Classmates.com 2008 Annual Report Download - page 44

Table of Contents
As a result of the FTD acquisition, the results of operations of FTD have been included in the consolidated statements of operations and
cash flows from August 26, 2008, the date of the acquisition.
Segment Definitions
We report our businesses in three reportable segments:
Key Business Metrics
We review a number of key business metrics to help us monitor our performance and trends affecting our businesses, and to develop
forecasts and budgets. These key measures are:
FTD Segment Metrics
Consumer Orders. We monitor the number of consumer orders for floral and gift products received during a given period. Consumer
orders are orders delivered that originated from FTD consumers in the U.S. and Canada (through the www.ftd.com Web site and the 1-800-
SEND-FTD telephone number) as well as orders originated from Interflora consumers in the U.K. and The Republic of Ireland (through the
www.interflora.co.uk Web site and a toll-free telephone number). Orders originating with a florist or other retail location for delivery to
consumers are not included. The number of consumer orders received may fluctuate significantly from period to period due to seasonality
resulting from: the timing of key holidays; fluctuations in marketing expenditures on initiatives designed to attract new and retain existing
customers; changes in pricing for our floral and gift products or competitive offerings; changing consumer preferences; and general economic
conditions, among other factors.
Average Order Value. We monitor the average value for consumer orders received in a given period, which we refer to as the average
order value. Average order value represents the average U.S. Dollar amount paid to us for consumer orders delivered during a period. This
average U.S. Dollar amount is determined after translating the British Pound amounts received for orders delivered in the U.K. into U.S. Dollars.
Average order value includes merchandise revenue, and shipping and service fees, less discounts, payable by the consumer. Average order
values may fluctuate from period to period based on: changes in merchandise pricing; product mix; shipping and service fees; discounts; and the
foreign currency exchange rate between the U.S. Dollar and the British Pound, among other factors.
Classmates Media and Communications Segments Metrics
Pay Accounts. We generate a significant portion of our revenues from our pay accounts and they represent one of the most important
drivers of our business model. A pay account is defined as a member who has subscribed to, and paid for, our Classmates Media or
Communications services, and whose subscription has not expired. Pay accounts also include, at any given measurement date, a number of
members who are receiving pay services free of charge for a limited period of time on a promotional basis. In general, the key metrics that affect
our revenues from our pay accounts base include the number of pay accounts and the average monthly revenue per pay account. In general, a pay
account becomes a free account following the expiration or termination of the related subscription.
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Segment Products and Services
FTD
Floral and related products and services for consumers, retail florists and other
retail locations
Classmates Media
Online social networking and online loyalty marketing
Communications
Internet access, email, Internet security, and Web hosting