Enom 2010 Annual Report Download - page 37

Table of Contents
We depend on key personnel to operate our business, and if we are unable to retain our current personnel or hire additional personnel, our ability to
develop and successfully market our business could be harmed.
We believe that our future success is highly dependent on the contributions of our executive officers, in particular the contributions of our Chairman and
Chief Executive Officer, Richard M. Rosenblatt, as well as our ability to attract and retain highly skilled managerial, sales, technical and finance personnel.
We do not maintain "key person" life insurance policies for our Chief Executive Officer or any of our executive officers. Qualified individuals are in high
demand, and we may incur significant costs to attract them. All of our officers and other employees are at-will employees, which means they may terminate
their employment relationship with us at any time, and their knowledge of our business and industry would be extremely difficult to replace. If we are unable
to attract and retain our executive officers and key employees, our business, operating results and financial condition will be harmed.
Volatility or lack of performance in our stock price may also affect our ability to attract employees and retain our key employees. Our executive officers
have become, or will soon become, vested in a substantial amount of stock or stock options. Employees may be more likely to leave us if the shares they own
or the shares underlying their options have significantly appreciated in value relative to the original purchase prices of the shares or the exercise prices of the
options, or if the exercise prices of the options that they hold are significantly above the market price of our common stock.
Our industry is undergoing rapid change, and our business model is also evolving, which makes it difficult to evaluate our current business and future
prospects and may increase the risk of your investment.
We derive a significant portion of our revenue from the sale of advertising on the Internet, which is an evolving industry that, in its short history, has
undergone rapid and dramatic changes in industry standards and consumer and customer demands. For example, devices through which consumers are
accessing information, the types of information being delivered and the types of websites through which consumers access information are all in a rapid state
of change. Our business model is also evolving and is distinct from many other companies in our industry, and it may not be successful. In addition, the ways
in which online advertisements are delivered are also rapidly changing. For example, an increasing percentage of advertisements are being delivered through
social media websites such as Facebook. While we sell social media tools, we currently do not operate any properties that are solely social media sites. If
advertisers determine that their yields on such social media sites significantly outstrip their return on other types of websites, such as eHow, our results could
be impacted. We need to continually evolve our services and the way we deliver them to keep up with such changes to remain relevant to our customers. We
may not be able to do so.
The interruption or failure of our information technology and communications systems, or those of third parties that we rely upon, may adversely affect
our business, operating results and financial condition.
The availability of our products and services depends on the continuing operation of our information technology and communications systems. Any
damage to or failure of our systems, or those of third parties that we rely upon (co-location providers for data servers, storage devices, and network access)
could result in interruptions in our service, which could reduce our revenue and profits, and damage our brand. Our systems are also vulnerable to damage or
interruption from earthquakes, terrorist attacks, floods, fires, power loss, telecommunications failures, computer viruses or other attempts to harm our systems.
We, and in particular our Registrar, have experienced an increasing number of computer distributed denial of service attacks which have forced us to shut
down certain of our websites, including eNom.com. We have implemented certain defenses against these attacks, but we may continue to be subject to such
attacks, and future denial of service attacks may cause all or portions of our websites to become unavailable. In addition, some of our data centers are located
in areas with a high risk of major earthquakes. Our data centers are also subject to break-ins, sabotage
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