ServiceMagic 2012 Annual Report Download - page 29

Table of Contents
Product development expense consists primarily of compensation and other employee-related costs (including stock-based compensation)
that are not capitalized for personnel engaged in the design, development, testing and enhancement of product offerings and related technology.
For the year ended December 31, 2012 compared to the year ended December 31, 2011
Product development expense in 2012 increased from 2011 primarily due to increases of $12.6 million from Match, $4.5 million from
Media and $4.2 million from Search & Applications. The increase from Match is primarily due to an increase in compensation and other
employee-related costs due, in part, to an increase in headcount and Meetic, which was included for only part of the prior year. The increase
from Media is primarily due to News_Beast, consolidated beginning June 1, 2012. The increase from Search & Applications is primarily due to
the acquisition of The About Group on September 24, 2012.
For the year ended December 31, 2011 compared to the year ended December 31, 2010
Product development expense in 2011 increased from 2010 primarily due to increases of $7.7 million from Match and $4.6 million from
Search & Applications. The increase from Match is primarily due to an increase in compensation and other employee-related costs due, in part,
to acquisitions as well as an increase in headcount. Contributing to the increase at Search & Applications is a decrease in costs being capitalized
in the current year, partially offset by lower compensation and other employee-
related costs due, in part, to staff reductions that took place during
the fourth quarter of 2010 associated with the Ask.com restructuring.
Depreciation
For the year ended December 31, 2012 compared to the year ended December 31, 2011
Depreciation in 2012 decreased from 2011 resulting primarily from certain fixed assets becoming fully depreciated in 2011 and the write-
off of $4.9 million in capitalized software costs associated with the exit of the Company's direct sponsored listings business in 2011, partially
offset by an increase in depreciation from Match, primarily related to Meetic, which was included for only part of the prior year.
For the year ended December 31, 2011 compared to the year ended December 31, 2010
Depreciation in 2011 decreased from 2010 primarily due to the write-off of certain assets in the prior year, partially offset by the write-off
of $4.9 million in capitalized software costs in the third quarter of 2011 associated with the exit from the Company's direct sponsored listings
business.
Operating Income Before Amortization
________________________
NM = not meaningful
26
Years Ended December 31,
2012
$ Change % Change 2011 $ Change % Change 2010
(Dollars in thousands)
Depreciation $52,481 $(4,238) (7)% $56,719 $(7,178) (11)% $63,897
As a percentage of revenue 2%
3% 4%
Years Ended December 31,
2012
$ Change % Change 2011 $ Change % Change 2010
(Dollars in thousands)
Search & Applications
$
313,146
$
108,166
53
%
$
204,980
$
64,188
46
%
$
140,792
Match
225,765
69,491
44
%
156,274
34,217
28
%
122,057
Local
24,932
(3,352
)
(12
)%
28,284
17,613
165
%
10,671
Media
(44,827
)
(28,982
)
(183
)%
(15,845
)
6,004
27
%
(21,849
)
Other
(6,095
)
(3,596
)
(144
)%
(2,499
)
(4,590
)
NM
2,091
Corporate
(67,957
)
(5,170
)
(8
)%
(62,787
)
1,396
2
%
(64,183
)
Total
$
444,964
$
136,557
44
%
$
308,407
$
118,828
63
%
$
189,579