Classmates.com 2009 Annual Report Download - page 7

Table of Contents
Floral wire services, which we also refer to as floral network services, utilize proprietary network communications systems to facilitate the
transmission and fulfillment of orders among their floral network members. Services provided by floral wire services typically include order
transmission, clearing-house, marketing and other services in support of the floral network. Order clearing-house services play an important role
by ensuring the flow of payment between a floral network member sending an order received from a consumer and the member receiving and
fulfilling the order, thereby eliminating counterparty credit risk. The growth of nationwide floral marketers and the Internet channel has led
traditional retail florists to increasingly rely on floral networks to augment their order volumes. Access to incremental consumer orders
represents one of the principal benefits a member receives from membership in a floral network.
Providers of floral network services typically offer a broad range of services that are designed to promote revenue growth and facilitate the
efficient operation of a retail florist's business, including the ability to send, receive and deliver floral orders. Additional products and services
offered by providers of floral network services include: point-of-sale technology systems and services, credit card processing services, e-
commerce Web site services, and telephone answering, order-taking, transmission and clearing-house services. Certain providers of floral
network services have recently broadened their focus and developed new product and service offerings, to appeal to supermarkets and mass
merchants which have increased their presence within the retail floral market in recent years.
Providers of floral network services that have a separate nationwide floral marketing business (such as FTD's consumer operations under
the FTD and Interflora brands) which generates a significant flow of consumer floral orders can potentially increase the value of their services by
providing a strong flow of consumer orders for fulfillment by network members.
Classmates Media Segment—Online Social Networking
Online social networking is rapidly growing and evolving to include a broad spectrum of Web sites and online services that have attracted
significant usage by nearly all demographics of Internet users. During December 2009, social networking Web sites attracted 830.9 million
unique visitors worldwide, according to comScore MediaMetrix, an Internet industry research company. Widespread adoption of broadband
Internet access, digital photography and online video has facilitated the sharing of content over the Internet, serving as a catalyst for industry
growth.
We believe people have a fundamental drive to connect with others, be part of a community, express themselves, and maintain personal
relationships. Core, life-long relationships are often based on enduring affiliations related to shared experiences such as family, school,
workplace, or military service. Affiliations based on schools attended encompass a particularly large population of individuals. According to the
U.S. Census Bureau, as of 2008, there were approximately 193 million high school graduates living in the U.S. and approximately 123 million
people living in the U.S. who had attended college. We believe that the occurrence of class reunions among this large population frequently
strengthens an individual's curiosity and nostalgic feelings about school memories, friends and acquaintances.
Over time, people frequently lose touch with each other for a variety of reasons, including geographic moves and job changes. According to
the U.S. Census Bureau, in 2008 approximately 35 million people relocated and nearly one-third of America's workforce changed jobs that year.
In addition, it is estimated by the U.S. Department of Labor that the average American worker will hold more than 10 jobs by age 40. There is a
growing trend towards using new mediums of communication that facilitate social interaction in enabling individuals to find and reconnect with
friends and former colleagues.
Social networking Web sites fulfill a number of different needs, including allowing users to find, connect or reconnect with individuals and
important memories from their past. These Web sites and
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