Juno 2012 Annual Report Download - page 67

Table of Contents
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FTD cost of revenues includes product costs; shipping and delivery costs; costs associated with taking orders; printing and postage costs; systems
installation, training and support costs; data center costs; depreciation of network computers and equipment; license fees; costs related to customer
billing and billing support for floral network members; fees associated with the storage and processing of customer credit cards and associated bank
fees; and domain name registration fees.
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Content & Media cost of revenues includes costs related to the sale of gift cards; costs of points earned by members of our online loyalty
marketing service; data center costs; personnel- and overhead-related costs associated with operating our networks and data centers; depreciation of
network computers and equipment; amortization of content purchases; license fees; costs related to providing customer support; costs related to
customer billing and billing support for our pay accounts; fees associated with the storage and processing of customer credit cards and associated bank
fees; domain name registration fees; costs associated with the sale of yearbook reprints and the related shipping and handling costs; and costs related to
third-party merchandise.
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Communications cost of revenues includes telecommunications and data center costs; personnel- and overhead-related costs associated with
operating our networks and data centers; depreciation of network computers and equipment; license fees; costs related to providing customer support;
costs related to customer billing and billing support for our pay accounts; fees associated with the storage and processing of customer credit cards and
associated bank fees; domain name registration fees, and the costs associated with the sale of NetZero 4G mobile broadband service devices, including
the related shipping and handling costs.
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Sales and marketing expenses include expenses associated with promoting our brands, products and services and with generating advertising
revenues. Expenses associated with promoting our brands, products and services include advertising and promotion expenses; fees paid to distribution
partners, third-party advertising networks and co-registration partners to acquire new pay and free accounts; personnel and overhead-related expenses
for marketing, merchandising, customer service, and sales personnel; and telemarketing costs incurred to acquire and retain pay accounts and up-sell pay
accounts to additional services. Expenses associated with generating advertising revenues include sales commissions and personnel-related expenses.
We have expended significant amounts on sales and marketing, including branding and customer acquisition campaigns consisting of television,
Internet, public relations, sponsorships, print, and outdoor advertising, and on retail and other performance-based distribution relationships. Marketing
and advertising costs to promote our products and services are expensed in the period incurred. Advertising and promotion expenses include media,
agency and promotion expenses. Media production costs are expensed the first time the advertisement is run. Media and agency costs are expensed over
the period the advertising runs.
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Technology and development expenses include expenses for product development, maintenance of existing software, technology and websites, and
development of new or improved software and technology, including personnel-related expenses for our technology group in various office locations.
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