Earthlink 2008 Annual Report Download - page 18

Table of Contents
As a result of our continuing review of our business, we may have to undertake further restructuring plans that would require additional
charges, including incurring facility exit and restructuring charges.
During 2007 and 2008, we implemented a corporate restructuring plan under which we significantly reduced our workforce and closed or
consolidated various facilities. We also completed the divestiture of our municipal wireless broadband operations. We continue to evaluate our
business, and these reviews may result in additional restructuring activities. We may choose to divest certain business operations based on our
management's assessment of their strategic value to our business. Decisions to eliminate or limit certain business operations in the future could
involve the expenditure of capital, consumption of management resources, realization of losses, transition and wind-
up expenses, further
reduction in workforce, impairment of the value of purchased assets and goodwill, facility consolidation and the elimination of revenues along
with associated costs, any of which could cause our operating results to decline and may fail to yield the expected benefits. Engaging in further
restructuring activities could result in additional charges and costs, including facility exit and restructuring costs, and could adversely affect our
business, financial position, results of operations and cash flows.
If we do not continue to innovate and provide products and services that are useful to subscribers, we may not remain competitive, and our
revenues and operating results could suffer.
The market for Internet and telecommunications services is characterized by changing technology, changes in customer needs and frequent
new service and product introductions. Our future success will depend, in part, on our ability to use leading technologies effectively, to continue
to develop our technical expertise, to enhance our existing services and to develop new services that meet changing customer needs on a timely
and cost-
effective basis. We may not be able to adapt quickly enough to changing technology, customer requirements and industry standards.
Such changes could include acceleration of the adoption of broadband due to government funding to deploy broadband to rural areas. If we fail
to use new technologies effectively, to develop our technical expertise and new services, or to enhance existing services on a timely basis, either
internally or through arrangements with third parties, our product and service offerings may fail to meet customer needs which could adversely
affect our revenues and profitability.
We may be unsuccessful in making and integrating acquisitions and investments into our business, which could result in operating
difficulties, losses and other adverse consequences.
We have acquired and invested in businesses in the past, including our acquisition of New Edge. We expect to continue to evaluate and
consider potential strategic transactions that we believe may complement our business, including acquisitions of businesses, technologies,
services, products and other assets; acquisitions of subscriber bases from ISPs; and investments in companies that offer products and services
that are complementary to our offerings or allow us to vertically integrate or grow our business. At any given time, we may be engaged in
discussions or negotiations with respect to one or more of such transactions that may be material to our financial condition and results of
operations. There can be no assurance that any such discussions or negotiations will result in the consummation of any transaction.
These transactions involve significant challenges and risks including diversion of management's attention from our other businesses; the
impact on employee morale and retention; the integration of new employees, business systems and technology; the need to implement controls,
procedures and policies or the need to remediate significant control deficiencies that may exist at acquired companies; potential unknown
liabilities; or any other unforeseen operating difficulties. These factors could adversely affect our operating results or financial condition.
We may not realize the anticipated benefits of acquisitions or investments, we may not realize them in the time frame expected and our
acquisitions and investments may lose value. Additionally, future acquisitions and investments may result in the dilutive issuances of equity
securities, use of our cash resources, incurrence of debt or contingent liabilities, amortization expense related to acquired definite
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