ServiceMagic 2009 Annual Report Download - page 11

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Table of Contents
Registered members (those who establish a username and password) may post a profile on these websites, as well as use any related searching
and matching tools free of charge. Subscribers (those who establish a username and password and pay a subscription fee) may, in addition to
these services, initiate, review or respond to e-mails from other subscribers.
Our subscription programs start with a single-month term, with discounts for longer term subscriptions, and generally renew automatically
unless terminated by subscribers. In the United States, we also offer access to our services via mobile phone and other mobile devices through
our matchMobile service.
Marketing
We market our products and services through a wide variety of traditional offline and online marketing. Our offline marketing activities
consist of a wide variety of traditional marketing and business development activities, including television, print, radio and outdoor advertising
and related public relations efforts. Our online marketing activities consist primarily of the purchase of banner and other display advertising,
targeted e-mail campaigns and search engine marketing. In addition, we enter into a variety of alliances with third parties who advertise and
promote our services. Some alliances are exclusive and some, but not all, contain renewal provisions.
Revenues
Our revenues are derived from subscription fees for our online personals services and related products and online advertising.
Competition
The personals business is very competitive and highly fragmented in the United States and abroad and barriers to entry are minimal. We
compete primarily with online and offline broad-based personals, dating and matchmaking services (both free and paid), the personals sections
of newspapers and magazines, other conventional media companies that provide personals services, and traditional venues where singles meet
(both online and offline). We also compete with numerous online and offline personals, dating and matchmaking services that cater to specific
demographic groups.
We believe that our ability to compete successfully will depend primarily upon the following factors:
• the size and diversity of our registered member and subscriber bases relative to those of our competitors;
•
the functionality of our websites and the attractiveness of their features and our services generally to consumers relative to those
of our competitors;
• how quickly we can enhance our existing technology and services and/or develop new features, products and services in response
to:
•
new, emerging and rapidly changing technologies;
• the introduction of product and service offerings by our competitors;
• evolving industry standards; and
•
changes in consumer requirements and trends in the single community relative to our competitors; and
•
our ability to engage in cost
-
effective marketing efforts, including by way of maintaining relationships with third parties with
which we have entered into alliances, and the recognition and strength of our various brands relative to those of our competitors.
7