Incredimail 2008 Annual Report Download - page 21

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one time. In addition, the term “active user” as used in this annual report means a registered user who has performed any activity using any
IncrediMail® product or service, including opening or sending emails using IncrediMail®, logged into his instant messaging with a HiYo client,
downloading content or updating the product, in the 90 days prior to the measurement date.
Our Market
Email Market Opportunity
. In recent years, email has become one of the most important forms of electronic communication worldwide. The
email market may be divided into two segments: the consumer, or home user, market and the business, or corporate, market. Our products target
the consumer market. Both the consumer and the business markets are serviced by many of the same popular email software programs, such as
Microsoft Outlook, and by web-based email services, such as Hotmail, Yahoo!
®
Mail and Gmail.
Security remains a critical concern for the consumer market as viruses, worms and identity theft continue to grow. Spam also continues to
rise. Any new email software product should provide an effective and secure product that satisfies users’ concerns.
Evolution of the Specialized Email Software Programs. In order to be viable, email systems must function as an effective means of
communication. In addition, we believe that many in the consumer or home user market are seeking an entertaining experience and a way to
express their creativity and individual personalities. We believe that consumer email users are ready to accept email software products that offer
users a customizable and entertaining email experience together with security and anti-spam features.
The IncrediMail Solution
We employ an innovative approach to enhancing our users’ email experience. Our IncrediMail products provide the following benefits:
21
Our Strategy
Our objective is to become the market leader in entertaining and creative email systems for the consumer and home user market. Based on
our survey of downloads of our products and those of competitors from third party websites, we believe that IncrediMail
®
Xe is one of the most
downloaded free products providing an entertaining and creative email system, and our strategy will include building on its popularity and seeking
to convert free users to paying customers. The key elements of our strategy are to:
—
Variety and Amount of Content. Our products offer users access to an extensive and continually growing pool of content that we
believe is one of the largest collections of creative and diverse graphics, sound and multimedia content available online for email
communications. We began assembling our content in 1999.
—
Creative Technology. Our proprietary technology, which is based on advanced software development standards, is designed to
produce robust quality products that provide the functionality expected in an email client packaged in a friendly, less
technologically
-
oriented and entertaining environment.
—
Customization . The diversity of our graphics, sound and multimedia content enables our users to customize and personalize their
email messages and letters easily and quickly.
—
Flexibility and Ease of Use for Both Sender and Recipient.
We strive to offer a simple and intuitive user interface that enables our
users to create different experiences depending on the nature or recipient of the email or letter. Users can easily change one or more
features for a specific email. Further, recipients of IncrediMail® emails can easily open them, using most available email clients
and
can see all the features without the need for special software.
—
Maintain and grow our user base.
Our effective viral marketing has resulted in millions of registered users who spread the word
about our products and services at relatively low marketing costs to us. For that reason, we expect a significant part of our products
and services offering will remain free. In order to increase the size of our user base, we have broadened our product offering to
instant messaging with new demographics and intend to supplement the viral growth of our products with media buying and other
advertising and marketing activities, primarily online. We plan to continue, and further increase the size of the team charged with
optimizing the marketing of our products, increasing the effectiveness of our online marketing activity, and monetize user
registrations and active user base.
—
Increase the use of our products by our users and the searches performed by them through our products.
With the increasing
monetization possibilities of search generation, the strategic importance of enabling search through and because of our products has
grown significantly. This is further emphasized by the demographics of our users and the relatively high revenues they generate
while searching over the Internet. We therefore intend to increase the availability of search generating channels to our users through
numerous points in each and throughout our products and to leverage the large active user base, primarily, those that are using our
free products.