Travelzoo 2010 Annual Report Download - page 38

in which we may market our services in the future are uncertain and may afford little or no effective protection of
our intellectual property.
Employees
As of December 31, 2010, we had 255 employees worldwide. None of our employees are represented under
collective bargaining agreements. We consider our relations with our employees to be good. Because of our
anticipated continued growth, we expect that the number of our employees will continue to increase for the
foreseeable future.
Internet Access to Other Information
We make available free of charge, on or through our website (www.travelzoo.com), annual reports on
Form 10-K, quarterly reports on Form 10-Q and 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 well as proxy statements,
as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC.
Information included on our website does not constitute part of this Report.
Item 1A. Risk Factors
Investing in our common stock involves a high degree of risk. Any or all of the risks listed below as well as other
variables affecting our operating results could have a material adverse effect on our business, our quarterly and
annual operating results or financial condition, which could cause the market price of our stock to decline or cause
substantial volatility in our stock price, in which event the value of your common stock could decline. You should
also keep these risk factors in mind when you read forward-looking statements.
Risks Related to Our Financial Condition and Business Model
We cannot assure you that we will be profitable.
In the year ended December 31, 2010, we generated net income of $13.2 million. In the year ended
December 31, 2009, we generated net income of $5.2 million. Although we were profitable in 2010 and 2009,
we incurred a net loss in 2008, and there is no assurance that we will continue to be profitable in the future. We
forecast our future expense levels based on our operating plans and our estimates of future revenues. We may find it
necessary to significantly accelerate expenditures relating to our sales and marketing efforts or otherwise increase
our financial commitment to creating and maintaining brand awareness among Internet users and advertisers. If our
revenues grow at a slower rate than we anticipate, or if our spending levels exceed our expectations or cannot be
adjusted to reflect slower revenue growth, we may not generate sufficient revenues to be profitable. Any of these
developments could result in a significant decrease in the trading price of our common stock.
Fluctuations in our operating results may negatively impact our stock price.
Our quarterly and annual operating results may fluctuate significantly in the future due to a variety of factors
that could affect our revenues or our expenses in any particular period. You should not rely on quarter-to-quarter
comparisons of our results of operations as an indication of future performance. Factors that may affect our results
include:
• mismatches between resource allocation and advertiser demand due to difficulties in predicting advertiser
demand in a new market;
• changes in general economic conditions that could affect marketing efforts in general and online marketing
efforts in particular;
• the magnitude and timing of marketing initiatives, including our acquisition of new subscribers and our
expansion efforts in other regions;
• the introduction, development, timing, competitive pricing and market acceptance of our products and
services and those of our competitors;
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