Incredimail 2014 Annual Report Download - page 32

On August 1, 2014, we announced the signing of a three-year agreement with Microsoft’
s Bing division, extending our existing
partnership, starting January 1, 2015 through December 31, 2017. Upon mutual agreement, the agreement may be renewed for 2018, as well.
The agreement includes desktop and tablet distribution with limited exclusivity in the United States as well as mobile distribution. In parallel,
and in conjunction with the fact that revenues from Google are no longer material to us, we decided to exercise our right to opt out of our
ClientConnect agreement with Google as of August 31, 2014. We continue to work with Google through our original Perion agreement, which
expires on April 30, 2015.
On September 23, 2014, we announced the completion of a public offering of Series L Convertible Bonds. We issued Bonds having an
aggregate principal amount of approximately ILS 143.5 million (approximately $36.9 million as of December 31, 2014) at a price of ILS 965 per
unit of ILS 1,000 par value. We received total net proceeds of approximately ILS 136.5 million (approximately $35.1 million as of December
31, 2014). For more information, see Item 5.B – "Liquidity and Capital Resources."
On November 6, 2014, we announced a restructuring of our search monetization business which included a head count reduction as
well as other cost saving measures, such as consolidating of our Israel offices from three floors to two in order to sublease the third floor.
On February 10, 2015, we consummated the acquisition of Make Me Reach SAS, a private French company headquartered in Paris,
France. The total purchase price was $11.2 million, of which $5.6 million in cash and $4.8 million in the form of 1,437,510 ordinary shares were
paid upon closing. In the subsequent 12 months post-
closing, the founder of Make Me Reach may be entitled to receive an additional amount of
$0.4 million in cash and $0.4 million in ordinary shares. In addition, certain key employees of Make Me Reach are entitled to retention payments
in an aggregate amount of up to $775,000, of which, $144,397 was paid in cash at closing and $62,883 was paid in the form of 18,998 ordinary
shares at closing. In the subsequent 12 months post-
closing, certain key employees may be entitled to receive the remaining balance of the
retention payment, which shall be paid as follows: up to $359,552 in cash and $208,168 in ordinary shares. Make Me Reach has become part of
Perion’
s mobile marketing business which was recently created to address the advertising needs of mobile app developers, and will enable
Perion to provide a more comprehensive technical and platform solution for app developers. Make Me Reach is a Facebook Preferred Marketing
Developer (PMD) and Twitter Marketing Platform Partner (MPP).
B. BUSINESS OVERVIEW
Overview
Search-based Monetization
We currently generate most of our revenues by providing a search-
based monetization solution for our publishers with enhanced
analytics capabilities to track and monitor their business performance. From the end user perspective, we enable users to configure their browser
settings through the search setting dialogue so they are powered by our search-engine partners.
Publishers can choose to distribute our products as a standalone solution to their users, who can then choose to download and install it.
As part of our products' installation process, end users are able to replace their home page and default search engine with ours, where users may
conduct searches or follow links to advertisements that advertisers may display.
As part of any installation process of our search related products which are distributed as part of our monetization platform, end users
are able to:
We employ two types of marketing methods, inbound and outbound. The outbound method is accomplished by identifying software developers
and sending them emails via an automated process, offering a partnership for monetization services. The inbound method is based on a software
developer or publisher seeking distribution or monetization services, through search engines or social networks, and as a result arriving at the
sign-up page on our website. The outbound process is supported by a proactive marketing program, including Ad-words, social media-
based
advertising, display advertising and other marketing venues.
•
replace their search asset(s) with ours, where users may conduct searches or follow links to advertisements that advertisers may
display; and
•
install our search protect software or any of our search assets, which were designed to maintain the end user's selected browser
settings and to prevent third party software downloads from changing such settings.
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