ServiceMagic 2012 Annual Report Download - page 16

Table of Contents
of sellers and publishers of advertising may limit our ability to purchase certain types of advertising or advertise some of our products and
services, which could affect our ability to compete effectively and, in turn, adversely affect our business, financial condition and results of
operations.
One of the most cost-effective efforts we employ to attract and acquire new, and retain existing, users and customers is commonly referred
to as search engine optimization, or SEO. SEO involves developing websites to rank well within search engine results. Search engines frequently
update and change the logic that determines the placement and display of results of user searches. The failure to successfully manage SEO
efforts across our businesses, including the timely modification of SEO efforts from time to time in response to periodic changes in search
engine algorithms, search query trends and related actions by providers of search services designed to ensure the display of unique offerings in
search results (which actions by search service providers may result in algorithmic listings being displayed less prominently within search engine
results), could result in a substantial decrease in traffic to our various websites, as well as increased costs if we were to replace free traffic with
paid traffic, which would adversely affect our business, financial condition and results of operations.
In addition, search engines have increasingly expanded their offerings into other, non-
search related categories, and have in certain instances
displayed their own integrated or related product and service offerings in a more prominent manner than those of third parties within their search
engine results. Continued expansion and competition from search engines could result in a substantial decrease in traffic to our various websites,
as well as increased costs if we were to replace free traffic with paid traffic, which would adversely affect our business, financial condition and
results of operations.
Lastly, as discussed above, we also enter into various arrangements with third parties in an effort to increase traffic, which arrangements are
generally more cost-effective than traditional marketing efforts. If we are unable to renew existing (and enter into new) arrangements of this
nature, sales and marketing costs as a percentage of revenue would increase over the long-term.
Any failure to attract and acquire new, and retain existing, traffic, users and customers in a cost-effective manner could adversely affect our
business, financial condition and results of operations.
Our success depends, in part, on our ability to maintain and enhance our various brands.
Through our various businesses, we own and operate a number of highly-recognizable brands with strong brand appeal within their
respective industries. We believe that our success depends, in part, upon our continuing ability to maintain and enhance these brands. Our brands
could be negatively impacted by a number of factors, including product and service quality concerns, consumer complaints, actions brought by
consumers, governmental or regulatory authorities and related media coverage and data protection and security breaches. Moreover, the failure
to market our products and services successfully (or in a cost-effective manner), the inability to develop and introduce products and services that
resonate with consumers and/or the inability to adapt quickly enough (and/or in a cost effective manner) to evolving changes in the internet and
related technologies, applications and devices, could adversely impact our various brands, and in turn, our business, financial condition and
results of operations.
The internet and related technologies and applications continue to evolve and we may not be able to adapt to these changes.
The development of new products and services in response to the evolving trends and technologies of the internet, as well as the
identification of new business opportunities in this dynamic environment, requires significant time and resources. We may not be able to adapt
quickly enough (and/or in a cost-effective manner) to these changes, appropriately time the introduction of new products and services to the
market or identify new business opportunities in a timely manner. Also, these changes could require us to modify related infrastructures and our
failure to do so could render our existing websites, applications, services and proprietary technologies obsolete. Our failure to respond to any of
these changes appropriately (and/or in a cost effective manner) could adversely affect our business, financial condition and results of operations.
In the case of certain of our Applications, third parties have introduced (and continue to introduce) new or updated technologies,
applications and policies that may interfere with the ability of users to access or utilize these Applications generally or otherwise make users less
likely to use these services (such as through the introduction of features and/or processes that disproportionately and adversely impact the ability
of consumers to access and use these services relative to those of our competitors). For example, third parties continue to introduce technologies
and applications (including new and enhanced web browsers and operating systems) that may limit or prevent certain types of applications from
being installed and/or have features and policies that significantly lessen the likelihood that users will install our applications or that previously
installed applications will remain in active use. In addition, there are technologies and applications that interfere with the functionality of (or
settings changes made by) our Applications. For example, there are technologies and applications that interfere with search boxes embedded
within our toolbars and the maintenance of home page and web browser search settings previously
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