ServiceMagic 2014 Annual Report Download - page 25

Table of Contents
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 brand-building efforts, 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, require 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 and policies
that may interfere with the ability of users to access or utilize our applications generally or otherwise make users less likely to use our services
(such as through the introduction of features and/or processes that disproportionately and adversely impact the ability of consumers to access and
use our services relative to those of our competitors). For example, third parties continue to introduce technologies (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 that interfere with the functionality of (or settings changes made by) our applications. For example, there are
technologies that interfere with search boxes embedded within our toolbars and the maintenance of home page and web browser search settings
previously selected by our users. These technologies, applications and policies adversely impact our ability to generate search queries through our
applications, which in turn adversely impacts our revenues. Technologies have also been introduced that can block the display of advertisements on
web pages and that provide users with the ability to opt out of advertising products. Our failure to successfully modify our toolbars and other
applications in a cost-effective manner in response to the introduction and adoption of these new technologies could adversely affect our business,
financial condition and results of operations.
Our success depends, in part, on our ability to develop and monetize mobile versions of our products and services.
Our success depends, in part, on our ability to develop and monetize mobile versions of our products and services. While many of our users
continue to access our products and services through personal computers, users of (and usage volumes on) mobile devices, including smartphones
and tablets, continue to increase relative to those of personal computers. While we have developed mobile versions of certain of our products and
services (and have developed certain products and services exclusively for mobile devices) and intend to continue to do so in the future, we may not
be able to monetize these applications as effectively as we monetize our non-mobile products and services. In addition, the success of our mobile
applications is dependent on their interoperability with various mobile operating systems, technologies, networks and standards that we do not
control and any changes in any of these things that compromise the quality or functionality of our products and services could adversely impact
usage of our products and services on mobile devices and, in turn, our ability to attract advertisers. Lastly, as the adoption of mobile devices
becomes more widespread, we will need to take steps to ensure that our products and services are attractive to users of mobile devices. This shift
could adversely affect our business, financial condition and results of operations if we are unable to replace the related revenues.
The processing, storage, use and disclosure of personal data could give rise to liabilities as a result of governmental regulation, conflicting legal
requirements or differing views of personal privacy rights.
We receive, transmit and store a large volume of personal information and other user data (including personal credit card data, as well as
private content (such as videos and correspondence)) in connection with the processing of search queries, the provision of online products and
services, transactions with users and customers and advertising on our websites. The sharing, use, disclosure and protection of this information are
determined by the respective privacy and data security policies of our various businesses. These policies are, in turn, subject to federal, state and
foreign laws and regulations, as well as evolving industry standards and practices, regarding privacy generally and the storing, sharing, use,
disclosure and protection of personal information and user data. Examples include the European Union Data Protection Directive (as adopted and
implemented by the various European Union member states, the "EU Directive"), various U.S. state regulations concerning minimum data
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