Enom 2013 Annual Report Download - page 86

the extent to which the fair value has been less than cost, (2) the financial condition and near-term prospects of the issuer and (3) the intent and
ability of us to retain our investment in the issuer for a period of time sufficient to allow for any anticipated recovery in fair value. We have
determined that there has been no impairment of our equity marketable securities to date.
The cost of marketable securities sold is based upon the specific identification method and any realized gains or losses on the sale of
investments are reflected as a component of interest income or expense. For the year ended December 31, 2013, unrealized gain on marketable
securities was $0.9 million. There were no unrealized gains or losses marketable securities for the years ended December 31, 2012 and 2011.
In addition, we classify marketable securities as current or non-current based upon whether such assets are reasonably expected to be
realized in cash or sold or consumed during the normal operating cycle of the business.
Revenue Recognition
We recognize revenue when four basic criteria are met: persuasive evidence of a sales arrangement exists; performance of services has
occurred; the sales price is fixed or determinable; and collectability is reasonably assured. We consider persuasive evidence of a sales
arrangement to be the receipt of a signed contract. Collectability is assessed based on a number of factors, including transaction history and the
credit worthiness of a customer. If it is determined that collection is not reasonably assured, revenue is not recognized until collection becomes
reasonably assured, which is generally upon receipt of cash. We record cash received in advance of revenue recognition as deferred revenue.
For arrangements with multiple deliverables, we allocate revenue to each deliverable if the delivered item(s) has value to the customer on
a standalone basis and, if the arrangement includes a general right of return relative to the delivered item, delivery or performance of the
undelivered item(s) is considered probable and substantially in our control. The fair value of the selling price for a deliverable is determined
using a hierarchy of (1) company specific objective and reliable evidence, then (2) third-party evidence, then (3) best estimate of selling price.
We allocate any arrangement fee to each of the elements based on their relative selling prices.
Our revenue is principally derived from the following services:
Content & Media
Advertising Revenue . Advertising revenue is generated by performance-based Internet advertising, such as cost-per-
click advertising, in
which an advertiser pays only when a user clicks on our advertisement that is displayed on our owned and operated websites and customer we
bsites; fees generated by users viewing third-party website banners and text-link advertisements; fees generated by enabling customer leads or
registrations for partners; and fees from referring users to, or from users making purchases on, sponsors’ websites. In determining whether an
arrangement exists, we ensure that a binding arrangement is in place, such as a standard insertion order or a fully executed customer-specific
agreement. Obligations pursuant to our advertising revenue arrangements typically include a minimum number of impressions or the satisfaction
of the other performance criteria. Revenue from performance-based arrangements, including referral revenue, is recognized as the related
performance criteria are met. We assess whether performance criteria have been met and whether the fees are fixed or determinable based on a
reconciliation of the performance criteria and an analysis of the payment terms associated with the transaction. The reconciliation of the
performance criteria generally includes a comparison of third-
party performance data to the contractual performance obligation and to internal or
customer performance data in circumstances where that data is available.
Where we enter into revenue sharing arrangements with our customers, such as those relating to advertising on our customers' domains,
and when we are considered the primary obligor, we report the underlying revenue on a gross basis in our consolidated statements of operations,
and record these revenue-sharing payments to our cu stomers as revenue-sharing expenses, which are included in service costs.
In certain cases, we record revenue based on available and preliminary information from third parties. Amounts collected on the related
receivables may vary from reported informatio n based upon third-party refinement of estimated and reported amounts owing that occurs
typically within 30 days of the period end. For the years ended December 31, 2013, 2012 and 2011, the difference between the amounts
recognized based on preliminary information and cash collected was not material.
Subscription Services and Social Media Services. Subscription services revenue is generated through the sale of membership fees paid
to access content available on certain of our owned and operated websites. The majority of the memberships range from 6 to 12 month terms.
Subscription services revenue is recognized on a straight-line basis over the membership term.
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