Rosetta Stone 2011 Annual Report Download - page 12

Table of Contents
that permit parents to follow student progress and access specific information about student performance, such as completed exercises, test scores,
and time spent learning, and to generate printable progress reports. In addition, parents have the ability to enroll their students in predefined
curriculum paths designed to assist in lesson planning and in achieving learning objectives.
Our solutions are available both pre-packaged and by subscription online through our language-learning portal. For the year ended December 31, 2011,
approximately 73% of our revenue was from CD-ROM sales while approximately 27% was from online subscriptions to both consumers and institutions.
We also provide an online peer-to-peer practice environment called SharedTalk, at www.sharedtalk.com, where registered language learners meet for
language exchange and to practice their foreign language skills. During 2011, we had more than 154,000 active SharedTalk users. In addition, we have
developed Rosetta Stone products for the exclusive use of Native American communities to help to save their endangered languages, including Mohawk,
Chitimacha, Inuktitut, Iñupiaq and Navajo.
ReFLEX Product Offering
In July 2011, Rosetta Stone introduced ReFLEX, a solution designed specifically for English learners who want to improve their listening and speaking
skills. ReFLEX is sold as an online subscription in South Korea to the English language-learning market. We intend to launch ReFLEX in Japan in 2012.
ReFLEX improves learners' ability to converse in English. Learners are guided by an adaptive artificial intelligence system to practice in daily 30 minute
sessions focusing on the challenging phonetic and prosodic differences between English and other languages, speaking without translation, and conversing
with live native speakers in Rosetta Studio sessions.
Technology
We develop most of our own technology, including our proprietary unified language-learning software platform. Our newest application, Version 4,
currently supports up to five levels of proficiency and is available in 24 languages. Version 3 currently supports up to five levels of proficiency and is
available in 31 languages. The technology underlying Version 3 and Version 4 is designed to handle the complexities of a wide variety of languages,
including languages written from right-to-left such as Arabic and Hebrew and languages with characters such as Chinese and Japanese.
Our Version 3 and Version 4 platform is flexible and capable of meeting a wide range of market requirements, including:
enabling reporting features and additional curriculum options for our home school edition;
providing our solutions in a local networked environment to enable a class management tool in the classroom edition;
offering our solutions online through a commercial learning management system for our enterprise customers; and
providing localized interfaces and help files in the user's native language, which are currently available in nine languages.
In each of these cases, the learner receives the same engaging language-learning experience and content.
We have developed a speech recognition technology focused on the unique challenges of language learners, stressing non-native speech understanding
and pronunciation feedback. This technology, which
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