Enom 2010 Annual Report Download - page 35

Table of Contents
acquire and integrate websites and other businesses;
successfully expand our footprint in our existing areas of consumer interest and enter new areas of consumer interest; and
respond effectively to competition and potential negative effects of competition on profit margins.
In addition, our personnel, systems, procedures and controls may be inadequate to support our current and future operations. The improvements required
to manage our growth will require us to make significant expenditures, expand, train and manage our employee base and allocate valuable management
resources. If we fail to effectively manage our growth, our operating performance will suffer and we may lose our advertisers, customers and key personnel.
If we do not continue to innovate and provide products and services that are useful to our customers, we may not remain competitive, and our revenue
and operating results could suffer.
Our success depends on our ability to innovate and provide products and services useful to our customers in both our Content & Media and Registrar
service offerings. Our competitors are constantly developing innovations in content creation and distribution as well as in domain name registration and
related services, such as web hosting, email and website creation solutions. As a result, we must continue to invest significant resources in product
development in order to maintain and enhance our existing products and services and introduce new products and services that deliver a sufficient return on
investment and that our customers can easily and effectively use. If we are unable to provide quality products and services, we may lose consumers,
advertisers, customers and freelance content creators, and our revenue and operating results would suffer. Our operating results would also suffer if our
innovations are not responsive to the needs of our customers and our advertisers, are not appropriately timed with market opportunities or are not effectively
brought to market.
We may have difficulty scaling and adapting our existing technology and network infrastructure to accommodate increased traffic and technology
advances or changing business requirements, which could lead to the loss of consumers, advertisers, customers and freelance content creators, and cause
us to incur expenses to make architectural changes.
To be successful, our network infrastructure has to perform well and be reliable. The greater the user traffic and the greater the complexity of our
products and services, the more computing power we will need. In the future, we may spend substantial amounts to purchase or lease data centers and
equipment, upgrade our technology and network infrastructure to handle increased traffic on our owned and operated websites and roll out new products and
services. This expansion could be expensive and complex and could result in inefficiencies or operational failures. If we do not implement this expansion
successfully, or if we experience inefficiencies and operational failures during its implementation, the quality of our products and services and our users'
experience could decline. This could damage our reputation and lead us to lose current and potential consumers, advertisers, customers and freelance content
creators. The costs associated with these adjustments to our architecture could harm our operating results. Cost increases, loss of traffic or failure to
accommodate new technologies or changing business requirements could harm our business, revenue and financial condition.
We rely on technology infrastructure and a failure to update or maintain this technology infrastructure could adversely affect our business.
Significant portions of our content, products and services are dependent on technology infrastructure that was developed over multiple years. Updating
and replacing our technology infrastructure may be challenging to implement and manage, may take time to test and deploy, may
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