Enom 2010 Annual Report Download - page 109

Table of Contents
Demand Media, Inc. and Subsidiaries
Notes to Consolidated Financial Statements (Continued)
(In thousands, except per share amounts)
2. Summary of Significant Accounting Policies (Continued)
associated with the Company's owned and operated and customer websites, including depreciation of the systems and hardware used to build and operate the
Company's Content & Media platform and Registrar, personnel costs relating to in-house editorial, customer service and information technology.
Registry fee expenses consist of payments to entities accredited by ICANN as the designated registry related to each top level domain ("TLD"). These
payments are generally fixed dollar amounts per domain name registration period and are recognized on a straight-line basis over the registration term. The
costs of renewal registration fee expenses for owned and operated undeveloped websites are also included in service costs. Amortization of the cost of website
names and media content owned by the Company is included in amortization of intangible assets.
Accounts Receivable
Accounts receivable primarily consist of amounts due from:
Third parties who provide advertising services to the Company's owned and operated websites in exchange for a share of the underlying
advertising revenue. Accounts receivable from third parties are recorded as the amount of the revenue share as reported to the Company by the
advertising networks and are generally due within 30 to 45 days from the month-end in which the invoice is generated. Certain accounts
receivable from these parties are billed quarterly and are due within 45 days from the quarter-end in which the invoice is generated, and are non-
interest bearing;
Social media services customers and include (i) account set-up fees, which are generally billed and collected once set-up services are completed,
(ii) monthly recurring services, which are billed in advance of services on a quarterly or monthly basis, (iii) account overages, which are billed
when incurred and contractually due, and (iv) consulting services, which are generally billed in the same manner as set-up fees. Accounts
receivable from social media customers are recorded at the invoiced amount, are generally due within 30 days and are non-interest bearing;
Direct advertisers who engage the Company to deliver branded advertising impressions. Accounts receivable from direct advertisers are recorded
at negotiated advertising rates (customarily based on advertising impressions) and as the related advertising is delivered over the Company's
owned and operated websites. Direct advertising accounts receivables are generally due within 30 to 60 days from the date the advertising
services are delivered and billed; and,
Customers who syndicate the Company's content over their websites in exchange for a share of related advertising revenue. Accounts receivable
from these customers are recorded at the revenue share as reported by the underlying customers and are generally due within 30 to 45 days.
The Company's Registrar services are primarily conducted on a prepaid basis or through credit card or Internet payments processed at the time a
transaction is consummated, and as such, the Company does not carry significant receivables related to these business activities.
Receivables from registries represent refundable amounts for registrations that were placed on auto-renew status by the registries, but were not explicitly
renewed by a registrant as of the balance
F-13
•
•
•
•