Equifax 2007 Annual Report Download - page 26

The loss of access to credit and other data from external sources
could harm our ability to provide our products and services.
We rely extensively upon data from external sources to maintain
our proprietary and non-proprietary databases, including data
received from customers, strategic partners and various government
and public record sources. Our data sources could withdraw their
data from us for a variety of reasons, including legislatively or
judicially imposed restrictions on use. We also compete with
several of our third-party data suppliers. If a substantial number
of data sources or certain key data sources were to withdraw or
be unable to provide their data, if we were to lose access to data
due to government regulation, or if the collection of data becomes
uneconomical, our ability to provide products and services to our
clients could be materially adversely impacted, which could result
in decreased revenues, net income and earnings per share.
Our markets are highly competitive and new product introductions
and pricing strategies being offered by our competitors could
decrease our sales and market share or require us to reduce our
prices in a manner that reduces our operating margins.
We operate in a number of geographic, product and service markets
that are highly competitive, as described above under “Competition.”
We currently have a business relationship with Fair Isaac Corporation
to resell their credit scoring product and are also involved in
litigation with that firm arising from our development with
TransUnion and Experian of the VantageScoreSM credit scoring
product which is competitive with Fair Isaac’s products. Competitors
may develop products and services that are superior to or that
achieve greater market acceptance than our products and services.
The sizes of our competitors vary across market segments,
as do the resources we have allocated to the segments we target.
Therefore, some of our competitors may have signifi cantly greater
fi nancial, technical, marketing or other resources than we do in
one or more of our market segments, or overall. As a result, our
competitors may be in a position to respond more quickly than we
can to new or emerging technologies and changes in customer
requirements, or may devote greater resources than we can to the
development, promotion, sale and support of products and services.
Moreover, new competitors or alliances among our competitors
may emerge and potentially reduce our market share, revenue or
margins. If we are unable to respond as quickly or effectively to
changes in customer requirements as our competition, our ability
to expand our business and sell our products and services will be
negatively affected.
Some of our competitors also may choose to sell products
competitive to ours at lower prices by accepting lower margins
and profi tability, or may be able to sell products competitive to
ours at lower prices given proprietary ownership of data, technical
superiority or economies of scale. Price reductions by our competi-
tors could negatively impact our margins and results of operations,
and could also harm our ability to obtain new customers on favorable
terms. Historically, certain of our products have experienced
declines in per unit pricing due to competitive factors and customer
demand. If prices decline in the future at faster rates than in the
past due to unforeseen changes in competition or customer demand,
our business could be adversely affected.
Our ability to increase our revenues will depend to some extent
upon introducing new products and services, and if the marketplace
does not accept these new products and services, our revenues
may remain flat or decline.
To increase our revenues, we must enhance and improve existing
products and continue to introduce new products and new versions
of existing products that keep pace with technological developments,
satisfy increasingly sophisticated customer requirements and
achieve market acceptance. We believe much of our future growth
prospects will rest on our ability to continue to expand into newer
products and services. Products that we plan to market in the future
are in various stages of development. We cannot assure that the
marketplace will accept these products. If our current or potential
customers are not willing to switch to or adopt our new products
and services, our ability to increase revenues or improve operating
margins will be impaired.
If we fail to keep up with rapidly changing technologies, our
products and services could become less competitive or obsolete.
In our markets, technology changes rapidly and there are
continuous improvements in computer hardware, network operating
systems, programming tools, programming languages, operating sys-
tems, database technology and the use of the Internet. Advances
in technology may result in changing customer preferences for
products and services and delivery formats. If we fail to enhance
our current products and develop new products in response to
changes in technology, industry standards or customer preferences,
our products and services could rapidly become less competitive
or obsolete. Our future success will depend, in part, upon our ability
to internally develop new and competitive technologies; use
leading third-party technologies effectively; continue to develop
our technical expertise; anticipate and effectively respond to
changing customer needs; and infl uence and respond to emerging
industry standards and other technological changes.
If we are unable to raise sufficient additional capital at an
acceptable cost, we may be unable to continue to effectively
compete and expand our business.
We may require additional capital to purchase assets, complete
strategic acquisitions, repurchase shares on the open market or
for general liquidity needs. Declines in our credit rating or limits
on our ability to sell additional shares may adversely affect our
ability to raise capital or materially increase our cost of capital.
Our inability to raise additional capital at a reasonable cost may
adversely impact our revenue growth and the price of our stock.
We may suffer adverse financial consequences if Computer
Sciences Corporation requires us to purchase its credit reporting
business when the public equity or debt markets or other financing
conditions are unfavorable to us.
In 1988, we entered into an agreement with Computer Sciences
Corporation, or CSC, and certain of its affi liates under which
CSC’s credit reporting agencies utilize our computerized credit
database services. Under this agreement, CSC has an option,
exercisable at any time, to sell its credit reporting business to us.
The option expires in August 2013. The option exercise price
24 EQUIFAX | 2007 ANNUAL REPORT