
    
    $
    Equity Method
    
    Equity loss
    
    
    10,204
    
    
    
    
    
    
    
    Cost Method (Note 15)
    
    Other income (loss), net
    
    
    4,735
    
    
    
    
    
    
    
    $
    23,203
    
    
    $
    
    
    
    $
    
 Impairments  Consolidated Company
   49




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 3. Ownership Interests in Partner Companies, Goodwill and Intangibles, net  (Continued)
 Equity Method Companies
  Balance Sheets (Unaudited)
 As of December 31,2008 (1)
    
    
    2007 (2)(in thousands)Cash, cash equivalents and short-term investments
    
    $
    42,215
    
    
    $
    48,674Other current assets
    
    
    73,988
    
    
    
    78,027Non-current assets
    
    
    178,101
    
    
    
    171,146Total assets
    
    $
    294,304
    
    
    $
    297,847Current liabilities
    
    $
    125,229
    
    
    $
    107,852Non-current liabilities
    
    
    6,123
    
    
    
    12,317Long-term debt
    
    
    8,172
    
    
    
    19,752Stockholders equity
    
    
    154,780
    
    
    
    157,926Total liabilities and stockholders equity
    
    $
    294,304
    
    
    $
    297,847Total carrying value
    
    $
    83,751
    
    
    $
    98,144
 (1)
    
    Includes (ICG voting ownership): Channel Intelligence (46%), ClickEquations (30%),
Freeborders (31%), GoIndustry (29%), Metastorm (32%), StarCite (34%) and WhiteFence (36%).(2)
    
    Includes (ICG voting ownership): Channel Intelligence (41%), Freeborders (32%),
GoIndustry (31%), Metastorm (32%), StarCite (26%), Vcommerce (48%) and WhiteFence (35%).      50




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 3. Ownership Interests in Partner Companies, Goodwill and Intangibles, net  (Continued)
 Results of Operations (Unaudited)
 Year Ended December 31,2008(1)
    
    
    2007(2)
    
    
    2006(3)(in thousands)Revenues
    
    $
    239,828
    
    
    $
    206,780
    
    
    $
    190,759Net income (loss)
    
    $
    (61,621
    )
    
    $
    (39,360
    )
    
    $
    (20,144
    )Equity
income (loss) excluding impairments
    
    $
    (23,498
    )
    
    $
    (14,416
    )
    
    $
    (5,461
    )Impairment
charge of GoIndustry
    
    $
    (10,204
    )
    
    $
    
    
    
    $
    Total equity income (loss)
    
    $
    (33,702
    )
    
    $
    (14,416
    )
    
    $
    (5,461
    )
 (1)
    
    Includes Channel Intelligence, ClickEquations, Freeborders, GoIndustry, Metastorm,
StarCite, Vcommerce (to date of consolidation) and WhiteFence.(2)
    
    Includes Channel Intelligence, Freeborders, GoIndustry, Marketron (to date of
disposition), Metastorm,StarCite, Vcommerce and WhiteFence.(3)
    
    Includes Channel Intelligence (from date of acquisition),
ComputerJobs.com, Inc. (ComputerJobs) (to
date of disposition), CreditTrade Inc. (CreditTrade) (to
date of disposition), eCredit.com, Inc. (eCredit) (to date
of disposition), Freeborders, GoIndustry, Marketron, Metastorm, Vcommerce (from date of
acquisition) and WhiteFence. CreditTrade/Creditex/IntercontinentalExchange
Sales
   Marketron Sale
   51




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 3. Ownership Interests in Partner Companies, Goodwill and Intangibles, net  (Continued)
  Other
Sales
  Escrow Information
  Issuances of Stock by Partner Companies
  Issuance of Stock by
    
    Year ended December 31,Partner Company
    
    Partner Company for:
    
    2008
    
    
    2007
    
    
    2006GoIndustry
    
    Financing/Acquisition/Merger Transactions (a)
    
    $
    (1,344
    )
    
    $
    4,996
    
    
    $
    5,393StarCite
    
    Merger with OnVantage (b)
    
    
    
    
    
    
    
    
    
    
    11,315Metastorm
    
    Financing and Acquisition Transaction (c)
    
    
    
    
    
    
    2,224
    
    
    
    Other
    
    Restricted Stock/Stock Option Activity
    
    
    715
    
    
    
    89
    
    
    
    (1,539
    )Impact of partner
company equity transactions
    
    $
    (629
    )
    
    $
    7,309
    
    
    $
    15,169
 (a)
    
    In 2008, 2007 and 2006, GoIndustry issued equity in conjunction with financing rounds, an
acquisition transaction and a reverse merger. As a result of these transactions, the
Companys ownership in GoIndustry was reduced from 35% in 2006 to 31% in 2007 to 29% in 2008.
In conjunction with the financing in 2008, the Company purchased an additional 52,690,950
shares of GoIndustry for approximately $10.5 million. At December 31, 2008, the Company owns
133,832,852 shares of GoIndustry, or approximately 29% of the outstanding shares.(b)
    
    On December 29, 2006, StarCite merged with OnVantage, Inc. Following completion of the
transaction, the Companys ownership interest was below 50% in the combined entity and is accounted
for under the equity method of accounting. Based on the estimated fair value of the combined
entity, the Company recorded its share of the difference between the fair value and book value
of StarCite deemed sold in relation to StarCites merger with OnVantage.(c)
    
    In 2007, Metastorm issued equity in conjunction with a financing and an acquisition
transaction. As a result of these transactions, the companys
ownership interest in Metastorm was
reduced from 41% to 32%.  52




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 4. Marketable Securities and Related Derivatives
  UnrealizedCommon Shares
    
    
    
    
    
    
    HoldingOwned
    
    
    Cost
    
    
    Gains/(Losses)
    
    
    Fair Value(in thousands, except shares)December 31, 2008Blackboard
    
    
    2,187,060
    
    
    $
    3,162
    
    
    $
    54,205
    
    
    $
    57,367$
    3,162
    
    
    $
    54,205
    
    
    $
    57,367December 31, 2007Blackboard
    
    
    2,187,060
    
    
    $
    3,162
    
    
    $
    84,867
    
    
    $
    88,029$
    3,162
    
    
    $
    84,867
    
    
    $
    88,029
     53




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 5. Debt
 Other Long-Term Debt
  As of December 31,Interest Rates
    
    
    2008
    
    
    2007(in thousands)Capital leases
    
    
    4.0-11.5
    %
    
    $
    153
    
    
    $
    226Other Debt
    
    
    4.5-10.3
    %
    
    
    4,081
    
    
    
    5784,234
    
    
    
    804Current maturities
    
    
    
    
    
    
    (318
    )
    
    
    (613
    )Other long-term debt
    
    
    
    
    
    $
    3,916
    
    
    $
    191
  2009
    
    $
    3182010
    
    
    1852011
    
    
    232012
    
    
    3,708$
    4,234
 Loan and Credit Agreements
    54




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 5. Debt  (Continued)
  Senior Convertible Notes
  6. Fixed Assets
  As of December 31,Useful Life
    
    
    2008
    
    
    2007(in thousands)Computer equipment and software,
office equipment and furniture
    
    3-10 years
    
    $
    18,184
    
    
    $
    15,808Leasehold improvements
    
    1-5 years
    
    
    1,084
    
    
    
    78719,268
    
    
    
    16,595Less:
accumulated depreciation and amortization
    
    
    
    
    
    
    (17,485
    )
    
    
    (14,872
    )$
    1,783
    
    
    $
    1,723
  7. Discontinued Operations
     55




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 7. Discontinued Operations  (Continued)
  8. Segment Information
     56




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 8. Segment Information  (Continued)
  Segment Information
 Reconciling ItemsDiscontinuedTotal
    
    
    Operations and
    
    
    
    
    
    
    
    
    
    
    ConsolidatedCore
    
    
    Other Holdings
    
    
    Segment
    
    
    Dispositions*
    
    
    Corporate
    
    
    Other**
    
    
    ResultsYear Ended December
31, 2008Revenues
    
    $
    71,181
    
    
    $
    
    
    
    $
    71,181
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    71,181Net income (loss)
    
    $
    (23,758
    )
    
    $
    (4,381
    )
    
    $
    (28,139
    )
    
    $
    
    
    
    $
    (18,966
    )
    
    $
    24,179
    
    
    $
    (22,926
    )Assets
    
    $
    138,374
    
    
    $
    8,281
    
    
    $
    146,655
    
    
    $
    
    
    
    $
    138,925
    
    
    $
    
    
    
    $
    285,580Year Ended December
31, 2007Revenues
    
    $
    52,923
    
    
    $
    
    
    
    $
    52,923
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    52,923Net income (loss)
    
    $
    (18,194
    )
    
    $
    (856
    )
    
    $
    (19,050
    )
    
    $
    1,849
    
    
    $
    (17,022
    )
    
    $
    3,595
    
    
    $
    (30,628
    )Assets
    
    $
    153,365
    
    
    $
    14,982
    
    
    $
    168,347
    
    
    $
    
    
    
    $
    164,084
    
    
    $
    
    
    
    $
    332,431Year Ended December
31, 2006Revenues
    
    $
    64,749
    
    
    $
    
    
    
    $
    64,749
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    64,749Net income (loss)
    
    $
    (15,089
    )
    
    $
    592
    
    
    $
    (14,497
    )
    
    $
    7,824
    
    
    $
    (13,788
    )
    
    $
    36,085
    
    
    $
    15,624Assets
    
    $
    149,594
    
    
    $
    9,781
    
    
    $
    159,375
    
    
    $
    22,535
    
    
    $
    172,517
    
    
    $
    
    
    
    $
    354,427
 *
    
    Discontinued operations represent net income of $995 and $8,289 for the years ended December 31, 2007 and 2006,
respectively. All other amounts relate to dispositions for the years ended December 31, 2008, 2007 and 2006.**
    
    Other reconciling items to net income (loss) are as follows: Year Ended December 31,2008
    
    
    2007
    
    
    2006Other income (loss) (Note 15)
    
    $
    44,277
    
    
    $
    (238
    )
    
    $
    34,813Taxes
    
    
    330
    
    
    
    4,301
    
    
    
    40Minority interest
    
    
    (1,960
    )
    
    
    (468
    )
    
    
    1,232Impairment
of GoIndustry (Other Holdings) (Note 3)
    
    
    (10,204
    )
    
    
    
    
    
    
    Impairment
of Vcommerce (Core) (Note 3)
    
    
    (8,264
    )
    
    
    
    
    
    
    $
    24,179
    
    
    $
    3,595
    
    
    $
    36,085
  57




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 9. Parent Company Financial Information
  Parent Company Balance Sheets
 December 31,2008
    
    
    2007(in thousands)AssetsCash and cash equivalents
    
    $
    73,208
    
    
    $
    69,125Other current assets
    
    
    1,405
    
    
    
    6,286Current assets
    
    
    74,613
    
    
    
    75,411Ownership interests in Partner Companies
    
    
    113,395
    
    
    
    149,407Marketable securities
    
    
    57,367
    
    
    
    88,029Hedges of marketable securities
    
    
    6,626
    
    
    
    Other
    
    
    319
    
    
    
    644Total assets
    
    $
    252,320
    
    
    $
    313,491Liabilities and stockholders equityCurrent liabilities
    
    $
    4,011
    
    
    $
    4,666Hedges of marketable securities
    
    
    
    
    
    
    3,653Non-current liabilities
    
    
    898
    
    
    
    495Stockholders equity
    
    
    247,411
    
    
    
    304,677Total liabilities and stockholders equity
    
    $
    252,320
    
    
    $
    313,491
 Parent Company Statements of Operations
 Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Revenues
    
    $
    
    
    
    $
    
    
    
    $
    Operating expensesGeneral and administrative
    
    
    19,755
    
    
    
    21,680
    
    
    
    20,874Impairment related and other
    
    
    9,058
    
    
    
    
    
    
    
    Total operating expenses
    
    
    28,813
    
    
    
    21,680
    
    
    
    20,874(28,813
    )
    
    
    (21,680
    )
    
    
    (20,874
    )Other income (loss), net *
    
    
    44,277
    
    
    
    (37
    )
    
    
    42,059Interest income (expense), net
    
    
    1,603
    
    
    
    4,658
    
    
    
    7,086Income (loss) before income taxes and equity loss
    
    
    17,067
    
    
    
    (17,059
    )
    
    
    28,271Income tax benefit (expense)
    
    
    330
    
    
    
    4,301
    
    
    
    40Equity loss
    
    
    (40,323
    )
    
    
    (17,870
    )
    
    
    (12,687
    )Net income (loss)
    
    $
    (22,926
    )
    
    $
    (30,628
    )
    
    $
    15,624
 *
    
    For purposes of parent company reporting, discontinued operations (see Note 7) are included in
the Other income (loss), net line item.  58




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INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 9. Parent Company Financial Information  (Continued)
 Parent Company Statements of Cash Flows
 Year Ended December 312008
    
    
    2007
    
    
    2006(in thousands)Operating ActivitiesNet income (loss)
    
    $
    (22,926
    )
    
    $
    (30,628
    )
    
    $
    15,624Adjustments to reconcile net loss to cash used in operating activitiesDepreciation and amortization
    
    
    133
    
    
    
    140
    
    
    
    138Impairment related and other
    
    
    9,058
    
    
    
    
    
    
    
    Equity-based compensation
    
    
    6,298
    
    
    
    7,173
    
    
    
    7,624Equity loss
    
    
    40,323
    
    
    
    17,870
    
    
    
    12,687Other income (loss)
    
    
    (44,277
    )
    
    
    37
    
    
    
    (42,059
    )Changes in assets and liabilities, net of effect of acquisitions:Taxes receivable
    
    
    4,889
    
    
    
    (4,301
    )
    
    
    8,020Prepaid expenses and other assets
    
    
    (8
    )
    
    
    (32
    )
    
    
    1,523Accounts payable
    
    
    6
    
    
    
    (33
    )
    
    
    (4,149
    )Accrued expenses
    
    
    (1,480
    )
    
    
    (230
    )
    
    
    (199
    )Other liabilities
    
    
    403
    
    
    
    
    
    
    
    Cash used in operating activities
    
    
    (7,581
    )
    
    
    (10,004
    )
    
    
    (791
    )Investing ActivitiesCapital expenditures, net
    
    
    (47
    )
    
    
    (63
    )
    
    
    (228
    )Proceeds from sales of marketable securities
    
    
    60,233
    
    
    
    24
    
    
    
    5,554Proceeds from sales of ownership interests in Partner Companies
    
    
    3,267
    
    
    
    34,925
    
    
    
    44,845Acquisitions of ownership interests in Partner Companies, net
    
    
    (42,460
    )
    
    
    (22,919
    )
    
    
    (66,542
    )Purchase of short-term investments
    
    
    
    
    
    
    
    
    
    
    Cash provided by (used in) investing activities
    
    
    20,993
    
    
    
    11,967
    
    
    
    (16,371
    )Financing ActivitiesRepurchase of senior convertible notes
    
    
    
    
    
    
    (37,087
    )
    
    
    (12,768
    )Repayment of loans from employees
    
    
    
    
    
    
    
    
    
    
    4,624Share repurchases
    
    
    (9,329
    )
    
    
    
    
    
    
    Cash provided by (used in) financing activities
    
    
    (9,329
    )
    
    
    (37,087
    )
    
    
    (8,144
    )Net increase (decrease) in cash and cash equivalents
    
    
    4,083
    
    
    
    (35,124
    )
    
    
    (25,306
    )Cash and cash equivalents at beginning at year
    
    
    69,125
    
    
    
    104,249
    
    
    
    129,555Cash and cash equivalents at end of year
    
    $
    73,208
    
    
    $
    69,125
    
    
    $
    104,249
 10. Stockholders Equity
    59




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 10. Stockholders Equity  (Continued)
 Stockholder Rights Plan
    11. Stock Option Plans
    60




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 11. Stock Option Plans  (Continued)
  WeightedAverage YearsRemaining ofUnrecognized
    
    
    Stock-BasedYear Ended
    
    
    Stock-Based
    
    
    CompensationDecember 31,
    
    
    Compensation at
    
    
    Expense at2008
    
    
    2007
    
    
    2006
    
    
    December 31, 2008
    
    
    December 31, 2008Stock Appreciation Rights
    
    $
    4.1
    
    
    $
    3.9
    
    
    $
    4.2
    
    
    $
    4.0
    
    
    
    1.1Stock Options
    
    
    0.0
    
    
    
    0.1
    
    
    
    0.5
    
    
    
    0.0
    
    
    
    0.8Restricted Stock
    
    
    1.6
    
    
    
    2.3
    
    
    
    2.6
    
    
    
    0.2
    
    
    
    1.4Deferred Stock Units
    
    
    0.3
    
    
    
    0.3
    
    
    
    0.3
    
    
    
    0.1
    
    
    
    0.2Equity-Based Compensation
    
    
    6.0
    
    
    
    6.6
    
    
    
    7.6
    
    
    
    4.3Equity-Based Compensation
for Consolidated Partner
Companies:Restricted Stock
    
    
    0.8
    
    
    
    0.6
    
    
    
    0.1
    
    
    
    1.6
    
    
    
    2.2$
    6.8
    
    
    $
    7.2
    
    
    $
    7.7
    
    
    $
    5.9
 Stock Appreciation Rights (SARs) and Stock Options Fair Value Assumptions
  2008
    
    
    2007
    
    
    2006Expected volatility
    
    
    60
    %
    
    
    60
    %
    
    
    60
    %Average expected option life
    
    6.25 years
    
    6.25 years
    
    6.25 yearsRisk-free interest rate
    
    
    3.08
    %
    
    
    3.51-5.10
    %
    
    
    4.55-5.10
    %Dividend yield
    
    
    0.0
    %
    
    
    0.0
    %
    
    
    0.0
    %
   61




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 11. Stock Option Plans  (Continued)
 SARs
   Weighted
    
    
    WeightedAverage
    
    
    AverageSARs
    
    
    Base Price
    
    
    Fair ValueIssued at December 31, 2005
    
    
    3,605,500
    
    
    $
    7.34
    
    
    $
    4.43SARs cancelled
    
    
    (156,771
    )
    
    $
    7.34
    
    
    $
    4.43SARs granted
    
    
    201,450
    
    
    $
    9.25
    
    
    $
    5.66Issued at December 31, 2006
    
    
    3,650,179
    
    
    $
    7.45
    
    
    $
    4.50SARs cancelled
    
    
    (134,064
    )
    
    $
    7.34
    
    
    $
    4.43SARs granted
    
    
    100,000
    
    
    $
    11.96
    
    
    $
    7.18Issued at December 31, 2007
    
    
    3,616,115
    
    
    $
    7.58
    
    
    $
    4.58SARs
exercised
    
    
    (67,363
    )
    
    $
    7.34
    
    
    $
    4.43SARs cancelled
    
    
    (782
    )
    
    $
    7.34
    
    
    $
    4.43SARs granted
    
    
    322,400
    
    
    $
    8.41
    
    
    $
    4.96Issued at December 31, 2008
    
    
    3,870,370
    
    
    $
    7.65
    
    
    $
    4.61
  Weighted Average
    
    
    Aggregate IntrinsicRemaining
    
    
    Value of SARsContractual Life
    
    
    Outstanding atSARs
    
    
    SARs
    
    
    of SARs Outstanding
    
    
    December 31, 2008Grant Price
    
    Outstanding
    
    
    Exercisable
    
    
    (in years)
    
    
    (in thousands)$7.34
    
    
    3,241,520
    
    
    
    2,786,055
    
    
    
    6.6
    
    
    $
    $8.41
    
    
    322,400
    
    
    
    
    
    
    
    9.7
    
    
    $
    $8.14  $12.01
    
    
    306,450
    
    
    
    186,181
    
    
    
    7.8
    
    
    $
    3,870,370
    
    
    
    2,972,236
    
    
    
    
    
    
    $
    
   62




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 11.
Stock Option Plans  (Continued)
 Stock Options
   Weighted
    
    
    WeightedAverage
    
    
    AverageGrant Date
    
    
    Grant DateShares
    
    
    Exercise Price
    
    
    Fair ValueOutstanding at December 31, 2005
    
    
    726,887
    
    
    $
    37.24
    
    
    $
    30.44Options granted
    
    
    250
    
    
    $
    9.34
    
    
    $
    5.74Options forfeited
    
    
    (89,683
    )
    
    $
    38.01
    
    
    $
    35.73Outstanding at December 31, 2006 and 2007
    
    
    637,454
    
    
    $
    37.13
    
    
    $
    29.69Options granted
    
    
    500
    
    
    $
    7.22
    
    
    $
    4.26Options forfeited
    
    
    (23,000
    )
    
    $
    19.76
    
    
    $
    15.70Outstanding at December 31, 2008
    
    
    614,954
    
    
    $
    36.58
    
    
    $
    29.81
   Weighted AverageRemaining
    
    
    Aggregate IntrinsicContractual Life
    
    
    Value atShares
    
    
    Shares
    
    
    of Shares Outstanding
    
    
    December 31, 2008Exercise Price
    
    Outstanding
    
    
    Vested
    
    
    (in years)
    
    
    (in thousands)$4.59  $8.00
    
    
    137,474
    
    
    
    136,588
    
    
    
    4.3
    
    
    $
    86$8.01  $12.00
    
    
    186,233
    
    
    
    185,983
    
    
    
    4.2
    
    
    $
    $12.01  $20.00
    
    
    104,699
    
    
    
    104,699
    
    
    
    2.7
    
    
    $
    $20.01  $2,210.00
    
    
    186,548
    
    
    
    186,548
    
    
    
    1.9
    
    
    $
    614,954
    
    
    
    613,818
    
    
    
    
    
    
    $
    86
   63




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 11. Stock Option Plans  (Continued)
 Restricted Stock
  WeightedAverage GrantShares
    
    
    Date Fair ValueIssued and unvested, December 31, 2005
    
    
    1,133,065
    
    
    $
    7.15Granted
    
    
    49,620
    
    
    $
    9.28Vested
    
    
    (326,563
    )
    
    $
    7.12Forfeited
    
    
    (37,500
    )
    
    $
    7.34Issued and unvested, December 31, 2006
    
    
    818,622
    
    
    $
    7.28Granted
    
    
    15,000
    
    
    $
    12.01Vested
    
    
    (311,499
    )
    
    $
    7.22Forfeited
    
    
    (35,844
    )
    
    $
    7.23Issued and unvested December 31, 2007
    
    
    486,279
    
    
    $
    7.39Granted
    
    
    
    
    
    $
    Vested
    
    
    (468,729
    )
    
    $
    7.20Forfeited
    
    
    (250
    )
    
    $
    6.98Issued and unvested, December 31, 2008
    
    
    17,300
    
    
    $
    10.82
   Deferred Stock Units (DSUs)
  
  64




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INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 11. Stock Option Plans  (Continued)
  Weighted 
Average GrantDSUs
    
    

Date Fair ValueIssued and unvested, December 31, 2005
    
    
    74,062
    
    
    $
    7.34Granted
    
    
    56,494
    
    
    $
    9.08Vested
    
    
    (109,056
    )
    
    $
    7.87Issued and unvested, December 31, 2006
    
    
    21,500
    
    
    $
    9.20Granted
    
    
    74,375
    
    
    $
    11.33Vested
    
    
    (64,375
    )
    
    $
    11.43Issued and unvested, December 31, 2007
    
    
    31,500
    
    
    $
    11.37Granted
    
    
    36,000
    
    
    $
    8.70Vested
    
    
    (31,500
    )
    
    $
    11.37Issued and unvested, December 31, 2008
    
    
    36,000
    
    
    $
    8.70
 Consolidated Partner Companies
    Other
   65




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 12. Income Taxes
  Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Income tax expense (benefit) from continuing operations:Federal taxes
    
    $
    (147
    )
    
    $
    (4,252
    )
    
    $
    (40
    )State taxes
    
    
    53
    
    
    
    
    
    
    
    Foreign taxes
    
    
    451
    
    
    
    260
    
    
    
    Total
    
    $
    357
    
    
    $
    (3,992
    )
    
    $
    (40
    )
  Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Current
    
    $
    357
    
    
    $
    (3,992
    )
    
    $
    (40
    )Deferred
    
    
    
    
    
    
    
    
    
    
    Total
    
    $
    357
    
    
    $
    (3,992
    )
    
    $
    (40
    )
   66




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 12. Income Taxes  (Continued)
   As of December 31,2008
    
    
    2007(in thousands)Net operating loss carry forward
    
    $
    184,724
    
    
    $
    184,084Capital loss carry forward
    
    
    128,279
    
    
    
    163,433Other comprehensive income
    
    
    (18,971
    )
    
    
    (29,703
    )Reserves and accruals
    
    
    2,134
    
    
    
    1,693Stock-based compensation expense
    
    
    6,991
    
    
    
    5,119Other, net
    
    
    744
    
    
    
    629Partner Company basis difference
    
    
    138,199
    
    
    
    151,503Valuation allowance
    
    
    (442,100
    )
    
    
    (476,758
    )Net deferred tax asset (liability)
    
    $
    
    
    
    $
    
  Year
ended December 31,2008
    
    
    2007
    
    
    2006Tax expense (benefit) at statutory rate
    
    
    (35.0
    )%
    
    
    (35.0
    )%
    
    
    35.0
    %Foreign and state taxes
    
    
    2.1
    %
    
    
    
    
    
    
    Non-deductible expenses and other
    
    
    1.2
    %
    
    
    10.9
    %
    
    
    5.1
    %Valuation allowance
    
    
    33.2
    %
    
    
    12.9
    %
    
    
    (40.4
    )%1.5
    %
    
    
    (11.2
    )%
    
    
    (0.3
    )%
 13. Related Parties
    67




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 14. Other Supplemental Non-Cash Financing and Investing Activities
   15. Other Income (Loss)
 Other Income (Loss), net
  Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands)Sales/distributions of ownership interests in Partner Companies (Note 3)
    
    $
    38,007
    
    
    $
    9,786
    
    
    $
    31,034Losses on debt extinguishment (Note 5)
    
    
    
    
    
    
    (10,833
    )
    
    
    (2,490
    )Unrealized gain (loss) on mark-to-market of hedges (Note 4)
    
    
    10,204
    
    
    
    (3,651
    )
    
    
    Realized gains (losses) on marketable securities
    
    
    634
    
    
    
    23
    
    
    
    5,484Impairments of cost method Partner Companies
    
    
    (4,735
    )
    
    
    
    
    
    
    Other
    
    
    167
    
    
    
    4,437
    
    
    
    785$
    44,277
    
    
    $
    (238
    )
    
    $
    34,813Total other income (loss) for Consolidated Partner Companies
    
    
    (1,052
    )
    
    
    71
    
    
    
    (208
    )$
    43,225
    
    
    $
    (167
    )
    
    $
    34,605
   16. Commitments and Contingencies
   68




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 16. Commitments and Contingencies  (Continued)
  2009
    
    $
    2,2242010
    
    $
    1,9552011
    
    $
    1,7482012
    
    $
    1,2742013
    
    $
    1,044Thereafter
    
    $
    3,919
    17. Net Income (Loss) per Share
  Year Ended December 31,2008
    
    
    2007
    
    
    2006(in thousands, except shares and per share data)Basic and Diluted:Income (loss) from continuing operations
    
    $
    (22,926
    )
    
    $
    (31,623
    )
    
    $
    7,335Income (loss) on discontinued operations
    
    
    
    
    
    
    995
    
    
    
    8,289Net income (loss)
    
    $
    (22,926
    )
    
    $
    (30,628
    )
    
    $
    15,624Basic:Income (loss) from continuing operations per share
    
    $
    (0.60
    )
    
    $
    (0.83
    )
    
    $
    0.20Income (loss) on discontinued operations per share
    
    
    
    
    
    
    0.02
    
    
    
    0.22Net income (loss) per share
    
    $
    (0.60
    )
    
    $
    (0.81
    )
    
    $
    0.42Diluted:Income (loss) from continuing operations per share
    
    $
    (0.60
    )
    
    $
    (0.83
    )
    
    $
    0.19Income (loss) on discontinued operations per share
    
    
    
    
    
    
    0.02
    
    
    
    0.22Net income (loss) per share
    
    $
    (0.60
    )
    
    $
    (0.81
    )
    
    $
    0.41Basic weighted average common shares outstanding
    
    
    38,105,583
    
    
    
    37,915,626
    
    
    
    37,569,795Incremental Diluted Shares Impact:Stock options
    
    
    
    
    
    
    
    
    
    
    52,245Restricted stock
    
    
    
    
    
    
    
    
    
    
    460,550Warrants
    
    
    
    
    
    
    
    
    
    
    4,352DSUs
    
    
    
    
    
    
    
    
    
    
    15,662SARs
    
    
    
    
    
    
    
    
    
    
    3,618Convertible debt
    
    
    
    
    
    
    
    
    
    
    Diluted weighted average common shares outstanding
    
    
    38,105,583
    
    
    
    37,915,626
    
    
    
    38,106,222
  69




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 17. Net Income (Loss) per Share  (Continued)
  Weighted AverageShares
    
    
    Price per ShareYear ended December 31, 2008Stock options
    
    
    614,954
    
    
    $
    36.58SARs
    
    
    3,870,370
    
    
    $
    7.65Restricted stock
    
    
    17,300
    
    
    $
    10.82DSUs
    
    
    36,000
    
    
    $
    8.70Year Ended December 31, 2007Stock options
    
    
    637,454
    
    
    $
    37.13SARs
    
    
    3,616,115
    
    
    $
    7.58Restricted stock
    
    
    486,279
    
    
    $
    7.39DSUs
    
    
    31,500
    
    
    $
    11.37Warrants
    
    
    12,500
    
    
    $
    6.00Year Ended December 31, 2006Stock options
    
    
    381,997
    
    
    $
    57.31Stock options (exercised with partial recourse loans)
    
    
    508,028
    
    
    $
    41.70SARs
    
    
    3,483,124
    
    
    $
    7.42Senior convertible notes
    
    
    3,337,705
    
    
    $
    9.11Warrants
    
    
    3,150
    
    
    $
    100.00
 18. Share Repurchase Program
   70




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##### Table of Contents



INTERNET CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS  (Continued)
 19. Selected Quarterly Financial Information (Unaudited)
  Fiscal 2008 Quarter Ended
    
    
    Fiscal 2007 Quarter EndedMar.31
    
    
    Jun.30
    
    
    Sep.30
    
    
    Dec.31
    
    
    Mar.31
    
    
    Jun.30
    
    
    Sep.30
    
    
    Dec.31(in thousands, except per share data)Revenues
    
    $
    16,022
    
    
    $
    17,581
    
    
    $
    17,104
    
    
    $
    20,474
    
    
    $
    11,782
    
    
    $
    12,520
    
    
    $
    14,559
    
    
    $
    14,062Operating ExpensesCost of revenue
    
    
    11,371
    
    
    
    11,575
    
    
    
    11,687
    
    
    
    11,767
    
    
    
    9,025
    
    
    
    10,381
    
    
    
    10,029
    
    
    
    10,088Selling, general &
administrative
    
    
    8,662
    
    
    
    9,830
    
    
    
    8,336
    
    
    
    9,337
    
    
    
    9,115
    
    
    
    7,756
    
    
    
    8,342
    
    
    
    7,568Research and development
    
    
    1,465
    
    
    
    2,771
    
    
    
    3,112
    
    
    
    2,864
    
    
    
    1,568
    
    
    
    1,562
    
    
    
    1,532
    
    
    
    1,371Impairment related and other
    
    
    75
    
    
    
    117
    
    
    
    197
    
    
    
    9,663
    
    
    
    52
    
    
    
    54
    
    
    
    37
    
    
    
    45(5,551
    )
    
    
    (6,712
    )
    
    
    (6,228
    )
    
    
    (13,157
    )
    
    
    (7,978
    )
    
    
    (7,233
    )
    
    
    (5,381
    )
    
    
    (5,010
    )Other income (loss), net
    
    
    5,847
    
    
    
    (359
    )
    
    
    34,368
    
    
    
    3,369
    
    
    
    (11,869
    )
    
    
    3,678
    
    
    
    1,646
    
    
    
    6,378Interest income
    
    
    829
    
    
    
    404
    
    
    
    317
    
    
    
    298
    
    
    
    1,478
    
    
    
    1,148
    
    
    
    1,462
    
    
    
    1,250Interest expense
    
    
    (13
    )
    
    
    (64
    )
    
    
    (129
    )
    
    
    (128
    )
    
    
    (246
    )
    
    
    (22
    )
    
    
    (19
    )
    
    
    (13
    )Income (loss) before minority
interest and equity loss
    
    
    1,112
    
    
    
    (6,731
    )
    
    
    28,328
    
    
    
    (9,618
    )
    
    
    (18,615
    )
    
    
    (2,429
    )
    
    
    (2,292
    )
    
    
    2,605Income tax (expense) benefit
    
    
    (54
    )
    
    
    (239
    )
    
    
    224
    
    
    
    (288
    )
    
    
    2,148
    
    
    
    494
    
    
    
    794
    
    
    
    556Minority interest
    
    
    (530
    )
    
    
    (584
    )
    
    
    (34
    )
    
    
    (812
    )
    
    
    388
    
    
    
    (19
    )
    
    
    (487
    )
    
    
    (351
    )Equity loss
    
    
    (7,081
    )
    
    
    (4,741
    )
    
    
    (6,020
    )
    
    
    (15,860
    )
    
    
    (3,516
    )
    
    
    (1,806
    )
    
    
    (3,070
    )
    
    
    (6,023
    )Income (loss) from continuing
operations
    
    $
    (6,553
    )
    
    
    (12,295
    )
    
    
    22,498
    
    
    
    (26,578
    )
    
    
    (19,595
    )
    
    
    (3,760
    )
    
    
    (5,055
    )
    
    
    (3,213
    )Income (loss) on discontinued
operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (220
    )
    
    
    1,024
    
    
    
    191Net income (loss)
    
    $
    (6,553
    )
    
    $
    (12,295
    )
    
    $
    22,498
    
    
    $
    (26,578
    )
    
    $
    (19,595
    )
    
    $
    (3,980
    )
    
    $
    (4,031
    )
    
    $
    (3,022
    )Basic income (loss) per share(1)Income (loss) from continuing
operations
    
    $
    (0.17
    )
    
    $
    (0.32
    )
    
    $
    0.59
    
    
    $
    (0.71
    )
    
    $
    (0.52
    )
    
    $
    (0.10
    )
    
    $
    (0.14
    )
    
    $
    (0.08
    )Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.01
    )
    
    
    0.03
    
    
    
    0.0$
    (0.17
    )
    
    $
    (0.32
    )
    
    $
    0.59
    
    
    $
    (0.71
    )
    
    $
    (0.52
    )
    
    $
    (0.11
    )
    
    $
    (0.11
    )
    
    $
    (0.08
    )Shares used in computation
of basic income (loss)
per share (1)
    
    
    38,221
    
    
    
    38,383
    
    
    
    38,437
    
    
    
    37,386
    
    
    
    37,803
    
    
    
    37,846
    
    
    
    37,925
    
    
    
    38,086Diluted income (loss) per share(1)Income (loss) from continuing
operations
    
    $
    (0.17
    )
    
    $
    (0.32
    )
    
    $
    0.58
    
    
    $
    (0.71
    )
    
    $
    (0.52
    )
    
    $
    (0.10
    )
    
    $
    (0.14
    )
    
    $
    (0.08
    )Discontinued operations
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    
    (0.01
    )
    
    
    0.03
    
    
    
    0.0$
    (0.17
    )
    
    $
    (0.32
    )
    
    $
    0.58
    
    
    $
    (0.71
    )
    
    $
    (0.52
    )
    
    $
    (0.11
    )
    
    $
    (0.11
    )
    
    $
    (0.08
    )Shares used in computation
of diluted income (loss)
per share (1)
    
    
    38,221
    
    
    
    38,383
    
    
    
    38,784
    
    
    
    37,386
    
    
    
    37,803
    
    
    
    37,846
    
    
    
    37,925
    
    
    
    38,086
 
 (1)
    
    The sum of quarterly income (loss) per share differs from the full year amount due to changes
in the number of shares outstanding during the year. 
 ITEM 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosures
   71




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##### Table of Contents



ITEM 9A. Controls and Procedures
 Disclosure Controls and Procedures
  Managements Report on Internal Control Over Financial Reporting
  Internal
Control-Integrated Framework.
   Inherent Limitations on Effectiveness of Controls
   72




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##### Table of Contents



Report of Independent Registered Public Accounting Firm
 
 Internal
ControlIntegrated Framework
    Internal ControlIntegrated Framework
  
  73




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ITEM 9B. Other Information
   74




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##### Table of Contents



PART III
 
 ITEM
10. Directors, Executive Officers and Corporate Governance
   
 ITEM 11. Executive Compensation
  
 ITEM 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder
Matters
  
 ITEM 13. Certain Relationships and Related Transactions, and Director Independence
  
 ITEM 14. Principal Accountant Fees and Services
   75




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##### Table of Contents



PART IV
 
 ITEM 15. Exhibits and Financial Statement Schedules
 1. Consolidated Financial Statements
   2. Financial Statement Schedule
 Report of Independent Registered Public Accounting Firm
 
    
  INTERNET CAPITAL GROUP
SCHEDULE II VALUATION AND QUALIFYING ACCOUNTS
Years Ended December 31, 2006, 2007 and 2008
(in thousands)
 Balance at the
    
    
    Charged to
    
    
    
    
    
    
    Balance at thebeginning of
    
    
    costs and
    
    
    
    
    
    
    end ofthe year
    
    
    expenses
    
    
    Write-offs
    
    
    the yearAllowance for Doubtful Accounts:December 31, 2006
    
    $
    599
    
    
    $
    641
    
    
    $
    (1,103
    ) (a)
    
    $
    137December 31, 2007
    
    $
    137
    
    
    $
    (45
    )
    
    $
    (48
    )
    
    $
    44December 31, 2008
    
    $
    44
    
    
    $
    750
    (b)
    
    
    (73
    )
    
    $
    721
 
 (a)
    
    Reserve of $656 was eliminated upon deconsolidation of partner company during 2006.(b)
    
    Reserve of $411 was established upon acquisition of partner company during 2008.  76




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##### Table of Contents



3. List of Exhibits
  Exhibit Number
    
    Document2.1
    
    
    Agreement of Merger, dated February 2, 1999, between
Internet Capital Group, L.L.C. and Internet Capital Group,
Inc. (incorporated by reference to Exhibit 2.1 to the
Companys Registration Statement on
Form S-1, filed May 11,
1999 (File No. 333-78193)).3.1.1
    
    
    Restated Certificate of Incorporation of Internet Capital
Group, Inc. (incorporated by reference to Exhibit 2.1 to
the Companys Registration Statement on Form 8-A, filed
August 4, 1999 (File
No. 000-26989)).3.1.2
    
    
    Certificate of Amendment of Restated Certificate of
Incorporation (incorporated by reference to Exhibit 3.3 to
the Companys Annual Report on Form 10-K for the year ended
December 31, 2002, filed March 31, 2003 (File No.
001-16249)).3.1.3
    
    
    Second Amendment of Restated Certificate of Incorporation
of Internet Capital Group, Inc. (incorporated by reference
to Exhibit 3.1 to the Companys Quarterly Report on Form
10-Q for the quarter ended June 30, 2004, filed August 9,
2004 (File No. 001-16249)).3.2
    
    
    Amended and Restated By-laws of Internet Capital Group,
Inc. (incorporated by reference to Exhibit 3.1 to the
Companys Current Report on Form 8-K, filed March 5, 2007
(File No. 001-16249)).4.1
    
    
    Form of Certificate for Internet Capital Group, Inc. Common
Stock (incorporated by reference to Exhibit 4.1 to the
Companys Annual Report on Form 10-K for the year ended
December 31, 2004, filed March 16, 2005 (File No.
001-16249)).4.2
    
    
    Rights Agreement, dated as of November 22, 2000, between
Internet Capital Group, Inc. and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent, including Form of Rights
Certificate (incorporated by reference to Exhibit 1.1 to
the Companys Registration Statement on Form 8-A, filed
December 1, 2000 (File No. 001-16249)).10.1
    
    
    Internet Capital Group, Inc. Amended and Restated 1999
Equity Compensation Plan (incorporated by reference to
Exhibit 10.6 to the Companys Current Report on Form 8-K,
filed March 5, 2007 (File No. 001-16249)).10.2
    
    
    Internet Capital Group, Inc. Amended and Restated 2005
Omnibus Equity Compensation Plan (incorporated by reference
to Exhibit 10.7 to the Companys Current Report on Form
8-K, filed March 5, 2007 (File No. 001-16249)).
  77




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##### Table of Contents



Exhibit Number
    
    Document10.3
    
    
    Internet Capital Group, Inc. Amended and Restated Non-Management
Director Compensation Plan (incorporated by reference to Exhibit
10.4 to the Companys Current Report on Form 8-K, filed March 5,
2007 (File No. 001-16249)).10.4
    
    
    Internet Capital Group, Inc. Amended and Restated Director Deferred
Stock Unit Program (incorporated by reference to Exhibit 10.5 to
the Companys Current Report on Form 8-K, filed December 18, 2008
(File No. 001-16249)).10.5.1
    
    
    Logistics.com, Inc. 2001 Equity Compensation Plan (incorporated by
reference to Exhibit 10.3 to the Companys Annual Report on Form
10-K for the year ended December 31, 2002, filed March 31, 2003
(File No. 001-16249)).10.5.2
    
    
    Amendment No. 1 to the Logistics.com, Inc. 2001 Equity Compensation
Plan (incorporated by reference to Exhibit 10.3.1 to the Companys
Annual Report on Form 10-K for the year ended December 31, 2002,
filed March 31, 2003 (File No. 001-16249)).10.6
    
    
    Internet Capital Group 2008 Performance Plan (incorporated by
reference to Exhibit 10.1 of the Companys Current Report on Form
8-K, filed March 5, 2008 (File No. 001-16249)).10.7
    
    
    Internet Capital Group 2009 Performance Plan (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form
8-K, filed March 4, 2009 (File No. 001-16249)).10.8
    
    
    Form of Internet Capital Group, Inc. Restricted Stock Grant Without
Performance Acceleration (incorporated by reference to Exhibit
10.32 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2004, filed March 16, 2005 (File No.
001-16249)).10.9
    
    
    Form of Internet Capital Group, Inc. Restricted Stock Grant With
Performance Acceleration (incorporated by reference to Exhibit
10.33 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2004, filed March 16, 2005 (File No.
001-16249)).10.10
    
    
    Form of Internet Capital Group, Inc. Stock Option Grant Without
Performance Acceleration (incorporated by reference to Exhibit
10.34 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2004, filed March 16, 2005 (File No.
001-16249)).10.11
    
    
    Form of Internet Capital Group, Inc. Stock Option Grant With
Performance Acceleration (incorporated by reference to Exhibit
10.35 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2004, filed March 16, 2005 (File No.
001-16249)).10.12
    
    
    Form of Internet Capital Group, Inc. Non-Employee Director Initial
Stock Option Grant (incorporated by reference to Exhibit 10.36 to
the Companys Annual Report on Form 10-K for the year ended
December 31, 2004, filed March 16, 2005 (File No. 001-16249)).10.13
    
    
    Form of Internet Capital Group, Inc. Non-Employee Director Annual
Stock Option Grant (incorporated by reference to Exhibit 10.37 to
the Companys Annual Report on Form 10-K for the year ended
December 31, 2004, filed March 16, 2005 (File No. 001-16249)).10.14
    
    
    Form of Internet Capital Group, Inc. Stock Unit Award Agreement
(incorporated by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K, filed July 28, 2005 (File No. 001-16249)).
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Exhibit Number
    
    Document10.15
    
    
    Form of Internet Capital Group, Inc. Stock Appreciation
Rights Certificate (incorporated by reference to Exhibit
10.2 to the Companys Current Report on Form 8-K, filed
July 28, 2005 (File No. 001-16249)).10.16.1
    
    
    Employment Agreement, dated February 28, 2007, by and among
Internet Capital Group Operations, Inc., Internet Capital
Group, Inc. and Walter W. Buckley, III (incorporated by
reference to Exhibit 10.1 to the Companys Current Report
on Form 8-K, filed March 5, 2007 (File No. 001-16249)).10.16.2
    
    

Amendment 2008-1 to the Employment Agreement, dated as of
December 18, 2008, by and between Internet Capital Group
Operations, Inc. and Walter W. Buckley, III (incorporated
by reference to Exhibit 10.2 to the Companys Current
Report on Form 8-K, filed December 18, 2008 (File No.
001-16249)).10.17
    
    
    Letter Agreement, dated December 18, 2008, by and between
Internet Capital Group and R. Kirk Morgan (incorporated by
reference to Exhibit 10.4 to the Companys Current Report
on Form 8-K, filed December 18, 2008 (File No. 001-16249)).10.18.1
    
    
    Employment Agreement, dated April 18, 2007, by and between
Internet Capital Group and Douglas A. Alexander
(incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K, filed April 18, 2007 (File No.
001-16249)).10.18.2
    
    

Amendment 2008-1 to the Employment Agreement, dated as of
December 18, 2008, by and between Internet Capital Group
Operations, Inc. and Douglas A. Alexander (incorporated by
reference to Exhibit 10.3 to the Companys Current Report
on Form 8-K, filed December 18, 2008 (File No. 001-16249)).10.19
    
    
    Form of Restrictive Covenant Agreement (incorporated by
reference to Exhibit 10.4 to the Companys Current Report
on Form 8-K, filed July 28, 2005 (File No. 001-16249)).10.20.1
    
    
    Letter of Credit Agreement, dated as of September 30, 2002,
by and between Comerica Bank-California and Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Quarterly Report on Form
10-Q for the quarter ended September 30, 2002, filed
November 14, 2002 (File No. 001-16249)).10.20.2
    
    
    First Amendment to Letter of Credit Agreement, dated as of
October 20, 2003, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Quarterly Report on Form
10-Q for the quarter ended September 30, 2003, filed
November 14, 2003 (File No. 001-16249)).10.20.3
    
    
    Second Amendment to Letter of Credit Agreement, dated as of
December 15, 2004, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.14.2 to the Companys Annual Report on Form
10-K for the year ended December 31, 2004, filed March 16,
2005 (File No. 001-16249)).
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Exhibit Number
    
    Document10.20.4
    
    
    Third Amendment to Letter of Credit Agreement, dated as of
December 15, 2005, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Current Report on Form
8-K, filed December 15, 2005 (File No. 001-16249)).10.20.5
    
    
    Fourth Amendment to Letter of Credit Agreement, dated as of
December 5, 2006, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Current Report on Form
8-K, filed December 19, 2006 (File No. 001-16249)).10.20.6
    
    
    Fifth Amendment to Letter of Credit Agreement, dated as of
December 7, 2007, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Current Report on Form
8-K, filed December 13, 2007 (File No. 001-16249)).10.20.7
    
    
    Sixth Amendment to Letter of Credit Agreement, dated as of
December 13, 2008, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Current report on Form
8-K, filed December 18, 2008 (File No. 001-16249)).10.21
    
    
    Note Purchase Agreement, dated February 12, 2007, by and
between Mason Capital Management, LLC (and its affiliates
and advisory clients named therein) and Internet Capital
Group, Inc. (incorporated by reference to the Companys
Current Report on Form 8-K, filed February 12, 2007 (File
No. 001-16249)).10.22
    
    
    Note Purchase Agreement, dated February 12, 2007, by and
between Sonoma Capital, LP and Internet Capital Group, Inc.
(incorporated by reference to the Companys Current Report
on Form 8-K, filed February 12, 2007 (File No. 001-16249)).10.23
    
    
    Letter Agreement, dated December 16, 2005, by and between
ICG Holdings, Inc. and Credit Suisse First Boston Capital
LLC (incorporated by reference to Exhibit 10.31 to the
Companys Annual Report on Form 10-K for the year ended
December 31, 2005, filed March 15, 2006 (File No.
001-16249)).10.24
    
    
    Form of Loan Agreements, each dated as of May 8, 2008, by
and between ICG Holdings, Inc. and Credit Suisse Capital
LLC (incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2008, filed May 12, 2008 (File No.
001-16249)).10.25
    
    
    Form of Promissory Note by ICG Holdings, Inc. in favor of
Credit Suisse Capital LLC (incorporated by reference to
Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q
for the quarter ended March 31, 2008, filed May 12, 2008
(File No. 001-16249)).10.26.1
    
    
    Agreement of Lease, dated June 30, 2003, between FV Office
Partners, L.P. and Internet Capital Group Operations, Inc.
(incorporated by reference to Exhibit 10.1 to the Companys
Quarterly Report on Form 10-Q for the quarter ended June
30, 2003, filed August 14, 2003 (File No. 001-16249)).
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Exhibit Number
    
    Document10.26.2
    
    
    First Amendment to Lease, dated November 20, 2003, between
FV Office Partners, L.P. and Internet Capital Group
Operations, Inc. (incorporated by reference to Exhibit
10.37 to the Companys Annual Report on Form 10-K for the
year ended December 31, 2003, filed March 15, 2004 (File
No. 001-16249)).10.26.3
    
    
    Second Amendment to Lease, dated August 21, 2006, by and
between Chesterbrook Partners, L.P. (as
successor-in-interest to FV Partners, L.P.) and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.33.3 to the Companys Annual Report on Form
10-K for the year ended December 31, 2006, filed March 16,
2007 (File No. 001.16249)).10.27
    
    
    Form of Agreement of Limited Partnership for Internet
Capital Group, Inc. Carried Interest Long-Term Incentive
Plan (incorporated by reference to Exhibit 10.2 to the
Companys Current report on Form 8-K, filed
December 13, 2007 (File No. 001-16249)).10.28
    
    
    Form of Limited Partnership Interest Grant (incorporated by
reference to Exhibit 10.3 to the Companys Current Report
on Form 8-K, filed December 13, 2007 (File No. 001-16249)).
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Exhibit Number
    
    Document11.1
    
    
    Statement Regarding Computation of Per Share Earnings (included
herein at Note 2-Significant Accounting Policies in the
subsection Net Income (Loss) Per Share to the Consolidated
Financial Statements and Note 17-Net Income (Loss) Per Share to
the Consolidated Financial Statements).14.1
    
    
    Internet Capital Group Corporate Code of Conduct (incorporated by
reference to Exhibit 10.2 to the Companys Current Report on Form
8-K, filed March 4, 2009 (File No. 001-16249)).21.1
    
    
    Subsidiaries of Internet Capital Group, Inc. (filed herewith).23.1
    
    
    Consent of KPMG LLP (filed herewith).23.2
    
    

Consent
of Grant Thornton LLP/Metastorm Inc. (filed herewith).31.1
    
    
    Certification of Chief Executive Officer required by Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith).31.2
    
    
    Certification of Chief Financial Officer required by Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith).32.1
    
    
    Certification of the Chief Executive Officer required by Section
906 of the Sarbanes-Oxley Act of 2002 (filed herewith).32.2
    
    
    Certification of the Chief Financial Officer required by Section
906 of the Sarbanes-Oxley Act of 2002 (filed herewith).99.1
    
    

Consolidated Financial Statements of Metastorm Inc. (filed herewith).
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SIGNATURES
  Date: March 16, 2009
    INTERNET CAPITAL GROUP, INC.By:
    /s/ R. KIRK MORGANName:
    R. Kirk MorganTitle:
    Chief Financial Officer  Signature
    
    
    
    Title/s/ WALTER W. BUCKLEY, III

Walter W. Buckley, III
    
    
    
    Chief Executive Officer and Chairman of the Board
of Directors (Principal Executive Officer)

/s/ R. KIRK MORGAN

R. Kirk Morgan
    
    
    
    Chief Financial Officer
(Principal Financial and Accounting Officer)/s/ DAVID J. BERKMAN

David J. Berkman
    
    
    
    Director/s/ THOMAS A. DECKER

Thomas A. Decker
    
    
    
    Director/s/ DAVID K. DOWNES

David K. Downes
    
    
    
    Director/s/ THOMAS P. GERRITY

Thomas P. Gerrity
    
    
    
    Director/s/ MICHAEL J. HAGAN

Michael J. Hagan
    
    
    
    Director/s/ ROBERT E. KEITH, JR.

Robert E. Keith, Jr.
    
    
    
    Director/s/ WARREN V. MUSSER

Warren V. Musser
    
    
    
    Director/s/ PHILIP J. RINGO

Philip J. Ringo
    
    
    
    Director
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EXHIBIT INDEX
 Exhibit Number
    
    Document2.1
    
    
    Agreement of Merger, dated February 2, 1999, between
Internet Capital Group, L.L.C. and Internet Capital Group,
Inc. (incorporated by reference to Exhibit 2.1 to the
Companys Registration Statement on
Form S-1, filed May 11,
1999 (File No. 333-78193)).3.1.1
    
    
    Restated Certificate of Incorporation of Internet Capital
Group, Inc. (incorporated by reference to Exhibit 2.1 to
the Companys Registration Statement on
Form 8-A, filed
August 4, 1999 (File
No. 000-26989)).3.1.2
    
    
    Certificate of Amendment of Restated Certificate of
Incorporation (incorporated by reference to Exhibit 3.3 to
the Companys Annual Report on Form 10-K for the year ended
December 31, 2002, filed March 31, 2003 (File No.
001-16249)).3.1.3
    
    
    Second Amendment of Restated Certificate of Incorporation
of Internet Capital Group, Inc. (incorporated by reference
to Exhibit 3.1 to the Companys Quarterly Report on Form
10-Q for the quarter ended June 30, 2004, filed August 9,
2004 (File No. 001-16249)).3.2
    
    
    Amended and Restated By-laws of Internet Capital Group,
Inc. (incorporated by reference to Exhibit 3.1 to the
Companys Current Report on Form 8-K, filed March 5, 2007
(File No. 001-16249)).4.1
    
    
    Form of Certificate for Internet Capital Group, Inc. Common
Stock (incorporated by reference to Exhibit 4.1 to the
Companys Annual Report on Form 10-K for the year ended
December 31, 2004, filed March 16, 2005 (File No.
001-16249)).4.2
    
    
    Rights Agreement, dated as of November 22, 2000, between
Internet Capital Group, Inc. and ChaseMellon Shareholder
Services, L.L.C., as Rights Agent, including Form of Rights
Certificate (incorporated by reference to Exhibit 1.1 to
the Companys Registration Statement on Form 8-A, filed
December 1, 2000 (File No. 001-16249)).10.1
    
    
    Internet Capital Group, Inc. Amended and Restated 1999
Equity Compensation Plan (incorporated by reference to
Exhibit 10.6 to the Companys Current Report on Form 8-K,
filed March 5, 2007 (File No. 001-16249)).10.2
    
    
    Internet Capital Group, Inc. Amended and Restated 2005
Omnibus Equity Compensation Plan (incorporated by reference
to Exhibit 10.7 to the Companys Current Report on Form
8-K, filed March 5, 2007 (File No. 001-16249)).
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Exhibit Number
    
    Document10.3
    
    
    Internet Capital Group, Inc. Amended and Restated Non-Management
Director Compensation Plan (incorporated by reference to Exhibit
10.4 to the Companys Current Report on Form 8-K, filed March 5,
2007 (File No. 001-16249)).10.4
    
    
    Internet Capital Group, Inc. Amended and Restated Director Deferred
Stock Unit Program (incorporated by reference to Exhibit 10.5 to
the Companys Current Report on Form 8-K, filed December 18, 2008
(File No. 001-16249)).10.5.1
    
    
    Logistics.com, Inc. 2001 Equity Compensation Plan (incorporated by
reference to Exhibit 10.3 to the Companys Annual Report on Form
10-K for the year ended December 31, 2002, filed March 31, 2003
(File No. 001-16249)).10.5.2
    
    
    Amendment No. 1 to the Logistics.com, Inc. 2001 Equity Compensation
Plan (incorporated by reference to Exhibit 10.3.1 to the Companys
Annual Report on Form 10-K for the year ended December 31, 2002,
filed March 31, 2003 (File No. 001-16249)).10.6
    
    
    Internet Capital Group 2008 Performance Plan (incorporated by
reference to Exhibit 10.1 of the Companys Current Report on Form
8-K, filed March 5, 2008 (File No. 001-16249)).10.7
    
    
    Internet Capital Group 2009 Performance Plan (incorporated by
reference to Exhibit 10.1 to the Companys Current Report on Form
8-K, filed March 4, 2009 (File No. 001-16249)).10.8
    
    
    Form of Internet Capital Group, Inc. Restricted Stock Grant Without
Performance Acceleration (incorporated by reference to Exhibit
10.32 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2004, filed March 16, 2005 (File No.
001-16249)).10.9
    
    
    Form of Internet Capital Group, Inc. Restricted Stock Grant With
Performance Acceleration (incorporated by reference to Exhibit
10.33 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2004, filed March 16, 2005 (File No.
001-16249)).10.10
    
    
    Form of Internet Capital Group, Inc. Stock Option Grant Without
Performance Acceleration (incorporated by reference to Exhibit
10.34 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2004, filed March 16, 2005 (File No.
001-16249)).10.11
    
    
    Form of Internet Capital Group, Inc. Stock Option Grant With
Performance Acceleration (incorporated by reference to Exhibit
10.35 to the Companys Annual Report on Form 10-K for the year
ended December 31, 2004, filed March 16, 2005 (File No.
001-16249)).10.12
    
    
    Form of Internet Capital Group, Inc. Non-Employee Director Initial
Stock Option Grant (incorporated by reference to Exhibit 10.36 to
the Companys Annual Report on Form 10-K for the year ended
December 31, 2004, filed March 16, 2005 (File No. 001-16249)).10.13
    
    
    Form of Internet Capital Group, Inc. Non-Employee Director Annual
Stock Option Grant (incorporated by reference to Exhibit 10.37 to
the Companys Annual Report on Form 10-K for the year ended
December 31, 2004, filed March 16, 2005 (File No. 001-16249)).10.14
    
    
    Form of Internet Capital Group, Inc. Stock Unit Award Agreement
(incorporated by reference to Exhibit 10.1 to the Companys Current
Report on Form 8-K, filed July 28, 2005 (File No. 001-16249)).
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Exhibit Number
    
    Document10.15
    
    
    Form of Internet Capital Group, Inc. Stock Appreciation
Rights Certificate (incorporated by reference to Exhibit
10.2 to the Companys Current Report on Form 8-K, filed
July 28, 2005 (File No. 001-16249)).10.16.1
    
    
    Employment Agreement, dated February 28, 2007, by and among
Internet Capital Group Operations, Inc., Internet Capital
Group, Inc. and Walter W. Buckley, III (incorporated by
reference to Exhibit 10.1 to the Companys Current Report
on Form 8-K, filed March 5, 2007 (File No. 001-16249)).10.16.2
    
    

Amendment 2008-1 to the Employment Agreement, dated as of
December 18, 2008, by and between Internet Capital Group
Operations, Inc. and Walter W. Buckley, III (incorporated
by reference to Exhibit 10.2 to the Companys Current
Report on Form 8-K, filed December 18, 2008 (File No.
001-16249)).10.17
    
    
    Letter Agreement, dated December 18, 2008, by and between
Internet Capital Group and R. Kirk Morgan (incorporated by
reference to Exhibit 10.4 to the Companys Current Report
on Form 8-K, filed December 18, 2008 (File No. 001-16249)).10.18.1
    
    
    Employment Agreement, dated April 18, 2007, by and between
Internet Capital Group and Douglas A. Alexander
(incorporated by reference to Exhibit 10.1 to the Companys
Current Report on Form 8-K, filed April 18, 2007 (File No.
001-16249)).10.18.2
    
    

Amendment 2008-1 to the Employment Agreement, dated as of
December 18, 2008, by and between Internet Capital Group
Operations, Inc. and Douglas A. Alexander (incorporated by
reference to Exhibit 10.3 to the Companys Current Report
on Form 8-K, filed December 18, 2008 (File
No. 001-16249)).10.19
    
    
    Form of Restrictive Covenant Agreement (incorporated by
reference to Exhibit 10.4 to the Companys Current Report
on Form 8-K, filed July 28, 2005 (File No. 001-16249)).10.20.1
    
    
    Letter of Credit Agreement, dated as of September 30, 2002,
by and between Comerica Bank-California and Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Quarterly Report on Form
10-Q for the quarter ended September 30, 2002, filed
November 14, 2002 (File No. 001-16249)).10.20.2
    
    
    First Amendment to Letter of Credit Agreement, dated as of
October 20, 2003, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Quarterly Report on Form
10-Q for the quarter ended September 30, 2003, filed
November 14, 2003 (File No. 001-16249)).10.20.3
    
    
    Second Amendment to Letter of Credit Agreement, dated as of
December 15, 2004, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.14.2 to the Companys Annual Report on Form
10-K for the year ended December 31, 2004, filed March 16,
2005 (File No. 001-16249)).
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Exhibit Number
    
    Document10.20.4
    
    
    Third Amendment to Letter of Credit Agreement, dated as of
December 15, 2005, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Current Report on Form
8-K, filed December 15, 2005 (File No. 001-16249)).10.20.5
    
    
    Fourth Amendment to Letter of Credit Agreement, dated as of
December 5, 2006, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Current Report on Form
8-K, filed December 19, 2006 (File No. 001-16249)).10.20.6
    
    
    Fifth Amendment to Letter of Credit Agreement, dated as of
December 7, 2007, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Current Report on Form
8-K, filed December 13, 2007 (File No. 001-16249)).10.20.7
    
    
    Sixth Amendment to Letter of Credit Agreement, dated as of
December 13, 2008, by and between Comerica Bank, Internet
Capital Group, Inc., ICG Holdings, Inc. and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.1 to the Companys Current report on Form
8-K, filed December 18, 2008 (File No. 001-16249)).10.21
    
    
    Note Purchase Agreement, dated February 12, 2007, by and
between Mason Capital Management, LLC (and its affiliates
and advisory clients named therein) and Internet Capital
Group, Inc. (incorporated by reference to the Companys
Current Report on Form 8-K, filed February 12, 2007 (File
No. 001-16249)).10.22
    
    
    Note Purchase Agreement, dated February 12, 2007, by and
between Sonoma Capital, LP and Internet Capital Group, Inc.
(incorporated by reference to the Companys Current Report
on Form 8-K, filed February 12, 2007 (File No. 001-16249)).10.23
    
    
    Letter Agreement, dated December 16, 2005, by and between
ICG Holdings, Inc. and Credit Suisse First Boston Capital
LLC (incorporated by reference to Exhibit 10.31 to the
Companys Annual Report on Form 10-K for the year ended
December 31, 2005, filed March 15, 2006 (File No.
001-16249)).10.24
    
    
    Form of Loan Agreements, each dated as of May 8, 2008, by
and between ICG Holdings, Inc. and Credit Suisse Capital
LLC (incorporated by reference to Exhibit 10.1 to the
Companys Quarterly Report on Form 10-Q for the quarter
ended March 31, 2008, filed May 12, 2008 (File No.
001-16249)).10.25
    
    
    Form of Promissory Note by ICG Holdings, Inc. in favor of
Credit Suisse Capital LLC (incorporated by reference to
Exhibit 10.2 to the Companys Quarterly Report on Form 10-Q
for the quarter ended March 31, 2008, filed May 12, 2008
(File No. 001-16249)).10.26.1
    
    
    Agreement of Lease, dated June 30, 2003, between FV Office
Partners, L.P. and Internet Capital Group Operations, Inc.
(incorporated by reference to Exhibit 10.1 to the Companys
Quarterly Report on Form 10-Q for the quarter ended June
30, 2003, filed August 14, 2003 (File No. 001-16249)).
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Exhibit Number
    
    Document10.26.2
    
    
    First Amendment to Lease, dated November 20, 2003, between
FV Office Partners, L.P. and Internet Capital Group
Operations, Inc. (incorporated by reference to Exhibit
10.37 to the Companys Annual Report on Form 10-K for the
year ended December 31, 2003, filed March 15, 2004 (File
No. 001-16249)).10.26.3
    
    
    Second Amendment to Lease, dated August 21, 2006, by and
between Chesterbrook Partners, L.P. (as
successor-in-interest to FV Partners, L.P.) and Internet
Capital Group Operations, Inc. (incorporated by reference
to Exhibit 10.33.3 to the Companys Annual Report on Form
10-K for the year ended December 31, 2006, filed March 16,
2007 (File No. 001.16249)).10.27
    
    
    Form of Agreement of Limited Partnership for Internet
Capital Group, Inc. Carried Interest long-term Incentive
Plan (incorporated by reference to Exhibit 10.2 to the
Companys Current report on Form 8-K, filed December 13,2
007 (File No. 001-16249)).10.28
    
    
    Form of Limited Partnership Interest Grant (incorporated by
reference to Exhibit 10.3 to the Companys Current Report
on Form 8-K, filed December 13, 2007 (File No. 001-16249)).
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Exhibit Number
    
    Document11.1
    
    
    Statement Regarding Computation of Per Share Earnings (included
herein at Note 2-Significant Accounting Policies in the
subsection Net Income (Loss) Per Share to the Consolidated
Financial Statements and Note 17-Net Income (Loss) Per Share to
the Consolidated Financial Statements).14.1
    
    
    Internet Capital Group Corporate Code of Conduct (incorporated by
reference to Exhibit 10.2 to the Companys Current Report on Form
8-K, filed March 4, 2009 (File No. 001-16249)).21.1
    
    
    Subsidiaries of Internet Capital Group, Inc. (filed herewith).23.1
    
    
    Consent of KPMG LLP (filed herewith).23.2
    
    

Consent
of Grant Thornton LLP/Metastorm Inc. (filed herewith).31.1
    
    
    Certification of Chief Executive Officer required by Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith).31.2
    
    
    Certification of Chief Financial Officer required by Section 302 of
the Sarbanes-Oxley Act of 2002 (filed herewith).32.1
    
    
    Certification of the Chief Executive Officer required by Section
906 of the Sarbanes-Oxley Act of 2002 (filed herewith).32.2
    
    
    Certification of the Chief Financial Officer required by Section
906 of the Sarbanes-Oxley Act of 2002 (filed herewith).99.1
    
    

Consolidated Financial Statements of Metastorm Inc. (filed herewith).
  89