Classmates.com 2004 Annual Report Download - page 57

materially affect our ability to deliver our services. We cannot assure you that we will not experience significant technical problems with our
services in the future.
A security breach or inappropriate use of our network or services could expose us to claims.
The future success of our business will depend on the security of our network and, in part, on the security of the network infrastructures of
our third-party telecommunications service providers, providers of customer support services and other vendors. Unauthorized or inappropriate
access to, or use of, our network, computer systems and services could potentially jeopardize the security of confidential information, including
credit card information, of our users and of third parties. Third parties have in the past used our network, services and brand names to perpetrate
crimes, such as identity theft or credit card theft, and may do so in the future. Users or third parties may assert claims of liability against us as a
result of any failure by us to prevent these activities. Although we use security measures which we believe to be industry standard, we cannot
assure you that the measures we take will be successfully implemented or will be effective in preventing these activities. We also cannot assure
you that the security measures of our third
-party network providers, providers of customer and billing support services or other vendors will be
adequate. In addition to potential legal liability, these activities may adversely impact our reputation and may interfere with our ability to provide
our services, all of which could adversely impact our business.
Harmful software programs such as viruses could disrupt our business.
Our business is dependent on the continued acceptance of the Internet as an effective medium. Damaging software programs, such as
computer viruses, worms and Trojan horses, have from time to time been disseminated through the Internet and have caused significant
disruption to Internet users. Certain of these programs have disabled the ability of computers to access the Internet, requiring users to obtain
technical support in order to gain access to the Internet. Other programs have had the potential to damage or delete computer programs. The
development and widespread dissemination of harmful programs has the potential to seriously disrupt Internet usage. If Internet usage is
significantly disrupted for an extended period of time, or if the prevalence of these programs results in decreased residential Internet usage, our
business could be materially and adversely impacted. In addition, actions taken by us or our telecommunications providers to attempt to
minimize the spread of harmful programs could adversely impact our users' ability to utilize our services.
Our failure to protect our proprietary rights could harm our business.
Our trademarks, patents, copyrights, domain names and trade secrets are important to the success of our business. We principally rely upon
patent, trademark, copyright, trade secret and contract laws to protect our proprietary technology. We cannot be certain that we have taken
adequate steps to prevent misappropriation of our rights. Our failure to adequately protect our proprietary rights could adversely affect our
brands.
Governmental agencies and their designees generally regulate the acquisition and maintenance of domain names. The regulation of domain
names in the United States and in foreign countries is in flux and may change. As a result, we may be unable to acquire or maintain relevant
domain names in the countries that we conduct, or plan to conduct, business. For example, we do not own the domain name
www.unitedonline.com. Furthermore, the relationship between regulations governing domain names and laws protecting trademarks and similar
proprietary rights is unclear. Therefore, we may be unable to prevent third parties from acquiring domain names that are similar to, infringe
upon, dilute or otherwise decrease the value of our trademarks and other proprietary rights.
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