Enom 2010 Annual Report Download - page 15

Table of Contents
Our data centers located in North America and Europe host our various public-facing websites and applications, as well as many of our back-end
business intelligence and financial systems. The websites are designed to be fault-tolerant, with collections of identical web servers connecting to enterprise
databases. Our social media tools do not require an enterprise database, but instead rely on high performance, high availability disk systems for data storage.
The design also includes load balancers, firewalls and routers that connect the components and provide connections to the Internet.
Sales and Marketing
To date, we have generated advertising revenue primarily through the sale of online advertisements, sourced through advertising networks as well as
through our direct sales force. Our advertising arrangements are primarily pay-per-performance, also known as cost-per-click ("CPC"), and pay-per-
impression or cost per 1,000 impressions ("CPM"). Under the CPC arrangement, we earn revenue based on the number of clicks associated with an
advertisement; under the CPM arrangement, we derive revenue from displaying the advertisements on pages that are visited by our audience. A significant
portion of our cost-per-click advertising is provided by Google. For the years ended December 31, 2009 and 2010, we derived approximately 18% and 29%,
respectively, of our total revenue from our advertising arrangements with Google.
Customers
We currently deploy our platform to website publishers and our Registrar products and services to resellers, including large e-commerce websites,
Internet service providers and web-hosting companies and, to a lesser extent, consumers. No single publisher, consumer, e-commerce website, service
provider or web-hosting company represents more than 10% of our total consolidated revenue.
Competition
Content & Media
The online content and media market we participate in is new, rapidly evolving and intensely competitive. Competition is expected to intensify in the
future as more companies enter the space. We compete for business on a number of factors including return on marketing investment, price, access to targeted
audiences and quality. Our principal competitors in this space include traditional Internet companies like Yahoo! and AOL, both of whom are making
significant investments in order to compete with aspects of our business. For example, in 2010, Yahoo! acquired Associated Content, an online publisher and
distributor of original content. Associated Content allows anyone, both paid and non-paid content creators, to publish content in any format, and connects the
content to consumers, partners and advertisers. In 2009, AOL launched Seed, a content and media platform that helps create online content for distribution
across all of AOL's properties.
Additionally, we compete with web portals that focus on particular areas of consumer interest such as Glam, WebMD and About.com for online
audiences and marketing budgets. With respect to our social media tools we compete with several private companies such as Jive Software and Lithium.
Registrar
The markets for domain name registration and web-based services are intensely competitive. We compete for business on a number of factors including
price, value-added services, such as e-mail and web-hosting, customer service and reliability. Our principal competitors include existing registrars, such as
GoDaddy, Tucows and Melbourne IT, and new registrars entering the domain name registration business.
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