Classmates.com 2008 Annual Report Download - page 26

Table of Contents
We have evaluated and expect to continue to evaluate, a wide variety of potential strategic transactions that we believe may complement
our current or future business activities. However, we cannot assure you that the anticipated benefits and synergies of an acquisition, including
our recent acquisition of FTD, will materialize or that any integration attempts will be successful. Acquiring a business, service or technology
involves many operational and financial risks, including risks relating to:
•
disruption of our ongoing business and significant diversion of resources and management time from day
-
to
-
day responsibilities;
•
acquisition financings that involve the issuance of potentially dilutive equity or the incurrence of debt;
• reduction of cash and other resources available for operations and other uses;
• exposure to risks specific to the acquired business, service or technology to which we are not currently exposed;
•
risks of entering markets in which we have little or no direct prior experience;
•
unforeseen obligations or liabilities;
• difficulty assimilating the acquired customer bases, technologies and operations;
• difficulty assimilating and retaining management and employees of the acquired business;
•
potential impairment of relationships with users, customers or vendors as a result of changes in management of the acquired
business;
• potentially dilutive issuance of equity, large write-offs either at the time of the acquisition or in the future, the incurrence of
restructuring charges, the incurrence of debt, 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 of such controls, policies and procedures or the remediation of any deficiencies.
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 foreign
currency exchange rates, potentially unfamiliar economic, political and regulatory environments and integration difficulties due to language,
cultural and geographic differences.
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