Juno 2013 Annual Report Download - page 48

Table of Contents
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We are currently involved in certain legal proceedings and investigations. We record liabilities related to pending matters when an unfavorable
outcome is deemed probable and management can reasonably estimate the amount or range of loss. As additional information becomes available, we
continually assess the potential liability related to such pending matters.
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Revenues
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Content & Media services revenues primarily consist of amounts charged to pay accounts for social networking services. Communications
services revenues consist of amounts charged to pay accounts for dial-up Internet access, mobile broadband, DSL, email, Internet security, web hosting,
and other services. Our Content & Media and Communications services revenues are primarily dependent on two factors: the average number of pay
accounts for a period and ARPU. In general, we charge our pay accounts in advance of providing a service, which results in the deferral of services
revenue to the period in which the services are provided. Communications services revenues also include revenues generated from the resale of
telecommunications to third parties.
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Content & Media products revenues consist of revenues generated from the sale of yearbook reprints and related shipping and handling fees, as
well as revenues generated from reselling third-party merchandise. Communications products revenues consist of revenues generated from the sale of
mobile broadband devices and the related shipping and handling fees.
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We provide advertising opportunities to marketers with both brand and direct response objectives through a full suite of display, search, email, and
text-link opportunities across our various properties. Our social networking services generate advertising revenues primarily from display
advertisements on our websites. Advertising inventory on our social networking websites includes text and graphic placements on the user home page,
profile page, class list page, and most other pages on our websites. Our loyalty marketing service's advertising and other revenues are derived from
advertising fees, consisting primarily of fees based on performance measures, that are generated when emails are transmitted to members, when
members respond to emails, when members complete online transactions, and when members engage in a variety of other online activities, including,
but not limited to, games, Internet searches and market research surveys. Our loyalty marketing service's advertising and other revenues also include
revenues generated from the sale of gift cards.
Our Communications services generate advertising revenues from search placements, display advertisements and online market research associated
with our Internet access and email services. Advertising revenues also include intercompany commissions from the Content & Media segment which
are included in reported segment results and are eliminated upon consolidation.
Cost of Revenues
Content & Media cost of revenues includes costs of points earned by members of our loyalty marketing service; costs related to the sale of gift
cards; depreciation of network computers and equipment; data center costs; amortization of content purchases; fees associated with the storage and
processing of customer credit cards and associated bank fees; costs related to providing customer support; personnel- and overhead-related costs; costs
related to third-party merchandise; costs
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