Go Daddy 2015 Annual Report Download - page 39

Table of Contents
form, to re-engineer our products or to discontinue the sale of our products if re-engineering could not be accomplished on a timely basis, any of which could
adversely affect our business, operating results and financial condition.
Our business depends on our customers’ continued and unimpeded access to the Internet and the development and maintenance of Internet infrastructure.
Internet access providers may be able to block, degrade or charge for access to certain of our products, which could lead to additional expenses and the loss of
customers.
Our products depend on the ability of our customers to access the Internet. Currently, this access is provided by companies having significant market power
in the broadband and Internet access marketplace, including incumbent telephone companies, cable companies, mobile communications companies and
government-owned service providers. The adoption of any laws or regulations adversely affecting the growth, popularity or use of the Internet, including laws
impacting Internet neutrality, could decrease the demand for our products and increase our operating costs. The legislative and regulatory landscape regarding the
regulation of the Internet and, in particular, Internet neutrality, in the United States are subject to uncertainty. The Federal Communications Commission passed
Open Internet rules in February 2015, effective in June 2015, generally providing for Internet neutrality with respect to fixed and mobile broadband Internet
service, but they have been challenged in federal court. Any changes in the legislative and regulatory landscape regarding Internet neutrality, or otherwise
regarding the regulation of the Internet, could harm our business. For example, to the extent any laws, regulations or rulings permit Internet service providers to
charge some users higher rates than others for the delivery of their content, Internet service providers could attempt to use such law, regulation or ruling to impose
higher fees or deliver our content with less speed, reliability or otherwise on a non-neutral basis as compared to other market participants, and our business could
be adversely impacted. Internationally, government regulation concerning the Internet, and in particular, network neutrality, may be developing or non-existent.
Within such a regulatory environment, we could experience discriminatory or anti-competitive practices impeding both our and our customers’ domestic and
international growth, increasing our costs or adversely affecting our business.
Our corporate culture has contributed to our success, and if we cannot maintain this culture, we could lose the innovation, creativity and teamwork fostered by
our culture, and our business may be harmed.
We believe a critical contributor to our success has been our corporate culture, which we believe fosters innovation, creativity, a customer-centric focus,
collaboration and loyalty. Our corporate culture is central to our devoted Customer Care team which is a key component of the value we offer our customers. As
we continue to evolve our business, we may find it difficult to maintain these important aspects of our corporate culture, which could limit our ability to innovate
and operate effectively. Difficulty in preserving our corporate culture will be exacerbated as we continue to expand internationally, grow our employee base and
expand our solutions. Any failure to preserve our culture could also negatively affect our ability to retain and recruit personnel, continue to perform at current
levels or execute on our business strategy.
Our business is exposed to risks associated with credit card and other online payment chargebacks and fraud.
A majority of our revenue is processed through credit cards and other online payments. If our refunds or chargebacks increase, our processors could require
us to increase reserves or terminate their contracts with us, which would have an adverse effect on our financial condition.
Our failure to limit fraudulent transactions conducted on our websites, such as through the use of stolen credit card numbers, could also subject us to liability.
Under credit card association rules, penalties may be imposed at the discretion of the association for inadequate fraud protection. Any such potential penalties
would be imposed on our credit card processor by the association. Under our contracts with our payment processors, we are required to reimburse our processors
for such penalties. However, we face the risk that we may fail to maintain an adequate level of fraud protection and that one or more credit card associations or
other processors may, at any time, assess penalties against us or terminate our ability to accept credit card payments or other form of online payments from
customers, which would have a material adverse effect on our business, financial condition and operating results.
We could also incur significant fines or lose our ability to give customers the option of using credit cards to pay their fees to us if we fail to follow payment
card industry data security standards, even if there is no compromise of customer information. Although we believe we are in compliance with payment card
industry data security standards and do not believe there has been a compromise of customer information, it is possible that at times either we or any of our
acquired companies may not have been in full compliance with these standards. Accordingly, we could be fined or our products could be suspended, which would
cause us
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