Amazon.com 2008 Annual Report Download - page 21

and others to protect our proprietary rights. Effective intellectual property protection may not be available in
every country in which our products and services are made available. We also may not be able to acquire or
maintain appropriate domain names in all countries in which we do business. Furthermore, regulations governing
domain names may not protect our trademarks and similar proprietary rights. We may be unable to prevent third
parties from acquiring domain names that are similar to, infringe upon, or diminish the value of our trademarks
and other proprietary rights.
We may not be able to discover or determine the extent of any unauthorized use of our proprietary rights.
Third parties that license our proprietary rights also may take actions that diminish the value of our proprietary
rights or reputation. The protection of our intellectual property may require the expenditure of significant
financial and managerial resources. Moreover, the steps we take to protect our intellectual property may not
adequately protect our rights or prevent third parties from infringing or misappropriating our proprietary rights.
We also cannot be certain that others will not independently develop or otherwise acquire equivalent or superior
technology or other intellectual property rights.
Other parties also may claim that we infringe their proprietary rights. We have been subject to, and expect to
continue to be subject to, claims and legal proceedings regarding alleged infringement by us of the intellectual
property rights of third parties. Such claims, whether or not meritorious, may result in the expenditure of
significant financial and managerial resources, injunctions against us or the payment of damages. We may need
to obtain licenses from third parties who allege that we have infringed their rights, but such licenses may not be
available on terms acceptable to us or at all. In addition, we may not be able to obtain or utilize on terms that are
favorable to us, or at all, licenses or other rights with respect to intellectual property we do not own in providing
e-commerce services to other businesses and individuals under commercial agreements. These risks have been
amplified by the increase in third parties whose sole or primary business is to assert such claims.
Our digital content offerings depend in part on effective digital rights management technology to control
access to digital content. If the digital rights management technology that we use is compromised or otherwise
malfunctions, we could be subject to claims, and content providers may be unwilling to include their content in
our service.
We Have a Rapidly Evolving Business Model and Our Stock Price Is Highly Volatile
We have a rapidly evolving business model. The trading price of our common stock fluctuates significantly
in response to, among other risks, the risks described elsewhere in this Item 1A, as well as:
• changes in interest rates;
• conditions or trends in the Internet and the e-commerce industry;
• quarterly variations in operating results;
• fluctuations in the stock market in general and market prices for Internet-related companies in
particular;
• changes in financial estimates by us or securities analysts and recommendations by securities analysts;
• changes in our capital structure, including issuance of additional debt or equity to the public;
• changes in the valuation methodology of, or performance by, other e-commerce companies; and
• transactions in our common stock by major investors and certain analyst reports, news, and speculation.
Volatility in our stock price could adversely affect our business and financing opportunities and force us to
increase our cash compensation to employees or grant larger stock awards than we have historically, which could
hurt our operating results or reduce the percentage ownership of our existing stockholders, or both.
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