Priceline 2010 Annual Report Download - page 99

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Acquisitions could result in operating difficulties.
As part of our business strategy, we acquired Booking.com Limited in September 2004, Booking.com B.V.
in July 2005, Agoda in November 2007 and TravelJigsaw in May 2010. We may enter into additional business
combinations and acquisitions in the future. Acquisitions may result in dilutive issuances of equity securities, use of
our cash resources, incurrence of debt and amortization of expenses related to intangible assets acquired. In
addition, the process of integrating an acquired company, business or technology may create unforeseen operating
difficulties and expenditures. The acquisitions of Booking.com B.V., Booking.com Limited, Agoda and
TravelJigsaw were accompanied by a number of risks, including, without limitation:
x the need to implement or remediate controls, procedures and policies appropriate for a larger public
company at companies that prior to the acquisitions may have lacked such controls, procedures and
policies;
x the difficulty of assimilating the operations and personnel of Booking.com Limited, which are
principally located in Cambridge, England, Booking.com B.V., which are principally located in
Amsterdam, The Netherlands, Agoda, which are principally located in Singapore and Bangkok,
Thailand, and TravelJigsaw, which are principally located in Manchester, England, with and into our
operations, which are headquartered in Norwalk, Connecticut;
x the potential disruption of our ongoing business and distraction of management;
x the difficulty of incorporating acquired technology and rights into our services and unanticipated
expenses related to such integration;
x the failure to further successfully develop acquired technology resulting in the impairment of amounts
currently capitalized as intangible assets;
x the impairment of relationships with customers of Booking.com B.V., Booking.com Limited, Agoda
and TravelJigsaw or our own customers as a result of any integration of operations;
x the impairment of relationships with employees of Booking.com B.V., Booking.com Limited, Agoda
and TravelJigsaw or our own business as a result of any integration of new management personnel;
x the potential unknown liabilities associated with Booking.com B.V., Booking.com Limited, Agoda and
TravelJigsaw.
We may experience similar risks in connection with any future acquisitions. We may not be successful in
addressing these risks or any other problems encountered in connection with the acquisitions of Booking.com B.V.,
Booking.com Limited, Agoda or TravelJigsaw, or that we could encounter in future acquisitions, which would harm
our business or cause us to fail to realize the anticipated benefits of our acquisitions. As of December 31, 2010, we
had approximately $702 million assigned to the intangible assets and goodwill of Booking.com B.V., Booking.com
Limited, Agoda and TravelJigsaw, and therefore, the occurrence of any of the risks identified above could result in a
material adverse impact, including an impairment of these assets, which could cause us to have to record a charge
for impairment. Any such charge could adversely impact our operating results, which would likely cause our stock
price to decline significantly.
We may not be able to keep up with rapid technological and other changes.
The markets in which we compete are characterized by rapidly changing technology, evolving industry
standards, consolidation, frequent new service announcements, introductions and enhancements and changing
consumer demands. We may not be able to keep up with these rapid changes. In addition, these market
characteristics are heightened by the emerging nature of the Internet and the apparent need of companies from many
industries to offer Internet based services. As a result, our future success will depend on our ability to adapt to
rapidly changing technologies, to adapt our services to evolving industry standards and to continually improve the
performance, features and reliability of our service in response to competitive service offerings and the evolving
demands of the marketplace. In addition, the widespread adoption of new Internet, networking or
telecommunications technologies or other technological changes could require us to incur substantial expenditures to
modify or adapt our services or infrastructure.