Description of Company

12 Months Ended

Dec. 31, 2011

Description of Company

Description of Company

1. Description of Company

PC Mall, Inc. is a leading value added direct marketer of technology products, services and solutions to businesses, government and educational institutions and individual consumers. We go to market through our dedicated sales force of over 700 account executives. We also offer our products, services and solutions through our field service teams, various direct marketing techniques and a limited number of retail stores. Since our founding in 1987, we have served our customers in part by offering them multi-branded hardware solutions from leading brands including HP, Apple, Cisco, Microsoft and Lenovo. Through us, these and other manufacturers are able to reach multiple customer segments including consumers, small and medium sized businesses, large enterprise businesses, as well as state, local and federal governments and educational institutions. We add additional value to our manufacturer partners by being able to sell, deliver and incorporate their products and services into comprehensive solutions with a high degree of customization. Our model also facilitates an efficient supply chain and support mechanism for manufacturers by using a combination of direct marketing, centralized selling and support, and centralized product fulfillment.

In conjunction with our eCost.com acquisition, which is discussed in detail below, beginning with the first quarter of 2011, our management considered the OnSale and eCOST businesses together as a separate segment and report their results accordingly, including revising all historical segment financial information reported herein. As such, in 2011, existing sales under the OnSale brand were no longer reported under the MacMall segment. In 2011, we had five operating segments, SMB, MME, Public Sector, MacMall and OnSale. We include corporate related expenses such as legal, accounting, information technology, product management, certain support services and other administrative costs that are not otherwise allocated to our reportable operating segments in Corporate and Other. In 2011, we generated approximately 37% of our revenue in our MME segment, 35% of our revenue in our SMB segment, 13% of our revenue in our MacMall segment, 12% of our revenue in our Public Sector segment and 3% of our revenue in our OnSale segment.

Our SMB segment consists of sales made primarily to small and medium sized businesses, generally with less than 1,000 employees. The SMB segment utilizes an outbound phone based sales force and, where applicable, a field-based sales force, together with an online extranet customized for individual customers that enables them to manage their IT procurement process. In addition, the SMB segment markets to small businesses through its Small Business Network utilizing its own social network site at www.pcmallsbn.com.

Our MME segment consists of sales made primarily to mid-market and enterprise-sized businesses, generally with more than 1,000 employees, under the SARCOM, NSPI and Abreon brands. The MME segment sells complex products, services and solutions, utilizing a field relationship-based selling model, an outbound phone based sales force, a field service organization and an online extranet.

Our Public Sector segment consists of sales made primarily to federal, state and local governments, as well as educational institutions. The Public Sector segment utilizes an outbound phone and field relationship-based selling model, as well as contract and bid business development teams and an online extranet.

Our MacMall segment historically included sales made under our MacMall brand name via telephone and the Internet to consumers, small businesses and creative professionals.

Our OnSale segment historically included sales made under our OnSale and eCost brand names via the Internet and inbound phone-based sales forces. The OnSale segment has utilized traditional internet marketing as well as our recently developed “daily deals” business model. Beginning in the first quarter of 2011, in response to what we believe to be a rapidly changing way in which consumers shop and go to market, our OnSale segment expanded its business to enter the market for local daily deals through social commerce. As this market and its related customer buying behaviors have continued to evolve, the “daily deals” business model is rapidly expanding to include sales of IT products. In response to these developments, we have determined that our strategic objectives can be best achieved by incorporating the best practices, technologies and methodologies we have developed in our stand alone “daily deals” business into our traditional eCommerce platform and no longer operating a stand alone “daily deals” business. In the first quarter of 2012, we expect to realign our operating segments by consolidating the OnSale and MacMall segments.