Enom 2014 Annual Report Download - page 19

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up to this point. A decline in eHow’s performance could result in a material adverse effect to our business, financial condition and
results of operations.
Poor perception of our brands or business could harm our reputation and adversely affect our business, financial condition and
results of operations.
Our Content & Media business is dependent on attracting a large number of visitors to our owned and operated online properties
and our customers’ online properties and providing leads and clicks to our advertisers, which depends in part on our reputation within
the industry and with our users. Perception that the quality of our content may not be the same or better than that of other published
Internet content, even if baseless, can damage our reputation. Any damage to our reputation could harm our ability to attract and retain
advertisers, visitors, customers, freelance professionals and artists, which would materially adversely affect our business, financial
condition and results of operations. Furthermore, certain of our owned and operated online properties, such as Livestrong.com and
eHow.com, as well as some of the content we produce for our customers’ online properties, are associated with high-profile experts to
enhance brand recognition and credibility. Any adverse news reports, negative publicity or other alienation of all or a segment of our
consumer base relating to these high-profile experts would reflect poorly on our brands and could have a material adverse effect on
our business. For example, Livestrong.com is a licensed trademark from the Livestrong Foundation, which is the charitable foundation
created by Lance Armstrong to promote cancer awareness and healthy lifestyles.
We rely primarily on freelance professionals and artists for a majority of our online content. We may not be able to attract or
retain sufficient freelance professionals and artists to generate content on a scale or of a quality sufficient to grow or maintain our
business.
We rely primarily on freelance professionals for the content that we distribute through our owned and operated online properties
and our customers’ online properties, and on artists to sell their original artwork on Saatchi Art or upload their unique art designs to
Society6. We may not be able to attract or retain sufficient qualified and experienced freelance professionals and artists to generate
content on a scale or of a quality sufficient to grow or maintain our business. For example, our content solutions offering may require
the engagement of producers, contributors, talent, editors and filmmakers with a specialized skill set, and there is no assurance that we
will be able to engage such specialists in a cost-effective manner or at all. In addition, our online artist marketplaces rely on artists to
join our communities and contribute original artwork and designs that they seek to sell or monetize through the sale of art prints and
other print-on-demand products.
Furthermore, as our business evolves, we may not offer the volume of traditional content assignments that we previously
offered, and some of our freelance professionals may seek assignments elsewhere or otherwise stop producing content for us. In
addition, our competitors may attempt to attract members of our freelance professional and artist communities by offering
compensation and revenue-sharing arrangements that we are unable to match. In the vast majority of cases we have no written
agreements with freelance professionals which obligate them to create content beyond the specific content that they elect to create at
any particular time, and no agreements with artists to obligate them to continue to contribute or maintain original designs and artwork
on Society6 or Saatchi Art. In the event that we are unable to attract or retain qualified freelance professionals, we could incur
substantial costs in procuring suitable replacement content, and if we are unable to attract artists to our online marketplaces, our
revenues from sales of artwork and print-on-demand products will decrease, either of which could have a negative impact on our
business, financial condition and results of operations.
We may not be successful in developing new content offerings, including our content solutions services, or acquiring, investing in
or developing new lines of business, which may limit our future growth and have a negative effect on our business, financial
condition and results of operations.
Important potential areas of growth for us are the development of new content offerings, including our content solutions
services, and the acquisition, investment or internal development of new lines of business such as our marketplace initiatives. We have
limited experience developing our content solutions services and developing, launching or growing online marketplaces, and we may
not be successful in implementing these new lines of business. New lines of business may also be subject to significant business,
economic and competitive uncertainties and contingencies frequently encountered by new businesses in competitive environments,
many of which are beyond our control, including the lack of market acceptance. If we develop, acquire or invest in new lines of
business or new content offerings, we will need to effectively integrate and manage these new businesses and implement appropriate
operational, financial and management systems and controls. We may not be able to achieve the expected benefits from these new
lines of business or content offerings, and we may not recover the funds and resources we have expended on them. If we are unable to
successfully acquire, invest in or develop new lines of business or expand our content offerings, our future growth would be limited
which could have a negative effect on our business, financial condition and results of operations.