Classmates.com 2007 Annual Report Download - page 26

assure you that the anticipated benefits of an acquisition will materialize or that any integration attempts will be successful. Acquiring a business,
service or technology involves many risks, including:
• disruption of our ongoing business and significant diversion of management from day-to-day responsibilities;
•
acquisition financings that involve the issuance of potential dilutive equity or the incurrence of debt;
•
reduction of cash and other resources available for operations and other uses;
• unforeseen obligations or liabilities;
•
difficulty assimilating the acquired customer bases, technologies and operations;
•
difficulty assimilating and retaining employees from the acquired business;
• risks of entering markets in which we have little or no direct prior experience;
• potential impairment of relationships with users, customers or vendors as a result of changes in management of the acquired
business;
• large write-offs either at the time of the acquisition or in the future, the incurrence of restructuring charges, the amortization of
identifiable intangible assets, and the impairment of amounts capitalized as goodwill and other intangible assets; and
•
lack of, or inadequate, controls, policies and procedures appropriate for a public company, and the time, cost and difficulties
related to the implementation or remediation of such controls, policies and procedures.
Any of these risks could harm our business and financial results. In addition, an acquisition of a foreign business involves risks in addition
to those set forth above, including risks associated with potentially unfamiliar economic, political and regulatory environments and integration
difficulties due to language, cultural and geographic differences.
We may not successfully develop or acquire and market new services and features in a timely or cost-effective manner; consumers or
advertisers may not accept our new services and features.
We may not be able to compete effectively if we are not able to timely and cost-effectively adapt to changes in technology and industry
standards or develop or acquire and successfully commercialize new and enhanced services and features. New services or features may be
dependent on our obtaining needed technology or services from third-parties, which we may not be able to obtain in a timely manner upon terms
acceptable to us, or at all. We have expended, and may in the future expend, significant resources enhancing our existing services and features
and developing, acquiring and implementing new services or features. Product development involves a number of uncertainties, including
unanticipated delays and expenses. New or enhanced services and features may have technological problems or may not be accepted by
consumers or advertisers. For example, our VoIP and photo sharing services did not meet with commercial success. We cannot assure you that
we will be successful in developing, acquiring or implementing new or enhanced services or features, or that new or enhanced services or
features will be commercially successful.
Our business is highly dependent on our billing and customer support systems, and on third-parties for technical support and customer
support; our business may suffer if these systems do not function and we cannot perform and provide these services.
Customer billing and service are highly complex processes, and our systems must efficiently interface with other third-
parties' systems such
as the systems of credit card processing companies and other companies to whom we outsource these functions. Our ability to accurately and
efficiently bill and service our users is dependent on the successful operation of these systems. We have experienced
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