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UNITED STATES SECURITIES AND
    EXCHANGE COMMISSIONWashington, D.C.
    20549
    Form 10-K
  (Mark One)þ

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the fiscal year ended
    December 31,
    2009ORo

TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
    SECURITIES EXCHANGE ACT OF 1934For the transition period
    from          to   Commission File Number: 001-34518
  Ancestry.com Inc.
 (Exact name of registrant as
    specified in its charter)
  Delaware

26-1235962(State or other jurisdiction of
    incorporation or organization)

(I.R.S. Employer Identification
    Number)360 West 4800 NorthProvo, Utah

84604(Address of Principal Executive
    Offices)

(Zip Code)   (801) 705-7000
 (Registrants telephone
    number, including area code)
  Securities registered pursuant to Section 12(b) of the
    Act:
  Title of Each Class

Name of Each Exchange on Which RegisteredCommon stock, $0.001 par value

The NASDAQ Stock Market LLC   Securities registered pursuant to Section 12(g) of the
    Act:
 None
  o þ
  o þ
  þ o
  Regulation S-T o o
  Regulation S-K Form 10-K Form 10-K. þ
  Rule 12b-2
  Large accelerated
    filer o

Accelerated
    filer o

Non-accelerated
    filer þ

Smaller reporting
    company o(do not check if a smaller
    reporting company)   Rule 12b-2 o þ
      DOCUMENTS INCORPORATED BY REFERENCE




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##### 





Ancestry.com,
    Inc.
  TABLE OF
    CONTENTS
   
 PagePART IForward Looking Statements


3Terminology


4Item 1.


Business


4Item 1A.


Risk Factors


10Item 1B.


Unresolved Staff Comments


30Item 2.


Properties


30Item 3.


Legal Proceedings


30Item 4.


Submission of Matters to a Vote of Security
    Holders


30PART IIItem 5.


Market for Registrants Common Equity,
    Related Stockholder Matters and Issuer Purchases of Equity
    Securities


30Item 6.


Selected Financial Data


33Item 7.


Managements Discussion and Analysis of
    Financial Condition and Results of Operations


36Item 7A.


Quantitative and Qualitative Disclosures about
    Market Risk


56Item 8.


Financial Statements and Supplementary Data


56Item 9.


Changes in and Disagreements with Accountants on
    Accounting and Financial Disclosure


57Item 9A.


Controls and Procedures


57Item 9B.


Other Information


57PART IIIItem 10.


Directors, Executive Officers and Corporate
    Governance


57Item 11.


Executive Compensation


58Item 12.


Security Ownership of Certain Beneficial Owners
    and Management and Related Stockholder Matters


58Item 13.


Certain Relationships and Related Transactions
    and Director Independence


59Item 14.


Principal Accountant Fees and Services


59PART IVItem 15.


Exhibits and Financial Statement Schedules


60EX-21.1EX-23.1EX-31.1EX-31.2EX-32.1   2




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PART I Forward-Looking
    Statements  Form 10-K
  
    our future financial performance, including our revenues, cost
    of revenues, operating expenses and ability to sustain
    profitability;
    our rate of revenue growth;
    our ability to attract and retain subscribers;
    our ability to generate additional revenues on a cost-effective
    basis;
    our ability to acquire content and make it available online;
    the success of our promotional programs and new products;
    disruptions in our services;
    our international expansion plans;
    success with respect to any future acquisitions;
    our ability to retain and hire necessary employees;
    our ability to adequately protect our intellectual property;
    the impact of claims or litigation;
    our liquidity and working capital requirements;
    the impact of external market forces; and
    the effect of laws applying to our business, including privacy
    laws.   3




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Terminology        Item 1.
    Business  Mission
    Overview
         4




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Growth
    Strategy
      Ancestry.com
    Web sites
  Ancestry.com. African-American
       5




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14-day
  Product

Monthly

AnnualU.S. Deluxe

$
19.95/month


$
155.40/yearWorld Deluxe

$
29.95/month


$
299.40/year   International Ancestry.com Web
    sites.
  Other
    Products and Web sites
  
    Family Tree Maker.  Family Tree Maker is the
    leading family history desktop software on the market, with over
    1.4 million units distributed since 2004. Most Family Tree
    Maker versions include a limited subscription to the
    Ancestry.com Web site.
    Ancestry.com  DNA.We sell DNA testing kits that help
    people learn more about their family history and ancient
    ancestry.
    Ancestry.com Expert Connect.Our Expert Connect product
    is a genealogist marketplace that connects people with
    professional genealogists around the world.
    Mundia.com.  Mundia.com is our global,
    multi-language
    family history networking service intended for markets in which
    we do not have a local presence.
    Jiapu.com.  We are investing in the further
    development of Jiapu.com, our China Web site focused on family
    networking and ancestral family history.
    MyCanvas.com.  MyCanvas.com is a digital
    publishing platform that allows people to design and order
    high-quality customized photo books, calendars and posters using
    discoveries made on Ancestry.com.
    myfamily.com.  myfamily.com is a family
    networking service that provides families with a safe and secure
    home on the web where they can share photos, videos,
    stories, news, calendars and family history insights.
    Other sites.  RootsWeb.com is a free genealogy
    community on the Internet. Genealogy.com is a legacy service
    that offers a collection of family and local histories, vital
    records content and military records, most of which are also
    available on Ancestry.com.  Subscribers
   6




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Marketing
    and Advertising
    Retention marketing. on-site
  Conversion marketing. on-site
  Subscriber acquisition and brand marketing.
  Recent
    Developments.
    Search,
    Family Tree and Collaboration Technologies
    Vertical search engine.
  Record hinting.
  Content
    Process and Technologies
  Company content acquisition.
 7




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Digitization.
  Indexing.
  Operations
  Web sites and technology operations.
    Subscriber services.
  Competition
      
    FamilySearch, and its Web site FamilySearch.org, a genealogy
    organization that is part of The Church of Jesus Christ of
    Latter-day
    Saints. FamilySearch has an extensive collection of paper and
    microfilm records (more than 2.3 million rolls of microfilm
    and 180,000 sets of microfiche). FamilySearch has digitized a
    large quantity of these records and has published them online at
    FamilySearch.org, where it makes them available to the public
    for free and through over 4,500 family history centers located
    throughout the world. FamilySearch is a well funded organization
    and has stated its intention to undertake a massive digitization
    project to bring most of its collection online over the next few
    years. 8




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
    Commercial entities, including online genealogical research
    services, library content distributors, search engines and
    portals, retailers of books and software related to genealogical
    research and family tree creation and family history oriented
    social networking Web sites.
    Non-profit entities and organizations, genealogical societies,
    governments and agencies that may make vital statistics or other
    records available to the public for free.    Intellectual
    Property
        Employees
   9




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The
    Spectrum Investment
    Financial
    Information about Segments and Geographic Areas
    Other
    Information
  (801) 705-7000. http://corporate.ancestry.com
    http://ir.ancestry.com Form 10-K, Form 10-Q, Form 8-K
  Item 1A.
    Risk
    Factors  A wide range of factors could materially affect our
    performance. The following factors and other information
    included in this Annual Report should be carefully considered.
    Although the risk factors described below are the ones
    management deems significant, additional risks and uncertainties
    not presently known to us or that we presently deem less
    significant may also impair our business operations. If any of
    the following events actually occur, our business, financial
    condition and results of operations could be adversely
    affected.
  Risks
    Related to Our Business
  If our
    efforts to retain and attract subscribers are not successful,
    our revenues will be adversely affected.
   10




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Our
    recent revenue growth rate may not be sustainable, which could
    negatively affect our stock price or financial condition and
    results of operations.
    If we
    experience excessive rates of subscriber churn, our revenues and
    business will be harmed.
      Because
    we recognize revenues from subscriptions to our service over the
    term of the subscription, downturns or upturns in subscription
    sales may not be immediately reflected in our operating results
    and therefore could affect our operating results in later
    periods.
   11




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Because
    we generate substantially all of our revenue from online family
    history resources, particularly in the United States and United
    Kingdom, a decline in demand for our services or for online
    family history resources in general, and particularly of the
    United States and United Kingdom, could cause our revenue
    to decline.
    
    individuals interest in, and their willingness to spend
    time and money, conducting family history research;
    availability of discretionary funds;
    awareness of our brand and the family history category;
    the appeal and reliability of our services;
    the price, performance and availability of competing family
    history products and services;
    public concern regarding privacy and data security;
    our ability to maintain high levels of customer satisfaction; and
    the rate of growth in online commerce generally.    A
    change in our mix of subscription durations could have a
    significant impact on our revenue and churn.
    Challenges
    in acquiring historical content and making it available online
    could adversely affect our ability to retain and expand our
    subscriber base, and therefore adversely affect our business,
    financial condition and results of operations.
   12




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We
    depend in part upon third party licenses for some of our
    historical content, and a loss of those licenses, or disputes
    regarding royalties under these licenses, could adversely affect
    our ability to retain and expand our subscriber base, and
    therefore adversely affect our revenues, financial condition and
    results of operations.
     13




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Digitizing
    and indexing new content can take a significant amount of time
    and expense, and can expose us to risks associated with the loss
    or damage of historical documents. Our inability to maintain or
    acquire content or make new content available online in a timely
    and cost-effective manner, or liability for loss of historical
    documents, could have an adverse effect on our business,
    financial condition and results of operations.
        We
    face competition from a number of different sources, and our
    failure to compete effectively with current and future
    competitors could adversely affect our ability to retain and
    expand our subscriber base, and therefore adversely impact our
    revenues, results of operations and financial
    condition.
      
    FamilySearch, and its Web site FamilySearch.org, a genealogy
    organization that is part of The Church of Jesus Christ of
    Latter-day
    Saints. FamilySearch has an extensive collection of paper and
    microfilm records (more than 2.3 million rolls of microfilm
    and 180,000 sets of microfiche). FamilySearch has digitized a
    large quantity of these records and has published them online at
    FamilySearch.org, where it makes them available to the public
    for free and through over 4,500 family history centers located
    throughout the world. FamilySearch is a well funded organization
    and has stated its intention to undertake a massive digitization
    project to bring most of its collection online over the next few
    years.
    Commercial entities, including online genealogical research
    services, library content distributors, search engines and
    portals, retailers of books and software related to genealogical
    research and family tree creation and family history oriented
    social networking Web sites.
    Non-profit entities and organizations, genealogical societies,
    governments and agencies that may make vital statistics or other
    records available to the public for free. 14




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Competitive
    pricing pressures could cause us to fail to retain existing or
    attract new subscribers and harm our revenues and results of
    operations.
    Our
    growth could strain our personnel, technology and infrastructure
    resources, and if we are unable to implement appropriate
    controls and procedures to manage our growth, we may not be able
    to successfully implement our business plan.
    Any
    significant disruption in service on our Web sites or in our
    computer systems, which are currently hosted primarily by a
    single third-party, could damage our reputation and result in a
    loss of subscribers, which would harm our business and operating
    results.
   15




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Our
    operating results depend on numerous factors and may fluctuate
    from quarter to quarter, which could make them difficult to
    predict.
    
    our ability to retain existing subscribers and attract new
    subscribers;
    the mix of annual and monthly subscribers at any given time and
    the mix of packages to which they subscribe to;
    timing and amount of costs of new and existing marketing and
    advertising efforts;
    timing and amount of operating costs and capital expenditures
    relating to expansion of our business, operations and
    infrastructure, including content acquisition and international
    expansion costs;
    the cost and timing of the development and introduction of new
    product and service offerings by us or our competitors;
    downward pressure on the pricing of our subscriptions;
    system failures, security breaches or Web site downtime;
    fluctuations in the usage of our Web sites; and
    fluctuations in foreign currency exchange rates.   16




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We
    require a significant amount of cash to service our
    indebtedness, which reduces the cash available to finance our
    organic growth and strategic acquisitions, alliances and
    collaborations. If we fail to grow as a result of limitations on
    available cash, it could harm our financial condition and stock
    price.
    
    make us more vulnerable to unfavorable economic conditions;
    make it more difficult to obtain additional financing in the
    future for working capital, capital expenditures or other
    general corporate purposes;
    limit our flexibility in planning for, or reacting to, changes
    in our business and the markets in which we operate;
    require us to dedicate or reserve a large portion of our cash
    flow from operations for making payments on our indebtedness,
    which would prevent us from using it for other purposes;
    make us susceptible to fluctuations in market interest rates
    that affect the cost of our borrowings to the extent that our
    variable rate debt is not covered by interest rate derivative
    agreements; and
    make it more difficult to pursue strategic acquisitions,
    alliances and collaborations.      We may
    need additional capital, and we cannot be certain that
    additional financing will be available. If we fail to obtain
    additional financing if needed, it could harm our growth and our
    ability to respond to business challenges.
   17




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If our
    marketing and advertising efforts fail to generate additional
    revenues on a cost-effective basis, or if we are unable to
    manage our marketing and advertising expenses, it could harm our
    results of operations and growth.
      We
    cannot predict what impact, if any, the television show
    Who Do You Think You Are? will have on our
    business.
   18




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If we
    are unable to improve market recognition of and loyalty to our
    brands, or if our reputation were to be harmed, we could lose
    subscribers or fail to increase the number of subscribers, which
    could harm our revenues, results of operations and financial
    condition.
      Our
    business could be adversely affected if our subscribers are not
    satisfied with our products and services. If we lose subscribers
    or fail to increase the number of subscribers due to
    dissatisfaction with our products and services, it could harm
    our revenues, results of operations and financial
    condition.
    Our
    promotional offerings and our introduction of new services may
    have unintended effects on the demand for our services, which
    could result in diminished revenue visibility.
  pay-per-view
 19




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We
    face many risks associated with our plans to continue to expand
    our international offerings and marketing and advertising
    efforts, which could harm our business, financial condition and
    results of operations.
    
    difficulties in developing and marketing our offerings and
    brands as a result of distance, language and cultural
    differences;
    foreign currency exchange rate fluctuations;
    more stringent consumer and data protection laws;
    local socio-economic and political conditions;
    technical difficulties and costs associated with the
    localization of our service offerings;
    strong local competitors;
    lack of experience in certain geographical markets;
    different and conflicting legal and regulatory regimes;
    changes in governmental regulations;
    different and conflicting intellectual property laws;
    difficulties in staffing and managing international operations;
    and
    risk of business or user fraud.    If we
    are unable to continually enhance our products and services and
    adapt them to technological changes and subscriber needs, we may
    not remain competitive and our business may fail to grow or
    decline.
    
    anticipate demand for new products and services;
    enhance our existing solutions; and
    respond to technological advances on a cost-effective and timely
    basis.   20




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Undetected
    product or service errors or defects could result in the loss of
    revenues, delayed market acceptance of our products or services
    or claims against us.
    
    require us to make extensive changes to our subscription
    services or software product, which would increase our expenses;
    expose us to claims for damages;
    require us to incur additional technical support costs;
    cause a negative registered user reaction that could reduce
    future sales;
    generate negative publicity regarding us and our subscription
    services and software product; or
    result in subscribers delaying their subscription or software
    purchase or electing not to renew their subscriptions.    Privacy
    concerns could require us to incur significant expense and
    modify our operations in a manner that could result in
    restrictions and prohibitions on our use of certain information,
    and therefore harm our business.
    Our
    possession and use of personal information presents risks and
    expenses that could harm our business. Unauthorized disclosure
    or manipulation of such data, whether through breach of our
    network security or otherwise, could expose us to costly
    litigation and damage our reputation.
     21




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Any
    claims related to activities of registered users and the content
    they upload could result in expenses that could harm our results
    of operations and financial condition.
    Increases
    in credit card processing fees would increase our operating
    expenses and adversely affect our results of operations, and the
    termination of our relationship with any major credit card
    company would have a severe, negative impact on our ability to
    collect revenues from subscribers.
     22




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If
    government regulation of the Internet or other areas of our
    business changes or if consumer attitudes toward use of the
    Internet change, we may need to change the manner in which we
    conduct our business in a manner that is less profitable or
    incur greater operating expenses, which could harm our results
    of operations.
    Our
    revenues may be adversely affected if we are required to charge
    sales taxes in additional jurisdictions and/or other taxes for
    our products and services.
    We
    face risk associated with currency exchange rate fluctuations,
    which could adversely affect our operating
    results.
    If we
    acquire any businesses or technologies in the future, they could
    prove difficult to integrate, disrupt our ongoing business,
    dilute stockholder value or have an adverse effect on our
    results of operations.
   23




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return-on-investment
  
    potential disruption of our ongoing business and distraction of
    management;
    difficulty integrating the operations and products of the
    acquired business;
    use of cash to fund the acquisition or for unanticipated
    expenses;
    limited market experience in new businesses;
    exposure to unknown liabilities, including litigation against
    the companies we may acquire;
    additional costs due to differences in culture, geographic
    locations and duplication of key talent;
    acquisition-related accounting charges affecting our balance
    sheet and operations;
    dilution to our current stockholders from the issuance of equity
    securities; and
    potential loss of key employees or customers of the acquired
    company.    Our
    business may be significantly impacted by a change in the
    economy, including any resulting effect on consumer
    spending.
    The
    loss of one or more of our key personnel, or our failure to
    attract, assimilate and retain other highly qualified personnel
    in the future, could harm our business.
       24




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We are
    subject to additional regulatory compliance matters as a result
    of becoming a public company, which compliance includes
    Section 404 of the Sarbanes-Oxley Act of 2002, and our
    management has limited experience managing a public company.
    Failure to comply with these regulatory matters could harm our
    business.
  Form 10-K
  Our
    reported financial results may be adversely affected by changes
    in accounting principles applicable to us.
    Any
    expenses or liability resulting from litigation could adversely
    affect our results of operations and financial
    condition.
   25




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Risks
    Related to Intellectual Property
  If our
    intellectual property and technologies are not adequately
    protected to prevent use or appropriation by our competitors,
    the value of our brand and other intangible assets may be
    diminished, and our business may be adversely
    affected.
       26




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Confidentiality
    agreements with employees and others may not adequately prevent
    disclosure of trade secrets and other proprietary information.
    Failure to protect our proprietary information could make it
    easier for third parties to compete with our products and harm
    our business.
    Intellectual
    property claims against us could be costly and result in the
    loss of significant rights related to, among other things, our
    Web sites and marketing and advertising
    activities.
  non-infringing
    If we
    are unable to protect our domain names, our reputation and brand
    could be affected adversely, which would adversely affect our
    subscriber base, and therefore adversely affect our
    revenues.
   27




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Risks
    Related to our Corporate Structure
  Our
    share price may be volatile due to fluctuations in our operating
    results and other factors, each of which could cause our stock
    price to decline.
    
    actual or anticipated fluctuations in our key operating metrics,
    financial condition and operating results;
    a greater than expected loss of existing subscribers;
    a negative change in one or more of our key metrics;
    actual or anticipated changes in our growth rate;
    issuance of new or updated research or reports by securities
    analysts;
    our announcement of actual results for a fiscal period that are
    higher or lower than projected or expected results or our
    announcement of revenue or earnings guidance that is higher or
    lower than expected;
    fluctuations in the valuation of companies perceived by
    investors to be comparable to us;
    share price and volume fluctuations attributable to inconsistent
    trading volume levels of our shares;
    sales or expected sales of additional common stock;
    announcements from, or operating results of, our competitors; or
    general economic and market conditions.    If an
    insufficient number of securities or industry analysts publish
    research or reports about our business, or if they change their
    recommendations regarding our stock adversely, our stock price
    and trading volume could decline.
   28




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Our
    principal stockholder and its affiliates own a majority of our
    outstanding common stock, and their interests may not always
    coincide with the interests of the other holders of our common
    stock.
    Delaware
    law and our corporate charter and bylaws contain anti-takeover
    provisions that could delay or discourage takeover attempts that
    stockholders may consider favorable.
      Substantial
    sales of our common stock by our stockholders, including sales
    pursuant to 10b5-1 plans, could depress our stock price
    regardless of our operating results.
  lock-up lock-up lock-up
 29




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Item 1B.
    Unresolved
    Staff Comments    Item 2.
    Properties      Item 3.
    Legal
    Proceedings      Item 4.
    Submission
    of Matters to a Vote of Securities Holders  1-for-2
 PART II  Item 5.
    Market
    for Registrants Common Equity, Related Stockholder Matters
    and Issuer Purchases of Equity Securities    High

LowFourth quarter 2009 (beginning November 5, 2009)


16.32



12.80    30




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Stock
    Performance Graph
  Notwithstanding any statement to the contrary in any of our
    filings with the SEC, the following information shall not be
    deemed filed with the SEC or soliciting
    material under the Securities Exchange Act of 1934 and
    shall not be incorporated by reference into any such filings
    irrespective of any general incorporation language contained in
    such filing.
  e-commerce
  COMPARISON
    OF CUMULATIVE TOTAL RETURN OF ANCESTRY.COM INC., NASDAQ
    COMPOSITE
 INDEX, AND S&P NORTH AMERICAN TECH INTERNET INDEX
  
      Recent
    Sales of Unregistered Securities and Use of Proceeds
     31




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Form S-1 No. 333-160986) for
      Issuer
    Purchase of Equity Securities
    Dividend
    Policy
   32




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Item 6.
    Selected
    Financial Data  SELECTED
    CONSOLIDATED FINANCIAL DATA
    Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007Year Ended December 31,


through


through


Year Ended December 31,2005


2006


Dec. 5, 2007


Dec. 31, 2007


2008


2009(In thousands, except per share data)Operations Data:Subscription revenues

$
126,031


$
137,643


$
141,141


$
11,692


$
181,391


$
207,707Product and other revenues


14,228



12,909



12,269



1,278



16,200



17,195Total revenues


140,259



150,552



153,410



12,970



197,591



224,902Total cost of revenues


28,572



31,039



36,142



2,962



43,614



46,323Total operating expenses


99,505



108,895



106,040



10,358



138,257



146,618Income (loss) from operations


12,182



10,618



11,228



(350
)


15,720



31,961Net income (loss)


8,144



8,149



7,771



(1,303
)


2,384



21,295Net income per common share:(1)Basic

















$
0.06


$
0.55Diluted

















$
0.06


$
0.51     (1)
    
    In connection with the Spectrum investment, we were
    recapitalized. As a result, the capital structure of our
    predecessor is not comparable to that of the successor.
    Accordingly, net income per common share is not comparable or
    meaningful for periods prior to 2008 and has not been presented.  Predecessor


SuccessorAs of December 31,2005


2006


2007


2008


2009(In thousands)Balance Sheet Data:Cash, cash equivalents and short-term investments

$
38,113


$
43,219


$
12,277


$
40,121


$
100,272Total assets


140,126



140,640



476,212



477,975



523,348Deferred revenues


56,714



52,307



56,730



61,178



69,711Long-term debt (including current portion)


25,000



15,000



140,000



133,000



100,025Total liabilities


102,229



95,129



263,830



258,187



228,458Total stockholders equity


37,897



45,511



212,382



219,788



294,890  33




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Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007Year Ended December 31,


through


through


Year Ended December 31,2005


2006


Dec. 5, 2007


Dec. 31, 2007


2008


2009(In thousands)Other Financial Data:Adjusted EBITDA(1)(3)

$
23,513


$
30,455


$
39,344


$
3,755


$
62,645


$
71,585Free cash flow(2)(3)


(3,586
)


4,212



14,025



1,774



31,712



29,613     (1)
    
    Adjusted EBITDA.We define adjusted EBITDA as net income
    (loss) plus net interest (income) expense; income tax expense;
    non-cash charges including depreciation, amortization,
    impairment of intangible assets and stock-based compensation
    expense; other (income) expense and expenses associated with the
    Spectrum investment, such as
    in-process
    research and development and transaction related expenses.(2)
    
    Free cash flow.We define free cash flow as net income
    (loss) plus net interest (income) expense; income tax expense;
    non-cash charges including depreciation, amortization,
    impairment of intangible assets and stock-based compensation
    expense; other (income) expense and expenses associated with the
    Spectrum investment, such as in-process research and development
    and transaction related expenses, and minus capitalization of
    content database costs, capital expenditures and cash paid for
    income taxes and interest.(3)
    
    Income from operations and net income, and therefore adjusted
    EBITDA and free cash flow, include an expense related to a
    settlement in the third quarter of 2009 of a claim regarding the
    timeliness and accuracy of a content index we created. The
    settlement resulted in an expense of approximately
    $2.3 million in 2009.       34




---



##### Table of Contents




    adjusted EBITDA and free cash flow do not reflect our future
    requirements for contractual commitments and adjusted EBITDA
    does not reflect our cash expenditures or future requirements
    for capital expenditures;
    adjusted EBITDA and free cash flow do not reflect changes in, or
    cash requirements for, our working capital;
    adjusted EBITDA does not reflect interest income or interest
    expense;
    adjusted EBITDA does not reflect cash requirements for income
    taxes;
    adjusted EBITDA and free cash flow do not reflect the non-cash
    component of employee compensation;
    although depreciation, amortization and impairment of intangible
    assets are non-cash charges, the assets being depreciated or
    amortized will often have to be replaced in the future, and
    adjusted EBITDA and free cash flow do not reflect any cash
    requirements for these replacements;
    adjusted EBITDA and free cash flow do not reflect acquired
    in-process research and development charges; and
    other companies in our industry may calculate adjusted EBITDA or
    free cash flow or similarly titled measures differently than we
    do, limiting their usefulness as comparative measures.    Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007Year Ended December 31,


through


through


Year Ended December 31,2005


2006


Dec. 5, 2007


Dec. 31, 2007


2008


2009(In thousands)Reconciliation of adjusted EBITDA and free cash flow to net
    income (loss):Net income (loss)

$
8,144


$
8,149


$
7,771


$
(1,303
)

$
2,384


$
21,295Interest (income) expense, net


211



(1,292
)


(1,295
)


857



11,483



5,347Income tax expense


5,086



4,595



5,018



103



1,845



5,340Depreciation expense


7,598



9,559



10,594



754



10,732



10,936Amortization expense


4,767



6,489



7,094



1,974



30,046



23,214Stock-based compensation


(1,344
)


3,789



898



77



4,672



5,474Other (income) expense, net


(1,259
)


(834
)


(266
)


(7
)


8



(21
)Impairment of intangible assets and acquired in-process research
    and development


310











1,300



1,475



Transaction related expenses










9,530











Adjusted EBITDA

$
23,513


$
30,455


$
39,344


$
3,755


$
62,645


$
71,585Capitalization of content database costs


(11,521
)


(11,285
)


(10,591
)


(1,129
)


(8,965
)


(9,398
)Purchase of property and equipment


(11,873
)


(10,127
)


(10,572
)


(852
)


(11,621
)


(13,362
)Cash paid for interest


(1,480
)


(1,031
)


(756
)






(10,068
)


(7,740
)Cash paid for income taxes


(2,225
)


(3,800
)


(3,400
)






(279
)


(11,472
)Free cash flow

$
(3,586
)

$
4,212


$
14,025


$
1,774


$
31,712


$
29,613  35




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Item 7.
    Managements
    Discussion and Analysis of Financial Condition and Results of
    Operations  Overview
  You should read the following discussion together with
    Item 6 Selected Financial Data and our
    consolidated financial statements and the related notes included
    elsewhere in this Annual Report. This discussion contains
    forward-looking
    statements about our business and operations. Our actual results
    may differ materially from those we currently anticipate as a
    result of many factors, including those we describe under
    Risk Factors and elsewhere in this Annual Report.
    See Forward-Looking Statements.
  Company
    Overview
          Key
    Business Metrics
    
    Total subscribers.  A subscriber is an
    individual who pays for renewable access to one of our
    Ancestry.com Web sites. Total subscribers is defined as the
    number of subscribers at the end of the relevant period. 36




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##### Table of Contents




    Monthly churn.  Monthly churn is a measure
    representing the number of subscribers that cancel in the
    quarter divided by the sum of beginning subscribers and
    subscriber additions during the quarter. To arrive at monthly
    churn, we divide the result by three. Management uses this
    measure to determine the health of our subscriber base.
    Subscriber acquisition cost.  Subscriber
    acquisition cost is external marketing and advertising expense,
    divided by total subscriber additions in the period. Management
    uses this metric to determine the efficiency of our marketing
    and advertising programs in acquiring new subscribers.
    Average monthly revenue per
    subscriber.  Average monthly revenue per
    subscriber is total subscription revenues earned in the period
    from subscriptions to one of the Ancestry.com Web sites divided
    by the average number of subscribers in the period, divided by
    the number of months in the period. The average number of
    subscribers for the period is calculated by taking the average
    of the beginning and ending number of subscribers for the period.      Year Ended December 31,2007

2008

2009Total subscribers


832,193



913,683



1,066,123Subscriber additions(1)


479,663



556,045



673,991Monthly churn(1)


3.5
%


4.0
%


3.8
%Subscriber acquisition cost(1)

$
70.96


$
71.99


$
72.46Average monthly revenue per subscriber(1)

$
14.83


$
16.09


$
16.55     (1)
    
    In connection with the Spectrum investment in December 2007, we
    were recapitalized. As a result, amounts used to determine these
    metrics are based on both the predecessor and successor periods
    as it is not meaningful to present these metrics separately for
    the two periods in 2007.  Components
    of Consolidated Statements of Operations
  Revenues
  Subscription revenues. 14-day 14-day 14-day
 37




---



##### Table of Contents



Predecessor


SuccessorPeriod from,


Period fromJan. 1, 2007


Dec. 6, 2007through


through


Year Ended December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009United States

$
106,101


$
8,633


$
134,112


$
156,150United Kingdom


27,181



2,321



33,223



34,402All other countries


7,859



738



14,056



17,155Total subscription revenues

$
141,141


$
11,692


$
181,391


$
207,707   Product and other revenues.
  Cost
    of Revenues
  Cost of subscription revenues.
  Cost of product and other revenues.
  stock-based
  Operating
    Expenses
  Technology and development.
  Marketing and advertising.
  General and administrative.
 38




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##### Table of Contents



Amortization of acquired intangible
    assets.
  Transaction related expenses.
  Other
    Income (Expense)
  Interest expense.
  Interest income.
  Income tax expense.
  Critical
    Accounting Estimates
      Recoverability
    of Intangible Assets, Including Goodwill
     39




---



##### Table of Contents



Amortization
    of Our Content Database Costs
    Stock-Based
    Compensation
     40




---



##### Table of Contents



Income
    taxes
         41




---



##### Table of Contents



Results
    of Operations
    Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007through


through


Year Ended December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009(In thousands, except per share data)Revenues:Subscription revenues

$
141,141


$
11,692


$
181,391


$
207,707Product and other revenues


12,269



1,278



16,200



17,195Total revenues


153,410



12,970



197,591



224,902Costs of revenues:Cost of subscription revenues


33,590



2,462



38,187



40,183Cost of product and other revenues


2,552



500



5,427



6,140Total cost of revenues


36,142



2,962



43,614



46,323Gross profit


117,268



10,008



153,977



178,579Operating expenses:Technology and development


31,255



3,517



33,206



36,236Marketing and advertising


42,400



3,157



52,341



61,625General and administrative


20,723



2,142



28,931



32,540Amortization of acquired intangible assets


2,132



1,542



23,779



16,217Transaction related expenses


9,530











Total operating expenses


106,040



10,358



138,257



146,618Income (loss) from operations


11,228



(350
)


15,720



31,961Other income (expense):Interest expense


(756
)


(1,146
)


(12,355
)


(6,139
)Interest income


2,051



289



872



792Other income (expense), net


266



7



(8
)


21Income (loss) before income taxes


12,789



(1,200
)


4,229



26,635Income tax expense


(5,018
)


(103
)


(1,845
)


(5,340
)Net income (loss)

$
7,771


$
(1,303
)

$
2,384


$
21,295Net income per common share:(1)Basic









$
0.06


$
0.55Diluted









$
0.06


$
0.51     (1)
    
    In connection with the Spectrum investment, we were
    recapitalized. As a result, the capital structure of our
    predecessor is not comparable to that of the successor.
    Accordingly, net income per common share is not comparable or
    meaningful for periods prior to 2008 and has not been presented. 42




---



##### Table of Contents



Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007


Year Endedthrough


through


December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009Revenues:Subscription revenues


92.0
%


90.1
%


91.8
%


92.4
%Product and other revenues


8.0



9.9



8.2



7.6Total revenues


100.0



100.0



100.0



100.0Costs of revenues:Cost of subscription revenues


21.9



19.0



19.3



17.9Cost of product and other revenues


1.7



3.8



2.8



2.7Total cost of revenues


23.6



22.8



22.1



20.6Gross profit


76.4



77.2



77.9



79.4Operating expenses:Technology and development


20.4



27.1



16.8



16.1Marketing and advertising


27.6



24.4



26.5



27.4General and administrative


13.5



16.5



14.7



14.5Amortization of acquired intangible assets


1.4



11.9



12.0



7.2Transaction related expenses


6.2











Total operating expenses


69.1



79.9



70.0



65.2Income (loss) from operations


7.3



(2.7
)


7.9



14.2Other income (expense):Interest expense


(0.5
)


(8.8
)


(6.2
)


(2.7
)Interest income


1.3



2.2



0.4



0.3Other income (expense), net


0.2



0.1



(0.0
)


(0.0
)Income (loss) before income taxes


8.3



(9.2
)


2.1



11.8Income tax expense


(3.2
)


(0.8
)


(0.9
)


(2.3
)Net income (loss)


5.1



(10.0
)


1.2



9.5   Years
    Ended December 31, 2007, 2008 and 2009
  Revenues
  Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007through


through


Year Ended December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009(In thousands)Subscription revenues

$
141,141


$
11,692


$
181,391


$
207,707Product and other revenues


12,269



1,278



16,200



17,195Total revenues

$
153,410


$
12,970


$
197,591


$
224,902  43




---



##### Table of Contents



Subscription
    revenues
  2009 compared to 2008.
  2008 compared to 2007.
  Product
    and other revenues
  2009 compared to 2008.
  2008 compared to 2007.
 44




---



##### Table of Contents



Cost
    of Revenues and Gross Profit
  Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007through


through


Year Ended December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009(In thousands)Revenues:Subscription revenues

$
141,141


$
11,692


$
181,391


$
207,707Product and other revenues


12,269



1,278



16,200



17,195Total revenues


153,410



12,970



197,591



224,902Cost of revenues:Cost of subscription revenues


33,590



2,462



38,187



40,183Cost of product and other revenues


2,552



500



5,427



6,140Total cost of revenues


36,142



2,962



43,614



46,323Gross profit

$
117,268


$
10,008


$
153,977


$
178,579Gross profit percentage


76.4
%


77.2
%


77.9
%


79.4
%   Cost of
    subscription revenues
  2009 compared to 2008.
  2008 compared to 2007.
  Cost of
    product and other revenues
  2009 compared to 2008.
  2008 compared to 2007.
 45




---



##### Table of Contents



Operating
    Expenses
  Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007through


through


Year Ended December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009(In thousands)Operating expenses:Technology and development

$
31,255


$
3,517


$
33,206


$
36,236Marketing and advertising


42,400



3,157



52,341



61,625General and administrative


20,723



2,142



28,931



32,540Amortization of acquired intangible assets


2,132



1,542



23,779



16,217Transaction expenses


9,530











Total operating expenses

$
106,040


$
10,358


$
138,257


$
146,618   Technology
    and development
  2009 compared to 2008.
  2008 compared to 2007.
  Marketing
    and advertising
  2009 compared to 2008.
  2008 compared to 2007.
  General
    and administrative
  2009 compared to 2008.
 46




---



##### Table of Contents



2008 compared to 2007.
  Amortization
    of acquired intangible assets
  2009 compared to 2008.
  2008 compared to 2007.
  Transaction related expenses.
  Other
    Income (Expense) and Income Tax Expense
  Predecessor

SuccessorPeriod from

Period fromJan. 1, 2007

Dec. 6, 2007

Year Endedthrough

through

December 31,Dec. 5, 2007

Dec. 31, 2007

2008

2009(In thousands)Other income (expense):Interest expense

$
(756
)

$
(1,146
)

$
(12,355
)

$
(6,139
)Interest income


2,051



289



872



792Other income (expenses), net


266



7



(8
)


21Income tax expense


(5,018
)


(103
)


(1,845
)


(5,340
)Other data:Effective tax rate


39.2
%


n/m



43.6
%


20.0
%   Interest
    expense
  2009 compared to 2008.
  2008 compared to 2007.
 47




---



##### Table of Contents



Interest
    income
  2009 compared to 2008.
  2008 compared to 2007.
  Other
    income (expense), net
  2009 compared to 2008.
  2007 compared to 2008.
  Income
    tax expense
    true-up,
 48




---



##### Table of Contents



Unaudited
    Quarterly Results of Operations
    Three Months EndedMarch 31,


June 30,


September 30,


December 31,


March 31,


June 30,


September 30,


December 31,2008


2008


2008


2008


2009


2009


2009


2009(In thousands, except per share data)Consolidated Statements of Operations Data:Revenues:Subscription revenues

$
42,807


$
44,612


$
46,197


$
47,775


$
49,184


$
50,719


$
52,603


$
55,201Product and other revenues


4,234



3,431



3,877



4,658



4,049



3,854



4,384



4,908Total revenues


47,041



48,043



50,074



52,433



53,233



54,573



56,987



60,109Cost of revenues:Cost of subscription revenues


9,429



9,392



8,878



10,488



9,756



9,966



10,033



10,428Cost of product and other revenues


940



947



1,405



2,135



1,514



1,310



1,389



1,927Total cost of revenues


10,369



10,339



10,283



12,623



11,270



11,276



11,422



12,355Gross profit


36,672



37,704



39,791



39,810



41,963



43,297



45,565



47,754Operating expenses:Technology and development


7,736



7,909



8,060



9,501



8,856



8,692



9,142



9,546Marketing and advertising


11,254



13,317



12,063



15,707



14,921



15,065



14,240



17,399General and administrative


6,999



6,865



7,171



7,896



7,563



6,777



10,229



7,971Amortization of acquired intangible assets


5,941



5,945



5,946



5,947



4,058



4,055



4,052



4,052Total operating expenses


31,930



34,036



33,240



39,051



35,398



34,589



37,663



38,968Income from operations


4,742



3,668



6,551



759



6,565



8,708



7,902



8,786Other income (expense):Interest expense


(3,331
)


(2,873
)


(3,123
)


(3,028
)


(1,841
)


(1,515
)


(1,428
)


(1,355
)Interest income


157



274



201



240



131



567



48



46Other income (expense), net


3



(2
)


(19
)


10



8



2



4



7Income (loss) before income taxes


1,571



1,067



3,610



(2,019
)


4,863



7,762



6,526



7,484Income tax benefit (expense)


(609
)


(790
)


(1,349
)


903



(1,360
)


(3,082
)


(2,485
)


1,587Net income (loss)

$
962


$
277


$
2,261


$
(1,116
)

$
3,503


$
4,680


$
4,041


$
9,071Net income per share:Basic

$
0.03


$
0.01


$
0.06


$
(0.03
)

$
0.09


$
0.12


$
0.11


$
0.22Diluted

$
0.03


$
0.01


$
0.06


$
(0.03
)

$
0.09


$
0.12


$
0.10


$
0.20Weighted average shares outstandingBasic


38,047



38,070



38,127



38,199



38,226



38,287



38,327



40,857Diluted


38,428



38,500



38,584



38,757



39,139



40,159



41,059



45,458  49




---



##### Table of Contents



Three Months EndedMarch 31,


June 30,


September 30,


December 31,


March 31,


June 30,


September 30,


December 31,2008


2008


2008


2008


2009


2009


2009


2009Consolidated Statements of Operations Data:Revenues:Subscription revenues


91.0
%


92.9
%


92.3
%


91.1
%


92.4
%


92.9
%


92.3
%


91.8
%Product and other revenues


9.0



7.1



7.7



8.9



7.6



7.1



7.7



8.2Total revenues


100.0



100.0



100.0



100.0



100.0



100.0



100.0



100.0Cost of revenues:Cost of subscription revenues


20.0



19.5



17.7



20.0



18.3



18.3



17.6



17.4Cost of product and other revenues


2.0



2.0



2.8



4.1



2.9



2.4



2.4



3.2Total cost of revenues


22.0



21.5



20.5



24.1



21.2



20.7



20.0



20.6Gross profit


78.0



78.5



79.5



75.9



78.8



79.3



80.0



79.4Operating expenses:Technology and development


16.5



16.5



16.1



18.1



16.7



15.9



16.0



15.9Marketing and advertising


23.9



27.7



24.1



30.0



28.0



27.6



25.0



28.9General and administrative


14.9



14.3



14.3



15.1



14.2



12.4



18.0



13.3Amortization of acquired intangible assets


12.6



12.4



11.9



11.3



7.6



7.4



7.1



6.7Total operating expenses


67.9



70.9



66.4



74.5



66.5



63.3



66.1



64.8Income (loss) from operations


10.1



7.6



13.1



1.4



12.3



16.0



13.9



14.6Other income (expense):Interest expense


(7.1
)


(6.0
)


(6.3
)


(5.7
)


(3.5
)


(2.8
)


(2.5
)


(2.2
)Interest income


0.3



0.6



0.4



0.5



0.3



1.0



0.1



0.1Other income (expense), net


0.0



0.0



0.0



0.0



0.0



0.0



0.0



0.0Income (loss) before income taxes


3.3



2.2



7.2



(3.8
)


9.1



14.2



11.5



12.5Income tax benefit (expense)


(1.3
)


(1.6
)


(2.7
)


1.7



(2.5
)


(5.6
)


(4.4
)


2.6Net income (loss)


2.0



0.6



4.5



(2.1
)


6.6



8.6



7.1



15.1     Three Months EndedMarch 31,


June 30,


September 30,


December 31,


March 31,


June 30,


September 30,


December 31,2008


2008


2008


2008


2009


2009


2009


2009(Dollars in thousands, except subscriber acquisition cost and
    average monthly revenue per subscriber)Other Financial Data:Adjusted EBITDA

$
16,138


$
15,036


$
17,888


$
13,583


$
16,504


$
18,443


$
17,931


$
18,707Free cash flow


10,119



7,736



10,163



3,694



8,048



6,704



9,096



5,765Stock-based compensation expense included in:Cost of subscription revenues

$
18


$
22


$
20


$
20


$
29


$
32


$
17


$
18Technology and development


187



317



287



341



475



360



388



408Marketing and advertising


33



73



74



74



88



81



104



97General and administrative


1,051



707



720



728



934



804



953



686Total stock-based compensation expense

$
1,289


$
1,119


$
1,101


$
1,163


$
1,526


$
1,277


$
1,462


$
1,209 50




---



##### Table of Contents



Three Months EndedMarch 31,


June 30,


September 30,


December 31,


March 31,


June 30,


September 30,


December 31,2008


2008


2008


2008


2009


2009


2009


2009(Dollars in thousands, except subscriber acquisition cost and
    average monthly revenue per subscriber)Other Data:Total subscribers


845,697



861,235



893,882



913,683



959,411



990,959



1,028,180



1,066,123Subscriber additions


145,755



127,035



139,486



143,769



188,561



160,394



159,795



165,241Monthly churn


4.5
%


3.8
%


3.6
%


4.0
%


4.3
%


3.8
%


3.6
%


3.6
%Subscriber acquisition cost

$
59.95


$
83.91


$
66.22


$
79.26


$
62.23


$
73.27


$
70.55


$
85.21Average monthly revenue per subscriber

$
15.68


$
16.19


$
16.33


$
16.45


$
16.46


$
16.42


$
16.48


$
16.67   Selected Consolidated
    Financial Data
  Three Months EndedMarch 31,


June 30,


September 30,


December 31,


March 31,


June 30,


September 30,


December 31,2008


2008


2008


2008


2009


2009


2009


2009(In thousands)Reconciliation of adjusted EBITDA and free cash flow to net
    income (loss):Net income (loss)

$
962


$
277


$
2,261


$
(1,116
)

$
3,503


$
4,680


$
4,041


$
9,071Interest expense, net


3,174



2,599



2,922



2,788



1,710



948



1,380



1,309Income tax (benefit) expense


609



790



1,349



(903
)


1,360



3,082



2,485



(1,587
)Depreciation expense


2,708



2,712



2,733



2,579



2,643



2,687



2,762



2,844Amortization expense


7,399



7,537



7,503



7,607



5,770



5,771



5,805



5,868Stock-based compensation


1,289



1,119



1,101



1,163



1,526



1,277



1,462



1,209Other (income) expense, net


(3
)


2



19



(10
)


(8
)


(2
)


(4
)


(7
)Impairment of intangible assets














1,475















Adjusted EBITDA

$
16,138


$
15,036


$
17,888


$
13,583


$
16,504


$
18,443


$
17,931


$
18,707Capitalization of content database costs


(1,690
)


(1,960
)


(2,733
)


(2,582
)


(1,786
)


(1,886
)


(2,183
)


(3,543
)Purchase of property and equipment


(2,324
)


(2,961
)


(2,073
)


(4,263
)


(2,605
)


(3,546
)


(1,415
)


(5,796
)Cash paid for interest


(1,995
)


(2,377
)


(2,834
)


(2,862
)


(4,028
)


(1,388
)


(1,208
)


(1,116
)Cash paid for income taxes


(10
)


(2
)


(85
)


(182
)


(37
)


(4,919
)


(4,029
)


(2,487
)Free cash flow

$
10,119


$
7,736


$
10,163


$
3,694


$
8,048


$
6,704


$
9,096


$
5,765   Liquidity
    and Capital Resources
  Form S-1 No. 333-
   51




---



##### Table of Contents




    the development of new services;
    market acceptance of our services;
    the levels of advertising and promotion required to retain and
    acquire subscribers;
    the launch of additional services and improvement of our
    competitive position in the marketplace;
    the expansion of our development and marketing organizations;
    the establishment of additional offices in the United States and
    worldwide and the building of infrastructure necessary to
    support our growth; and  
    our relationships with suppliers and clients.      Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec, 6, 2007


Year Endedthrough


through


December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009(In thousands)Net cash provided by (used for):Operating activities

$
31,311


$
6,222


$
55,245


$
67,649Investing activities


(21,163
)


(281,505
)


(20,586
)


(22,760
)Financing activities


(11,615
)


245,831



(6,814
)


15,303Increase (decrease) in cash and cash equivalents and short-term
    investments

$
(1,467
)

$
(29,452
)

$
27,845


$
60,192   Cash
    Flow Analysis
  Sources
    and uses of cash
   52




---



##### Table of Contents



Net cash
    provided by operating activities
      Net cash
    used in investing activities
      Net cash
    provided by (used in) financing activities
     53




---



##### Table of Contents



Contractual
    obligations
    Payments Due by PeriodLess than


1-3


4-5


AfterTotal


1 Year


Years


Years


5 Years(In thousands)Long-term debt

$
100,025


$
28,416


$
71,609


$



$
Interest on Long-Term Debt(1)


8,133



3,412



4,721







Operating leases


12,129



2,420



4,285



3,213



2,211Total contractual cash obligations(2)

$
120,287


$
34,248


$
80,615


$
3,213


$
2,211     (1)
    
    Interest on Long-Term Debt represents estimated quarterly
    interest payments assuming that interest rates in effect at
    December 31, 2009 remain constant and all debt is
    outstanding until its due dates. As our long-term debt has
    variable interest rates (for example, the interest rate was 7.4%
    at December 31, 2008 but was 4.0% as of December 31,
    2009), actual payments may vary due to changes in LIBOR and
    prime. See Note 6 to our consolidated financial statements
    included in this Annual Report for further details.(2)
    
    Amounts exclude uncertain tax position liability of
    $0.6 million, for which timing of payments are not
    determinable.    Long-term
    debt
       54




---



##### Table of Contents



Interest
    rate cap contracts
    Off-balance
    sheet arrangements
    Indemnifications
  and/or
  Recent
    Accounting Pronouncements
    The FASB Accounting Standards
    Codification and the Hierarchy of Generally Accepted Accounting
    Principles,
   55




---



##### Table of Contents



Item 7A.
    Quantitative
    and Qualitative Disclosures about Market Risk  Quantitative
    and Qualitative Disclosures about Market Risk
                Item 8.
    Financial
    Statements and Supplementary Data  page F-1.
 56




---



##### Table of Contents



Item 9.
    Changes
    in and Disagreements with Accountants on Accounting and
    Financial Disclosure    Item 9A.
    Controls
    and Procedures  (a)
    Evaluation
    of Disclosure Controls and Procedures  Rules 13a-15(e) 15d-15(e)
    (b)
    Managements
    Annual Report on Internal Control Over Financial
    Reporting    (c)
    Changes
    in Internal Control Over Financial Reporting    Item 9B.
    Other
    Information   PART III  Item 10.
    Directors,
    Executive Officers and Corporate Governance   57




---



##### Table of Contents



http://www.ancestry.com
          Form 8-K
  Item 11.
    Executive
    Compensation      Item 12.
    Security
    Ownership of Certain Beneficial Owners and Management and
    Related Stockholder Matters  Equity
    Compensation Plan Information
    CA

B

Number of Securities RemainingNumber of Securities to be

Weighted Average

Available for Future IssuanceIssued Upon exercise of

Exercise Price of

Under Equity CompensationOutstanding Options,

Outstanding Options,

Plans (Excluding SecuritiesPlan Category

Warrants and Rights

Warrants and Rights

Reflected in Column A)Equity compensation plans approved by security holders


10,373,290
(1)

$
5.29



2,120,146
(2)Equity compensation plans not approved by security holders










Total


10,373,290


$
5.29



2,120,146     (1)
    
    Consists of awards granted under the 2009 Stock Incentive Plan,
    the Generations Holding, Inc. 2008 Stock Purchase and Option
    Plan, the MyFamily.com, Inc. 2004 Stock Plan, the MyFamily.com,
    Inc. Executive Stock Plan and the MyFamily.com, Inc. 1998 Stock
    Plan.(2)
    
    The 2009 Stock Incentive Plan is subject to automatic annual
    increase on the first day of each fiscal year beginning in 2010
    and thereafter by a number of shares of common stock equal to 4%
    of the number of outstanding shares of common stock on the last
    day of the immediately preceding fiscal year, or such lesser
    number of shares of common stock prescribed by the Board of
    Directors with respect to a particular calendar year. It is also
    subject to increase by the number of shares that cease to be
    subject to awards under the other 58




---



##### Table of Contents



option and incentive plans (other than by reason of exercise or
    settlement of the awards to the extent they are exercised for or
    settled in vested and non-forfeitable shares of common stock).    Item 13.
    Certain
    Relationships and Related Transactions and Director
    Independence    Item 14.
    Principal
    Accountant Fees and Services   59




---



##### Table of Contents



PART IV  Item 15.
    Exhibits
    and Financial Statement Schedules                        Regulation S-K).
  Incorporated by ReferenceExhibit









Exhibit

FiledNumber

Exhibit Description

Form

File No.

Filing Date

Number

Herewith3
.1

Amended and Restated Certificate of Incorporation

S-1/A

333-160986

Nov. 2, 2009


3
.23
.2

Amended and Restated Bylaws

S-1/A

333-160986

Oct. 20, 2009


3
.24
.1

Form of Common Stock Certificate

S-1/A

333-160986

Oct. 6, 2009


4
.110
.1

MyFamily.com, Inc. 1998 Stock Plan.

S-1/A

333-160986

Sept. 15, 2009


10
.110
.2

MyFamily.com, Inc. 2004 Stock Plan.

S-1/A

333-160986

Sept. 15, 2009


10
.210
.3

MyFamily.com, Inc. Executive Stock Plan.

S-1/A

333-160986

Sept. 15, 2009


10
.310
.4

Generations Holding, Inc. 2008 Stock Purchase and Option Plan.

S-1/A

333-160986

Sept. 15, 2009


10
.410
.5

Ancestry.com Inc. 2009 Stock Incentive Plan.

S-1/A

333-160986

Sept. 15, 2009


10
.510
.6

MyFamily.com, Inc. 1998 Stock Plan Stock Option Agreement.

S-1/A

333-160986

Sept. 15, 2009


10
.610
.7

MyFamily.com, Inc. 2004 Stock Plan Stock Option Agreement.

S-1/A

333-160986

Sept. 15, 2009


10
.710
.8

MyFamily.com, Inc. Executive Stock Plan Stock Option Agreement.

S-1/A

333-160986

Sept. 15, 2009


10
.810
.9

Generations Holding, Inc. 2008 Stock Purchase and Option Plan
    Stock Option Agreement.

S-1/A

333-160986

Sept. 15, 2009


10
.910
.10

Generations Holding, Inc. 2008 Stock Purchase and Option Plan
    Stock Option Agreement for
    Non-U.S.
    Employees.

S-1/A

333-160986

Sept. 15, 2009


10
.1010
.11

Ancestry.com Inc. Form of Grant Notice for 2009 Stock Incentive
    Plan  Restricted Stock Units.

S-1/A

333-160986

Sept. 15, 2009


10
.11 60




---



##### Table of Contents



Incorporated by ReferenceExhibit









Exhibit

FiledNumber

Exhibit Description

Form

File No.

Filing Date

Number

Herewith10
.12

Ancestry.com Inc. Form of Grant Notice for 2009 Stock Incentive
    Plan  Nonqualified Stock Option.

S-1/A

333-160986

Sept. 15, 2009


10
.1210
.13

Ancestry.com Inc. Form of Grant Notice for 2009 Stock Incentive
    Plan  Incentive Stock Options.

S-1/A

333-160986

Sept. 15, 2009


10
.1310
.14

Registration Rights Agreement, by and among Generations Holding,
    Inc., certain Spectrum Group Stockholders and certain Other
    Stockholders, dated December 5, 2007.

S-1/A

333-160986

Sept. 15, 2009


10
.1410
.15

Stockholders Agreement, by and among Generations Holding, Inc.,
    certain Spectrum Group Stockholders and certain Other
    Stockholders, dated December 5, 2007.

S-1/A

333-160986

Sept. 15, 2009


10
.1510
.16

Credit and Guaranty Agreement, by and among The Generations
    Network, Inc., certain guarantors and certain lending parties,
    dated December 7, 2007.

S-1/A

333-160986

Sept. 15, 2009


10
.1610
.17

First Amendment to Credit and Guaranty Agreement, dated
    March 31, 2008.

S-1/A

333-160986

Sept. 15, 2009


10
.1710
.18

Second Amendment to Credit and Guaranty Agreement, dated
    July 16, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.1810
.19

Form of Indemnification Agreement to be entered into with each
    director and executive officer.

S-1/A

333-160986

Oct. 20, 2009


10
.1910
.20

Employment Letter by and between Timothy Sullivan and
    Ancestry.com Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2010
.21

Employment Letter by and between Howard Hochhauser and
    Ancestry.com Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2110
.22

Employment Letter by and between Joshua Hanna and Ancestry.com
    Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2210
.23

Employment Letter by and between David Rinn and Ancestry.com
    Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2310
.24

Employment Letter by and between William Stern and Ancestry.com
    Inc., dated June 29, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2410
.25

Employment Letter by and between Christopher Tracy and
    Ancestry.com Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2510
.26

Employment Letter by and between Andrew Wait and Ancestry.com
    Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.26 61




---



##### Table of Contents



Incorporated by ReferenceExhibit









Exhibit

FiledNumber

Exhibit Description

Form

File No.

Filing Date

Number

Herewith10
.27

Employment Letter by and between Michael Wolfgramm and
    Ancestry.com Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2710
.28

Ancestry.com Inc. Form of Grant Notice for 2009 Stock Incentive
    Plan  Nonqualified Stock Options for
    Non-Employee
    Directors.

S-1/A

333-160986

Nov. 2, 2009


10
.2810
.29

Generations Holdings, Inc. 2008 Stock Purchase and Option Plan
    Stock Option Agreement for non-employee Directors.

S-1/A

333-160986

Nov. 2, 2009


10
.2921
.1

Subsidiaries of the Registrant











X23
.1

Consent of Independent Registered Public Accounting Firm











X31
.1*

Certification of Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002











X31
.2*

Certification of Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002











X32
.1*

Certifications of Chief Executive Officer and Chief Financial
    Officer Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002











X     *
    
    These certifications are not deemed filed with the SEC and are
    not to be incorporated by reference in any filing we make under
    the Securities Act of 1933 or the Securities Exchange Act of
    1934, irrespective of any general incorporation language in any
    filings.
    
    Indicates a management contract or compensatory plan 62




---



##### 



INDEX TO
    CONSOLIDATED FINANCIAL STATEMENTS
   
 PageReport of Independent Registered Public
    Accounting Firm


F-2Consolidated Balance Sheets


F-3Consolidated Statements of Operations


F-4Consolidated Statements of Stockholders
    Equity


F-5Consolidated Statements of Cash Flows


F-6Notes to Consolidated Financial Statements


F-7   F-1




---



##### Table of Contents



REPORT OF
    INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM          
    F-2




---



##### Table of Contents



ANCESTRY.COM
    INC.
    CONSOLIDATED BALANCE SHEETS  December 31,2008


2009(In thousands, except share data)ASSETSCurrent assets:Cash and cash equivalents

$
40,121


$
66,941Restricted cash


6,572



2,181Short-term investments






33,331Accounts receivable, net of allowances of $394 and $472 at
    December 31, 2008 and 2009, respectively


5,155



5,860Income tax receivable


3,089



2,017Deferred income taxes


7,582



8,797Prepaid expenses and other current assets


3,674



5,380Total current assets


66,193



124,507Property and equipment, net


17,004



19,430Content database costs, net


47,244



49,650Intangible assets, net


57,701



41,484Goodwill


285,466



285,466Other assets


4,367



2,811Total assets

$
477,975


$
523,348LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable

$
4,827


$
6,877Accrued expenses


19,536



18,850Escrow liability


5,682



1,763Deferred revenues


61,178



69,711Current portion of long-term debt


21,457



28,416Total current liabilities


112,680



125,617Long-term debt, less current portion


111,543



71,609Deferred income taxes


33,710



30,117Other long-term liabilities


254



1,115Total liabilities


258,187



228,458Commitments and contingenciesStockholders equity:Preferred stock, $0.001 par value; 5,000,000 shares
    authorized; no shares issued and outstanding






Common stock, $0.001 par value; 175,000,000 shares
    authorized; 38,216,510 and 42,416,330 shares issued and
    outstanding at December 31, 2008 and 2009, respectively


38



42Additional paid-in capital


218,669



272,513Accumulated other comprehensive income (loss)






(41
)Retained earnings


1,081



22,376Total stockholders equity


219,788



294,890Total liabilities and stockholders equity

$
477,975


$
523,348    F-3




---



##### Table of Contents



ANCESTRY.COM
    INC.





CONSOLIDATED STATEMENTS OF OPERATIONS  Predecessor


SuccessorPeriod from


Period fromJan 1, 2007


Dec. 6, 2007through


through


Year Ended December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009(In thousands, except share and per share data)Revenues:Subscription revenues

$
141,141


$
11,692


$
181,391


$
207,707Product and other revenues


12,269



1,278



16,200



17,195Total revenues


153,410



12,970



197,591



224,902Costs of revenues:Cost of subscription revenues


33,590



2,462



38,187



40,183Cost of product and other revenues


2,552



500



5,427



6,140Total cost of revenues


36,142



2,962



43,614



46,323Gross profit


117,268



10,008



153,977



178,579Operating expenses:Technology and development


31,255



3,517



33,206



36,236Marketing and advertising


42,400



3,157



52,341



61,625General and administrative


20,723



2,142



28,931



32,540Amortization of acquired intangible assets


2,132



1,542



23,779



16,217Transaction related expenses


9,530











Total operating expenses


106,040



10,358



138,257



146,618Income (loss) from operations


11,228



(350
)


15,720



31,961Other income (expense):Interest expense


(756
)


(1,146
)


(12,355
)


(6,139
)Interest income


2,051



289



872



792Other income (expense), net


266



7



(8
)


21Income (loss) before income taxes


12,789



(1,200
)


4,229



26,635Income tax expense


(5,018
)


(103
)


(1,845
)


(5,340
)Net income (loss)

$
7,771


$
(1,303
)

$
2,384


$
21,295Net income per common shareBasic









$
0.06


$
0.55Diluted









$
0.06


$
0.51Weighted average common shares outstandingBasic










38,112,782



38,930,043Diluted










38,529,270



41,532,684    F-4




---



##### Table of Contents



ANCESTRY.COM
    INC.
    CONSOLIDATED STATEMENTS OF STOCKHOLDERS EQUITY  Accumulated


RetainedConvertible








Additional


Other


Earnings


TotalPreferred Stock


Common Stock


Paid-In


Comprehensive


(Accumulated


StockholdersShares


Amount


Shares


Amount


Capital


Income (Loss)


Deficit)


Equity(In thousands, except share data)PredecessorBalance as of December 5, 2007


62,406,411


$
62



34,340,389


$
34


$
135,103


$
(30
)

$
(77,624
)

$
57,545SuccessorElimination of the predecessor equity structure


(62,406,411
)


(62
)


(34,340,389
)


(34
)


(135,103
)


30



77,624



(57,545
)Investment in the predecessor










38,045,312



38



213,569











213,607Balance as of December 6, 2007





$




38,045,312


$
38


$
213,569


$



$



$
213,607Stock-based compensation


















77











77Comprehensive loss:Unrealized gain on short-term investments, net of tax






















1







1Net loss


























(1,303
)


(1,303
)Total comprehensive loss






























(1,302
)Balance as of December 31, 2007





$




38,045,312


$
38


$
213,646


$
1


$
(1,303
)

$
212,382Exercise of stock options, net










194,948







654











654Write-off of deferred tax asset


















(36
)










(36
)Stock-based compensation


















4,634











4,634Stock option adjustments affecting goodwill


















239











239Repurchase of common stock and stock awards










(23,750
)






(468
)










(468
)Comprehensive income:Unrealized loss on short-term investments, net of tax






















(1
)






(1
)Net income


























2,384



2,384Total comprehensive income






























2,383Balance as of December 31, 2008





$




38,216,510


$
38


$
218,669


$



$
1,081


$
219,788Exercise of stock options, net










143,937







620











620Issuance of common stock, net of costs










4,074,061



4



47,754











47,758Income tax benefit from stock option exercises


















45











45Stock-based compensation


















5,525











5,525Repurchase of common stock










(18,178
)






(100
)










(100
)Comprehensive income:Unrealized loss on short-term investments, net of tax






















(41
)






(41
)Net income


























21,295



21,295Total comprehensive income






























21,254Balance as of December 31, 2009





$




42,416,330


$
42


$
272,513


$
(41
)

$
22,376


$
294,890    F-5




---



##### Table of Contents



ANCESTRY.COM
    INC.



CONSOLIDATED STATEMENTS OF CASH FLOWS Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007through


through


Year Ended December 31,Dec. 5, 2007


Dec 31, 2007


2008


2009(In thousands)Operating activities:Net income (loss)

$
7,771


$
(1,303
)

$
2,384


$
21,295Adjustments to reconcile net income (loss) to net cash provided
    by operating activities:Depreciation


10,594



754



10,732



10,936Amortization of content


4,973



432



6,267



6,997Amortization of intangible assets


2,121



1,542



23,779



16,217Amortization of deferred financing costs










871



862Impairment of content databases










1,475



Deferred gain on sale-leaseback


(591
)










Deferred income taxes


449



336



1,653



(4,763
)Stock-based compensation expense


898



77



4,672



5,474In-process research and development acquired






1,300







Changes in operating assets and liabilities, net of effects of
    acquisitions:Accounts receivable


(325
)


(1,116
)


(389
)


(705
)Restricted cash


(208
)


16



2,643



472Prepaid expenses and other assets


(310
)


(279
)


(1,732
)


(1,012
)Income tax receivable


(176
)


77



93



1,072Accounts payable and accrued expenses


148



5,040



(1,004
)


1,410Deferred revenues


5,849



(1,426
)


4,448



8,533Other long-term liabilities


118



772



(647
)


861Net cash provided by operating activities


31,311



6,222



55,245



67,649Investing activities:Capitalization of content database costs


(10,591
)


(1,129
)


(8,965
)


(9,398
)Purchases of property and equipment


(10,572
)


(852
)


(11,621
)


(13,362
)Purchases of short-term investments


(44,995
)










(33,372
)Proceeds from sale and maturity of short-term investments


75,980







362



Net cash used in acquisition of the predecessor, including
    transaction costs






(279,524
)






Net cash provided by (used in) investing activities


9,822



(281,505
)


(20,224
)


(56,132
)Financing activities:Proceeds from exercise of stock options


1,681







654



620Proceeds from issuance of common stock














47,758Principal payments on debt


(15,000
)






(7,000
)


(32,975
)Proceeds from issuance of debt, net






136,082







Proceeds from issuance of common stock in connection with
    acquisition of the predecessor






109,749







Repurchase of common stock










(468
)


(100
)Reduction in income taxes payable as a result of stock option
    exercises


1,704











Net cash provided by (used in) financing activities


(11,615
)


245,831



(6,814
)


15,303Net increase (decrease) in cash and cash equivalents


29,518



(29,452
)


28,207



26,820Cash and cash equivalents at beginning of period


11,848



41,366



11,914



40,121Cash and cash equivalents at end of period

$
41,366


$
11,914


$
40,121


$
66,941Supplemental disclosures of cash flow information:Cash paid for interest

$
756


$



$
10,068


$
7,740Cash paid for income taxes


3,400







279



11,472Supplemental disclosures of noncash investing and financing
    activities:Noncash exchange of equity instruments in acquisition of the
    predecessor






103,858







Unrealized loss on short-term investments














(41
)Capitalization of stock-based compensation


3







9



5    F-6




---



##### Table of Contents



ANCESTRY.COM
    INC.



NOTES TO
    CONSOLIDATED FINANCIAL STATEMENTS  1.
    NATURE
    OF OPERATIONS      Basis
    of Presentation
      Use of
    Estimates
     F-7




---



##### Table of Contents



Revenue
    Recognition and Cost of Revenues
      pay-per-view
       F-8




---



##### Table of Contents



Predecessor


SuccessorPeriod from Jan. 1,


Period from


Year Ended


Year Ended2007 through


Dec. 6, 2007 through


Dec. 31,


Dec. 31,Dec. 5, 2007


Dec 31, 2007


2008


2009Balance at beginning of period

$
371


$
401


$
270


$
394Provision


1,132



5



1,531



1,472Write-offs


(1,102
)


(136
)


(1,407
)


(1,394
)Balance at end of period

$
401


$
270


$
394


$
472   Certain
    Risks and Concentrations
    Cash
    and Cash Equivalents
    Restricted
    Cash
    Short-Term
    Investments
  available-for-sale
  Accounts
    Receivable
   F-9




---



##### Table of Contents



Property
    and Equipment
    Inventory
  first-in,
  Content
    Database Costs
    Software
    Development Costs
      Impairment
    of Long-Lived Assets
   F-10




---



##### Table of Contents



Goodwill
    and Other Intangible Assets
      Income
    Taxes
      Comprehensive
    Income (Loss)
  available-for-sale
     F-11




---



##### Table of Contents



Stock-Based
    Compensation
      Advertising
    Research
    and Development
    Net
    Income Per Common Share
    Year Ended December 31,2008


2009Basic net income per common share:Net income

$
2,384


$
21,295Shares used in computation:Weighted-average common shares outstanding


38,113



38,930Basic net income per common share

$
0.06


$
0.55Diluted net income per common share:Net income

$
2,384


$
21,295Shares used in computation:Weighted-average common shares outstanding


38,113



38,930Dilutive stock options


416



2,603Weighted-average number of diluted common shares


38,529



41,533Diluted net income per common share

$
0.06


$
0.51  F-12




---



##### Table of Contents



Recent
    Accounting Pronouncements
    The FASB Accounting Standards
    Codification and the Hierarchy of Generally Accepted Accounting
    Principles
    2.
    CASH,
    CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS    December 31,2008


2009Cash

$
26,616


$
5,159Cash equivalents:Money market funds


13,505



61,782Total cash and cash equivalents

$
40,121


$
66,941Short-term investments:U.S. agency securities

$



$
33,331    F-13




---



##### Table of Contents



available-for-sale.
  3.
    ACQUISITIONS
    AND DISPOSITIONS    Cash paid (net of predecessor cash used of $28,712)

$
249,132Fair value of successor common stock issued to predecessor
    stockholders


95,695Transaction costs


1,764Fair value of stock options exchanged


8,163Total

$
354,754     Risk-free interest rate


2.90
%Expected term (in years)


2.0Expected stock price volatility


65
%Expected dividend yield


  F-14




---



##### Table of Contents



Assets acquired:Cash and cash equivalents, restricted cash and investments

$
19,338Other current assets


10,483Property and equipment


16,017Other assets


213Acquired intangible assets:Capitalized content


45,337Subscriber relationships and contracts


35,600Core technology


21,700Trade name and trademarks


25,700In-process technology


1,300Goodwill


285,019Total assets


460,707Liabilities assumed:Deferred revenues


(58,156
)Current liabilities


(22,816
)Long-term liabilities


(24,981
)Total net assets acquired

$
354,754          F-15




---



##### Table of Contents



4.
    PROPERTY
    AND EQUIPMENT    EstimatedUseful


December 31,Lives


2008


2009Computer equipment


3 years


$
21,234


$
29,657Purchased and internal use software


3 years



5,623



9,993Furniture and fixtures


3 years



1,023



1,092Leasehold improvements


5 years



610



77128,490



41,513Accumulated depreciation and amortization






(11,486
)


(22,083
)$
17,004


$
19,430   5.
    INTANGIBLE
    ASSETS AND CONTENT DATABASE COSTS    Balance at December 31, 2007

$
285,019Adjustments related to 2007 acquisition


447Balance at December 31, 2008

$
285,466     EstimatedUseful


December 31,Lives


2008


2009Subscriber relationships and contracts


6-8 years


$
35,600


$
35,600Core technology


4-5 years



21,700



21,700Trademarks and trade names


6 years



25,700



25,700Other intangible assets


1 year



22



2283,022



83,022Accumulated amortization






(25,321
)


(41,538
)Net intangible assets





$
57,701


$
41,484Capitalized content database costs


10 years


$
46,122


$
54,863Capitalized content database costs not yet placed in service






7,793



8,45553,915



63,318Accumulated amortization






(6,671
)


(13,668
)Net content database costs





$
47,244


$
49,650      F-16




---



##### Table of Contents



6.
    LONG-TERM
    DEBT  and/or 1 2
           F-17




---



##### Table of Contents



3-month 3-month
    December 31,2008


2009Term loan

$
133,000


$
100,025Current portion of long-term debt


(21,457
)


(28,416
)Long-term debt

$
111,543


$
71,609     2010

$
28,4162011


11,5502012


60,059$
100,025   7.
    STOCKHOLDERS
    EQUITY  Common
    Stock
  1-for-2 1-for-2
  Form S-1
  Preferred
    Stock
    Warrants
   F-18




---



##### Table of Contents



8.
    STOCK
    OPTION PLANS    1 48
    2007

2008

2009Weighted



Weighted



WeightedAverage



Average



AverageExercise



Exercise



ExerciseShares

Price

Shares

Price

Shares

PriceOutstanding at beginning of year


7,279,863


$
3.74



5,712,204


$
4.42



8,822,526


$
4.88Granted


352,750



4.70



4,188,121



5.42



1,898,909



7.15Exercised


(1,496,513
)


1.12



(194,948
)


3.34



(143,937
)


4.31Canceled


(423,896
)


4.66



(882,851
)


4.78



(204,208
)


5.44Outstanding at end of year


5,712,204



4.42



8,822,526



4.88



10,373,290



5.29Exercisable at end of year


3,429,111



4.30



3,996,892



4.39



6,298,343



4.71Vested and expected to vest


4,279,793



4.36



8,370,492



4.86



10,181,408



5.26  F-19




---



##### Table of Contents



December 31,2007

2008

2009Expected volatility


65
%


50
%


50
%Expected term (in years)


4.0



4.0



4.2Weighted average risk-free interest rate


4.7
%


2.3
%


1.9
%Weighted average fair value of the underlying common stock

$
4.70


$
5.42


$
7.15Expected dividends










       Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007


Year Endedthrough


through


December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009Cost of subscription revenues

$
73


$
3


$
80


$
96Technology and development


260



23



1,132



1,631Marketing and advertising


279



27



254



370General and administrative


286



24



3,206



3,377Total stock-based compensation expense

$
898


$
77


$
4,672


$
5,474    F-20




---



##### Table of Contents



9.
    EMPLOYEE
    BENEFIT PLANS  48-month
    10.
    RELATED-PARTY
    TRANSACTIONS    11.
    INCOME
    TAXES    Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007


Year Endedthrough


through


December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009Income (loss) before income taxes:United States

$
12,159


$
(1,266
)

$
4,336


$
26,374Foreign


630



66



(107
)


261$
12,789


$
(1,200
)

$
4,229


$
26,635  F-21




---



##### Table of Contents



Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007


Year Endedthrough


through


December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009Current income tax:Federal

$
4,210


$
441


$



$
8,577State


(173
)


1



3



1,095Foreign


180



16



414



476Total


4,217



458



417



10,148Deferred income tax:Federal


246



(355
)


1,238



(4,086
)State


555







190



(722
)Total


801



(355
)


1,428



(4,808
)Provision for income taxes

$
5,018


$
103


$
1,845


$
5,340       Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007


Year Endedthrough


through


December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009Computed expected tax expense

$
4,476


$
(420
)

$
1,480


$
9,322State income taxes, net of federal tax effect


266



189



199



602Foreign income taxes


(41
)


(7
)


452



385Recognition of net operating loss carryforwards














(5,168
)Tax exempt municipal interest


(410
)


(31
)






Non-deductible acquisition costs


1,024







(725
)


Other


(297
)


372



439



199Provision for income taxes

$
5,018


$
103


$
1,845


$
5,340  F-22




---



##### Table of Contents



December 31,2008


2009Deferred tax assets:Deferred compensation

$
925


$
2,124Net operating loss carryforwards  U.S.


4,943



5,911Net operation loss carryforwards  Foreign


201



488Investment in subsidiary


498



Other accruals and reserves


1,378



1,472Valuation allowance


(201
)


(488
)Total gross deferred tax assets


7,744



9,507Deferred tax liabilities:Intangible assets


(31,394
)


(26,300
)Content in process


(2,071
)


(2,161
)Depreciation differences


(373
)


(2,098
)Other accruals and reserves


(34
)


(268
)Total gross deferred tax liabilities


(33,872
)


(30,827
)Net deferred tax liability

$
(26,128
)

$
(21,320
)           2008


2009Gross unrecognized tax benefits as of January 1,

$
543


$
543Decreases related to tax positions taken in prior years






(543
)Increases related to tax positions taken in current year






563Gross unrecognized tax benefits at December 31,

$
543


$
563    F-23




---



##### Table of Contents



non-U.S. income
  12.
    FAIR
    VALUE MEASUREMENTS    Level 1:
  Level 2:
  Level 3:
      Fair Value Measurement at ReportingDate UsingSignificantQuoted Prices in


Other


SignificantBalance at


Active Markets for


Observable


UnobservableDecember 31,


Identical Assets


Inputs


Inputs2008


(Level 1)


(Level 2)


(Level 3)Cash equivalents:Money market funds

$
13,505


$
13,505


$



$
Interest rate cap


2







2



Total assets

$
13,507


$
13,505


$
2


$
     Fair Value Measurement at ReportingDate UsingSignificantQuoted Prices in


Other


SignificantBalance at


Active Markets for


Observable


UnobservableDecember 31,


Identical Assets


Inputs


Inputs2009


(Level 1)


(Level 2)


(Level 3)Cash equivalents:Money market funds

$
61,782


$
61,782


$



$
Short-term investments


33,331



33,331







Interest rate cap


1







1



Total assets

$
95,114


$
95,113


$
1


$
  F-24




---



##### Table of Contents



13.
    COMMITMENTS
    AND CONTINGENCIES      Years Ending December 31,2010

$
2,4202011


2,3052012


1,9802013


1,5912014


1,622Thereafter


2,211Total minimum lease payments

$
12,129       10-year
 F-25




---



##### Table of Contents



14.
    GEOGRAPHIC
    INFORMATION      Predecessor


SuccessorPeriod from


Period fromJan. 1, 2007


Dec. 6, 2007through


through


Year Ended December 31,Dec. 5, 2007


Dec. 31, 2007


2008


2009United States

$
106,101


$
8,633


$
134,112


$
156,150United Kingdom


27,181



2,321



33,223



34,402All other countries


7,859



738



14,056



17,155Total subscription revenues

$
141,141


$
11,692


$
181,391


$
207,707   15.
    SUBSEQUENT
    EVENTS  Form 10-K
 F-26




---



##### Table of Contents



SIGNATURES
        By:
    /s/  Timothy
    Sullivan       Signature

Title

Date/s/  Timothy
    SullivanTimothy
    Sullivan

President, Chief Executive Officer and Director (Principal
    Executive Officer)

February 26, 2010/s/  Howard
    HochhauserHoward
    Hochhauser

Chief Financial Officer (Principal Financial and Accounting
    Officer)

February 26, 2010/s/  Victor
    ParkerVictor
    Parker

Director

February 26, 2010/s/  Benjamin
    SperoBenjamin
    Spero

Director

February 26, 2010/s/  Charles
    M. BoesenbergCharles
    M. Boesenberg

Director

February 26, 2010/s/  David
    GoldbergDavid
    Goldberg

Director

February 26, 2010/s/  Elizabeth
    NelsonElizabeth
    Nelson

Director

February 26, 2010/s/  Thomas
    LaytonThomas
    Layton

Director

February 26, 2010




---



##### Table of Contents



Incorporated by ReferenceExhibit









Exhibit

FiledNumber

Exhibit Description

Form

File No.

Filing Date

Number

Herewith3
.1

Amended and Restated Certificate of Incorporation

S-1/A

333-160986

Nov. 2, 2009


3
.23
.2

Amended and Restated Bylaws

S-1/A

333-160986

Oct. 20, 2009


3
.24
.1

Form of Common Stock Certificate

S-1/A

333-160986

Oct. 6, 2009


4
.110
.1

MyFamily.com, Inc. 1998 Stock Plan.

S-1/A

333-160986

Sept. 15, 2009


10
.110
.2

MyFamily.com, Inc. 2004 Stock Plan.

S-1/A

333-160986

Sept. 15, 2009


10
.210
.3

MyFamily.com, Inc. Executive Stock Plan.

S-1/A

333-160986

Sept. 15, 2009


10
.310
.4

Generations Holding, Inc. 2008 Stock Purchase and Option Plan.

S-1/A

333-160986

Sept. 15, 2009


10
.410
.5

Ancestry.com Inc. 2009 Stock Incentive Plan.

S-1/A

333-160986

Sept. 15, 2009


10
.510
.6

MyFamily.com, Inc. 1998 Stock Plan Stock Option Agreement.

S-1/A

333-160986

Sept. 15, 2009


10
.610
.7

MyFamily.com, Inc. 2004 Stock Plan Stock Option Agreement.

S-1/A

333-160986

Sept. 15, 2009


10
.710
.8

MyFamily.com, Inc. Executive Stock Plan Stock Option Agreement.

S-1/A

333-160986

Sept. 15, 2009


10
.810
.9

Generations Holding, Inc. 2008 Stock Purchase and Option Plan
    Stock Option Agreement.

S-1/A

333-160986

Sept. 15, 2009


10
.910
.10

Generations Holding, Inc. 2008 Stock Purchase and Option Plan
    Stock Option Agreement for
    Non-U.S.
    Employees.

S-1/A

333-160986

Sept. 15, 2009


10
.1010
.11

Ancestry.com Inc. Form of Grant Notice for 2009 Stock Incentive
    Plan  Restricted Stock Units.

S-1/A

333-160986

Sept. 15, 2009


10
.1110
.12

Ancestry.com Inc. Form of Grant Notice for 2009 Stock Incentive
    Plan  Nonqualified Stock Option.

S-1/A

333-160986

Sept. 15, 2009


10
.1210
.13

Ancestry.com Inc. Form of Grant Notice for 2009 Stock Incentive
    Plan  Incentive Stock Options.

S-1/A

333-160986

Sept. 15, 2009


10
.1310
.14

Registration Rights Agreement, by and among Generations Holding,
    Inc., certain Spectrum Group Stockholders and certain Other
    Stockholders, dated December 5, 2007.

S-1/A

333-160986

Sept. 15, 2009


10
.1410
.15

Stockholders Agreement, by and among Generations Holding, Inc.,
    certain Spectrum Group Stockholders and certain Other
    Stockholders, dated December 5, 2007.

S-1/A

333-160986

Sept. 15, 2009


10
.1510
.16

Credit and Guaranty Agreement, by and among The Generations
    Network, Inc., certain guarantors and certain lending parties,
    dated December 7, 2007.

S-1/A

333-160986

Sept. 15, 2009


10
.1610
.17

First Amendment to Credit and Guaranty Agreement, dated
    March 31, 2008.

S-1/A

333-160986

Sept. 15, 2009


10
.1710
.18

Second Amendment to Credit and Guaranty Agreement, dated
    July 16, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.18




---



##### Table of Contents



Incorporated by ReferenceExhibit









Exhibit

FiledNumber

Exhibit Description

Form

File No.

Filing Date

Number

Herewith10
.19

Form of Indemnification Agreement to be entered into with each
    director and executive officer.

S-1/A

333-160986

Oct. 20, 2009


10
.1910
.20

Employment Letter by and between Timothy Sullivan and
    Ancestry.com Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2010
.21

Employment Letter by and between Howard Hochhauser and
    Ancestry.com Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2110
.22

Employment Letter by and between Joshua Hanna and Ancestry.com
    Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2210
.23

Employment Letter by and between David Rinn and Ancestry.com
    Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2310
.24

Employment Letter by and between William Stern and Ancestry.com
    Inc., dated June 29, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2410
.25

Employment Letter by and between Christopher Tracy and
    Ancestry.com Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2510
.26

Employment Letter by and between Andrew Wait and Ancestry.com
    Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2610
.27

Employment Letter by and between Michael Wolfgramm and
    Ancestry.com Inc., dated July 20, 2009.

S-1/A

333-160986

Sept. 15, 2009


10
.2710
.28

Ancestry.com Inc. Form of Grant Notice for 2009 Stock Incentive
    Plan  Nonqualified Stock Options for
    Non-Employee
    Directors.

S-1/A

333-160986

Nov. 2, 2009


10
.2810
.29

Generations Holdings, Inc. 2008 Stock Purchase and Option Plan
    Stock Option Agreement for non-employee Directors.

S-1/A

333-160986

Nov. 2, 2009


10
.2921
.1

Subsidiaries of the Registrant











X23
.1

Consent of Independent Registered Public Accounting Firm











X31
.1*

Certification of Chief Executive Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002











X31
.2*

Certification of Chief Financial Officer Pursuant to
    Section 302 of the Sarbanes-Oxley Act of 2002











X32
.1*

Certifications of Chief Executive Officer and Chief Financial
    Officer Pursuant to Section 906 of the Sarbanes-Oxley Act
    of 2002











X     *
    
    These certifications are not deemed filed with the SEC and are
    not to be incorporated by reference in any filing we make under
    the Securities Act of 1933 or the Securities Exchange Act of
    1934, irrespective of any general incorporation language in any
    filings.
    
    Indicates a management contract or compensatory plan