Question-and-Answer Session
Operator
Your first question comes from Thomas Jurns – Deutsche Bank.
Thomas Jurns – Duetsche Bank
I think I heard you say that the sales expense associated with the subscription deal through EMS partner is several hundred thousand in Q4, is that correct?
Ralph Goldwasser
That's correct.
Thomas Jurns – Duetsche Bank
That's a huge hit. I guess that explains the differential entirely of the numbers that we have, that you had given up previously for Q4.
Ralph Goldwasser
I don't think so.
Thomas Jurns – Duetsche Bank
Looking into next year, with the 16% growth in operating income, a couple of questions along this. I guess that you don't expect similar types of deals to have a similar effect next year? Is this kind of a one of where you have this large expense upfront or do you think you might have some of those next year as well?
Yuchun Lee
This was the largest, multi-year subscription business we've seen to date that we'll be working with our MSV partner. As I mentioned in our prepared remarks that the contracts signed but the sales expense is expected to be incurred this quarter, but the revenue will be split out. So again, it is unusual, and in general our current look at '09 factored into account the effects of this already.
Thomas Jurns – Duetsche Bank
More generally, now that the subscription portion of your business is past 10% of revenue, has grown 32% in the last six months, so that's fantastic news, but as you get into little bit smaller deals do we not have the same kind of sizeable disconnect between the cost and the revenue recognition or is it you just expect a little bit more measured pace rather than this lumpy big one in Q4?
Yuchun Lee
We haven't broken out some of our revenue coming out of our Unica business and on subscription, but subscription line is growing more rapidly. I think going forward that the most painful part of the subscription business is the data phase which is what we went through in 2008. So part of our current look in '09, again we're in the early stage of looking at '09, does factor into account the impact of this accounting disconnect. Otherwise I think our module will expand even faster.
Thomas Jurns – Duetsche Bank
It sounds like a lot of enterprise business with the web site analytics, a lot of larger enterprises. Where's the bulk of the business with the web analytics product concentrated as you look at the size of the web site? Are you getting in the top couple thousand web sites? Do you have a significant portion of business perhaps outside the top twenty thousand? Where's the bulk of the business coming?
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