Juno 2014 Annual Report Download - page 9

Table of Contents
—As consumers continue to spend more time and money online, the competition for their time and engagement has continued to intensify.
Consumers have a great number of options for online content and entertainment, including, by way of example, games, websites offering news and current
events, movies, television shows, videos, information about any and virtually every topic, and the opportunity to communicate, socialize and interact with
acquaintances and others. Facebook, in particular, has become a dominant platform for finding and interacting with people online, including both past and
present acquaintances. Our services continue to provide a platform for social networking activities and communications, especially related to the high school
experience. Visitors to the Classmates website can interact with yearbooks, which can facilitate new forms of social connections, such as sharing memorable
content with friends and acquaintances or posting comments on the Classmates website or on Facebook. Certain aspects of the value proposition of our social
networking services compete with major social networking platforms such as Facebook, as well as Internet search engines such as Google. Many of our
competitors offer their content and services free of charge. We believe the primary competitive factors are price, features, functionality, size and engagement
of the user base, and quantity, quality and scope of the content. We believe we compete favorably with respect to certain of these areas, although many
competitors have a significant advantage over us in certain other areas. For additional information, see "Risk Factors", which appears in Item 1A of this
Annual Report on Form 10-K.
Loyalty Marketing
Our Content & Media segment also offers a loyalty marketing service under the MyPoints brand. MyPoints connects advertisers with its members by
allowing members to earn rewards points for engaging in online and offline activities. MyPoints is a free service for consumers who register and provide
certain identifying information to receive direct email marketing and other loyalty promotions. Members earn points for responding to email offers, shopping
online at the MyPoints website , taking market research companies' surveys, playing online games with MyPoints partners, searching the
Internet on a dedicated MyPoints' landing page and using the MyPoints-branded browser extension as a reminder service for members to shop and earn. In
addition to these point earning opportunities, MyPoints also offers a credit card with the ability to earn points through both online and offline shopping.
Reward points can be earned from over 1,500 affiliated retailers, which are redeemable for third-party gift cards and electronic gift cards currently from over
75 merchants or for PayPal credit, as well as the option to redeem in the form of a charitable donation. Gift cards are also available for purchase on the
MyPoints website.
MyPoints provides advertisers with an effective means to reach a large online audience. MyPoints uses a variety of criteria, including personal interests,
purchasing behavior and demographic profiles, to create targeted promotions for advertisers. These marketing campaigns are tailored to meet the goals of the
specific advertiser, which are most commonly to generate incremental sales of an advertiser's products or services but may also include objectives that do not
involve purchase transactions, such as generating sales leads or increased traffic to an advertiser's website. In many cases, MyPoints sends personalized email
marketing messages, called BonusMail®, that are directed specifically to individual MyPoints members to showcase a single advertiser or offer. MyPoints
members benefit not only from attractive discounts and other benefits featured in BonusMail® offers but also can receive points for purchases and, in some
cases, for clicking through the media links in BonusMail® to the advertiser's website, as well as for other actions taken within a limited time period. We
believe the limited-time nature of the BonusMail® offers adds a sense of urgency to the promotion for the consumer.
The advertising revenues generated from our loyalty marketing service revenues are classified as advertising and other revenues. Advertisers pay us
primarily based on performance measures that include when our MyPoints emails are transmitted to members, when members respond to emails and when
members complete transactions. Advertising and other revenues also include revenues generated
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