ServiceMagic 2010 Annual Report Download - page 9

Table of Contents
Mobile Applications
We market and distribute a number of mobile applications through which we provide search and additional services, including: the
Dictionary.com
iPhone and Android applications, which provide dictionary search, educational and learning services; the Ask.com iPhone
application, which provides general search and natural-language question and answer services; and various DailyBurn iPhone applications,
which track nutritional and fitness information and activities.
Revenues
Substantially all of the revenues from our toolbars, destination search and other websites and related services are derived from advertising,
with the substantial majority of these revenues attributable to our paid listing supply agreement with Google. When a user submits a search query
through properties and services within our Search segment and clicks on a Google paid listing displayed in response to the query, Google bills
the advertiser that purchased the paid listing directly and makes a related revenue share payment to us, which we either retain in its entirety or
share with third parties. In some cases, Google does not charge advertisers unless our user, after clicking on the paid listing, also takes certain
actions on the advertiser's website. To a lesser extent, we also generate revenues from the direct sale of paid listings directly to advertisers on a
cost-per-click basis, as well as from the sale of display and other advertising pursuant to a variety of advertising models, including on a fixed fee
per impression, cost-per-click and cost-per-action basis.
Competition
We compete with a wide variety of parties in connection with our efforts to: (i) attract users to our various search properties and search
services generally; (ii) develop, market and distribute toolbars and related applications; (iii) attract third parties to distribute our toolbars and
search boxes; and (iv) attract advertisers. Our competitors include Google, Yahoo!, Bing and other destination search websites and search-
centric
portals (some of which provide a broad range of content and services and/or link to various desktop applications), third party toolbar,
convenience search and applications providers, other search technology and convenience service providers, including internet access providers,
social networks, online advertising networks, traditional media companies and companies that provide online content.
Moreover, some of our current and potential competitors have longer operating histories, greater brand recognition, larger customer bases
and/or significantly greater financial, technical and marketing resources than we do. As a result, they have the ability to devote comparatively
greater resources to the development and promotion of their products and services, which could result in greater market acceptance of their
products and services relative to those offered by us.
In the case of our Mindspark business, we believe that our ability to compete successfully will depend primarily upon our continued ability
to create toolbars that resonate with consumers (which requires that we continue to bundle attractive features, content and services, some of
which may be owned by third parties, with quality search services), differentiate our toolbars from those of our competitors (primarily through
providing customized toolbars and access to multiple search and other services through our toolbars), market and distribute toolbars directly to
consumers in a cost-effective manner and secure cost-effective toolbar distribution arrangements with third parties and through other means, as
well as attract advertisers.
In the case of our destination search websites, we believe that our ability to compete successfully will depend primarily upon the relevance
and authority of our search results and other content, the functionality of our various destination search websites and the quality of related
content and features and the attractiveness of our services generally to consumers relative to those of our competitors. In the case of the
relevance and authority of our search results, our current goal is to differentiate
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