Classmates.com 2011 Annual Report Download - page 14

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Table of Contents
are also bundled with additional benefits, including pop-up blocking, antivirus software and enhanced email storage, although we also offer each
of these features and certain other value-added features as stand-alone pay services. Our dial-up Internet access services are available in more
than 12,500 cities across the U.S. and Canada.
Our broadband Internet access services consist of digital subscriber lines (also known as "DSL") services that we purchase from third
parties and resell under our own brands. These services are primarily used as a means to retain members who are leaving our dial-up Internet
access services. Since we have conducted very limited marketing of our broadband Internet access services to the general public, we have
experienced limited adoption of our broadband services.
Sources of Revenues
We generate revenues from the sale of products, services and online advertising.
Products Revenues
Products revenues consist of the FTD segment's merchandise revenues and related shipping and service fees, less discounts and refunds, for
FTD consumer orders, as well as revenues generated from sales of branded and non-branded hard goods, software and hardware systems, cut
flowers, packaging and promotional products, and a wide variety of other floral-related supplies to floral network members. Products revenues
also consist of the Content & Media segment's sales of yearbook copies and related shipping fees. We do not currently generate products
revenues from our Communications segment.
Services Revenues
FTD
FTD services revenues consist of fees charged to its floral network members for access to the FTD and Interflora brands and the Mercury
Man logo, access to the floral networks, credit card processing services, e-commerce website services, online advertising tools, clearing-house
services, order transmission, and after-hours telephone answering and order taking services.
Content & Media and Communications
Content & Media and Communications services revenues primarily consist of amounts charged for our pay services. Our Content & Media
and Communications services revenues are primarily dependent on two factors: the average number of pay accounts for a period and the average
monthly revenue per pay account ("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 revenues to the period in
which the services are provided. We have offered, and may offer in the future, a variety of price points, subscription periods, discounts, and
promotions, both in connection with offers extended to some of our existing accounts and through external marketing channels. Changes in our
offers, the extent to which we make such offers and the percentage of such offers that are accepted, can have a significant impact on ARPU,
profitability, pay account acquisition metrics, conversion rates of free accounts to pay accounts, and retention rates.
Advertising Revenues
We provide advertising opportunities 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 and the Internet. We also offer audience-based media solutions, targeting
technologies, website
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