Classmates.com 2010 Annual Report Download - page 19

Table of Contents
Seasonality and Cyclicality
Revenues and operating results from our FTD segment typically exhibit seasonality. Revenues and operating results tend to be lower for the
quarter ending September 30 because none of the most popular floral and gift-giving holidays, which include Mother's Day in the U.S. and the
U.K., Valentine's Day, Christmas, Easter, and Thanksgiving, fall within that quarter. In addition, depending on the year, Easter and the U.K.
Mother's Day sometimes fall within the quarter ending March 31 and sometimes fall within the quarter ending June 30. Furthermore, depending
on the year, certain of the most popular and gift-giving holidays, such as Valentine's Day, may occur on a weekend or government holiday. As a
result of these variations, we believe that comparisons of the FTD segment's revenues and operating results for any period with those of the
immediately preceding period, or in some instances, the same period of the preceding fiscal year, may be of limited relevance in evaluating its
historical performance and predicting its future financial performance. Our working capital, cash and any short-term borrowings may also
fluctuate during the year as a result of the factors described above.
Online loyalty marketing advertising revenues and operating results tend to be higher in the quarter ending December 31 when compared to
other quarters. Our Internet access services have typically experienced a lower rate of new member registrations during the quarter ending
June 30 when compared to other quarters. Seasonality has not had a material impact on our online nostalgia services revenues. There can be no
assurance that these seasonal trends will continue in the future.
Billing
Orders placed through FTD's consumer websites or telephone numbers typically are paid for using a credit, debit or payment card;
therefore, consumers generally pay for floral and gift orders before FTD pays the floral network members and third-party providers to fulfill and
deliver them. FTD's floral network members are generally billed for products and services and are billed or credited for net order activity on a
monthly basis.
The vast majority of the pay accounts for our Content & Media and Communications segments pay us in advance with a credit card. Other
payment options for some of our pay services include automated clearing-
house ("ACH"), personal check, money order, or via a customer's local
telephone bill. Internet access pay accounts that elect to pay with a personal check or money order are not provisioned until their payment is
received and they are required to subscribe for one of our prepaid multi-month billing plans.
We utilize a combination of third-party and internally-developed software applications for customer billing. Customer billing is a complex
process and our billing systems must efficiently interface with third parties' systems, such as our credit card, ACH and telephone bill processors'
systems. Our ability to accurately and efficiently bill and collect payment from our members and customers is dependent on the successful
operation of our billing systems and various third-
party processors. In addition, our ability to offer new pay services or alternative payment plans
is dependent on our ability to customize our billing systems.
Customer Support and Retention
We believe reliable customer service and technical support are important to retaining our customers. Our businesses generally offer a
variety of online and offline tools designed to provide solutions and answers to frequently asked questions. These tools are also designed to assist
our members and customers in verifying and updating their account information. In addition, we offer traditional email support and certain of our
services provide live telephone support as well.
Our customer relationship management and support infrastructure includes employees at our facilities in Woodland Hills, California;
Hyderabad, India; Fort Lee, New Jersey; Seattle, Washington;
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