Classmates.com 2009 Annual Report Download - page 55

Table of Contents
revenues associated with Internet access. Our Classmates Media and Communications services revenues are primarily dependent on two factors:
the average number of pay accounts for a period and the ARPU. The average number of pay accounts is a simple average calculated based on the
number of pay accounts at the beginning and end of a period. In general, we charge our pay accounts in advance of providing a service, which
results in the deferral of services revenue to the period in which the services are provided.
Products Revenues
Products revenues consist of merchandise revenue and related shipping and service fees, less discounts and refunds, for FTD consumer
orders as well as revenues generated from sales of containers, software and hardware systems, cut flowers, packaging and promotional products,
and a wide variety of other floral-related supplies to floral network members. We do not generate products revenues from our Classmates Media
segment or our Communications segment.
Advertising Revenues
We provide advertising solutions to marketers with both brand and direct response objectives through a full suite of display, search, email,
and text-link opportunities across our various properties. We also use targeting technologies, Web site sponsorships and Web site integrations in
order to provide effective solutions.
FTD
FTD advertising revenues consist primarily of post-transaction sales that are generated when FTD and Interflora consumers are provided
third-party offers after completing a purchase on the www.ftd.com , www.interflora.co.uk and www.interflora.ie Web sites.
Classmates Media
Our online social networking services have historically generated advertising revenues primarily from providing third-party offers to
Classmates members after they have completed the pay account registration process and, to a lesser extent, from display advertisements.
Advertising inventory on our social networking Web sites includes text and graphic placements on the user home page, profile page, class list
page, and most other pages on our Web sites. We also sell a portion of our advertising inventory through third-party advertising resellers.
Our online loyalty marketing service revenues are derived from advertising fees, consisting primarily of fees based on performance
measures, that are generated when emails are transmitted to members, when members respond to emails, when members complete online
transactions, and when members engage in a variety of other activities including, but not limited to, games, Internet searches and market research
surveys.
Communications
Our Communications services generate advertising revenues from search placements, display advertisements and online market research.
Substantially all of our Communications advertising revenues are generated from our Internet access services.
Cost of Revenues
FTD
FTD cost of revenues includes product costs; shipping and delivery costs; costs associated with taking orders; printing and postage costs;
costs related to FTD's product quality guarantee; systems
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