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PART I
ITEM 1. BUSINESS.
CAUTIONARY STATEMENT PURSUANT TO THE PRIVATE SECURITIES LITIGATION REFORM
ACT OF 1995
Certain statements set forth or incorporated by reference in this Form 10-K, as well as in our Annual
Report to Stockholders for the year ended December 31, 2006, constitute “forward-looking statements” within
the meaning of the Private Securities Litigation Reform Act of 1995. Words such as “believes,” “anticipates,”
“expects,” “intends,” “estimates,” and similar expressions are intended to identify forward-looking statements,
but are not the exclusive means of identifying such statements. These statements involve known and unknown
risks, uncertainties and other factors that may cause our actual results, performance or achievements, or
industry results, to be materially different from any future results, performance or achievements, or industry
results, expressed or implied by such forward-looking statements. Such factors are set forth under “Risk
Factors” under Item 1A in this Form 10-K. We expressly disclaim any obligation to update or publicly release
any revision to these forward-looking statements after the date of this Form 10-K.
Overview
We provide outsourced e-commerce solutions globally to a wide variety of companies primarily in the
software and high-tech products markets. We were incorporated in 1994 and began building and operating
online stores for our clients in 1996. We offer our clients a broad range of services that enable them to quickly
and cost effectively establish an online sales channel capability and to subsequently manage and grow online
sales on a global basis. Our offerings help our clients mitigate risk and grow their online revenues. Our
services include design, development and hosting of online stores, store merchandising and optimization, order
management, fraud prevention screening, export controls and management, tax compliance and management,
digital product delivery via download, physical product fulfillment, multi-lingual customer service, online
marketing including e-mail marketing, management of paid search programs, website optimization, web
analytics, and reporting.
Our products and services allow our clients to focus on promoting and marketing their brands while
leveraging the investments we have made in technology and infrastructure that facilitate the purchase of
products from their online stores. When shoppers visit the store on one of our clients’ websites, they are
seamlessly transferred to our e-commerce platform. Once on our platform, shoppers can browse for products
and make purchases online. After a purchase is made, we either deliver the product digitally via download
over the Internet or transmit instructions to a third party for physical fulfillment. We also process the buyer’s
payment, including collection and remittance of applicable taxes, and can provide customer service in multiple
languages to handle order-related questions. We believe we are an example of an emerging trend known as
“Software as a Service” (SaaS). We have invested substantial resources to develop our e-commerce software
platform and we provide access and use of it to our clients as a service as opposed to selling the software to
be operated on their own in-house computer hardware.
In addition to the services we provide that facilitate the completion of an online transaction, we also offer
services designed to increase traffic to our clients’ online stores and to improve the sales effectiveness of those
stores. Our services include paid search advertising, search engine optimization, affiliate marketing, store
optimization, and e-mail optimization. All of our services are designed to help our clients acquire customers
more effectively, sell to those customers more often and more efficiently, and increase the lifetime value of
each customer.
Our clients include many of the largest software and high-tech products companies and major retailers of
these products, including Allume Systems, Inc., Autodesk, Inc., CompUSA, Inc. Computer Associates,
Canon Inc., Hewlett Packard Company, Lexmark, Inc., Microsoft Corporation, OfficeMax Incorporated.,
Nuance Communications Inc, Symantec Corporation, and Trend Micro, Inc.
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