Washington Post 2006 Annual Report Download - page 41

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is available to students of those schools materially less attractive could have an adverse effect on Kaplan's operating
results.
‚ Risks and Uncertainties Related to Acquisitions of Other Businesses
The Company's Kaplan subsidiary has historically been an active acquirer of businesses that provide educational services,
including in some cases businesses that have different characteristics than existing Kaplan businesses and businesses with
all or most of their operations outside of the United States. Consistent with this historical trend, during 2006 Kaplan
completed a total of 11 acquisitions. Acquisitions involve various inherent risks and uncertainties, including possible
difficulties in efficiently integrating the service offerings, personnel and accounting and other administrative systems of an
acquired business with those of the acquiring organization, the consequences of diverting the attention of senior
management from existing operations, the risk that an acquired business does not meet or exceed the financial projections
that supported the price paid for it, the possible failure of the due diligence process to identify significant business risks or
undisclosed liabilities associated with the acquired business, and, in the case of a business with all or most of its operations
outside of the United States, the difficulties of effectively managing and staffing foreign operations.
‚ Actions of Competitors, Including Price Changes and the Introduction of Competitive Offerings
All of the Company's various businesses face significant competition and could be negatively impacted if competitors
reduce prices or introduce new products or services that compete more effectively with the corresponding products or
services offered by the Company.
‚ Changes in Prevailing Economic Conditions, Particularly in the Specific Geographic Markets Served by the Company's
Newspaper Publishing and Television Broadcasting Businesses
A significant portion of the Company's revenues comes from advertising, and the demand for advertising is sensitive to the
overall level of economic activity, both nationally and in specific local markets. Thus declines in economic activity could
adversely affect the operating results of the Company's newspaper and magazine publishing and television broadcasting
businesses.
‚ Changing Preferences of Readers or Viewers
The Company's publishing and television broadcasting businesses need to attract significant numbers of readers and
viewers in order to sell advertising on favorable terms. Those businesses will be adversely affected to the extent individuals
decide to obtain news, entertainment and local shopping information from Internet-based or other media.
‚ Changing Perceptions About the Effectiveness of Publishing and Television Broadcasting in Delivering Advertising
Historically, newspaper and magazine publishing and television broadcasting have been viewed as cost-effective methods
of delivering various forms of advertising. To the extent that advertisers decide other forms of media in which the Company
has a less significant position are superior, in terms of cost-effectiveness or other features, the profitability of the
Company's publishing and television broadcasting businesses will suffer.
‚ Technological Innovations in News, Information or Video Programming Distribution Systems
The continuing growth and technological expansion of Internet-based services has impacted the Company's media
businesses in various ways, and the development of direct broadcast satellite systems has significantly increased the
competition faced by the Company's cable television systems. The development and deployment of new technologies has
the potential to affect the Company's businesses, both positively and negatively, in ways that cannot now be reliably
predicted.
‚ Changes in the Nature and Extent of Government Regulations, Particularly in the Case of Television Broadcasting and
Cable Television Operations
The Company's television broadcasting and cable television businesses operate in highly regulated environments and
complying with applicable regulations has increased the costs and reduced the revenues of both businesses. Changes in
regulations have the potential to further negatively impact those businesses, not only by increasing compliance costs and
(through restrictions on certain types of advertising, limitations on pricing flexibility or other means) reducing revenues, but
also by possibly creating more favorable regulatory environments for the providers of competing services. More generally,
all of the Company's businesses could have their profitability or their competitive positions adversely affected by significant
changes in applicable regulations.
2006 FORM 10-K 25