EFTA Document EFTA01378036

mobile web front end unique to each brand. This will, among other things, allow us to be more efficient in terms of ongoing development on our desktop platform while being able to deploy a greater percentage of our total development resources to our mobile products. We will continue to support brand-specific native mobile applications that will integrate to the common back-end and API services layer. Similar efforts are underway at Meetic and our other predominantly European brands. We expect these initiatives will allow us to increase speed to market, reduce execution time and drive cost efficiencies. We host the majority of our brands in leased data centers located within the general geography served by the brand. Other brands utilize Amazon Web Services to support their infrastructure. Acquisition strategy In addition to growing our brands organically, we opportunistically pursue acquisitions of brands and businesses that will enhance our portfolio offering. Since January 2009. we have invested approximately 51,284.0 million to acquire 25 new brands for our dating portfolio including OkCupid, Meetic. Twoo, Pairs 110 Table of Contents and Plenty0fFish, enabling us to strengthen our business in existing markets and expand our product offerings globally. These acquired businesses have generated significant Adjusted EBITDA, have grown meaningfully since acquisition, and we expect them to increasingly contribute to future earnings. On October 28, 2015, we completed the acquisition of Plenty0fFish for approximately 5575.0 miMon in cash. At closing, approximately 571.9 million of the consideration was placed in escrow as security for potential purchase price adjustments and indemnification claims. Founded in 2003. Pie*Offish has steadily grown to become one of the largest dating communities in the United States. Canada. and Australia. Plenty0fFish has a broader age distribution, and less urban concentration, than both OkCupid and Tinder. We believe that our expertise as the world's leading provider of dating products enables us to understand the growth prospects of dating businesses better than most other parties. We expect that there will continue to be opportunities from time to time for us to expand our portfolio of dating brands by acquiring companies at favorable valuations. Additionally, we purchased Tutor.com and then The Princeton Review in 2012 and 2014, respectively. Successful operation of these businesses depends in substantial part on a common set of competencies with our dating business, and we believe we can expand the portfolio of assets over which we can leverage our competencies beyond dating. It is possible that we may acquire other non-dating assets if they meet the relevant criteria and provide the right value creation opportunity. Competition The dating industry is competitive and has no single, dominant brand. We compete primarily with other companies that provide similar dating and matchmaking products, including eHarmony, Spark Networks (Jdate, ChnstianMingle), Zoosk, Parship, ElitePartner, e-Darling and Sado°. In addition to other online dating brands, we compete indirectly with offline dating services, such as in-person matchmakers, and social media platforms. Arguably, our biggest competition comes from the traditional ways that people meet each other, and the choices some people make to not utilize dating products or services. We believe that our ability to compete successfully will depend primarily upon the following factors. our ability to increase consumer acceptance of dating products; the continued strength of our brands, the breadth and depth of our active communities of users relative to our competitors; our ability to evolve our products in response to our competitors offerings, user requirements. social trends and the technological landscape: our ability to continue to optimize our monetization strategies; and the design and functionality of our products. The majority of users in our category use multiple dating products at any given time. making our broad portfolio of brands a competitive advantage. 111 Table of Contert> Government regulation We are subject to foreign and domestic laws and regulations that affect companies conducting business on the internet generally, including laws relating to the liability of providers of online services for their operations and the activities of their users. As a result, we could be subject to actions based on negligence, various torts and trademark and copyright infringement, among other actions. See 'Risk factors—Risks relating to our business—Inappropriate actions by certain of our users could be attributed to us and damage our brands' reputation, which in turn could adversely affect our business" and "Risk factors—Risks relating to our business—We may fall to adequately protect our intellectual property rights or may be accused of infringing the intellectual property rights of Hip: tec.gov An:laves eds.,' dats'l 5751890/0I04746915006431 12226.158"-la.hunt I I'9'2013921:17 Ahr1 CONFIDENTIAL - PURSUANT TO FED. R. CRIM. P. 6(e) CONFIDENTIAL DB-SDNY-0075196 SONY GM_00221380 EFTA01378036