ServiceMagic 2011 Annual Report Download - page 42

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negatively impacted by the write-off of $32.6 million of deferred revenue in connection with its acquisition. Excluding the results of Meetic,
revenue grew 18% to $471.9 million. Revenue in the prior year period was negatively impacted by the write-off of $4.1 million in deferred
revenue associated with the Singlesnet acquisition and the formation of our venture with Meetic in Latin America.
Operating Income Before Amortization increased 28% to $156.3 million, primarily due to the higher Core and Developing revenue noted
above, partially offset by losses at Meetic resulting from the write-off of $32.6 million of deferred revenue in connection with its acquisition.
Operating Income Before Amortization was further impacted by increases in selling and marketing expense, general and administrative expense
and product development expense. The increase in selling and marketing expense is due to an increase of $22.7 million in advertising and
promotional expenditures primarily related to offline and online marketing spend associated with the OurTime.com website and an advertising
agreement entered into during the second quarter of 2010 with Yahoo. General and administrative expense increased from 2010, primarily due to
an increase in professional fees due, in part, to $4.0 million in transaction fees associated with the Meetic acquisition, as well as operating
expenses from OkCupid, which was not in the prior year period. The increase in product development expense is primarily due to an increase in
compensation and other employee-related costs related to an increase in headcount.
Operating income increased 19% to $137.6 million, primarily due to the increase in Operating Income Before Amortization described
above, partially offset by increases of $10.2 million in amortization of intangibles and $1.8 million in non-cash compensation expense. These
increases are primarily due to the Meetic acquisition.
For the year ended December 31, 2010 compared to the year ended December 31, 2009
Revenue increased 17% to $400.7 million, reflecting solid growth in its Core operations, including the contribution from People Media,
acquired July 13, 2009. Revenue in 2010 also increased due to Singlesnet, acquired March 2, 2010, and a venture with Meetic in Latin America,
which was formed on March 10, 2010. These increases in revenue were partially offset by the effects of the sale of Match Europe to Meetic on
June 5, 2009. Excluding the results of People Media from both 2010 and 2009, Match Europe from 2009 and Singlesnet and the Latin America
venture from 2010, revenue grew 11%.
Operating Income Before Amortization increased 30% to $122.1 million primarily due to the increase in revenue noted above, partially
offset by increases of $15.1 million in selling and marketing expense, $10.3 million in cost of revenue and $3.3 million in product development
expense. The increases in these expenses reflect the acquisitions of People Media and Singlesnet and the formation of the Latin America venture,
partially offset by the sale of Match Europe. The increase in selling and marketing expense was further impacted by an increase in advertising
and promotional expenditures due to an advertising agreement entered into during the second quarter of 2010 with Yahoo.
Operating income increased 36% to $115.4 million, primarily due to the increase in Operating Income Before Amortization described
above. Operating income also includes the impact in 2009 of $4.4 million in amortization of non-cash marketing, partially offset by an increase
in 2010 of $1.9 million in amortization of intangibles, relating primarily to the acquisition of Singlesnet and the formation of the Latin America
venture.
ServiceMagic
For the year ended December 31, 2011 compared to the year ended December 31, 2010
Revenue increased 13% to $205.1 million, benefiting from growth in both its domestic and international operations. Domestic revenue
growth reflects an 8% increase in service request accepts, which was driven, in part, by a 9% increase in service requests. Domestic growth also
reflects an
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