Go Daddy 2015 Annual Report Download - page 41

Table of Contents
In addition, laws governing these activities are unsettled in many international jurisdictions, or may prove difficult or impossible for us to comply with in
some international jurisdictions. Also, other existing bodies of law, including the criminal laws of various states, may be deemed to apply or new statutes or
regulations may be adopted in the future, any of which could expose us to further liability and increase our costs of doing business.
We may face liability or become involved in disputes over registration and transfer of domain names and control over websites.
As a provider of web-based and cloud-based products, including as a registrar of domain names and related products, we from time to time become aware of
disputes over ownership or control of customer accounts, websites or domain names. We could face potential claims of tort law liability for our failure to renew a
customer’s domain. We could also face potential tort law liability for our role in the wrongful transfer of control or ownership of accounts, websites or domain
names. The safeguards and procedures we have adopted may not be successful in insulating us against liability from such claims in the future. In addition, we face
potential liability for other forms of account, website or domain name "hijacking," including misappropriation by third parties of our network of customer
accounts, websites or domain names and attempts by third parties to operate accounts, websites or domain names or to extort the customer whose accounts,
websites or domain names were misappropriated. Furthermore, we are exposed to potential liability as a result of our domain privacy product, wherein the identity
and contact details for the domain name registrant are masked. Although our terms of service reserve our right to take certain steps when domain name disputes
arise related to our privacy product, including the removal of our privacy service, the safeguards we have in place may not be sufficient to avoid liability, which
could increase our costs of doing business.
Occasionally one of our customers may register a domain name identical, or similar, to a third party’s trademark or the name of a living person. These
occurrences have in the past and may in the future lead to our involvement in disputes over such domain names. Disputes involving registration or control of
domain names are often resolved through the Uniform Domain Name Dispute Resolution Policy (the UDRP), ICANN’s administrative process for domain name
dispute resolution, or less frequently through litigation under the ACPA, or under general theories of trademark infringement or dilution. The UDRP generally does
not impose liability on registrars, and the ACPA provides that registrars may not be held liable for registration or maintenance of a domain name absent a showing
of the registrar’s bad faith intent to profit. However, we may face liability if we act in bad faith or fail to comply in a timely manner with procedural requirements
under these rules. In addition, domain name registration disputes and compliance with the procedures under the ACPA and URDP typically require at least limited
involvement by us and, therefore, increase our cost of doing business. The volume of domain name registration disputes may increase in the future as the overall
number of registered domain names increases.
We are dependent on the continued services and performance of our senior management and other key employees, the loss of any of whom could adversely
affect our business, operating results and financial condition.
Our future performance depends on the continued services and contributions of our senior management and other key employees to execute on our business
plan and to identify and pursue new opportunities and product innovations. The loss of services of senior management or other key employees could significantly
delay or prevent the achievement of our development and strategic objectives. In addition, some of the members of our current management team have only been
working together for a short period of time, which could adversely impact our ability to achieve our goals. The loss of the services of our senior management or
other key employees for any reason could adversely affect our business, financial condition and operating results.
If we are unable to hire, retain and motivate qualified personnel, our business would suffer.
Our future success depends, in part, on our ability to continue to attract and retain highly skilled personnel. The loss of the services of any of our key
personnel, the inability to attract or retain qualified personnel or delays in hiring required personnel, may seriously harm our business, financial condition and
operating results. Our ability to continue to attract and retain highly skilled personnel, specifically employees with technical and engineering skills and employees
with language skills and cultural knowledge of the geographic markets we have recently expanded to or that we intend to expand to in the near future, will be
critical to our future success. Competition for highly skilled personnel is frequently intense. In addition, many of our employees have outstanding options or other
equity awards. Now that we are a public company, the ability to either exercise those options or sell their stock in a public market may lead to a larger than normal
turnover rate. We intend to issue stock options or other equity awards as key components of our overall compensation and employee attraction and retention
efforts. In addition, we are required under GAAP to recognize compensation expense in our operating results for employee equity-based compensation under our
equity grant programs, which may negatively impact our operating results and may increase the pressure to limit equity-based
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