Classmates.com 2009 Annual Report Download - page 45

Table of Contents
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 during a given period. Consumer orders are
orders delivered during the period that originated in the U.S. and Canada, primarily from the www.ftd.com Web site and the 1-800-SEND-FTD
telephone number, and in the U.K. and the Republic of Ireland, primarily from the www.interflora.co.uk and www.interflora.ie Web sites 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; general
economic conditions; fluctuations in marketing expenditures on initiatives designed to attract new and retain existing customers; changes in
pricing for our floral, plant and specialty gift products or competitive offerings; and changing consumer preferences, among other factors.
Average Order Value. We monitor the average value for consumer orders delivered in a given period, which we refer to as the average
order value. Average order value represents the average U.S. Dollar amount received 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. and the Republic
of Ireland into U.S. Dollars. Average order value includes merchandise revenue and shipping and service fees paid by the consumer, less certain
discounts and certain refunds. Average order values may fluctuate from period to period based on the average foreign currency exchange rate
between the U.S. Dollar and the British Pound; product mix; changes in merchandise pricing, shipping and service fees; levels of certain refunds
issued; and discounts, among other factors.
Classmates Media and Communications Segment 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. A pay account does not equate to a unique subscriber since one subscriber
could have several pay accounts. At any point in time, our pay account base includes a number of accounts receiving a free period of service as
either a promotion or retention tool and a number of accounts that have notified us that they are terminating their service but whose service
remains in effect. 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 ("ARPU"). A pay account generally becomes a free account following the expiration or termination of
the related subscription.
ARPU. We monitor ARPU, which is calculated by dividing Classmates Media or Communications services revenues, as applicable, for a
period (after translation into U.S. Dollars) by the average number of segment pay accounts for that period, divided by the number of months in
that period. The average number of pay accounts is the simple average of the number of pay accounts at the beginning and end of a period.
ARPU may fluctuate from period to period as a result of a variety of factors, including, but not limited to, changes in the mix of pay services and
the related pricing plans; the use of promotional or retention pricing to attract new, or retain existing, paying subscribers; increases or decreases
in the price of our services; the timing of pay accounts being added or removed during a period; and the average foreign currency exchange rate
between the U.S. Dollar and the Euro.
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