Travelzoo 2010 Annual Report Download - page 56

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We expect our headcount to continue to increase in the future. The Company’s headcount is one of the main
drivers of general and administrative expenses. Therefore, we expect our general and administrative expenses to
continue to increase.
Our strategy to replicate our business model in foreign markets is expected to result in a significant additional
increase in our general and administrative expenses.
Subscriber Acquisition
The table set forth below provides for each quarter in 2008, 2009, and 2010, an analysis of our average cost for
acquisition of new subscribers for our Travelzoo Top 20 newsletter and our Newsflash e-mail alert service for our
North America and Europe operating segments.
The table includes the following data:
•Average Cost per Acquisition of a New Subscriber: This is the quarterly costs of consumer marketing
programs whose purpose was primarily to acquire new subscribers, divided by total new subscribers added
during the quarter.
•New Subscribers: Total new subscribers who signed up for at least one of our e-mail publications
throughout the quarter. This is an unduplicated subscriber number, meaning a subscriber who signed up for
two or more of our publications is only counted once.
•Subscribers Removed From List: Subscribers who were removed from our lists throughout the quarter
either as a result of their requesting removal, or based on periodic list maintenance after we determined that
the e-mail address was likely no longer valid.
•Balance: This is the number of subscribers at the end of the quarter, computed by taking the previous
quarter’s subscriber balance, adding new subscribers during the current quarter, and subtracting subscribers
removed from list during the current quarter.
North America:
Period
Average Cost per
Acquisition of a New
Subscriber New Subscribers
Subscribers
Removed from
List Balance
Q1 2008 .................. $4.97 296,565 (270,427) 11,022,372
Q2 2008 .................. $3.39 348,506 (303,623) 11,067,255
Q3 2008 .................. $3.73 360,916 (292,052) 11,136,119
Q4 2008 .................. $2.75 487,681 (341,057) 11,282,743
Q1 2009 .................. $2.29 720,320 (259,537) 11,743,526
Q2 2009 .................. $2.15 885,031 (277,439) 12,351,118
Q3 2009 .................. $1.80 1,076,367 (418,417) 13,009,068
Q4 2009 .................. $1.61 619,831 (380,626) 13,248,273
Q1 2010 .................. $1.89 1,009,235 (434,754) 13,822,754
Q2 2010 .................. $1.62 719,777 (492,527) 14,050,004
Q3 2010 .................. $1.60 804,892 (689,727) 14,165,169
Q4 2010 .................. $1.14 540,703 (432,071) 14,273,801
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