Juno 2012 Annual Report Download - page 18

Table of Contents
content providers, such as AOL and MSN, and independent national Internet service providers, such as EarthLink and its PeoplePC subsidiary. We
believe the primary competitive factors in the Internet access industry are price, coverage area, features, scope of services, speed, and quality of service.
Our dial-up Internet access services do not compete favorably with broadband services with respect to certain of these factors, including, but not limited
to, speed and, in certain cases, price. When compared to other dial-up Internet access services, we believe our dial-up Internet access services compete
favorably. Our NetZero 4G mobile broadband service and our DSL service compete favorably with other broadband services with respect to certain
factors, although some of our competitors have an advantage over us with respect to certain other factors, such as price and coverage area.

Revenues and operating results from our FTD segment typically exhibit seasonality. Revenues and operating results tend to be lower for the
quarter ending September 30 because none of the most popular floral and gift-giving holidays, which include Mother's Day, Valentine's Day,
Christmas, Easter, and Thanksgiving, fall within that quarter. In addition, depending on the year, Easter and the U.K. Mother's Day sometimes fall
within the quarter ending March 31 and sometimes fall within the quarter ending June 30. Furthermore, depending on the year, certain of the most
popular floral and gift-giving holidays, such as Valentine's Day, may occur on a weekend or government holiday. As a result of these variations, we
believe that comparisons of the FTD segment's revenues and operating results for any period with those of the immediately preceding period, or in some
instances, the same period of the preceding fiscal year, may be of limited relevance in evaluating its historical performance and predicting its future
financial performance. Our working capital, cash and any short-term borrowings may also fluctuate during the year as a result of the factors described
above.
Online loyalty marketing advertising revenues and operating results tend to be higher in the quarter ending December 31 when compared to other
quarters. Our Internet access services have typically experienced a lower rate of new member registrations during the quarter ending June 30 when
compared to other quarters. Seasonality has not had a material impact on our online nostalgia services revenues. There can be no assurance that these
seasonal trends will continue in the future.


Orders placed through FTD's consumer websites or telephone numbers typically are paid for using a credit, debit or payment card or PayPal;
therefore, consumers generally pay for floral and gift orders before FTD pays the floral network members and third-party providers to fulfill and deliver
them. FTD's floral network members are billed on a monthly basis, generally for products and services and for net clearinghouse order activity.

The vast majority of the pay accounts for our Content & Media and Communications segments pay us in advance with a credit card. Other
payment options for some of our pay services include automated clearinghouse ("ACH"), personal check, money order, PayPal, or via a customer's
local telephone bill. Internet access pay accounts that elect to pay with a personal check or money order are not provisioned until their payment is
received and they are required to subscribe for one of our prepaid multi-month billing plans.
We utilize a combination of third-party and internally-developed software applications for customer billing. Customer billing is a complex process
and our billing systems must efficiently interface with third parties' systems, such as our credit card, ACH and telephone bill processors' systems. Our
ability to accurately and efficiently bill and collect payment from our members and customers is dependent on
17