NetZero 2011 Annual Report Download - page 40

Table of Contents
Our Internet access business is dependent on the availability of telecommunications services and compatibility with third-party systems and
products.
Our Internet access business substantially depends on the availability, capacity, affordability, reliability, and security of our
telecommunications networks. Only a limited number of telecommunications providers offer the network and data services we currently require,
and we purchase most of our telecommunications services from a few providers. In addition, our planned NetZero 4G mobile broadband service
will be entirely dependent upon services acquired from Clearwire. Some of our telecommunications services are provided pursuant to short-term
agreements that the providers can terminate or elect not to renew. In addition, some telecommunications providers may cease to offer network
services for certain less populated areas, which would reduce the number of providers from which we may purchase services and may entirely
eliminate our ability to purchase services for certain areas. If we are unable to maintain, renew or obtain new agreements with
telecommunications providers, our business, financial condition, results of operations, and cash flows could be materially and adversely affected.
Our dial-up Internet access services also rely on their compatibility with other third-party systems, products and features, including
operating systems. Incompatibility with third-party systems and products could adversely affect our ability to deliver our services or a user's
ability to access our services and could also adversely impact the distribution channels for our services. Our services are dependent on dial-up
modems and an increasing number of computer manufacturers, including certain manufacturers with whom we have distribution relationships,
do not pre-load their new computers with dial-up modems, requiring the user to separately acquire a modem to access our services. There can be
no assurance that, as the dial-up Internet access market declines and new technologies emerge, we will be able to continue to effectively
distribute and deliver our services.
ITEM 1B. UNRESOLVED STAFF COMMENTS
None.
ITEM 2. PROPERTIES
Our corporate headquarters are located in Woodland Hills, California and consist of leased space of approximately 110,000 square feet. Our
FTD segment also leases space for call center facilities in Centerbrook, Connecticut and Medford, Oregon as well as office space in Quebec,
Canada. We also lease warehouse space in a distribution center in Aurora, Illinois, which is used by our FTD segment. Our Content & Media
Segment leases office space in Seattle, Washington; San Francisco, California; Schaumburg, Illinois; Erlangen, Germany; and Berlin, Germany
and our Communications segment leases office space in Fort Lee, New Jersey. We also lease office space in Hyderabad, India, which is used by
all of our segments.
We own office space in Downers Grove, Illinois and Sleaford, England, which is occupied by our FTD segment. The Credit Agreement
includes a security interest in substantially all of FTD's assets, including a mortgage on the owned real property at the Downers Grove, Illinois
location.
We believe that our existing facilities are adequate to meet our current requirements and that suitable additional or substitute space will be
available, as needed, to accommodate any physical expansion of our corporate and operations facilities. For additional information regarding our
obligations under leases, see Note 13—"
Commitments and Contingencies" of the Notes to our Consolidated Financial Statements, which appears
in Part II, Item 8 of this Annual Report on Form 10-K.
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