Shutterfly 2010 Annual Report Download - page 11

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To resolve some of the remaining legal uncertainty, we expect new U.S. and foreign laws and regulations to be adopted over time that will
be directly or indirectly applicable to the Internet and to our activities. In addition, government agencies may begin regulating previously
unregulated Internet activities or applying existing laws in new ways to providers of online services. Moreover, the law relating to the liability
of providers of online services for activities of their users and business partners is currently unsettled both within the United States and abroad.
Any existing or new legislation applicable to us could expose us to government investigations or audits, prosecution for violations of applicable
laws and/or substantial liability, including penalties, damages, significant attorneys’
fees, expenses necessary to comply with such laws and
regulations or the need to modify our business practices. For example, in April 2009 we and 21 other e-
commerce companies were subpoenaed
to provide information related to discount programs offered by three membership program companies, including Webloyalty Inc., one of our
business partners. In addition, from time to time claims may be threatened against us for aiding and abetting, defamation, negligence, copyright
or trademark infringement, or other theories based on the nature and content of information to which we provide links or that we or others post
online. On a more general level, government regulation of the Internet could dampen the growth in the use of the Internet, have the effect of
discouraging innovation and investment in Internet-based enterprises or lead to unpredictable litigation.
We post on our website our privacy policies and practices concerning the use and disclosure of user data. Any failure by us to comply with
our posted privacy policies, Federal Trade Commission requirements or other privacy-
related laws and regulations could result in proceedings
that could potentially harm our business, results of operations and financial condition. In this regard, there are a large number of federal and state
legislative proposals before the United States Congress and various state legislative bodies regarding privacy issues related to our business. It is
not possible to predict whether or when such legislation may be adopted, and certain proposals, such as required use of disclaimers, if adopted,
could harm our business through a decrease in user registrations and revenues.
Employees
As of December 31, 2009, we had 519 full time employees. Below is a summary of employees by function:
During the peak holiday season, we hire contract workers on a temporary basis from third-
party outsourcing firms. For example, during our
peak production period in the fourth quarter of 2009, we used approximately 850 temporary workers to assist in our production and fulfillment
operations. None of our employees are represented by a labor union or are covered by a collective bargaining agreement. We have never
experienced any employment-related work stoppages and consider our employee relations to be good.
Available Information
Our Internet website is located at http://www.shutterfly.com. The information on our website is not a part of this annual report. We make
available free of charge on our website our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-
K and
amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as soon as reasonably
practicable after we electronically file such material with, or furnish it to, the Securities and Exchange Commission. Our SEC reports can be
accessed through the investor relations section of our Internet website.
The public may also read and copy any materials we file with the Securities and Exchange Commission at the Securities and Exchange
Commission’
s Public Reference Room at 100 F Street, NE, Washington, DC 20549. The public may obtain information on the operation of the
Public Reference Room by calling the Securities and Exchange Commission at 1-800-SEC-
0330. The Securities and Exchange Commission also
maintains an Internet website that contains reports, proxy and information statements and other information regarding issuers that file
electronically with the Securities and Exchange Commission. The Securities and Exchange Commission’
s Internet website is located at
http://www.sec.gov.
2009
2008
2007
Cost of revenue
243
262
204
Technology and development
148
127
115
Sales and marketing
73
70
57
General and administrative
55
55
55
Total
519
514
431
9