Incredimail 2013 Annual Report Download - page 107

PERION NETWORK LTD. AND ITS SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
U.S. dollars in thousands (except share and per share data)
Revenues from software license products are recognized when all criteria outlined in ASC 985-605, "Software -
Revenue
Recognition" are met. Revenues from software license products are recognized when persuasive evidence of an agreement
exists, delivery of the product has occurred, the fee is fixed or determinable, and collectability is probable. Company's e-
mail product users may also purchase a license to its content database. This content database provides additional Perion
Network content files in the form of email background, animation sounds, graphics and e-
mail notifies. Content database
licensing fees are recognized over the license period. Lifetime licensing revenues were recognized over the estimated
usage period of the content database. Since May 2011 the Company no longer offers lifetime licensing. In accordance with
its policy, the Company reviewed the estimated usage period of the lifetime licensing on an ongoing basis. During 2012,
the Company notified customers owning its lifetime licenses that they will no longer be able to access the Company’
s site
for downloading content, requesting they download all the content to their own computer. As result of such change, the
Company is no longer required to make content available under those arrangements. Therefore, the remaining deferred
revenues balance in the amount of $ 1,443 associated with these arrangements, was immediately recognized in 2012.
Revenues from email anti-
spam license fees, photo sharing, social expression product and service are recognized ratably
over the term of the license.
Deferred revenues include upfront payments received from customers, for whom revenues have not yet been recognized.
Finally, the Company offers advertisers the ability to place text-
based ads on its home page and website and banners in its
email clients. Advertisers are charged monthly based on the number of times a user clicks on one of the ads. The
Company recognizes revenue from advertisement at that time.
In parallel with the business combination with ClientConnect, as further described in Note 14, in August 2013, the
Company and Conduit entered into commercial agreement. Under the agreement, the Company provides Conduit
publisher services based on "pay per installation" fee. The agreement was amended on November 18, 2013, effective
November 1, 2013. Sales generated by the Company under the agreement and the direct customer acquisition costs
("CAC") amounted to:
NOTE 2:- SIGNIFICANT ACCOUNTING POLICIES (Cont.)
August
through
October
2013
November
through
December
2013
Sales
$
7,166
$
10,848
CAC
(6,633
)
(7,702
)
Sales, net
$
533
$
3,146
F
-
15