Orbitz 2014 Annual Report Download - page 16

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We rely on search engines, which may change their business models or search engine algorithms in ways that could
have a negative impact on our business.
We use Google and other internet search engines to generate traffic to our websites, principally through the purchase of
travel-related keywords. Google and other search engines frequently update and change the logic that determines the placement
and display of results of a user’s search. These changes could negatively affect the purchased or algorithmic placement of links
to our websites. In addition, a significant amount of traffic is directed to our websites through our participation in pay-per-click
and display advertising campaigns on search engines, social networking sites, meta-search sites and content properties. Pricing
and operating dynamics for these traffic sources can experience rapid change, both technically and competitively. Moreover,
any of these providers could, for competitive or other purposes, alter their search algorithms or results, causing our websites to
place lower in search query results. If a major search engine changes its algorithms in a manner that negatively affects the
search engine ranking, paid or unpaid, of our websites or that of our third-party distribution partners, or if competitive
dynamics impact the costs or effectiveness of search engine optimization, search engine marketing or other traffic generating
arrangements in a negative manner, our business and financial performance would be adversely affected, potentially to a
material extent.
We rely on third-party service providers who may experience disruptions in the services they provide to us or changes
in their businesses, which could have a negative impact on our business.
We are dependent upon third-party systems and service providers, and any disruption or adverse change in their
businesses could have a material adverse effect on our business. We rely on certain third-party computer systems, service
providers and software companies, including the electronic central reservation systems and GDSs. In particular, our businesses
rely on third parties to:
• conduct searches for airfares;
• process hotel room transactions;
• process credit card and other payments; and
• provide computer infrastructure critical to our business.
We currently utilize GDSs to process a significant portion of our bookings. In addition, we rely on a group of business
process outsourcing companies located in various countries to provide us with call center and telesales services, back office
administrative services such as ticketing fulfillment, hotel rate loading and quality control, information technology services,
and financial services. Any interruption in these third-party services could prevent us from operating certain aspects of our
business and damage our reputation. For instance, interruption or deterioration in our GDS partners’ products or services could
prevent us from searching and booking airline and car rental reservations.
Our success is dependent on our ability to maintain relationships with our technology partners. In the event our
arrangements with any of these third parties are impaired or terminated, we may not be able to find an alternative source of
systems support on a timely basis or on commercially reasonable terms, which could result in significant additional costs or
disruptions to our business. In addition, some of our agreements with third-party service providers can be terminated by those
parties on short notice and, in many cases, provide no recourse for service interruptions. A termination or disruption of these
services could have a material adverse effect on our business, financial condition and results of operations.
We face risks associated with data security and credit card fraud.
The secure transmission of confidential personal information over the Internet is essential in maintaining customer and
supplier confidence in our services. Substantial or ongoing data security breaches, whether instigated internally or externally on
our system or on other Internet-based systems, could significantly harm our business. It is possible that a party (whether
internal or external) could circumvent our security measures to steal confidential personal information, which could expose us
to a risk of loss or litigation and possible liability, and that we may be unsuccessful in implementing our remediation plan to
address potential exposures. Data security breaches could also damage our reputation, causing customers, potential customers
and suppliers to lose confidence in our data security, which could have a negative effect on the demand for our services.
Additionally, we disclose to certain of our third-party service providers, including our GDS providers, our customers’ credit
card information in order to process transactions. If such third-party provider incurs a data security breach that causes our
customers’ credit card information to be compromised, we could face the same risks as we would to a breach on our own
system, including risk of loss and litigation and damage to our reputation. Moreover, it’s possible that public perception
concerning security and privacy on the Internet generally could adversely affect customers’ willingness to use the Internet,
including our websites, as a means of conducting commercial transactions. Publicized breaches of security affecting other