America Online 2009 Annual Report Download - page 12

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websites, and third-party websites and social networks that link to AOL Properties. We also utilize search engine marketing and search engine optimization as
distribution methods. In addition, we make available open standards and protocols for use by third-party developers to enhance, promote and distribute AOL
Properties.
AOL Properties Revenue Generation
ADVERTISING REVENUES
We generate advertising revenues from AOL Properties through the sale of display advertising and search and contextual advertising. We offer
advertisers a wide range of capabilities and solutions to effectively deliver advertising and reach targeted audiences across AOL Properties through our
dedicated advertising sales force. The substantial number of unique visitors on AOL Properties allows us to offer advertisers the capability of reaching a broad
and diverse demographic and geographic audience without having to partner with multiple content providers. We seek to provide effective and efficient
advertising solutions utilizing data-driven insights that help advertisers decide how best to engage consumers. We offer advertisers marketing and promotional
opportunities to purchase specific placements of advertising directly on AOL Properties (i.e., in particular locations and on specific dates). In addition, we
offer advertisers the opportunity to bid on unsold advertising inventory on AOL Properties utilizing our proprietary scheduling, optimization and delivery
technology. Finally, advertising inventory on AOL Properties not sold directly to advertisers, as described above, may be included for sale to advertisers with
inventory purchased from third-party publishers in the Third Party Network.
We offer numerous types of display advertising, including text and banner advertising, mobile, video and rich media advertising, sponsorship of content
offerings, local and classified advertising and audience targeting opportunities. Display advertising revenues are generated through the display of graphical
advertisements as well as performance-based advertising. Search and contextual advertising revenues are generated when a consumer clicks on or views a
text-based ad on their screen. These text-based ads are either generated from a consumer- initiated search query or generated based on the content of the
webpage the consumer is viewing. Agreements for advertising on AOL Properties typically take the following forms:
• impression-based contracts in which we provide "impressions" (an "impression" is delivered when an advertisement appears in web pages viewed
by users) in exchange for a fixed fee (generally stated as cost-per-thousand impressions);
• time-based contracts in which we provide a minimum number of impressions over a specified time period for a fixed fee; or
• performance-based contracts in which performance is measured in terms of either "click-throughs" (when a user clicks on a company's
advertisement) or other user actions such as product/customer registrations, survey participation, sales leads or product purchases.
We utilize our own proprietary "ad serving technology" (i.e., technology that places advertisements on websites and digital devices) as the primary
vehicle for placements of advertisements on AOL Properties through our subsidiary, ADTECH AG. We also license this ad serving technology to third
parties.
Google is, except in certain limited circumstances, the exclusive web search provider for AOL Properties. In connection with these search services,
Google provides us with a share of the revenue generated through paid text-based search advertising and contextual advertising on AOL Properties. For the
year ended December 31, 2009, advertising revenues associated with the Google relationship (substantially all of which were search and contextual revenues
generated on AOL Properties) were $556.7 million. In addition, we sell search-based keyword advertising directly to advertisers on AOL Properties through
the use of a white-labeled, modified version of Google's advertising platform, for which we provide a share of the revenue generated through such sales to
Google. Domestically, we have agreed, except in certain limited circumstances, to use Google's search services on an exclusive basis through December 19,
2010. Upon expiration of this agreement, we expect to continue to generate
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