TripAdvisor 2015 Annual Report Download - page 18

Suchclaims,suits,andgovernmentinvestigationsareinherentlyuncertainandtheirresultscannotbepredictedwithcertainty.Regardlessoftheoutcome,
anyofthesetypesoflegalproceedingscanhaveanadverseimpactonusbecauseoflegalcosts,diversionofmanagementresources,injunctionsordamageawards
andotherfactors.Determiningreservesforourpendinglitigationisacomplex,fact-intensiveprocessthatrequiressignificantjudgment.Itispossiblethata
resolutionofoneormoresuchproceedingscouldresultinsubstantialfinesandpenaltiesthatcouldadverselyaffectourbusiness,consolidatedfinancialposition,
resultsofoperations,orcashflowsinaparticularperiod.Theseproceedingscouldalsoresultinreputationalharm,criminalsanctions,consentdecrees,ororders
preventingusfromofferingcertainfeatures,functionalities,products,orservices,requiringachangeinourbusinesspracticesorotherfieldaction,orrequiring
developmentofnon-infringingorotherwisealteredproductsortechnologies.Anyoftheseconsequencescouldadverselyaffectourbusinessandresultsof
operations.
We are dependent upon the quality of traffic in our network to provide value to online advertisers, and any failure in our quality control could have a material
adverse effect on the value of our websites to our advertisers and adversely affect our revenue.
Weusetechnologyandprocessestomonitorthequalityofandtoidentifymetricsassociatedwith,theInternettrafficthatwedelivertoonlineadvertisers.
Thesemetricsareusedtonotonlyidentifythevalueofadvertisingonourwebsitebutalsotoidentifylowqualityclickssuchasnon-humanprocesses,including
robots,spidersorothersoftware;themechanicalautomationofclicking;andothertypesofinvalidclicksorclickfraud.Evenwithsuchmonitoringinplace,there
isariskthatacertainamountoflow-qualitytraffic,ortrafficthatonlineadvertisersdeemtobeinvalid,willbedeliveredtosuchonlineadvertisers.Asaresult,we
mayberequiredtocreditamountsowedtousbyouradvertisers.Furthermore,low-qualityorinvalidtrafficmaybedetrimentaltoourrelationshipswith
advertisers,andcouldadverselyaffectouradvertisingpricingandrevenue.
We rely on assumptions and estimates and data to calculate certain of our key metrics, and real or perceived inaccuracies in such metrics may harm our
reputation and negatively affect our business.
Webelievethatcertainmetricsarekeytoourbusiness,includinguniquevisitors,hotelshoppers,revenueperhotelshopper,downloadsofourmobileapps,
andnumberofreviewsandopinions.Astheindustryinwhichweoperatecontinuestoevolveandasourbusinesscontinuestoevolve,sotoomightthemetricsby
whichweevaluateourbusiness.Whilethesenumbersarebasedonwhatwebelievetobereasonableestimates,ourinternaltoolshaveanumberoflimitationsand
ourmethodologiesfortrackingthesemetricsmaychangeovertime.Forexample,asinglepersonmayhavemultipleaccountsorbrowsetheinternetonmultiple
browsersordevices,someusersmayrestrictourabilitytoaccuratelyidentifythemacrossvisits,somemobileapplicationsautomaticallycontactourserversfor
regularupdateswithnouseraction,andwearenotalwaysabletocaptureuserinformationonallofourplatforms.Assuch,thecalculationsofouruniquevisitors
maynotaccuratelyreflectthenumberofpeopleactuallyvisitingourplatforms.Alsoiftheinternaltoolsweusetotrackthesemetricsunder-countorover-count
performanceor contain algorithmorother technicalerrors,the data wereportmaynot beaccurate.Inaddition, historically,certainmetrics werecalculatedby
independentthirdparties.Accordinglyreadersshouldnotplaceunduerelianceonthesenumbers.
Morerecently,westartedtocalculatemetrics,primarilyusinginternaltools,whicharenotindependentlyverifiedbyathirdparty.Wecontinuetoimprove
uponourtoolsandmethodologiestocapturedataandbelievethatourcurrentmetricsaremoreaccurate;however,theimprovementofourtoolsandmethodologies
couldcauseinconsistencybetweencurrentdataandpreviouslyreporteddata,whichcouldconfuseinvestorsorleadtoquestionsabouttheintegrityofourdata.
We rely on information technology to operate our business and remain competitive, and any failure to adapt to technological developments or industry trends
could harm our businesses.
Wedependontheuseofsophisticatedinformationtechnologiesandsystems.Asouroperationsgrowinsizeandscope,wemustcontinuouslyimproveand
upgradeoursystemsandinfrastructurewhilemaintainingorimprovingthereliabilityandintegrityofoursystemsandinfrastructure.Ourfuturesuccessalso
dependsonourabilitytoadaptourservicesandinfrastructuretomeetrapidlyevolvingconsumertrendsanddemandswhilecontinuingtoimprovethe
performance,featuresandreliabilityofourservicesinresponsetocompetitiveserviceandproductofferings.Theemergenceofalternativeplatformssuchas
smartphoneandtabletcomputingdevicesandtheemergenceofnichecompetitorswhomaybeabletooptimizeproducts,servicesorstrategiesforsuchplatforms
willrequirenewinvestmentintechnology.Newdevelopmentsinotherareas,suchascloudcomputing,couldalsomakeiteasierforcompetitiontoenterour
marketsduetolowerup-fronttechnologycosts.Inaddition,wemaynotbeabletomaintainourexistingsystemsorreplaceorintroducenewtechnologiesand
systemsasquicklyaswewouldlikeorinacost-effectivemanner.
If we do not continue to innovate and provide tools and services that are useful to travelers, we may not remain competitive, and our business and financial
performance could suffer.
Oursuccessdependsinpartoncontinuedinnovationtoprovidefeaturesandservicesthatmakeourwebsitesandsmartphoneandtabletcomputing
applicationsusefulfortravelers.Ourcompetitorsarecontinuallydevelopinginnovationsinonlinetravel-relatedservicesandfeatures.Asaresult,weare
continuallyworkingtoimproveourbusinessmodelanduserexperienceinordertodriveuser
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