ServiceMagic 2010 Annual Report Download - page 32

Download and view the complete annual report

Please find page 32 of the 2010 ServiceMagic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 169

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160
  • 161
  • 162
  • 163
  • 164
  • 165
  • 166
  • 167
  • 168
  • 169

Table of Contents
The cost of acquiring new consumers through online and offline third party distribution channels has increased, particularly in the case of
online channels as internet commerce continues to grow and competition in the segments in which IAC's businesses operate increases.
Results of Operations for the Years Ended December 31, 2010, 2009 and 2008
Consolidated Results
Revenue
Revenue in 2010 increased $290.1 million from 2009 primarily as a result of revenue increases of $155.4 million from Search,
$58.1 million from Match, $51.1 million from Media & Other and $25.6 million from ServiceMagic. Revenue reflects double digit growth
across all segments. The increase from Search reflects growth in queries from distributed and proprietary toolbars and destination websites. The
increase in revenue from Match reflects strong growth from the domestic business, including the combined contribution from People Media,
acquired July 13, 2009, and Singlesnet, acquired March 2, 2010, partially offset by a decrease in revenue due to the sale of Match Europe to
Meetic, on June 5, 2009. Also contributing to the increase in revenue from Match is the impact of Match's venture with Meetic in Latin America,
which was formed March 10, 2010. The increase in revenue from Media & Other was driven by the contribution from Notional and Electus,
which were not in the full prior year period, and growth at Pronto, Shoebuy, CollegeHumor and Vimeo. The increase in revenue from
ServiceMagic was primarily due to an increase in accepted domestic service requests driven primarily by increased marketing efforts and a more
active service provider network.
Revenue in 2009 decreased $63.4 million from 2008 primarily as a result of revenue decreases of $71.3 million from Search and
$22.9 million from Match, partially offset by an increase of $31.9 million from ServiceMagic. The decrease from Search was driven by a sharp
decline in network revenue, resulting from the discontinuation of relationships with certain partners that took place during 2008 in conjunction
with the renewed Google agreement. Partially offsetting this decline is the continued growth in partners and queries at the toolbar business and
the favorable impact in 2009 from the acquisition of Lexico, which includes Dictionary.com and Thesaurus.com, on July 3, 2008. The decrease
in revenue at Match was driven by the sale of Match Europe to Meetic, partially offset by the favorable impact from the acquisition of People
Media and solid growth in the U.S. business. The increase in revenue from ServiceMagic was primarily due to a more active service provider
network resulting in a 25% increase in the number of times service requests were accepted by a service professional and a shift in the mix of
requests to higher value service requests driven, in part, by increased marketing efforts.
28
Years Ended December 31,
2010
% Change
2009
% Change
2008
(Dollars in thousands)
Revenue
$1,636,815
22%
$1,346,695
(4)%
$1,410,078