Amazon.com 2007 Annual Report Download - page 18

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• the outcomes of legal proceedings and claims;
• variations in the mix of products and services we sell;
• variations in our level of merchandise and vendor returns;
• the extent to which we offer free shipping, continue to reduce product prices worldwide, and provide
additional benefits to our customers;
• the extent to which we invest in technology and content, fulfillment and other expense categories;
• increases in the prices of fuel and gasoline, as well as increases in the prices of other energy products
and commodities like paper and packing supplies;
• the extent to which operators of the networks between our customers and our websites successfully
charge fees to grant our customers unimpaired and unconstrained access to our online services;
• our ability to collect amounts owed to us when they become due;
• the extent to which use of our services is affected by spyware, viruses, “phishing” and other spam
emails, “denial of service” attacks, data theft, computer intrusions and similar events; and
• terrorist attacks and armed hostilities.
We May Not Be Successful in Our Efforts to Expand into International Market Segments
Our international activities are significant to our revenues and profits, and we plan to further expand
internationally. We have relatively little experience operating in these or future market segments and may not
benefit from any first-to-market advantages or otherwise succeed. It is costly to establish, develop and maintain
international operations and websites and promote our brand internationally. Our international operations may
not be profitable on a sustained basis.
In addition to risks described elsewhere in this section, our international sales and operations are subject to a
number of risks, including:
• local economic and political conditions;
• government regulation of e-commerce or other online services and restrictive governmental actions
(such as trade protection measures, including export duties and quotas and custom duties and tariffs),
nationalization and restrictions on foreign ownership;
• restrictions on sales or distribution of certain products or services and uncertainty regarding liability for
products, services and content, including uncertainty as a result of less Internet-friendly legal systems,
local laws, lack of legal precedent, and varying rules, regulations, and practices regarding the
distribution of media products and enforcement of intellectual property rights;
• import, export, or other business licensing requirements;
• limitations on the repatriation and investment of funds and foreign currency exchange restrictions;
• limited fulfillment and technology infrastructure;
• shorter payable and longer receivable cycles and the resultant negative impact on cash flow;
• laws and regulations regarding consumer and data protection, privacy, network security, encryption, and
restrictions on pricing or discounts;
• lower levels of use of the Internet;
• lower levels of consumer spending and fewer opportunities for growth compared to the U.S.;
• lower levels of credit card usage and increased payment risk;
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