Incredimail 2010 Annual Report Download - page 34

D. PROPERTY, PLANTS AND EQUIPMENT
We lease our facility, located in Tel Aviv, Israel, pursuant to a lease that was entered into during 2006 and expires in 2011, with an
option to extend the lease for 2 more years. The lease is for a total area of 1,700 square meters, at a monthly rent of approximately $20 per
square meter.
We own 33 servers that are hosted in a server farm by Bezeq International Ltd., which we refer to herein as "Bezeq". Our servers
include mainly web servers, application servers, ad servers, mail servers and database servers. Bezeq provides the Internet and related
telecommunications services, including hosting and location facilities, needed to operate our website. Bezeq is Israel’
s largest provider of such
services and is a member of Bezeq Group, Israel’
s national telecommunications provider. Bezeq provides these services through standard
purchase orders and invoices. We add servers and expand our systems located at their facilities as our operations require. We believe there are
many alternative providers of these services both within and outside of Israel.
ITEM 4.A UNRESOLVED STAFF COMMENTS
Not applicable.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The following discussion of our financial condition and results of operations should be read in conjunction with our financial
statements and the related notes to the financial statements included elsewhere in this annual report. In addition to historical financial
information, the following discussion and analysis contains forward looking statements within the meaning of Section 27A of the Securities Act
of 1933 and Section 21E of the Securities Exchange Act of 1934, including, without limitation, statements regarding the Company’
s
expectations, beliefs, intentions, or future strategies that are signified by the words "expects," "anticipates," "intends," "believes," or similar
language. These forward looking statements involve risks, uncertainties and assumptions. Our actual results and timing of selected events may
differ materially from those anticipated in these forward looking statements as a result of many factors, including those discussed under "Item
3.D Risk Factors" and elsewhere in this annual report.
A. OPERATING RESULTS
Overview
We design and market a suite of downloadable consumer products that are simple safe and useful. These include, customized and
entertaining email software products, a graphic add-
on to instant messaging software, wallpaper and screensaver software, and software for
presenting digital personal photos. We believe we are unique in addressing our demographic market of not early adopters, and particularly
regarding our email client, a global technology leader in enriching email interactions by offering users the ability to design highly personalized
email presentations. We believe that the user experience we have created has been successful in attracting a unique underserved demographic,
seeking software applications that make their life a little simpler and time effective.
Since we began operations in 2000, we have recorded over 146 million registered downloads of our free products in more than 100
countries, and in 2010, we recorded an average of approximately 1.5 million registered downloads each month. As of December 31, 2010, we
had approximately 10.7 million active users, and currently, our email users send over 280 million IncrediMail®
emails each month. We define
an "active" user as any user who has performed any activity using any IncrediMail®
product or service, including opening or sending emails
using IncrediMail®,
sending a message utilizing our HiYo tool, downloading content or updating the product, in the 30 days prior to the
measurement date. Our users use our products for as long as six years, based on current statistics (this estimate has been adjusted upwards over
the past three years). Through December 31, 2010, we have sold more than 2 million products and content licenses worldwide to our registered
users. We believe our historical track record of our users accepting and utilizing the search properties we offer, as well as converting registered
users to purchasing customers, represents a convincing validation of our business strategy.
Prices and license fees for our products vary based on market, length of license period and whether the products are offered together.
Our prices and fees range from less than $10 to about $60. These prices are subject to market conditions and can vary in currencies, other than
the US dollar. We are not aware of inflation or a fluctuation in foreign currency exchange rates having a material effect on our revenues.
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