Enom 2010 Annual Report Download - page 38

Table of Contents
and intentional acts of vandalism, and to potential disruptions if the operators of these facilities have financial difficulties. Some of our systems are not fully
redundant, and our disaster recovery planning is currently underdeveloped and does not account for all eventualities. The occurrence of a natural disaster, a
decision to close a facility we are using without adequate notice for financial reasons or other unanticipated problems at our data centers could result in
lengthy interruptions in our service.
Furthermore, third-party service providers may experience an interruption in operations or cease operations for any reason. If we are unable to agree on
satisfactory terms for continued data center hosting relationships, we would be forced to enter into a relationship with other service providers or assume
hosting responsibilities ourselves. If we are forced to switch hosting facilities, we may not be successful in finding an alternative service provider on
acceptable terms or in hosting the computer servers ourselves. We may also be limited in our remedies against these providers in the event of a failure of
service. We also rely on third-party providers for components of our technology platform, such as hardware and software providers. A failure or limitation of
service or available capacity by any of these third-party providers could adversely affect our business, revenue, financial condition and results of operations.
If our security measures are breached and unauthorized access is obtained to a user's or freelance content creator's data, our service may be perceived as
not being secure and customers may curtail or stop using our service.
Our Content & Media and Registrar service offerings involve the storage and transmission of users', Registrar customers' and our freelance content
creators' personal information, such as names, social security numbers, addresses, email addresses and credit card and bank account numbers, and security
breaches could expose us to a risk of loss of this information, litigation and possible liability. Our payment services may be susceptible to credit card and
other payment fraud schemes, including unauthorized use of credit cards, debit cards or bank account information, identity theft or merchant fraud.
As nearly all of our products and services are Internet based, the amount of data we store for our users on our servers (including personal information)
has increased. If our security measures are breached or our systems fail in the future as a result of third-party action, employee error, malfeasance or
otherwise, and as a result, someone obtains unauthorized access to our users' and our freelance content creators' data, our reputation and brands will be
damaged, the adoption of our products and services could be severely limited, our business may suffer and we could incur significant liability. Because
techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target, we
may be unable to anticipate these techniques or to implement adequate preventative measures. We may also need to expend significant resources to protect
against security breaches, including encrypting personal information, or remedy breaches after they occur, including notifying each person whose personal
data may have been compromised. The risk that these types of events could seriously harm our business is likely to increase as we expand the number of
Internet-based products and services we offer as well as increase the number of countries where we operate. If an actual or perceived breach of our security
measures occurs, the market perception of the effectiveness of our security measures and our reputation could be harmed and we could lose sales, advertisers,
freelance content creators and customers and potentially face costly litigation.
If we do not adequately protect our intellectual property rights, our competitive position and business may suffer.
Our intellectual property, consisting of trade secrets, trademarks, copyrights and patents, is, in the aggregate, important to our business. We rely on a
combination of trade secret, trademark, copyright and patent laws in the United States and other jurisdictions together with confidentiality agreements
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