NetZero 2010 Annual Report Download - page 14

Table of Contents
Internet Access Services
Our Internet access services consist of dial-up and, to a much lesser extent, broadband services. Our dial-up Internet access services are
provided on both a free and pay basis, with the free services subject to hourly and other limitations. Basic pay dial-up Internet access services
include Internet access and an email account. In addition, we offer accelerated dial-
up Internet access services which can significantly reduce the
time required for certain web pages to load during Internet browsing when compared to our basic dial-up Internet access services. Our
accelerated dial-up Internet access services 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 12,000 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 Revenue
We generate revenue from the sale of services, products and online advertising.
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, telephone
answering, order taking, order transmission, and clearing-house services.
Content & Media and Communications
Content & Media and Communications services revenues 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 revenue 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.
Products Revenues
Products revenues consist of the FTD segment's merchandise revenue and related shipping and service fees, less discounts and refunds, for
FTD consumer orders, as well as revenues generated from sales of containers, software and hardware systems, cut flowers, packaging and
promotional products, and a wide variety of other floral-related supplies to floral network members. We do not generate
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