Classmates.com 2008 Annual Report Download - page 104

Table of Contents
UNITED ONLINE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. DESCRIPTION OF BUSINESS, BASIS OF PRESENTATION, ACCOUNTING POLICIES, AND RECENT ACCOUNTING
PRONOUNCEMENTS
Description of Business
United Online, Inc. ("United Online", "UOL" or the "Company") is a leading provider of consumer products and services over the Internet
through a number of brands, including FTD, Interflora, Classmates, MyPoints, NetZero, and Juno. On August 26, 2008, the Company completed
its acquisition of 100% of the capital stock of FTD Group, Inc. (together with its subsidiaries, "FTD"). The Company reports its business in three
reportable segments: FTD, Classmates Media and Communications. The Company's FTD segment provides floral and related products and
services to consumers and retail florists, as well as to other retail locations offering floral and related products and services. The Company's
Classmates Media services are online social networking and online loyalty marketing. The Company's primary Communications services are
Internet access and email. On a combined basis, the Company's Web properties attract a significant number of Internet users and the Company
offers a broad array of Internet marketing services for advertisers.
United Online is a Delaware corporation that commenced operations in 2001 following the merger of Internet access providers
NetZero, Inc. and Juno Online Services, Inc. In April 2004, the Company acquired the Web hosting and domain name registration business of
About Web Services, Inc., and in November 2004, the Company acquired Classmates Online, Inc. ("Classmates"), a leading provider of online
social networking services. In March 2006, the Company acquired The Names Database, a global social networking service. In April 2006, the
Company acquired MyPoints.com, Inc. ("MyPoints"), a leading provider of online loyalty marketing services. In August 2008, the Company
acquired FTD Group, Inc., a leading provider of floral and related products and services. The Company's corporate headquarters is located in
Woodland Hills, California, and the Company also maintains offices in New York, New York; Fort Lee, New Jersey; Seattle, Washington; San
Francisco, California; Schaumburg, Illinois; Downers Grove, Illinois; Sleaford, England; Erlangen, Germany; Berlin, Germany; and Hyderabad,
India.
The Company believes that its existing cash and cash equivalents, and cash generated from operations will be sufficient to service its debt
obligations and fund its working capital requirements, capital expenditures, dividend payments, and other obligations through at least the next
twelve months. However, additional capital may be needed in order to fund the Company's operations, expand marketing activities, develop new
or enhance existing services or products, respond to competitive pressures, or acquire services, businesses or technologies.
Basis of Presentation
The accompanying consolidated financial statements for the years ended December 31, 2008, 2007 and 2006 include United Online and its
subsidiaries. All significant intercompany accounts and transactions have been eliminated in consolidation. The consolidated financial
statements, in the opinion of management, reflect all adjustments (consisting only of normal recurring adjustments) that are necessary for a fair
presentation of the results for the periods shown. The results of operations for such periods are not necessarily indicative of the results expected
for any future periods.
The preparation of financial statements in accordance with accounting principles generally accepted in the United States of America
("GAAP") requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of
contingent liabilities
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