Classmates.com 2007 Annual Report Download - page 60

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Revenues
Billable Services Revenues
Consolidated Billable Services Revenues. Consolidated billable services revenues decreased by $42.4 million, or 9%, to $423.6 million
for the year ended December 31, 2006, compared to $466.0 million for the year ended December 31, 2005. The decrease in billable services
revenues was due to a decrease in billable services revenues from our Communications segment, partially offset by an increase in revenues from
our Classmates Media segment. Billable services revenues from our Classmates Media segment and from our Communications segment
constituted 19.2% and 80.8%, respectively, of our consolidated billable services revenues for the year ended December 31, 2006, compared to
13.6% and 86.4%, respectively, for the year ended December 31, 2005.
Classmates Media Billable Services Revenues. Classmates Media billable services revenues increased by $17.6 million, or 28%, to
$81.1 million for the year ended December 31, 2006, compared to $63.6 million for the year ended December 31, 2005. The increase in billable
services revenues was due to a 22% increase in our average number of pay accounts from 1.6 million for the year ended December 31, 2005 to
2.0 million for the year ended December 31, 2006. The increase in the average number of pay accounts was primarily attributable to organic
growth in our Classmates business and, to a lesser extent, the acquisition of pay accounts associated with the acquisition of The Names Database
in March 2006, which had approximately 106,000 pay accounts at December 31, 2006 and positively impacted average pay accounts by 53,000
for the year ended December 31, 2006. Additionally, billable services revenues increased due to a 5% increase in ARPU from $3.28 for the year
ended December 31, 2005 to $3.44 for the year ended December 31, 2006 due to a greater percentage of higher-priced, shorter-term pay
subscription plans.
Communications Billable Services Revenues. Communications billable services revenues decreased by $60.0 million, or 15%, to
$342.4 million for the year ended December 31, 2006, compared to $402.4 million for the year ended December 31, 2005. The decrease in
billable services revenues was due to a 10% decrease in our average number of pay accounts from 3.3 million for the year ended December 31,
2005 to 3.0 million for the year ended December 31, 2006. The decrease in the average number of pay accounts was attributable to a decreased
number of dial-up Internet access pay accounts. Additionally, Communications billable services revenues decreased due to a 5% decrease in
ARPU from $10.16 for the year ended December 31, 2005 to $9.63 for the year ended December 31, 2006. The decrease in ARPU was primarily
attributable to a decline in ARPU for our dial-up Internet access services due to increased use of free months of service and promotional and
retention pricing to obtain or retain dial-up Internet access pay accounts.
Advertising Revenues
Consolidated Advertising Revenues. Consolidated advertising revenues increased by $40.0 million, or 68%, to $99.1 million for the year
ended December 31, 2006, compared to $59.1 million for the year ended December 31, 2005. The increase was primarily attributable to
increases in advertising revenues in our Classmates Media segment and, to a lesser extent, our Communications segment. Advertising revenues
from our Classmates Media segment and from our Communications segment constituted 58.8% and 41.2%, respectively, of our consolidated
advertising revenues for the year ended December 31, 2006, compared to 36.1% and 63.9%, respectively, for the year ended December 31, 2005.
Classmates Media Advertising Revenues. Classmates Media advertising revenues increased by $37.0 million, or 173%, to $58.3 million
for the year ended December 31, 2006, compared to $21.3 million for the year ended December 31, 2005. The increase was due to $39.6 million
in revenues from our loyalty marketing service, which we acquired in April 2006, partially offset by a $2.8 million
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