Overstock.com 2012 Annual Report Download - page 63
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Table of Contents
The following table reflects our sales and marketing expenses for the years ended December 31, 2011 and 2010 (in thousands):
The increase in sales and marketing expenses as a percentage of net revenues is primarily due to increased spending in search marketing, increased
in part to offset the negative impact of the Google penalty on revenues as described above, partially offset by a decline in spending for affiliate
marketing and television advertising.
Sales and marketing expenses include stock-based compensation expense of $377,000 and $608,000 for the years ended December 31, 2011 and
2010, respectively
Costs associated with our discounted shipping and other promotions, such as coupons, are not included in marketing expense. Rather they are
accounted for as a reduction of revenue and therefore affect sales and gross margin. We consider discounted shipping and other promotions as an
effective marketing tool, and intend to continue to offer them as we deem appropriate as part of our overall marketing plan.
We seek to efficiently invest in technology, including web services, customer support solutions and website search, and in expansion of new and
existing product categories, and in investments in technology to enhance the customer experience, improve our process efficiency and support our
logistics infrastructure.
The following table reflects our technology expenses for the years ended December 31, 2011 and 2010 (in thousands):
The increase for the year ended December 31, 2011 is primarily due to a $4.7 million increase in compensation expense (primarily due to increases
in staffing), and a $1.9 million increase in depreciation expense.
Technology expenses include stock-based compensation expense of $628,000 and $1.1 million for the years ended December 31, 2011 and 2010,
respectively.
54
Sales and marketing expenses $ 61,813 $ 61,334 $ 479 0.8%
Sales and marketing expenses as a percent of net revenues 5.9% 5.6%
Technology expenses $ 67,043 $ 58,260 $ 8,783 15.1%
Technology expenses as a percent of net revenues 6.4% 5.3%