Classmates.com 2005 Annual Report Download - page 37

Download and view the complete annual report

Please find page 37 of the 2005 Classmates.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 116

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116

ITEM 7.
MANAGEMENT
’
S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
We are a leading provider of consumer Internet subscription services through a number of brands, including NetZero, Juno and Classmates
Online. Our subscription services include dial-up Internet access, social-networking, VoIP telephony, personal Web-hosting, premium email,
Internet security and online digital photo-sharing, among others. We also offer advertising-supported versions of many of our services at no
charge to consumers. On a combined basis, our Web properties attract a significant number of Internet users each month. Advertisers can reach
this audience through the United Online Media Group, which offers marketers a broad array of Internet advertising products as well as online
market research and measurement services.
At December 31, 2005, we had approximately 5.0 million pay accounts representing approximately 6.4 million total subscriptions, and
approximately 17.6 million active accounts. A pay account represents a unique billing relationship with a customer who subscribes to one or
more of our pay services. A subscription represents a unique subscription to any individual pay service. “Active” accounts include total pay
accounts as well as free users who have logged onto our access, social-networking, email or VoIP services during the preceding 31 days. Active
accounts also include those free hosted Web sites that have received at least one visit during the preceding 90 days and the number of free photo-
sharing users that logged on to the service at least once within the preceding 90 days.
Pay Accounts and Subscriptions
The following table sets forth (in thousands), for the periods presented, an analysis of our pay accounts and subscriptions. A pay account
represents a unique billing relationship with a customer who subscribes to one or more of our services. A subscription represents a unique
subscription to any individual pay service offered by us including Internet access, social-networking, accelerator services, premium email, Web-
hosting and domain name registration, premium content, VoIP, Internet security and online photo-sharing subscriptions. Internet access and
accelerator are counted as two subscriptions, although most subscribers to the accelerated service currently purchase it bundled with our standard
Internet access. While we currently consider our non-access services to include VoIP, social-networking, premium email, Web-hosting and
domain name registration, premium content and photo-sharing, certain of these services are derived from, or are dependent on, our access
services.
In general we count and track pay accounts and free accounts by unique member identification. Users have the ability to register for
separate services under separate brands and member identifications independently. We do not track whether a pay account has purchased more
than one of our services unless the account uses the same member identification. As a result, unique pay accounts may not represent
36
December 31,
2005
September 30,
2005
June 30,
2005
March 31,
2005
December 31,
2004
Pay Accounts:
Internet access
2,855
2,980
3,078
3,130
3,100
Non-access services
2,154
2,060
1,955
1,822
1,726
Total pay accounts
5,009
5,040
5,033
4,952
4,826
Subscriptions:
Internet access
2,855
2,980
3,078
3,130
3,100
Accelerator
1,214
1,205
1,196
1,170
1,105
Non-access services
2,303
2,186
2,064
1,900
1,781
Total subscriptions
6,372
6,371
6,338
6,200
5,986