Classmates.com 2010 Annual Report Download - page 75

Table of Contents
Content & Media Sales and Marketing Expenses. Content & Media sales and marketing expenses decreased by $7.0 million, or 9%, to
$74.8 million for the year ended December 31, 2009, compared to $81.8 million for the year ended December 31, 2008. Content & Media sales
and marketing expenses as a percentage of Content & Media revenues decreased to 31.7% for the year ended December 31, 2009, compared to
35.5% for the prior-year period. The decrease of $7.0 million was largely the result of a $5.8 million decrease in marketing costs related to
acquiring new online nostalgia services members and online loyalty marketing members. The decrease was also due to a $1.2 million decrease in
personnel-and overhead-related expenses. The decrease in Content & Media sales and marketing expenses as a percentage of Content & Media
revenues was mainly due to a reduction in sales commissions as a result of a decline in revenues from our online loyalty marketing service and
an increase in revenues from our international online nostalgia services without a corresponding increase in related sales and marketing costs.
Content & Media Technology and Development Expenses. Content & Media technology and development expenses increased by
$3.6 million, or 16%, to $25.5 million, for the year ended December 31, 2009, compared to $22.0 million for the year ended December 31, 2008.
Content & Media technology and development expenses as a percentage of Content & Media revenues increased to 10.8% for the year ended
December 31, 2009, compared to 9.5% for the prior-year period. The increase in expenses was primarily due to a $1.8 million increase in
overhead-related expenses and a $1.6 million increase in personnel-related expenses.
Content & Media General and Administrative Expenses. Content & Media general and administrative expenses increased by
$1.8 million, or 5%, to $39.7 million for the year ended December 31, 2009, compared to $38.0 million for the year ended December 31, 2008.
Content & Media general and administrative expenses as a percentage of Content & Media revenues increased to 16.8% for the year ended
December 31, 2009, compared to 16.5% for the prior-year period. The increase of $1.8 million was primarily due to a $3.3 million non-income
tax favorable settlement in 2008, a $2.2 million charge in the quarter ended December 31, 2009 related to a reserve for a pending lawsuit, a
$1.0 million increase in professional services and consulting fees and a $0.9 million increase in personnel-related expenses. The increase was
partially offset by the expensing of $3.9 million in deferred transaction costs related to the potential initial public offering of Classmates Media
Corporation in the year ended December 31, 2008, a $1.5 million decrease in 2009 in recruiting and relocation-related expenses and a
$0.4 million decrease in overhead-related expenses.
Content & Media Restructuring Charges. Content & Media restructuring charges totaled $2.1 million for the year ended December 31,
2009. Content & Media restructuring charges totaled $40,000 for the year ended December 31, 2008. Restructuring charges for the year ended
December 31, 2009 were associated with a reduction in headcount in the fourth quarter of 2009. In connection with this reduction in headcount,
we eliminated 71 positions.
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