ServiceMagic 2014 Annual Report Download - page 68

Download and view the complete annual report

Please find page 68 of the 2014 ServiceMagic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 144

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144

IAC/INTERACTIVECORP AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
Search & Applications
The Search & Applications segment's revenue consists principally of advertising revenue, which is generated primarily through the display of
paid listings in response to search queries, as well as from display advertisements appearing on its websites and to a lesser extent, the syndication of
search results generated by Ask-branded destination search websites. The Company obtains the substantial majority of its paid listings from third-
party providers, primarily Google Inc. ("Google"). Paid listings are priced on a price per click basis and when a user submits a search query and
then clicks on a Google paid listing displayed in response to the query, Google bills the advertiser that purchased the paid listing directly and shares
a portion of the fee charged to the advertiser with the Company. The Company recognizes paid listing revenue from Google when it delivers the
user's click. In cases where the user's click is generated due to the efforts of a third-party distributor, the Company recognizes the amount due from
Google as revenue and records the revenue share or other payment obligation to the third-party distributor as traffic acquisition costs.
Search & Applications also generates revenue from subscription fees, which is recognized over the terms of the applicable subscriptions
(which range from one to two years) and from sales of apps and in-app purchases, which is recognized at the time of the sale.
The Match Group
Revenue of the dating businesses is derived principally from subscription fees for subscription-based online personals and related services.
Subscription fee revenue is recognized over the terms of the applicable subscriptions, which primarily range from one to six months. Deferred
revenue at the dating businesses is $117.9 million and $116.5 million at December 31, 2014 and 2013 , respectively. The dating businesses also
earn revenue from online advertising, which is recognized when an ad is displayed, and the purchase of add-on or premium features, which is
recognized based on usage.
The Princeton Review and Tutor's revenue consists primarily of fees received for in-person and online test preparation classes, access to
online test preparation materials and individual tutoring services. Fees from classes and access to online materials are recognized over the period of
the course and the period of the online access, respectively. Tutoring fees are generally collected in the form of subscription fees that entitle the
subscriber to a certain number of tutoring sessions over a certain period of time. These fees are recognized over the term of the subscription based
on usage.
DailyBurn's revenue consists primarily of subscription fee revenue, which is recognized over the terms for the applicable subscriptions, which
range from one to twelve months.
Media
Revenue of businesses included in this segment is generated primarily through media production, subscriptions and advertising. Media
production revenue is recognized when the production is available for the customer to broadcast or exhibit, subscription fee revenue is recognized
over the terms of the applicable subscriptions, which are one month or one year, and advertising revenue is recognized when an ad is displayed or
over the period earned.
eCommerce
HomeAdvisor's lead acceptance revenue is generated and recognized when an in-network home service professional is delivered a consumer
lead. HomeAdvisor's membership subscription revenue is generated through subscription sales to service professionals and is deferred and
recognized over the terms of the memberships, which are one month, three months, or one
year. HomeAdvisor's website hosting revenue is deferred
and recognized over the period of the hosting agreement.
ShoeBuy's revenue consists of merchandise sales, reduced by incentive discounts and sales returns, and is recognized when delivery to the
customer has occurred. Delivery is considered to have occurred when the customer takes title and assumes the risks and rewards of ownership,
which is on the date of shipment. Accruals for returned merchandise are based on historical experience. Shipping and handling fees billed to
customers are recorded as revenue. The costs associated with shipping goods to customers are recorded as cost of revenue.
54