Ziff Davis Inc (ZD) 2012 Q4 法說會逐字稿

Good afternoon, ladies and gentlemen, and welcome to the j2 Global fourth quarter and 2012 year-end earnings conference call.

It is my pleasure to introduce your host, Mr. Scott Turicchi, President of j2 Global Communications.

Thank you Mr. Turicchi, you may begin.

Thank you.

Good afternoon and welcome to the j2 Global investor conference call for the fourth quarter of 2012.

As the Operator just mentioned, I'm Scott Turicchi, the Company's President; and with me today is Hemi Zucker, our CEO and Kathy Griggs, our CFO.

As you are probably well aware, this has been a very exciting time for j2 since we last spoke.

We've entered the digital media business through our purchase of Ziff Davis, followed approximately two weeks ago with our purchase of IGN.

We will be discussing those acquisitions as well as our Q4 2012 and full-year financial results, provide an update on our business as well as guidance for 2013.

In addition, our Board has increased the quarterly dividend to $0.2325 per share.

We will use the IR presentation as a road map for today's call, a copy of which is available at our website.

When you launch the webcast, there's a button on the viewer on the right-hand side which will allow you to expand the Slides.

If you have not received a copy of the press release, you may access it through our corporate website at www.j2global.com/press.

In addition, you will be able to access the webcast from this site.

After completing our presentation we will conduct a Q&A session.

The Operator will instruct you at that time regarding the procedures for asking a question.

I remind you that at any time you may e-mail us questions to investor@j2global.com.

Before we begin our prepared remarks, I will read the Safe Harbor language.

As you know this call and the webcast will include forward-looking statements.

Such statements may involve risks and uncertainties that would cause actual results to differ materially from the anticipated results.

Some of those risks and uncertainties include, but are not limited, to the risk factors that we have disclosed in our various SEC filings including our 10-K filings, 10-Q filings, proxy statements and 8-K filings, as well as additional risk factors that we have included as part of the Slide show for the webcast.

We refer you to discussions in those documents regarding Safe Harbor Language as well as forward-looking statements.

At this time, I will turn the presentation over to Kathy to give you the update on our financial results.

Thank you, Scott.

Good afternoon, ladies and gentlemen.

Please refer to Slide 5 of the presentation for recap of our Q4 GAAP and non-GAAP operating results.

And to the supplemental schedules at the end of the presentation for a reconciliation of all non-GAAP financial measures to the nearest GAAP equivalent.

I am pleased to report that yet again we achieved quarterly -- record quarterly revenues.

Our Q4 2012 revenues were $102 million.

Revenues increased 9.4% over Q3 of 2012 and 20% over Q4 2011.

2012 full-year revenue was a record $371.4 million, up 12.5% from $330.2 million for 2011.

In Q4 we recognize $2.1 million in revenue from intellectual property licensing and expect these revenues to continue to come in every quarter, however, they will fluctuate from quarter-to-quarter.

Our cancel rate for the quarter improved from 2.3% down to another new record low rate of 2.2%.

We added more than 17,000 paid DIDs, and our ARPU grew to $13.31 per DID this quarter versus $13.27 last quarter.

In November 2012 we completed our acquisition of Ziff Davis, Inc, giving rise to our new division called Digital Media.

Revenues for this division for the partial quarter were $9.7 million with operating income of $2.9 million.

On February 1, 2013, we completed our second acquisition in the media space by acquiring IGN Inc.

In just a few months we more than doubled our media division to become a sizable business of more than $120 million in annual revenue rates.

On a non-GAAP basis our net income for the quarter was $32.4 million, an increase of $2.2 million from Q3 of 2012.

Non-GAAP growth and operating margins were 81.9% and 44.2%, respectively.

GAAP net income for the quarter were $30.2 million.

Our operating income were $42.2 million, growth and operating margins were 81.7% and 41.4%, respectively.

For Q4 2012 we achieved non-GAAP EPS of $0.70 per diluted share, up $0.06 from $0.64 in Q4 2011.

Our GAAP EPS for the quarter was $0.65 per share, up $0.03 from $0.62 in Q4 2011.

The improvement is magnified by the fact that we expensed $5 million of interest during the fourth quarter on our bond issuance.

For fiscal year 2012 we achieved record non-GAAP EPS of $2.69 up 6% from the prior year and despite $9 million of interest expense or $0.12 of EPS due to our 2012 bond issuance which was not present in 2011.

In other words, without the new bond cost, our EPS grew $0.28.

Free cash flow for the quarter was $45.2 million, representing 44.3% of revenue.

Full-year 2012 free cash flow was $166 million, a new record.

We achieved record EBITDA this quarter of $52.1 million, up 13% from $46.1 million in the same quarter last year.

For the 12 months ended December 31, 2012, we achieved EBITDA of $196 million, up 16% over full-year 2011 and also a record.

See the exhibits attached in our press release for a full reconciliation of EBITDA.

Our cash and investment balances totaled a record $344 million as of December 31, 2012.

As of February 8, 2013, our cash balances are approximately $305 million.

Today we announced that we are again increasing our dividend payout to $0.2325 per-share, the sixth consecutive quarterly increase.

The dividend will be paid on March 4 to shareholders of record as of March -- as of February 25.

Since starting our dividend program in 2011, we have increased the quarterly payout per share by more than 16%.

For Q4 2012 we incurred $5 million in non-cash amortization expense on intangible assets and $16 million for full-year 2012, representing approximately $0.09 and $0.27 per share of our EPS, respectively.

Fluctuations in foreign currency this quarter resulted in unrealized gains of our approximately $100,000, compared to gains of $0.5 million in Q3 which is reflected in other income and expense.

These gains or losses result primarily from the nature of our global structure, where various subsidiaries carry short term inter-Company debt obligations denominating currencies other than the US dollar, especially the euro, Australian dollar and the yen.

Continued fluctuations in these currencies can affect both the direction and the magnitude of the changes in this category.

There is no cash impact, however, unless and until these balances are settled.

Our estimated effective GAAP tax rate for Q4 2012 was 19.6% down from 19.9% for Q3 2012.

We expect our normalized tax rate for 2013 to be in the 25% to 27% range due to increasing income in higher taxed jurisdictions.

In conclusion, let me remind you that the supplemental schedules at the end of the presentation will provide you with more information on our metrics as well as a non-GAAP to GAAP reconciliation schedule for all financial measures included in our remarks.

Now I will turn the call over to Hemi, who will provide you an overview of our business metrics for 2012.

Thank you, Kathy, and good afternoon, everybody.

I will let -- sorry, Scott, you go first.

Thank you, Hemi.

You normally would go at this time, but we want to spend a few minutes to discuss our entrance into the digital media business.

So, for those you following along on our Slides, on Slide 8, let me give you a bit of background first on the Ziff Davis transaction, the rationale behind entering the media business and then talk a little bit about IGN.

Then it will be Hemi's turn to tell you about all of the great things that occurred both from the cloud business and in the media business.

As we've heard since we acquired Ziff Davis, a lot of people have been interested in the thought process that went into entering the space.

We believe that one of the elements that is valuable to j2 is bringing to bear a variety of skills to industries which to date we have demonstrated in the cloud industry.

Now, before looking to another space, though, there are a number of criteria that have to resonate before we would make that leap.

So you'll see at the top of Page 8, we would like spaces that are very large.

There's no doubt that the advertising and display business is quite large.

There are some statistics represented by Forester and IAB that are in the tens of billions of dollars and expected to grow double-digit over the next several years.

Secondly, though, we like spaces where there's a disruption going on in the marketplace.

Most notably, you see in the advertising and media world the shift that has been occurring from off-line to online and the unique skill set that is needed to transition properties from off-line to online as well as the skills needed to monetize traffic in the online world.

We like targets that have a similar type of either customer base or traffic flow.

In the case of the media business, there is a consistency between the terrific that is visiting the websites, in this case of Ziff and now IGN, that is similar to the customer base we have in the cloud.

We like businesses that have superior marginal economics so that, as revenues grow, a very high percentage of that flows through to EBITDA and free cash flow.

We also like spaces where data analytics matters and is important and gives you a competitive edge in how you either monetize your customer base or monetize your traffic.

And, finally, we like industries in spaces that are highly fragmented, because it lends itself well to our desire to do follow-on M&A.

Now, to give you little sense, we talked about the size of the market being very large and growing.

If you go to Slide 9, that in and of itself was not enough to enter the space.

We needed a couple of things beyond that.

One were brands that were well recognized, because that will allow organic traffic to flow freely to the sites without a large cost.

We also needed a team that had successfully demonstrated the ability of transitioning properties from off-line to online.

Now a little bit of background on Ziff Davis.

It was a company that was actually in bankruptcy in 2010.

The data you see for 2010 is for the seven months it was owned by the predecessor owner, but under the guidance of the core of the management team that is with us today.

So they've taken the revenues for the seven months from $11 million in fiscal year 2010 to $48.5 million in fiscal 2012.

But, more importantly, you can see the superior marginal economics as the traffic was better monetized going from $1.6 million to $12 million, or, currently, slightly in excess of 25% margins.

On the left-hand side you see that that was done in part by driving more visits and more page views to the various websites.

For those of you that aren't familiar, Ziff Davis operates a variety of brands, the most notable of which would be PCMAG.com.

But other important ones include ComputerShopper, Geek.com, LogicBuy, Toolbox.

And these are really geared for influencing and informing buyers of technology.

The tech and telecom space is the second largest online category at approximately $7 billion of annual spend.

As I mentioned, because of the strength of these brands, 100% of the traffic is organic, a combination of SEO, direct referrals and social.

There also is a very rapidly growing mobile component and social component that came with the Ziff Davis acquisition.

Now, shortly after we closed that deal, we became involved in the sales process for IGN on Slide 11.

This is also within the tech vertical but caters primarily to gamers and, to a lesser extent, to lifestyle through the two brands, IGN and AskMen.

There are much more visits and page views here -- 1.4 billion visits last year in 2012, slightly in excess of 5 billion page views, 1.6 billion video streams.

And this is important because one of the elements that IGN brings to the table is some enhancements in technology both in the mobile world and in the video world which will be important not only for the IGN business but also for the Ziff Davis business.

What it does for us is expand the media group into gaming and lifestyle; it doubles the size of our media business.

And, although we can't be terribly specific, we were able to acquire IGN at less than one times revenue and it makes now our Ziff Davis media properties the second largest in the digital publishing industry in this category.

Hemi will in his section give you a little bit more view in terms of how these properties will actually be integrated.

And, at this time, I will ask him to give you an update first on the cloud business and then on the media business.

Now I am sure it is my turn to talk.

Thank you, Scott, and good afternoon, everybody, and also welcome to the new employees of Ziff Davis and IGN that are listing to our earning call.

2012 was an amazing year, and 2013 will be even more exciting.

I will start with our Slide 13 and focus on our cloud business, and then I will finish with a discussion about our newly acquired media asset IGN.

In the recurring revenue business churn is king.

Churn rate is extremely important.

Our cancel rate is at a record low.

The value of our -- of the reduction of our churn rate from 3.5% in Q1 2009 to now 2.2% is very, very important, it is huge.

Tens of million of dollars are just going all the way to the bottom line and impacting our success in cash flow.

Our customer base is growing in size and in loyalty.

The increasing loyalty is mostly drive by our fax customers.

They replaced their fax machines with eFax and -- they love it and stay loyal.

In 2013 we will continue to put many efforts in keeping our low churn rate.

These levels of low churn rate is a Company-wide effort.

Every department in j2 is participating, and everybody is active in keeping these high level of loyalty for our customers.

Going forward to Page 14.

In this page, let's start with the right hand edge chart We are here showing the percentage of fax in the general revenue in j2 starting with 2019 (sic - see Slide 14 "2009") going to 2013.

2009, 2010 and 2011, the fax revenue was 82% of our general revenue, keeping it flat while growing.

From 2009 to 2013 our fax revenue grew from approximate $200 million to a projected number of $285 million in 2013.

While growing, our fax as a percentage of the revenue in 2013 has been moving from 82% in 2011, 75% and 2012 and 55% projected to be in 2013.

As such, it is our DID base revenue is becoming 55% with fax and then the other, I don't know, 10%, 15% with the other DID bases, we are thinking about changing our metric.

And we will start being focused on DID only, and probably next quarter we will be able to provide you with new metrics that better fit our new and changing [milieu].

Now let me move to our different revenue line covering 2012 and 2013.

Our number one and number two drivers in 2013 are going to be more advertising revenue and more technology initiatives like mobile and other improvements to our website.

And this will be aided a little bit with nothing material on the acquisition front.

Not materially in revenue but materially important because we are plenty to go into new areas and new places around the world.

I will start with 2012 and 2013 on fax.

Our fax in 2012 grew organically mostly driven by our corporate and in Japan.

And 2013 will continue with healthy growth both locally and worldwide.

Our voice revenue grew organically in the US, and we expanded into Australia and New Zealand through the acquisition of Zintel.

In 2013 we are focusing organic growth via advertising in new channels.

E-mail -- email and CRM is mostly our FuseMail hosted email, our Campaigner, email marketing and our CRM that was LandSlide now converted into Campaigner CRM.

We are continuing to grow this business mostly through new advertising in new initiatives in 2013.

This business in 2012 worth more than $20 million.

KeepItSafe -- KeepItSafe is our in cloud Storage.

We expanded in 2012 into New Zealand and Netherlands.

Our revenue grew from $2.1 million to $3.6 million, or 73%.

In 2013 we are planning massive growth.

We planning to more than triple the revenue both through organic and through small acquisition.

In media our new initiative, our new subsidiary, Mediapp, we have entered into the media space in the last quarter in Q4 2004 -- Q4 2012 with acquisition of Ziff Davis, and we have continued to grow in 2013 with the acquisition of IGN.

We have more than doubled our revenue in the media through this acquisition.

Now let's go to Slide 15 when I will discuss our IGN integration plan.

As you know, we have acquired IGN in February 1. Our CEO of media, Vivek, is working with the team of IGN on planning the integration.

This integration should be relatively easy, as the core function of Ziff Davis our mirrored with IGN.

They have editorial, they have reviews, they have traffic and sales and bring all additional media elements like video.

Our plans are to accelerate the traffic growth via referrals and increase page views per visit.

We are going to build upon emerging video advertising business.

As you know video, is one of the fastest-growing advertising elements out there, and IGN and [Osmund] are bringing strong video experience and growth.

We will add substantial data signals, also product expansion for our buyer based business.

The areas of synergy -- the synergistic areas that we are working on are in common advertisers, overhead efficiency systems and real estate conciliation.

This acquisition of IGN makes Ziff Davis the second largest digital publisher in the category.

At this is an amazing achievement thinking about the fact that three months ago we were not in the space, and now we are the second largest.

I am very excited about it, and I will forward the discussion to Scott.

Thank you, Hemi.

Let's do a quick wrap up before we turn to Q&A.

I direct you to Slide 17 for our guidance.

This is a consolidated guidance for both the cloud and the media business.

We anticipate aggregate revenues of between $500 million and $525 million for fiscal year 2013, non-GAAP EPS of between $2.65 and $2.85.

The assumptions there are for a tax rate of between 25% and 27%, so a little higher than we experienced in 2012.

It excludes any non-cash comp expense as well as certain transition costs that will be incurred at least initially for the media companies upon integration.

I would also like to note that in the guidance for this year we have an additional $0.15 of bond interest expense versus 2012.

And something to note on the media business that some of you may not be familiar with, it has some seasonality.

Q4 is a seasonally strong period for the media business.

It is not atypical for the fiscal year revenues to have for approximately 33% to 35% of the revenues fall in Q4 then to drop off in Q1 and then ramp up sequentially from Q2 to Q1 and Q3 to Q2and then Q4 to Q3.

So note that when you think about how the revenues flow over the course of the year.

As I mentioned, as Kathy has mentioned, we will have the dividend of $0.2325 for those who are shareholders of record as of February 25.

The payment date will be March 4. The philosophy of the dividend remains the same which is to pay out approximately 30% of quarterly non-GAAP earnings.

It will cost us about $10 million in aggregate cash, and the dividend is designed not to impact any of our either operational or M&A activities.

And, as Kathy noted, even after IGN, we remain very comfortable with an excess of $300 million of cash and investments.

To that end, the Board also authorized that the portion of the five million share buyback that we launched in February of 2012 but did not buy in 2012, which is approximately 2.9 million, would be carried over and run through February of 2014.

I would note that we did buy 2.1 million shares in February of 20 -- in 2012 at an average cost of $27.57.

Finally, before we open it up to Q&A, just to highlight, we've added some additional information in our supplemental tables.

The first line on 20 is what you are familiar with which are the metrics for the cloud that remain DID based, although, as Hemi mentioned, as our business continue to evolve, we believe that there are probably better metrics to cover both the DID and the non-DID based business.

We've added on 21 metrics for the media business and then information for j2 Global Consolidated.

22 is reconciliation of free cash flow and EBITDA to the nearest GAAP measure.

23 and 24 are reconciliations of the quarter and the full fiscal year GAAP to non-GAAP.

Slide 25 gives you the reconciliation of EBITDA for Ziff Davis for the three years of 2010, 2011 and 2012.

And then for our bondholders, Slide 26 gives you how our financial covenants and ratios look based on the Q4 results.

At this time I would ask our Operator to come back and give the instructions for the Q&A session.

Thank you.

(Operator Instructions)

Shyam Patil, Raymond James.

Hi, thank you, guys, and congratulations on the acquisitions.

First question, in terms of the guidance for 2013, can you -- I missed this if you gave this in your prepared remarks or the slide show, but do have a breakout of how much revenue you expect from cloud versus digital media and then within digital media how much you expect from Ziff versus IGN?

As we said in the press release at the time we bought IGN as well as what we said today, you can infer the media business without any further acquisitions is an excess of $120 million.

So the $60 million that we said for Ziff at the time we bought it we basically reaffirm that.

And IGN should more than double that so get us into this somewhat north of the $120 million range, and the balance of the revenue comes from the cloud side.

Got it.

And how about just the blended gross margin and operating margin for profile now that you have the media business?

How should we think about that this year?

Gross margins are very similar.

I'd say that today the media business is obviously not as scaled as the cloud business so we experience about 200 basis point better gross margins in cloud than media.

But the media business hovers right around 80% in terms of its gross margin.

What is different is the EBITDA margin.

You will see that certainly if you look at the Ziff Davis slide for fiscal year 2012 aggregated about 25% EBITDA margin and growing, though, as additional revenues come online.

So we look at, as we build that business, in terms of revenues, and I say the business meaning the media business, there should be increasing lift in the overall EBITDA margin although I would not expect at the $120 million the EBITDA margins to approach the cloud EBITDA margins of 52% -- not this year.

Do you have a sense as to what revenue run rate that might be -- that might start approaching the cloud business?

It's a tricky question because it depends on where and how the incremental revenues come in.

To the extent they come in from incremental page views that are unpaid for, or unique visitors, and/or incremental revenue on a CPM basis from advertisers, that incremental revenue basically goes right to the bottom line.

So you can actually run the math yourself and figure out where the break even point is to get from say approaching 30% EBITDA margins to 50%.

On the other hand, if you are going out and you are buying traffic, then you've got a cost against it.

And then it is question of what are you paying to get the traffic versus what are you selling in terms of third-party, and you are taking the difference.

So how your incremental revenue comes in will influence the answer to your question.

Got it.

Okay.

There is not a specific number, but I think you'll see that, in general, it is going to be much north of the $120 million before one should have an expectation of EBITDA margins at 50%.

Generally speaking also, the cloud business in Q4 is on its lightest quarter while the media is on its heaviest.

So this should be something to take into consideration.

Okay.

And then from an organic growth profile, do you have a sense as to what the digital media business should grow at beyond '13 on an organic basis if you don't do any further M&A?

Do you expect it to grow in line with the market stats you sited earlier, or do you think it is going to be growing at a faster rate than that?

Number one, we are not going to go beyond '13, as we normally don't.

We give one-year guidance.

Number two, I will be very surprised if the media business or the cloud business remains static, because our philosophy as the owner of both businesses is to feed them, and we have adequate capital.

Having said that, I think that it is probably realistic to assume growth rates consistent with the market or better.

Got it.

And then just my last question, in terms of the revenue synergies for IGN, I think you mentioned previously in a press release or it was implied that IGN had five times the page views but only slightly higher revenue, implying a pretty big differential in the monetization.

How do you -- when do you expect to start to see that gap narrow, and what is your sense as to what level the gap will narrow toward over time?

So we just started with the integration.

To be frank, we have started with the integration of both companies.

So the plans are conservative that, by the fourth quarter of the year, we will be in the high efficiency.

Not both businesses are the same.

In one side you have people that come to game -- video game website.

And the other are technical shoppers.

So it is very hard, especially for me at this stage to predict, but the plans, and I've seen, and I'm pretty confident with the management of Ziff Davis -- it is to have increased every quarter until the end of the year so you should see continued improvement.

When at the end we believe Ziff Davis efficiency will be part of the operations of the newly the acquired IGN.

Great.

Thank you.

James Breen, William Blair.

Thanks.

Just a couple questions.

One, just to be clear on the guidance you gave for 2013 does not imply any material M&A.

And then secondly, when I do look at that guidance, and based on the numbers you gave for the media unit, it seems as though it sort of implies 4% to 5% organic growth on the cloud side.

Just wondering if that is sort of the ballpark there.

And then lastly any updates thoughts on Carbonite and further M&A in the cloud space?

So first of all, Jim, you are correct.

There is no significant M&A assumption in the outlook.

Our plans for the organic and the total growth of the cloud, as I said, growth without any material acquisition is actually more than you said.

It is more in the range of 8%.

And regarding Carbonite, who are they?

No, seriously.

We are now owners of 10% of Carbonite.

9.9%.

9.9%.

9.9%?

Very important.

I said almost 10%, right?

(laughter).

So, I wasn't drunk.

And actually there's nothing going on.

We are waiting.

As you know, we have offered a price.

There was no counter offer.

We are sitting here waiting for the development and happy to see that our share value increased 25% almost.

Great.

Thank you.

Daniel Ives, FBR.

So obviously this is -- it is new for JCOM in terms of the media business and because they are almost like separate entities.

Could you just walk through just philosophically as a managing team how you are going to kind of balance managing the core traditional JCOM business along with the new media businesses?

Daniel, we have bought Ziff Davis with very strong management.

Vivek Shah reports to me.

He is the CEO of the media business.

I'm the CEO of j2 Global in general.

From my end the people that participate in the management of Ziff Davis are only the officers here.

Plus HR, basically, we are helping them in public Company matters when it comes to compliance, when it comes to everything to help them with resources and everything.

But we are aiding them.

Scott and I spend time with the management to make sure that they are progressing -- that we understand -- that we can support them, reviews, et cetera.

But the rest of the j2 is divided between cloud business and media business outside of the officers and, of course, the Board.

Okay, thanks.

Greg Burns, Sidoti & Company.

Afternoon.

Just wanted to better understand the seasonality in the media business.

Why is the fourth quarter such a seasonal quarter?

And, looking at the numbers for Ziff, it looks like very strong fourth quarter in terms of EBITDA and the margin -- I think much higher year-over-year in this fourth quarter.

Was there anything in particular driving that or just the better economies of scale?

Let's start with your first question.

So, specifically, for Ziff Davis, you've got a lot of the manufacturers of devices, think tablets, smartphones -- will do releases going into the holiday season.

So there's a spike in traffic if you segment it across the four quarters that is very favorable to the fourth quarter, where, as I mentioned, it is not unusual to see upwards of 35% of visits and revenue fall into that fourth fiscal quarter.

Now, what you see in that quarter is, as Kathy mentioned it, you'll see much higher margins because a lot of the costs remain fixed over the course of the year.

So, as you get that incremental bump in revenue, I think in Q4 for example, for the 45 days we owned Ziff Davis, it was something like 40%-plus EBITDA margins, even though for the full-year it was only 25%.

So, as that business scales, and you can see some degree of correlation, if you go back to Slide 9 between the traffic volume on the left which is part of the story -- the monetization piece is the other part -- will drive the revenues and the incremental flow through to EBITDA.

So, as the business scales, we would expect continuation of not only top line revenue growth, but improving EBITDA margins.

Okay, thanks.

And in terms of IGN and the amount of accretion you expect for next year, is it going to be contributing anything to earnings next year?

This year, this current year?

This year -- this current year, yes, correct.

Yes, it's expected, exclusive of some transition costs, we believe that it will be accretive in terms of adding to the EPS.

We will own it for 11 months, but I think as Hemi more than hinted at, the real opportunity in IGN really will occur in '14.

Because there is some physical integration to occur, there is some technical integration, analyzation of the traffic and, although we are optimistic that will occur by the fourth fiscal quarter of this year, I think in terms of the full benefit, you will see that in '14.

But, yes, it will be accretive as we stated at the time we bought it, and is contemplated in our guidance.

Okay.

I was just trying to say that they are profitable already.

Okay.

In terms of driving the increased monetization, what does Ziff have -- what can Ziff bring to bear on those properties or what kind of internal technology or best practices can -- does Ziff have that you could use and IGN to better monetize those properties?

I think that Ziff Davis was a smaller focused Company versus IGN is a small asset in a very large-company.

So they were focused -- they were doing -- a one trick pony.

They are very strong in getting more value for each visit, each click, each visitor.

They are just more efficient.

It is a Company that came out of bankruptcy, and they are very eager to succeed.

Everywhere you go they talk money.

They build their own DMP, data management platform.

It is part of their focus to really analyze the traffic that comes to their websites and to match that traffic against what the advertisers want to sell so that there isn't -- there is not a mismatch between a potential customer and what is being offered.

So, given that they deal with a large breadth of advertisers, there is an opportunity to take the traffic, segment it, and then have a more appropriate offering to that potential customer.

That is what they have demonstrated at Ziff.

It is part of the reason why you see the revenues go from -- even if you want to annualize the 2010 revenues from the $10 million level to somewhat higher levels -- even though that included the fourth quarter to now almost $50 million.

A lot of that has been through the optimization of the traffic.

Grow the traffic and optimize the traffic.

Yes, also know that you have, with the acquisition of IGN, more than doubled the traffic in advertising.

The bigger you are the more visitors you know you [look at them, ] you have interruption with them -- the more you know about the customer the more you can target it, the more you can serve them what they are looking for an the more money you will generate out of it.

Okay, great.

And I might have missed it, but did you give the percent of revenue that was fax, voice and some of the other segments for the quarter?

No, we don't.

But generally speaking as I said we are expecting fax to be this quarter $285 million

This year.

Sorry -- this year, this quarter I would say another few years, right?

(laughter).

And voice revenue is what, Scott, $70 million, $80 million?

It is in the $60 million range.

In the $60 million range and then you know I organized them by the size --

$20 million is for the email.

$20 million for the email.

Slightly under $5 million for the online backup.

I think you said about $4 million, but the run rate is higher.

That's basically [bids it all].

Okay.

Those are the 2012 numbers?

Not projections?

$285 million I think is (multiple speakers).

$285 million is 2013.

That's why I said $70 million (multiple speakers)

About $275 million for fax in 2012.

Yes.

Okay, thank you.

Thank you.

We have no further questions in queue at this time.

I would like to turn it back over to Management for any additional remarks.

All right.

Thank you very much.

We appreciate you joining us for this call.

As usual, we will be out on the road post the earnings call.

There are a couple of conferences coming up in March that I will be speaking at.

So, look for additional press release announcements in terms of the time and the date and whether they will be webcast.

And we look forward to speaking to you in early May regarding the Q1 results, if not before then.

Thank you.

Ladies and gentlemen, this does conclude today's teleconference.

You may disconnect your lines at this time.

Thank you for your participation.