Our Markets and Revenue Sources

We do not charge our users for sending, receiving or viewing our electronic greeting cards.

Advertisement on the internet is usually done through one of the following three pricing models:

1. Cost-per-thousand (or Cost Per Mille / cost per thousand impressions - CPM) which is an impression-based model, where the advertiser pays for the number of times the advertisement is viewed;
2. Cost-per-click (CPC) which is a performance-based model, where the advertiser pays for the number of times the advertisement is clicked;
3. Cost-per-action (CPA) which is an action-based model, where the advertiser pays for the number of times a user performs a specified action such as registering or requesting information. Billing mechanisms for the CPM and CPC pricing models would involve submission of traffic reports by the publisher and an accompanying invoice based on the traffic reports, whereas for the CPA model the advertiser would maintain a log of number of actions performed which would correspond to the traffic reports of the publisher based on which the invoice would be raised.

CPM models are preferred by large online portals and place higher risks on the advertiser vis-à-vis the advertisement publisher and have lower market rates. In comparison, the CPC model involves lesser risk from the advertiser’s perspective since they pay for every click on their advertisement and greater risk from the publisher’s perspective. The CPA model is less prevalent than the other models as this places additional risk on the publisher who may not receive revenues if the advertiser’s message is not compelling enough to warrant the specified actions by the users.

As of March 31, 2009, 95.48% and as of September 30, 2009, 98.71% of our revenues from advertisers were based on a CPM model and the remaining revenue from CPC and CPA models. Our advertisers include major U.S.-based organizations in the entertainment, retail, information technology and internet verticals.

Our arrangements with our advertisers are usually for periods between one month to one year and terminable by both parties at convenience by giving notice of up to one month. We collect payments normally on a monthly or bi-monthly basis at previously agreed rates.

We enable advertisers to deliver their messages and promote their products to a large and diverse group of consumers on a highly targeted basis. Our use of occasion specific pages which are tailored by the IP address from which a user has accessed our Website provides our e-commerce based advertisers with access to consumers at a time when they may be acknowledging an occasion and are therefore likely to be receptive to specific advertising and relevant gift ideas.

Through their registration and their selection of specific electronic greeting cards and gifts, members provide us with valuable demographic data, which we use to help our advertisers selectively target appropriate aggregate consumer subsets from our rapidly growing base of users and recipients through strategically placed advertisements and product offerings in specific content channels and through direct marketing campaigns.

Most of our revenue comes from overseas markets and specifically the US. In the six month period ended September 30, 2009 and in Fiscal 2009, 2008 and 2007, 51.47%, 68.42%, 79.07% and 93.87%, of our operating income were derived from overseas advertisers of which 50.63%, 67.26%, 78.54% and 93.87% came from the US. This calculation of revenues by advertiser location is based on the Subsidiary which bills the advertiser.

Most of our advertisers and our targeted audience are in the United States of America. We also have certain number of advertisers and users from Europe. Through the course of our operations in India, we offer a wide variety of electronic greeting cards, due to the varied communities, languages, festivals and regional celebrations prevalent in India. We intend to focus on the markets in China, Japan and other countries in East Asia.

We also target social networking sites to build brand awareness, increase visits to our Website and our advertisement revenue. We currently provide our services in the form of applications on the social networking websites, facebook.com and twitter.com. We believe social networking sites, frequented by young adults will help us gain brand visibility and build awareness about our Company and the services we offer.