America Online 2010 Annual Report Download - page 14

Table of Contents
Advertising arrangements for the sale of Third Party Network inventory typically take the form of impression-based contracts or performance-based
contracts. For the years ended December 31, 2010, 2009 and 2008, our advertising revenues on the Third Party Network were $335.6 million, $523.0 million
and $632.9 million, respectively.
Other Revenues
In addition to advertising and subscription revenues, we also generate fee, license and other revenues. We generate fees from our consumer applications
associated with mobile e-mail and instant messaging functionality from mobile carriers. Through MapQuest's business-to-business services, we generate
licensing revenue from third-party customers. We also generate revenues by licensing our proprietary ad serving technology to third parties, primarily through
our subsidiary, ADTECH AG.
AOL Ventures
Some of the initiatives described above may be classified as part of AOL Ventures. We formed AOL Ventures with the goal of creating an
entrepreneurial environment to attract and develop innovative initiatives. AOL Ventures focuses on acquisitions that we have previously made which have
start-up characteristics or which do not currently fit within our other areas of strategic focus, investments we intend to make in early-stage, externally-
developed opportunities and employee-originated innovations that we believe would benefit from incubation and development within the AOL Ventures
environment.
For initiatives included within AOL Ventures, our goal is to create an improved environment for fostering sustained long-term growth. For future
initiatives and investments—whether externally-developed or employee-originated—AOL Ventures will focus on early-stage opportunities that are aligned
with our long-term strategy. The size of our investment and corresponding ownership interest will vary depending on the opportunity, as will our level of
involvement and control. We intend to attract top talent and source attractive opportunities by partnering with leading angel investors, venture capitalists and
universities. In 2010, we closed twelve external investments, which represented a blend of content and advertising technology, with opportunities for growth
in mobile and local investments. We actively monitor the early stage venture ecosystem and work to create value from emerging companies that can provide a
strategic advantage to AOL. We currently expect to invest significantly less capital in AOL Ventures than in our other operations. In addition to capitalizing
on the initiatives and investments included within AOL Ventures ourselves, we may seek outside capital where appropriate.
Product Development
We seek to develop new and enhanced versions of our products and services for our consumers, publishers and advertisers. While in the past we have
relied primarily on our own proprietary technology to support our products and services, we have been steadily increasing our use of open source technologies
and platforms with a view to diversifying our sources of technology, as well as for cost management. Research and development costs related to our software
development efforts for 2010, 2009 and 2008 totaled $41.9 million, $63.2 million and $68.8 million, respectively. These costs consist primarily of personnel
and related costs that are incurred related to the development of software and user-facing Internet offerings that do not qualify for capitalization. At
December 31, 2010 and 2009, the net book value of capitalized internal-use software was $62.6 million and $112.1 million, respectively.
Intellectual Property and other Proprietary Rights
Our intellectual property and other proprietary assets include copyrights, trademarks and trademark applications, patents and patent applications,
domain names, trade secrets, other proprietary rights and licenses of intellectual property rights of various kinds. These assets and rights, both in the United
States and in other
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