Adobe 2010 Annual Report Download - page 41

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For instance, the SaaS business model we utilize in our Omniture business unit typically involves selling services on a
subscription basis pursuant to service agreements that are generally one to three years in length. Although many of our
service agreements contain automatic renewal terms, our customers have no obligation to renew their subscriptions for our
services after the expiration of their initial subscription period upon providing timely notice of non-renewal and we cannot
provide assurance that these subscriptions will be renewed at the same or higher level of service, if at all. Moreover, under
some circumstances, some of our customers have the right to cancel their service agreements prior to the expiration of the
terms of their agreements. We cannot be assured that we will be able to accurately predict future customer renewal rates. Our
customers’ renewal rates may decline or fluctuate as a result of a number of factors, including their satisfaction or
dissatisfaction with our services, the prices of our services, the prices of services offered by our competitors, mergers and
acquisitions affecting our customer base, reductions in our customers’ spending levels, or declines in consumer Internet
activity as a result of economic downturns or uncertainty in financial markets. If our customers do not renew their
subscriptions for our services or if they renew on less favorable terms to us, our revenues may decline.
We may not realize the anticipated benefits of past or future acquisitions, and integration of these acquisitions may disrupt
our business and management.
We have in the past and may in the future acquire additional companies, products or technologies. Recently, we
completed the acquisition of Omniture in October 2009 and completed the acquisition of Day in October 2010. We may not
realize the anticipated benefits of an acquisition and each acquisition has numerous risks. These risks include:
• difficulty in integrating the operations and personnel of the acquired company;
• difficulty in effectively integrating the acquired technologies, products or services with our current technologies,
products or services;
• difficulty in maintaining controls, procedures and policies during the transition and integration;
• entry into markets in which we have no or limited direct prior experience and where competitors in such markets
have stronger market positions;
• disruption of our ongoing business and distraction of our management and employees from other opportunities
and challenges;
• difficulty integrating the acquired company’ s accounting, management information, human resources and other
administrative systems;
• inability to retain key technical and managerial personnel of the acquired business;
• inability to retain key customers, distributors, vendors and other business partners of the acquired business;
• inability to achieve the financial and strategic goals for the acquired and combined businesses;
• inability to take advantage of anticipated tax benefits as a result of unforeseen difficulties in our integration
activities;
• incurring acquisition-related costs or amortization costs for acquired intangible assets that could impact our
operating results;
• potential additional exposure to fluctuations in currency exchange rates;
• potential impairment of our relationships with employees, customers, partners, distributors or third-party
providers of our technologies, products or services;
• potential failure of the due diligence processes to identify significant problems, liabilities or other shortcomings or
challenges of an acquired company or technology, including but not limited to, issues with the acquired
company’ s intellectual property, product quality or product architecture, data back-up and security, privacy
practices, revenue recognition or other accounting practices, employee, customer or partner issues or legal and
financial contingencies;
• unexpected changes in, or impositions of, legislative or regulatory requirements impacting the acquired business;
• exposure to litigation or other claims in connection with, or inheritance of claims or litigation risk as a result of, an
acquisition, including but not limited to, claims from terminated employees, customers, former stockholders or
other third parties;