Enom 2010 Annual Report Download - page 23

Table of Contents
We rely primarily on freelance content creators for our online content. We may not be able to attract or retain sufficient freelance content creators to
generate content on a scale sufficient to grow our business. As we do not control those persons or the source of content, we are at risk of being unable to
generate interesting and attractive features and other material content.
We rely primarily on freelance content creators for the content that we distribute through our owned and operated websites and our network of customer
websites. We may not be able to attract or retain sufficient freelance creators to generate content on a scale sufficient to grow our business. In addition, our
competitors may attempt to attract members of our freelance content creator community by offering compensation that we are unable to match. We believe
that over the past two years our ability to attract and retain freelance content creators has benefited from the weak overall labor market and from the
difficulties and resulting layoffs occurring in traditional media, particularly newspapers. We believe that this combination of circumstances is unlikely to
continue and any change to the economy or the media jobs market may make it more difficult for us to attract and retain freelance content creators. While
each of our freelance content creators are screened through our pre-qualification process, we cannot guarantee that the content created by our freelance
content creators will be of sufficient quality to attract users to our owned and operated websites and to our network of customer websites. In addition, we have
no written agreements with these persons which obligate them to create articles or videos beyond the one article or video that they elect to create at any
particular time and have no ability to control their future performance. As a result, we cannot guarantee that our freelance content creators will continue to
contribute content to us for further distribution through our owned and operated websites and our network of customer websites or that the content that is
created and distributed will be sufficient to sustain our current growth rates. In the event that these freelance content creators decrease their contributions of
such content, we are unable to attract or retain qualified freelance content creators or if the quality of such contributions is not sufficiently attractive to our
advertisers or to drive traffic to our owned and operated websites and to our network of customer websites, we may incur substantial costs in procuring
suitable replacement content, which could have a negative impact on our business, revenue and financial condition.
The loss of third-party data providers could significantly diminish the value of our services and cause us to lose customers and revenue.
We collect data regarding consumer search queries from a variety of sources. When a user accesses one of our owned and operated websites, we may
have access to certain data associated with the source and specific nature of the visit to our website. We also license consumer search query data from third
parties. Our Content & Media algorithms utilize this data to help us determine what content consumers are seeking, if that content is valuable to advertisers
and whether we can cost-effectively produce this content. Some of these third-party consumer search data agreements are for perpetual licenses of a discrete
amount of data and generally do not provide for updates of the data licensed. There can be no assurances that we will be able to enter into agreements with
these third parties to license additional data on the same or similar terms, if at all. If we are not able to enter into agreements with these providers, we may not
be able to enter into agreements with alternative third-party consumer search data providers on acceptable terms or on a timely basis or both. Any termination
of our relationships with these consumer search data providers, or any entry into new agreements on terms and conditions less favorable to us, could limit the
effectiveness of our content creation process, which would have a material adverse effect on our business, financial condition and results of operations. In
addition, new laws or changes to existing laws in this area may prevent or restrict our use of this data. In such event, the value of our algorithms and our
ability to determine what consumers are seeking could be significantly diminished.
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