Priceline 2014 Annual Report Download - page 11

search results. To the extent Apple or Google use their mobile operating systems or app distribution channels to favor their own travel service
offerings, our business could be harmed.
There has been a proliferation of new channels through which accommodation providers can offer reservations. For example,
companies such as HomeAway and Airbnb offer services focused on providing vacation rental property owners, particularly individuals, an
online place to list their accommodations where travelers can search and book such properties. Companies such as HotelTonight, Tingo and
Hipmunk have developed new and differentiated offerings that endeavor to provide savings on accommodation reservations to consumers and
that compete directly with us. Further, meta-search services may lower the cost for new companies to enter the market by providing a
distribution channel without the cost of promoting the new entrant's brand to drive consumers directly to its website. If any of these services are
successful in attracting consumers who would otherwise use our services, our business and results of operations would be harmed.
Competition in U.S. online travel remains intense and online travel companies are creating new promotions and consumer value
features in an effort to gain competitive advantages. In particular, the competition to provide "opaque" accommodation reservation services to
consumers, an area in which our priceline.com business has been a leader, has become more intense. For example, Expedia makes opaque
accommodation room reservations available on its principal website under the name "Expedia Unpublished Rates" and has, we believe,
supported this initiative with steeper discounts through lower margins. We believe these offerings, in particular "Expedia Unpublished Rates,"
have adversely impacted the market share and year-over-year growth rate of priceline.com's Name Your Own Price
®
opaque hotel reservation
service, which has been experiencing a decline in room night reservations since 2011. These and other competitors could also launch opaque
rental car services, which could negatively impact priceline.com's Name Your Own Price
®
and Express Deals
®
opaque rental car reservation
services. As a result of this increased competition, our share of the discount accommodation reservation market in the United States could further
decrease, which would harm our business and results of operations.
Operations and Technology
Our business is supported by multiple systems platforms, which were designed with an emphasis on scalability, performance and
reliability. The platforms are largely independent among Booking.com, priceline.com, KAYAK, agoda.com, rentalcars.com and OpenTable.
The software platforms and architecture use a variety of tools within each corporate implementation, including server-
side Java, C++, ASP, .Net,
Perl, PHP, JavaScript and SQL scripts integrated with Oracle, MySQL, MongoDB, Cassandra and Microsoft SQL-server database systems.
These internal platforms were designed to include open application protocol interfaces that can provide connectivity to vendors in the industries
in which we operate. These include large global systems, such as accommodation room, airline ticket and rental car reservation systems and
financial service providers, as well as individual accommodation service providers, such as individual hotels. Our applications utilize digital
certificates to help us conduct secure communications and transactions, as appropriate.
The systems infrastructure and web and database servers of our worldwide operations are primarily hosted in England, the Netherlands,
Hong Kong, Switzerland and five locations in the United States, each of which provides network connectivity, networking infrastructure, UPS
conditioned power and 24-hour monitoring and engineering support typical of hosted data centers. All data center facilities have a continuous
power supply system, generators, redundant servers and multiple back-up systems. If one hosting facility were inaccessible, for any reason, we
would need to divert traffic to another hosting facility, which may lead to a disruption to our services, foregone transactions and revenue and
consumer complaints.
Customer service for our international business is provided primarily through in-house call centers. We outsource most of the call
center and customer service functions for our U.S. businesses.
Intellectual Property
Over time and through acquisitions, we have assembled a portfolio of patents, trademarks, service marks, copyrights, domain names,
and trade secrets covering our services. We regard the protection of our intellectual property as critical to our success. We protect our intellectual
property rights by relying on national, federal, state and common law rights in the United States and internationally, as well as a variety of
administrative procedures, regulations, conventions and treaties. We also rely on contractual restrictions to protect our proprietary rights in our
services. We enter into confidentiality and invention assignment agreements with employees and contractors and nondisclosure agreements with
parties with whom we conduct business in order to limit access to and disclosure of our proprietary information.
We pursue the registration of our domain names, trademarks and service marks in the United States and internationally. We currently
hold numerous issued U.S. and international patents and pending U.S. and international patent applications. We file additional patent
applications on new inventions, as we deem appropriate. Effective trademark,
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