America Online 2014 Annual Report Download - page 21

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We provide our consumers with a general, internet-based search experience that utilizes the organic web
search results of Google Inc. (“Google”), presents additional links on the search results page that showcase
contextually relevant AOL and third-party content and information and provides a variety of search-related
features (such as suggesting related searches to help users further refine their search queries). We also provide
our consumers with relevant paid text-based search advertising through our relationship with Google, in which
we provide consumers sponsored link ads in response to their search queries. We distribute our search experience
via AOL owned and operated properties globally, enabling users to access AOL’s search services through search
boxes, homepage resets, toolbars, browser extensions, and working with internal and external partners to drive
traffic to our search landing pages. In addition, we offer vertical search services (i.e., search within a specific
content category) and mobile search services on Brand Group and Membership Group properties.
We also offer contextually relevant advertising from both Google and AOL’s proprietary products. These
advertisements are placed on sites targeted by advertisers based on the content of the websites. We also market
our search services through search engine marketing, working with marketing partners to drive traffic to, and
maximize the utilization of, our search services.
While the majority of our search revenues are reflected within the results of the Brand Group, search-related
revenues are also included within the results of the Membership Group for search offerings provided in that
segment.
Content, products and services on Brand Group properties are generally available to consumers and we are
focused on attracting greater numbers of consumers to our offerings. In addition, we utilize various distribution
channels as described below which allow us to more directly reach online consumers.
Certain of our Brand Group properties, such as our AOL.com portal and HuffingtonPost.com, serve as
valuable distribution channels for our content, products and services as do our subscription services. We utilize
our premium video platform as a means of distributing content and increasing engagement across our Brand
Group properties. We use a variety of other distribution channels as well, including agreements with
manufacturers of devices and other consumer electronics and mobile carriers. We distribute our content, products
and services directly to consumers on the open web and through the Apple App Store, the Google Play Store, the
Amazon Appstore and the Android Market. Additional distribution channels include toolbars, widgets, co-
branded portals and websites, mobile aggregators, third-party websites and social networks (whether offered
directly or by means of partnerships with social network operators such as Facebook, Inc. (“Facebook”), or
enabling users to share our content through social networks) that link to AOL Properties. We also utilize search
engine marketing and search engine optimization as distribution methods. We make available open standards and
protocols for use by third-party developers to enhance, promote and distribute our properties.
The Membership Group
The Membership Group consists of offerings that serve our registered account holders, both free and paid.
The Membership Group creates integrated experiences that allow our consumers to have access to useful content
from important brands, communication tools, including AOL Mail, and valuable services, such as AOL Search.
In addition, we continue to offer new products and services that are either third party or AOL-developed products
that are made available to our subscribers as value-added benefits in their packages, or in some instances, to all
internet customers on a stand-alone basis. We offer advertisers and agencies tools to effectively deliver
advertising and reach targeted audiences across Membership Group properties. Advertising inventory on
Membership Group sites not sold directly to advertisers may be included for sale to advertisers through AOL
Platforms and is reflected as intersegment revenue within the Membership Group. Search offerings are also
provided on Membership Group properties.
As of December 31, 2014, we had approximately 2.2 million domestic AOL subscribers. Our subscribers are
important users of Brand Group and Membership Group properties, and engaging our subscribers, as well as
former AOL subscribers who continue to utilize our free service plan, is an important component of our strategy.
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