TripAdvisor 2014 Annual Report Download - page 27

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success in this area primarily depends on our ability to attract owners, managers, travelers and advertisers to our marketplace. If
property owners and managers do not perceive the benefits of marketing their properties through our websites, or elect to list them
with a competitor instead of listing with us, our volume of new listings and listing renewals may suffer. As a result, we may be unable
to offer a sufficient supply and variety of vacation properties to attract travelers to our websites. Larger competitor already exists in
the vacation rental space, with significantly more users and listed properties, and new competitors with significant financial resources
are continually emerging.
We may be subject to claims that we violated intellectual property rights of others and these claims can be extremely costly to
defend and could require us to pay significant damages and limit our ability to operate.
Companies in the Internet and technology industries, and other patent and trademark holders seeking to profit from royalties in
connection with grants of licenses, own large numbers of patents, copyrights, trademarks and trade secrets and frequently enter into
litigation based on allegations of infringement or other violations of intellectual property rights. We have received in the past, and may
in the future receive, notices that claim we have misappropriated or misused other parties’ intellectual property rights. Any intellectual
property claim against us, regardless of merit, could be time consuming and expensive to settle or litigate and could divert
management’s attention and other resources. These claims also could subject us to significant liability for damages and could result in
our having to stop using technology or content found to be in violation of another party’s rights. We might be required or may opt to
seek a license for rights to intellectual property held by others, which may not be available on commercially reasonable terms, or at
all. Even if a license is available, we could be required to pay significant royalties, which would increase our operating expenses. We
may also be required to develop alternative non-infringing technology, or content, which could require significant effort and expense
and make us less competitive in the relevant market. Any of these results could harm our business and financial performance.
Investment in new business strategies and acquisitions could disrupt our ongoing business and present risks not originally
contemplated.
We have invested, and in the future may invest, in new business strategies or acquisitions. Such endeavors may involve
significant risks and uncertainties, including distraction of management from current operations, greater than expected liabilities and
expenses, inadequate return of capital, and unidentified issues not discovered in our investigations and evaluations of those strategies
and acquisitions. We may decide to make minority investments, including through joint ventures, in which we have limited or no
management or operational control. The controlling person in such a case may have business interests, strategies or goals that are
inconsistent with ours, and decisions of the company or venture in which we invested may result in harm to our reputation or
adversely affect the value of our investment. Further, we may issue shares of our common stock in these transactions, which could
result in dilution to our stockholders.
If the businesses we have acquired or invested in do not perform as expected or we are unable to effectively integrate acquired
businesses, our operating results and prospects could be harmed.
We have acquired a number of businesses in the past and our future growth may depend, in part, on future acquisitions, any of
which could be material to our financial condition and results of operations. Certain financial and operational risks related to
acquisitions that may have a material impact on our business are:
x Use of cash resources and incurrence of debt and contingent liabilities in funding acquisitions may limit other potential
uses of our cash, including stock repurchases, dividend payments and retirement of outstanding indebtedness;
x Amortization expenses related to acquired intangible assets and other adverse accounting consequences;
x Expected and unexpected costs incurred in identifying and pursuing acquisitions, and performing due diligence on
potential acquisition targets that may or may not be successful;
x Diversion of management’s attention or other resources from our existing business;
x Difficulties and expenses in integrating the operations, products, technology, privacy protection systems, information
systems or personnel of the acquired company;
x Costs associated with litigation or other claims relating to the acquired company;
x Impairment of relationships with employees, suppliers and affiliates of our business and the acquired business;
x The assumption of known and unknown debt and liabilities of the acquired company;
x Failure of the acquired company to achieve anticipated traffic, revenues, earnings or cash flows or to retain key
management or employees;
x Failure to generate adequate returns on acquisitions and investments;