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Table of Contents
PART I
ITEM 1. BUSINESS
Overview
United Online, through its operating subsidiaries, is a leading provider of consumer products and services over the Internet under a number
of brands, including FTD, Interflora, Memory Lane, Classmates, StayFriends, MyPoints, and NetZero.
United Online, Inc. is a Delaware corporation, headquartered in Woodland Hills, California, that commenced operations in 2001 following
the merger of dial-up Internet access providers NetZero, Inc. ("NetZero") and Juno Online Services, Inc. ("Juno"). In 2004, our Internet access
revenues began to decline and we began diversifying our business to include other consumer Internet offerings in an effort to provide new
growth opportunities for the Company. In November 2004, we acquired Classmates Online, Inc. (whose name was changed to Memory
Lane, Inc. in February 2011), a provider of online nostalgia services, and in April 2006, we acquired MyPoints.com, Inc. ("MyPoints"), a
provider of online loyalty marketing services. In August 2008, we acquired FTD Group, Inc. (together with its subsidiaries, "FTD"), a provider
of floral, gift and related products and services to consumers and retail florists, as well as to other retail locations offering floral, gift and related
products and services under the FTD and Interflora brands.
We report our businesses in three reportable segments:
Effective in the first quarter of 2011, we modified how we report segment information to the chief operating decision maker. Our segment
reporting now separately reports unallocated corporate expenses. Previously, such expenses were fully allocated to our reportable segments. We
have disclosed revised prior period results to conform to the current year presentation.
In 2011, the FTD segment, the Content & Media segment and the Communications segment accounted for 65%, 21% and 14% of
consolidated revenues, respectively. In 2010, the FTD segment, the Content & Media segment and the Communications segment accounted for
60%, 22% and 18% of consolidated revenues, respectively. In 2009, the FTD segment, the Content & Media segment and the Communications
segment accounted for 55%, 24% and 21% of consolidated revenues, respectively.
We generate revenues from three primary sources:
• Products revenues. Products revenues in our FTD segment are derived primarily from selling floral, gift and related products to
consumers via our Internet websites and telephone numbers and, to a lesser extent, to our floral network members. We do not
maintain significant physical inventory and generally do not bear the cost of warehousing our consumer product offerings, and we
generally receive payment from consumers before paying florists or other third parties to fulfill product orders. Products revenues
in our Content & Media segment are derived from the sale of yearbook copies and related shipping fees. Our Communications
segment does not currently generate products revenues.
4
Segment Products and Services
FTD
Floral, gift and related products and services for consumers,
retail florists and other retail locations
Content & Media
Online nostalgia products and services and online loyalty
marketing services
Communications
Internet access, email, Internet security, and web hosting
services