Rosetta Stone 2009 Annual Report Download - page 8

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Table of Contents
reporting features and curriculum options designed to enhance the effectiveness and administration of classroom, enterprise and home school
learning; and
an intuitive user interface that assists the learner's transition from listening comprehension to speaking.
Rosetta Stone offers a broad product suite, with courses currently available in 31 languages. Our courses are available in up to five levels of proficiency
per language, with each level providing approximately 40 hours of instruction and containing multiple units, lessons and activities.
In July 2009, we introduced Rosetta Stone TOTALe, an online language learning solution that integrates our online courses with coach-led practice
sessions, fun and engaging language games, interaction with native speakers and live support from customer service agents.
We also provide an online peer-to-peer practice environment called SharedTalk, at www.sharedtalk.com, where registered language learners meet for
language exchange to practice their foreign language skills. During 2009, we had more than 125,000 active SharedTalk users.
Our innovative solutions have received numerous awards and recognitions, including our placing #14 on the 2009 Inc. 5000 list for the education
industry, the 2009 National Parenting Publications Awards (NAPPA) Honors Award for Rosetta Stone Version 3 Personal Edition, four classroom specific
awards in 2009 for Classroom Version 3, two enterprise specific awards in 2009, the 2008 CODiE awards for best corporate learning solution and best
instructional solution in other curriculum areas sponsored by the Software & Information Industry Association, the 2008 education product of the year
awarded by MacWorld, the 2008 BESSIE multilevel foreign language award for Spanish Levels 1, 2, and 3 awarded by ComputED Gazette in 2008, the 2008
EDDIE Award for our classroom edition as the best foreign language website awarded by ComputED Gazette, the 2007 EDDIE multilevel foreign language
award for Chinese levels 1 and 2 and a 2007 multilevel English-as-a-second-language, or ESL, award for English levels 1, 2, and 3 awarded by ComputED
Gazette.
Competitive Strengths
We consider the foundations of our success to be the quality and breadth of our solutions, the strength of our brand and our direct distribution model.
Together, we believe these elements represent a business model with attractive economics that differentiates us from other language learning providers. The
quality of our solutions supports our price point, which in turn allows us to deploy a multi-channel marketing effort and a broad-based direct distribution
network. We focus on educating consumers about the benefits of our solutions by leveraging our advertising and our kiosk network to drive customers to our
call centers and websites, where they can learn about our solutions, try product demonstrations and then transact directly with us.
We believe our competitive strengths include:
Advanced Technology-Enabled Language Learning System. Our proprietary solutions combine effective immersion learning with the benefits of
flexibility and interactivity to provide for an efficient and engaging language learning experience. We intend to remain at the forefront of technological and
pedagogical advances in language learning.
Scalable and Adaptable Platform and Content. Our solutions are designed to be efficiently delivered across multiple languages, systems and
geographic markets. For example, we deploy many of the same images and image combinations across multiple languages, which accelerates our ability to
add new languages. Because our solutions do not rely upon translation from the target language into the learner's native language, they require only modest
localization to be used by learners from other native language backgrounds. This facilitates our ability to sell our existing language courses in new
international markets. In addition, our software platform is engineered to work in the same way both
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