Enom 2011 Annual Report Download - page 10

Content Investment Strategy
We strive to create long-lived content with positive growth characteristics that is expected to yield an attractive financial return over its expected useful
life. We base our capital allocation decisions primarily on our analysis of a predicted internal rate of return. Customers and advertisers may also sponsor the
creation of content such as the premium online video content we have created for certain brand advertisers.
Internal rates of return for content produced now or in the future may be significantly less than those achieved in previous periods. See Item 1A. "Risk
Factors-We base our capital allocation decisions primarily on our analysis of the predicted internal rate of return on content. If the estimates and
assumptions we use in calculating internal rate of return on content are inaccurate, our capital may be inefficiently allocated. If we fail to appropriately
allocate our capital, our growth rate and financial results will be adversely affected ."
Community of Freelance Creative Professionals
We engage our robust community of freelance creative professionals, including copy editors, writers and filmmakers, to create original, commercially
valuable online text and video content at scale. In order to ensure that we engage highly qualified content creators with relevant experience, the individuals
undergo a rigorous qualification process, which includes the submission of writing samples or examples of previously published work and minimum
experience thresholds before they are allowed to participate in generating content for our network of owned and operated websites and customer websites. On
some of our video projects, we may engage the services of recognized screen personalities, subject matter experts, make-up artists, set designers and others.
Through our title and content creation processes, we enable our freelance creative professionals to produce valuable content, reach an audience of
millions and earn income from available work assignments. We offer our freelance creative professionals the ability to pursue titles and topics in the
categories that most align with their area of expertise and competitive payments for their services.
Content Distribution
Owned and Operated. We deploy our content, social media and system of monetization tools on our owned and operated websites that collectively
attracted over 100 million unique visitors who generated over 815 million page views globally during the month ended January 31, 2012, according to
comScore. In addition to the content and social media features provided through our platform, some of our websites also feature unique online and mobile
applications. Users visit our sites through search engine referrals, direct navigation and social media referrals. Our websites are designed to be easily
discoverable by users due to the combination of relevant content, search engine optimization and the ability of users to recommend and share our content via
social media websites such as Facebook.
Among our portfolio of owned and operated websites, eHow is our most successful website to-date based on the number of monthly unique visitors.
eHow is the 19th largest website in the United States with over 48 million unique visitors in the US during the month ended January 31, 2012 as measured by
comScore. eHow's library includes over 3 million text articles and over 160,000 instructional videos that are presented in an easy-to-understand manner. A
significant majority of the text articles and videos in the eHow library was created by professionals and topical experts.
Another of our owned and operated sites, LIVESTRONG.com had over 12 million unique users in January 2012 according to comScore.
LIVESTRONG.com has an extensive library of health, fitness, lifestyle and nutrition text articles and videos, which combined with interactive tools and social
media community features, help users create customized goals and monitor their health, fitness and life achievements.
In addition to eHow and LIVESTRONG.com, our owned and operated websites include Cracked.com, a leading humor website offering original and
engaging comedy-driven text articles and videos, and other enthusiast websites across a number of verticals, such as casual games, sports, automotive and
general entertainment.
Customer Network. Our customer network includes leading publishers, brands and retailers, providing the potential to expand our distribution and
enhance our monetization opportunities. Over 400 websites operated by our customers, such as the San Francisco Chronicle, deploy some or all components
of our platform across their websites, enhancing their content, social media and monetization features and capabilities. In addition, YouTube is a major
distributor of our video content, including premium video produced under a multi-channel sponsorship arrangement with YouTube. We believe that our
videos on YouTube, which have been viewed more than 3.5 billion times, are particularly attractive to advertisers because they are rights cleared and
professionally produced. Collectively, our network of customer websites generated over 4.9 billion page views to our platform during the quarter ended
December 31, 2011 according to our internal data.
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