Tucows 2013 Annual Report Download - page 52

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Sales and marketing expenses consist primarily of personnel costs. These costs include commissions and related
expenses of our sales, product management, public relations, call center, support and marketing personnel. Other sales and
marketing expenses include customer acquisition costs, advertising and other promotional costs.
Year ended December 31,
2012
2011
Sales and marketing
$
8,701,446
$
7,442,681
Increase over prior period
$
1,258,765
Increase - percentage
17
%
Percentage of net revenues
8
%
8
%
Sales and marketing expenses for Fiscal 2012 increased by $1.3 million, or 17%, to $8.7 million as compared to
Fiscal 2011.This increase primarily related to costs associated with the addition of Ting customers and the acquisition of
EPAG in August 2011.
TECHNICAL OPERATIONS AND DEVELOPMENT
Technical operations and development expenses consist primarily of personnel costs and related expenses required
to support the development of new or enhanced service offerings and the maintenance and upgrading of existing
infrastructure. This includes expenses incurred in the research, design and development of technology that we use to register
domain names, email, retail, domain portfolio and other Internet services, as well as to distribute our digital content services.
Editorial costs relating to the rating and review of the software content libraries are included in the costs of product
development. All technical operations and development costs are expensed as incurred.
Year ended December 31,
2012
2011
Technical operations and development
$
4,302,820
$
4,868,228
Decrease over prior period
$
(565,408
)
Decrease - percentage
(12
)%
Percentage of net revenues
4
%
5
%
Technical operations and development expenses for Fiscal 2012 decreased by $0.6 million, or 12%, to $4.3 million
when compared to Fiscal 2011. These decreases primarily resulted from a decrease in workforce costs.
54
GENERAL AND ADMINISTRATIVE
General and administrative expenses consist primarily of compensation and related costs for managerial and
administrative personnel, fees for professional services, public listing expenses, rent, foreign exchange and other general
corporate expenses.
Year ended December 31,
2012
2011
General and administrative
$
6,610,819
$
6,096,596
Increase over prior period
$
514,223
Increase - percentage
8
%
Percentage of net revenues
6
%
6
%
General and administrative expenses for Fiscal 2012 increased by $0.5 million, or 8%, to $6.6 million as compared
to Fiscal 2011. This increase was primarily the result of incremental workforce related costs as well as additional costs
incurred in processing a higher volume of credit cards.
DEPRECIATION OF PROPERTY AND EQUIPMENT
Property and equipment is depreciated on a straight-line basis over the estimated useful lives of the assets.
Year ended December 31,
2012
2011