Vistaprint 2010 Annual Report Download - page 27

Form 10-K
We depend on search engines to attract a substantial portion of the customers who visit our
websites, and losing these customers would adversely affect our business and results of
operations.
Many customers access our websites by clicking through on search results displayed by search
engines such as Google, Bing and Yahoo!. These search engines typically provide two types of
search results, algorithmic and purchased listings. Algorithmic listings cannot be purchased, and
instead are determined and displayed solely by a set of formulas designed by the search engine.
Purchased listings can be purchased by companies and other entities in order to attract users to their
websites. We rely on both algorithmic and purchased listings to attract and direct a substantial portion
of the customers we serve.
Search engines revise their algorithms from time to time in an attempt to optimize their search
result listings and to maximize the advertising revenue generated by those listings. If the search
engines on which we rely for algorithmic listings modify their algorithms, this could result in fewer
customers clicking through to our websites, requiring us to resort to other more costly resources to
replace this traffic. This could reduce our operating and net income or our revenues, prevent us from
maintaining or increasing profitability and harm our business. If one or more search engines on which
we rely for purchased listings modifies or terminates its relationship with us, our expenses could rise,
our revenues could decline, and our business may suffer. The cost of purchased search listing
advertising could increase as demand for these channels continues to grow quickly, and further
increases could have negative effects on our ability to maintain or increase profitability. In addition,
some of our competitors purchase the term “Vistaprint” and other terms incorporating our proprietary
trademarks from Google and other search engines as part of their search listing advertising. Courts
do not always side with the trademark owners in cases involving search engines, and Google has
refused to prevent companies from purchasing the trademark “Vistaprint.” As a result, we may not be
able to prevent our competitors from advertising to, and directly competing for, customers who search
on the term “Vistaprint” on search engines.
Various private ‘spam’ blacklisting and similar entities have in the past, and may in the future,
interfere with our e-mail solicitation, the operation of our websites and our ability to conduct
business.
We depend primarily on e-mail to market to and communicate with our customers. Various
private entities attempt to regulate the use of e-mail for commercial solicitation. These entities often
advocate standards of conduct or practice that significantly exceed current legal requirements and
classify certain e-mail solicitations that comply with current legal requirements as unsolicited bulk
e-mails, or “spam.” Some of these entities maintain “blacklists” of companies and individuals, as well
as the websites, Internet service providers and Internet protocol addresses associated with those
companies and individuals, that do not adhere to what the blacklisting entity believes are appropriate
standards of conduct or practices for commercial e-mail solicitations. If a company’s Internet protocol
addresses are listed by a blacklisting entity, e-mails sent from those addresses may be blocked if they
are sent to any Internet domain or Internet address that subscribes to the blacklisting entity’s service
or purchases its blacklist.
Some of our Internet protocol addresses are currently listed with one or more blacklisting entities
despite our belief that our commercial e-mail solicitations comply with all applicable laws. In the future,
our other Internet protocol addresses may also be listed with one or more blacklisting entities. We
may not be successful in convincing the blacklisting entities to remove us from their lists. Although the
blacklisting we have experienced in the past has not had a significant impact on our ability to operate
our websites, send commercial e-mail solicitations, or manage or operate our corporate email
accounts, it has, from time to time, interfered with our ability to send operational e-mails—such as
password reminders, invoices and electronically delivered products—to customers and others, and to
send and receive emails to and from our corporate email accounts. In addition, as a result of being
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