Enom 2011 Annual Report Download - page 63

Sales and Marketing
2011 compared to 2010. Sales and marketing expenses increased 53%, or $13.0 million, to $37.4 million for the year ended December 31, 2011
from $24.4 million for the same period in 2010. The increase was primarily due to our direct sales and marketing efforts in 2011 and acquisition of IndieClick
in August 2011 and included a $10.1 million increase in personnel related costs, including stock-based compensation expense and sales commissions and $1.8
million related to expansion of marketing and promotional activities. As a percentage of revenue, sales and marketing expense increased 180 basis points to
11.5% during the year ended December 31, 2011 from 9.7% during the same period in 2010.
2010 compared to 2009. Sales and marketing expenses increased 22%, or $4.4 million, to $24.4 million for the year ended December 31, 2010
from $20.0 million for the same period in 2009. The increase was largely due to growth in our business including a $2.8 million increase in personnel costs
related to growing our direct advertising sales team and an increase in sales commissions and $0.8 million related to increase in stock-based compensation
expense due to additional stock options granted to our employees. As a percentage of revenue, sales and marketing expense decreased 40 basis points to 9.7%
during the year ended December 31, 2010 from 10.1% during the same period in 2009.
Product Development
2011 compared to 2010. Product development expenses increased by $11.6 million, or 44%, to $38.1 million during the year ended December 31,
2011 compared to $26.5 million in the same period in 2010. The increase was largely due to approximately $9.1 million increase in personnel and related
costs including stock-based compensation expense, net of internal costs capitalized as internal software development, due to additional headcount to further
develop our platform, our owned and operated websites, and to support and grow our Registrar product and service offerings. The remaining increase was
largely attributable to additional consultant and associated costs of $2.2 million incurred to develop and enhance new and existing products to support the
growth in our business, as well as a $0.1 million increase in depreciation expense. The stock-based compensation expense for the year ended December 31,
2011 included a one-time charge of $0.4 million related to certain stock awards vesting on certain conditions related to our IPO. As a percentage of revenue,
product development expenses increased 120 basis points to 11.7% during the year ended December 31, 2011 compared to 10.5% during the same period in
2010.
2010 compared to 2009. Product development expenses increased by $4.9 million, or 23%, to $26.5 million during the year ended December 31,
2010 compared to $21.7 million in the same period in 2009. The year-over-year increase was largely due to approximately $3.9 million increase in personnel
and related costs, net of internal costs capitalized as internal software development, to further develop our platform, our owned and operated websites, and to
support and grow our Registrar product and service offerings. As a percentage of revenue, product development expenses decreased 40 basis points to 10.5%
during the year ended December 31, 2010 compared to 10.9% during the same period in 2009.
General and Administrative
2011 compared to 2010. General and administrative expenses increased by $22.1 million, or 59%, to $59.5 million during the year ended
December 31, 2011 compared to $37.4 million in the same period in 2010. The increase was primarily due to a $15.8 million increase in personnel related
costs, inclusive of a $12.2 million increase stock-based compensation expense, due to additional headcount to support the growth of our business and the first
year as a public company, a $1.7 million increase in professional fees primarily related to our public company compliance initiatives and business
acquisitions, a $1.9 million increase in facilities and rent expense for additional office space and an $1.0 million increase in depreciation expense to support
our growth. The stock-based compensation expense for the year ended December 31, 2011 included a one-time charge of $4.6 million related to certain stock
awards vesting on certain conditions related to our IPO. As a percentage of revenue, general and administrative costs increased 350 basis points to 18.3%
during the year ended December 31, 2011 compared to 14.8% during the same period in 2010.
2010 compared to 2009. General and administrative expenses increased by $8.9 million or 31% to $37.4 million during the year ended
December 31, 2010 compared to $28.5 million in the same period in 2009. The increase was primarily due to a $2.7 million increase in personnel costs and a
$1.6 million increase certain information technology costs to support the growth of our business, a $1.4 million increase in professional fees primarily related
to our public company readiness efforts, a $0.7 million increase in stock-based compensation expense, a $0.4 million increase in rent expense for additional
office space to support our growth, and the inclusion of a $0.6 million gain on sale of one of our acquired website properties as a reduction to general and
administrative expenses in the year ended December 31, 2009. As a percentage of revenue, general and administrative costs increased 40 basis points to
14.8% during the year ended December 31, 2010 compared to 14.4% during
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