Amazon.com 2001 Annual Report Download - page 22

patent law, trade secret protection and confidentiality and/or license agreements with our employees, customers,
partners and others to protect our proprietary rights. Effective trademark, service mark, copyright, patent and
trade secret protection may not be available in every country in which our products and services are made
available online. We also may not be able to acquire or maintain appropriate domain names in all countries in
which we do business. Furthermore, regulations governing domain names may not protect our trademarks and
similar proprietary rights. We may be unable to prevent third parties from acquiring domain names that are
similar to, infringe upon or diminish the value of our trademarks and other proprietary rights. Policing
unauthorized use of our proprietary rights is inherently difficult, and we may not be able to determine the
existence or extent of any such unauthorized use. The protection of our intellectual property may require the
expenditure of significant financial and managerial resources. Moreover, we cannot be certain that the steps we
take to protect our intellectual property will adequately protect our rights or that others will not independently
develop or otherwise acquire equivalent or superior technology or other intellectual property rights.
Third parties that license our proprietary rights may take actions that diminish the value of our proprietary
rights or reputation. In addition, the steps we take to protect our proprietary rights may not be adequate and third
parties may infringe or misappropriate our copyrights, trademarks, trade dress, patents and similar proprietary
rights. Other parties may claim that we infringed their proprietary rights. We have been subject to, and expect to
continue to be subject to, claims and legal proceedings regarding alleged infringement by us of the patents,
trademarks and other intellectual property rights of third parties. Such claims, whether or not meritorious, may
result in the expenditure of significant financial and managerial resources, injunctions against us or the
imposition of damages that we must pay. We may need to obtain licenses from third parties who allege that we
have infringed their rights, but such licenses may not be available on terms acceptable to us, or at all. In addition,
we may not be able to obtain or utilize on terms which are favorable to us, or at all, licenses or other rights with
respect to intellectual property we do not own in providing e-commerce services to third party sellers or other
companies under strategic alliance agreements.
We Have a Limited Operating History and Our Stock Price Is Highly Volatile
We have a relatively short operating history and, as an e-commerce company, we have a rapidly evolving
and unpredictable business model. The trading price of our common stock fluctuates significantly. Trading prices
of our common stock may fluctuate in response to a number of events and factors, such as:
‰general economic conditions,
‰changes in interest rates,
‰conditions or trends in the Internet and the e-commerce industry,
‰fluctuations in the stock market in general and market prices for Internet-related companies in
particular,
‰quarterly variations in operating results,
‰new products, services, innovations and strategic developments by our competitors or us, or business
combinations and investments by our competitors or us,
‰changes in financial estimates by us or securities analysts and recommendations by securities analysts,
‰changes in Internet regulation,
‰changes in capital structure, including issuance of additional debt or equity to the public,
‰additions or departures of key personnel,
‰corporate restructurings, including layoffs or closures of facilities,
‰changes in the valuation methodology of, or performance by, other e-commerce companies, and
‰news and securities analyst reports and speculation relating to new alliances, general business or
Internet trends or our existing or future products or services.
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