Go Daddy 2015 Annual Report Download - page 24

Table of Contents
• introduction of competing products (or the anticipation thereof) by other market participants;
• poor business conditions for our customers or poor general macroeconomic conditions;
• the perceived value of our products or product enhancements relative to their cost; and
• changing regulatory requirements adversely affecting the products we offer.
There is no assurance we will successfully identify new opportunities, develop and bring new products to market on a timely basis, or products and
technologies developed by others will not render our products or technologies obsolete or noncompetitive, any of which could adversely affect our business and
operating results. If our new products or enhancements do not achieve adequate acceptance in the market, or if our new products do not result in increased sales or
subscriptions, our competitive position will be impaired, our anticipated revenue growth may not be achieved and the negative impact on our operating results may
be particularly acute because of the upfront technology and development, marketing and advertising and other expenses we may incur in connection with the new
product or enhancement.
Our brand is integral to our success. If we fail to effectively protect or promote our brand, our business and competitive position may be harmed.
Effectively protecting and maintaining awareness of our brand is important to our success, particularly as we seek to attract new customers globally. We have
invested, and expect to continue to invest, substantial resources to increase our brand awareness, both generally and in specific geographies and to specific
customer groups, such as web professionals (Web Pros). There can be no assurance that our brand development strategies will enhance the recognition of our brand
or lead to increased sales. Furthermore, our international branding efforts may prove unsuccessful due to language barriers and cultural differences. If our efforts to
effectively protect and promote our brand are not successful, our operating results may be adversely affected. In addition, even if our brand recognition and loyalty
increases, our revenue may not increase at a level commensurate with our marketing spend.
Our brand campaigns have historically included high-visibility events, such as the Super Bowl, and have involved celebrity endorsements or provocative
themes. Some of our past advertisements have been controversial. Since 2013 , we began re-orienting our brand position to focus more specifically on how we help
individuals start, grow and run their own ventures. There can be no assurance we will succeed in repositioning our brand, or that by doing so we will grow our total
customers, increase our revenue or maintain our current high level of brand recognition. If we fail in these branding efforts, our business and operating results
could be adversely affected.
A security breach or network attack could delay or interrupt service to our customers, harm our reputation or subject us to significant liability.
Our operations depend on our ability to protect our network and systems against interruption or damage from unauthorized entry, computer viruses, denial of
service attacks and other security threats beyond our control. We regularly experience distributed denial of service (DDOS) attacks by hackers aimed at disrupting
service to our customers and attempts to place illegal or abusive content on our or our customers’ websites, and we may be subject to DDOS attacks or content
abuse in the future. In addition, from time to time, activities of our customers or other parties may cause us to suspend or terminate customer accounts. We have
suspended and terminated, and will in the future suspend or terminate, a customer’s use of our products when their activities on their site breach our terms of
service (for example, phishing or resource misuse), interfere with or harm other customers’ websites sharing the same resources or otherwise violate applicable
law. We may also suspend or terminate a customer’s website if it is repeatedly targeted by DDOS or other attacks disrupting other customers’ websites or servers
or otherwise impacts our infrastructure. We cannot guarantee our backup systems, regular data backups, security protocols, network protection mechanisms and
other procedures currently in place, or that may be in place in the future, will be adequate to prevent or remedy network and service interruption, system failure,
damage to one or more of our systems or data loss. Also, our products are cloud-based, and the amount of data we store for our customers on our servers has been
increasing as our business has grown. Despite the implementation of security measures, our infrastructure may be vulnerable to computer viruses, worms, other
malicious software programs, illegal or abusive content or similar disruptive problems caused by our customers, employees, consultants or other Internet users who
attempt to invade or disrupt public and private data networks. Any actual or perceived breach of our security could damage our reputation and brand, expose us to a
risk of loss or litigation and possible liability, subject us to regulatory or other government inquiries or investigations, require us to expend significant capital and
other
19