Incredimail 2011 Annual Report Download - page 15

Our international operations involve special risks that could increase our expenses, adversely affect our operating results and require increased time and
attention of our management.
We derive and expect to continue to derive a substantial portion of our revenues from users outside United States. Our international sales and related
operations are subject to a number of inherent risks, including risks with respect to:
Risks Related to Our In
tellectual Property
Unlawful copying of our products or other third party violations of existing legal protections or reductions in the legal protection for intellectual property
rights of software developers or use of open source software could adversely affect our distribution and revenue.
The software products that we sell incorporate a technology that reduces the ability of third parties to copy the software without having paid for it. Unlicensed
copying and use of software and intellectual property rights represents a loss of users and potential revenue to us, which could be more significant in countries where
laws are less protective of intellectual property rights. Continued educational and enforcement efforts may not affect revenue positively and further deterioration in
compliance with existing legal protections or reductions in the legal protection for intellectual property rights of software developers could adversely affect our
revenue.
In addition, certain of our products or services may now or in the future incorporate open source software, which are typically distributed "as-
is" without
warranties, such as warranties of performance or ownership or indemnities against intellectual property infringement claims. Moreover, to the extent that we
incorporate open source software into our products or services, (although we do not currently intend to do so), the license for such open source software may obligate
us, among other things, to pass on to our licensees without charge the rights to use, copy, modify and redistribute the underlying software source code, both with
respect to the original open source code and any modifications to such code created by us.
•
potential loss of proprietary information due to piracy, misappropriation or laws that may be less protective of our intellectual property rights than
those of the United States;
• costs and delays associated with translating and supporting our products in multiple languages;
•
foreign exchange rate fluctuations and economic instability, such as higher interest rates and inflation, which could make our products more expensive
in those countries;
• costs of compliance with a variety of laws and regulations;
•
restrictive governmental actions such as trade restrictions;
• limitations on the transfer and repatriation of funds and foreign currency exchange restrictions;
•
compliance with different consumer and data protection laws and restrictions on pricing or discounts;
•
lower levels of adoption or use of the Internet and other technologies vital to our business and the lack of appropriate infrastructure to support
widespread Internet usage;
•
lower levels of consumer spending on a per capita basis and fewer opportunities for growth in certain foreign market segments compared to the United
States;
• lower levels of credit card usage and increased payment risk;
•
changes in domestic and international tax regulations; and
•
geopolitical events, including war and terrorism.
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