Travelzoo 2007 Annual Report Download - page 61

to submit requests to convert their shares into Travelzoo Inc. within the required time period, offset by a $242,000
increase in office expenses.
Europe
2007 2006 2005
Year Ended December 31,
(In thousands)
Net revenues .......................................... $5,856 $ 3,232 $ 757
Loss from operations .................................... (5,172) (1,586) (1,117)
Loss from operations as a % of revenues ..................... 88% 49% 148%
In Europe, revenues increased 81% in the year ended December 31, 2007 compared to the same period in 2006
and increased 327% in the year ended December 31, 2006 compared to the same period in 2005. We began
operations in the U.K. in May 2005. In 2006 we began operations in Germany and Spain and in 2007 we began
operations in France.
Our loss from operations in Europe was $5.2 million in the year ended December 31, 2007 compared to
$1.6 million in the year ended December 31, 2006. The $2.6 million increase in revenues was offset by a $4.7 million
increase in sales and marketing expenses and a $1.4 million increase in general and administrative expenses. The
$4.7 million increase in sales and marketing expenses was due primarily to a $2.5 million increase in advertising to
acquire new subscribers for our e-mail products, a $1.0 million increase in advertising to acquire traffic to our Web
sites, and a $1.0 million increase in salary and employee related expenses. The $1.4 million increase in general and
administrative expenses was due primarily to an $801,000 increase in salary expense and a $377,000 increase in rent
and office expenses.
Our loss from operations in Europe was $1.6 million in the year ended December 31, 2006 compared to
$1.1 million in the year ended December 31, 2005. The $2.5 million increase in revenues was offset by a $2.9 million
increase in operating expenses. The increase in operating expenses was primarily due to a $1.1 million increase in
expenses to acquire new subscribers for our e-mail products and advertising to acquire traffic to our Web sites, a
$1.1 million increase in salary expense due to an increase in headcount and a $331,000 increase in office expenses.
Asia Pacific
2007 2006 2005
Year Ended December 31,
(In thousands)
Net revenues ............................................... $ 8 $— $—
Loss from operations ......................................... (3,166) — —
Our loss from operations in Asia Pacific was $3.2 million in the year ended December 31, 2007 due primarily
to $2.2 million in general and administrative expenses primarily for salary and employee related expenses, rent and
office expenses, and legal and professional service expenses. There was also $914,000 in sales and marketing
expenses due primarily to advertising to acquire new subscribers for our e-mail products and salary and employee
related expenses. We began operations in Asia Pacific in 2007.
Interest Income
For the years ended December 31, 2007 and 2006, interest income consisted primarily of interest earned on
cash and cash equivalents. For the year ended December 31, 2005, interest income consisted primarily of interest
earned on cash, cash equivalents and short term investments. Our interest income increased to $1.3 million for the
year ended December 31, 2007 from $1.2 million for the year ended December 31, 2006 due primarily to higher
interest rates. Our interest income increased to $1.2 million for the year ended December 31, 2006 from $961,000
for the year ended December 31, 2005 due primarily to higher interest rates.
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