Travelzoo 2003 Annual Report Download - page 32

industry. However, our business may also beneÑt if travel companies increase their eÅorts to promote special
oÅers or other marketing programs. If the events result in a long-term negative impact on the travel industry,
such impact could have a material adverse eÅect on our business.
We will not be able to attract travel companies or Internet users if we do not continually enhance and
develop the content and features of our products and services.
To remain competitive, we must continually improve the responsiveness, functionality and features of our
products and services. We may not succeed in developing features, functions, products or services that travel
companies and Internet users Ñnd attractive. This could reduce the number of travel companies and Internet
users using our products and materially adversely aÅect our business.
We may lose business if we fail to keep pace with rapidly changing technologies and clients needs.
Our success is dependent on our ability to develop new and enhanced software, services and related
products to meet rapidly evolving technological requirements for online advertising. Our current technology
may not meet the future technical requirements of travel companies. Trends that could have a critical impact
on our success include:
‚ rapidly changing technology in online advertising;
‚ evolving industry standards, including both formal and de facto standards relating to online advertising;
‚ developments and changes relating to the Internet;
‚ competing products and services that oÅer increased functionality; and
‚ changes in travel company and Internet user requirements.
If we are unable to timely and successfully develop and introduce new products and enhancements to
existing products in response to our industry's changing technological requirements, our business could be
materially adversely aÅected.
Our business and growth will suÅer if we are unable to hire and retain highly skilled personnel.
Our future success depends on our ability to attract, train, motivate and retain highly skilled employees.
We may be unable to retain our skilled employees or attract, assimilate and retain other highly skilled
employees in the future. We have from time to time in the past experienced, and we expect to continue to
experience in the future, diÇculty in hiring and retaining highly skilled employees with appropriate
qualiÑcations. If we are unable to hire and retain skilled personnel, our growth may be restricted, which could
adversely aÅect our future success.
We may not be able to eÅectively manage our expanding operations.
We have recently experienced a period of rapid growth. In order to execute our business plan, we must
continue to grow signiÑcantly. As of December 31, 2003, we had 39 employees. We expect that the number of
our employees will continue to increase for the foreseeable future. This growth has placed, and our anticipated
future growth will continue to place, a signiÑcant strain on our management, systems and resources. We
expect that we will need to continue to improve our Ñnancial and managerial controls and reporting systems
and procedures. We will also need to continue to expand and maintain close coordination among our sales,
production, marketing, IT, and Ñnance departments. We may not succeed in these eÅorts. Our inability to
expand our operations in an eÇcient manner could cause our expenses to grow disproportionately to revenues,
our revenues to decline or grow more slowly than expected and otherwise have a material adverse eÅect on our
business.
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