ServiceMagic 2013 Annual Report Download - page 31

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Table of Contents
Selling and marketing expense
Selling and marketing expense consists primarily of advertising and promotional expenditures and compensation and other employee-
related costs (including stock-
based compensation) for personnel engaged in sales, sales support and customer service functions. Advertising and
promotional expenditures include online marketing, including fees paid to search engines and third parties that distribute our B2C downloadable
applications, and offline marketing, which is primarily television advertising.
For the year ended December 31, 2013 compared to the year ended December 31, 2012
Selling and marketing expense in 2013 increased from 2012 primarily due to increases of $42.7 million from Search & Applications, $16.8
million from Match and $9.4 million from Media. The increase in selling and marketing expense from Search & Applications is primarily due to
increases of $28.3 million and $13.8 million in online marketing spend and compensation and other employee-related costs, respectively. The
increase in online marketing spend from Search & Applications is primarily related to new B2C downloadable applications and the inclusion of
The About Group beginning September 24, 2012. Selling and marketing expense from Match increased primarily due to increases of $11.0
million and $5.3 million in advertising and promotional expenditures and compensation and other employee-related costs, respectively. The
increase in advertising and promotional expenditures is primarily due to an increase in offline marketing spend. The increase in compensation
and other employee-related costs is primarily due to an increase in headcount at Meetic and recent acquisitions. The increase in selling and
marketing expense from Media is primarily due to increases of $5.7 million in online marketing spend at Vimeo and $1.4 million in TV spend at
DailyBurn.
For the year ended December 31, 2012 compared to the year ended December 31, 2011
Selling and marketing expense in 2012 increased from 2011 primarily due to increases of $187.8 million from Search & Applications and
$80.4 million from Match. The increase in selling and marketing expense from Search & Applications is primarily due to an increase of $180.6
million in online marketing related to Ask.com and existing B2C downloadable applications. Selling and marketing expense at Match increased
primarily due to Meetic, which was included for only part of the prior year, and an increase in offline marketing spend.
General and administrative expense
General and administrative expense consists primarily of compensation and other employee-related costs (including stock-based
services.
For the year ended December 31, 2013 compared to the year ended December 31, 2012
General and administrative expense in 2013 decreased from 2012 primarily due to decreases of $25.3 million from Corporate, $8.9 million
from Local and $4.4 million from Media, partially offset by increases of $12.4 million from Search & Applications, $6.4 million from Match
and $6.2 million from Other. General and administrative expense from Corporate decreased primarily due to a decrease of $25.5 million in non-
cash compensation expense related primarily to the vesting of certain awards and an increase in the number of awards forfeited as compared to
of the Rezbook assets in July 2013. General and administrative expense from Media decreased primarily due to the inclusion in the prior year of
$7.0 million in restructuring costs related to the transition of Newsweek to a digital only publication and a $6.3 million gain related to the
subsequent sale of Newsweek in August 2013, partially offset by increases in compensation and other employee-related costs related to the
growth in Vimeo and DailyBurn. The increase in general and administrative expense from Search &
Years Ended December 31,
2013
$ Change
% Change
2012
$ Change
% Change
2011
(Dollars in thousands)
Selling and marketing
expense $964,131
$69,586
8%
$894,545
$277,347
45%
$617,198
As a percentage of
revenue 32%
32%
30%
Years Ended December 31,
2013
$ Change
% Change
2012
$ Change
% Change
2011
(Dollars in thousands)
General and administrative
expense $372,470
$(13,618)
(4)%
$386,088
$65,026
20%
$321,062
As a percentage of revenue 12%
14%
16%