Juno 2013 Annual Report Download - page 43

Table of Contents
revenue when persuasive evidence of an arrangement exists, delivery has occurred or services have been rendered, the fee is fixed or determinable, no
significant Company obligations remain, and collectibility is reasonably assured. Revenues exclude sales taxes collected.
Our revenues are comprised of services revenues, which are derived primarily from fees charged to pay accounts; advertising and other revenues;
and product revenues, which are derived primarily from the sale of yearbook reprints and related shipping fees, the sale of mobile broadband devices
and related shipping and handling fees, as well as from the sale of third-party merchandise.
Service revenues for our social networking services and for our Communications services are derived primarily from fees charged to pay accounts
and are recognized in the period in which fees are fixed or determinable and the related services are provided to the customer. Our pay accounts
generally pay in advance for their services by credit card, PayPal or check, and revenues are then recognized ratably over the service period. Advance
payments from pay accounts are recorded on the consolidated balance sheets as deferred revenue. We offer alternative payment methods to credit cards
for certain Communications pay service plans. These alternative payment methods currently include use of automated clearinghouse, payment by money
order, payment by check or payment through a local telephone company. In circumstances where payment is not received in advance, revenues are only
recognized if collectibility is reasonably assured.
Advertising revenues from our social networking services and from our Communications services consist primarily of amounts from our Internet
search provider that are generated as a result of users utilizing such provider's Internet search services, amounts generated from display advertisements,
and amounts generated from referring members to third-party websites or services. We recognize such advertising revenues in the period in which the
advertisement is displayed or, for performance-based arrangements, when the related performance criteria are met. In determining whether an
arrangement exists, we ensure that a written contract is in place, such as a standard insertion order or a customer-specific agreement. 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 the payment
terms associated with the transaction. The reconciliation of the performance criteria generally includes a comparison of our internally-tracked
performance data to the contractual performance obligation and, when available, to third-party or customer-provided performance data.
Advertising and other revenues for our loyalty marketing service consist primarily of fees generated when emails are transmitted to members,
when members respond to emails and when members complete online transactions. Each of these activities is a discrete, independent activity, which
generally is specified in the agreement with each advertising customer. As the earning activities take place, activity measurement data (examples include
the number of emails delivered and the number of responses received) is accumulated and the related revenues are recorded. Our loyalty marketing
service also generates revenues from the sale of gift cards.
Our social networking products revenues are derived from the sale of yearbook reprints and related shipping fees. Products revenues from the sale
of yearbook reprints are recognized upon delivery to the customer. Shipping fees charged to customers are recognized at the time the related products
revenues are recognized and are included in products revenues. Shipping costs are included in cost of revenues.
Our Communications products revenues are generated from the sale of mobile broadband service devices and the related shipping and handling
fees and are recognized upon delivery of such devices. Sales of mobile broadband service devices bundled with free service plans are allocated using the
relative selling price method in accordance with the multiple-element arrangement provisions of ASC 605. The selling prices of our mobile broadband
paid service plans are determined by vendor specific objective evidence, which is based upon the monthly stand-alone selling price of each plan. The
selling prices of the mobile broadband service devices and free service plans are determined by management's
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