Enom 2010 Annual Report Download - page 44

Table of Contents
Impairment in the carrying value of goodwill or long-lived assets, including our media content, could negatively impact our consolidated results of
operations and net worth.
Goodwill represents the excess of cost of an acquired entity over the fair value of the acquired net assets. Goodwill is not amortized, but is reviewed for
impairment at least annually or more frequently if impairment indicators are present. In general, long-lived assets, including our media content, are only
reviewed for impairment if impairment indicators are present. In assessing goodwill and long-lived assets for impairment, we make significant estimates and
assumptions, including estimates and assumptions about market penetration, anticipated growth rates and risk-adjusted discount rates based on our budgets,
business plans, economic projections, anticipated future cash flows and industry data. Some of the estimates and assumptions used by management have a
high degree of subjectivity and require significant judgment on the part of management. Changes in estimates and assumptions in the context of our
impairment testing may have a material impact on us, and any potential impairment charges could substantially affect our financial results in the periods of
such charges.
The impact of worldwide economic conditions may adversely affect our business, operating results and financial condition.
Our performance is subject to worldwide economic conditions. We believe that the recent recession has adversely affected our business. To the extent
that the current weak economic conditions continue, or materially deteriorate, our existing and potential advertisers and customers may no longer use our
content or register domain names through our Registrar service offering, or our advertisers may elect to reduce advertising budgets. Historically, economic
downturns have resulted in overall reductions in advertising spending. In particular, online advertising may be viewed by some of our existing and potential
advertisers and customers as a lower priority and may be among the first expenditures reduced as a result of unfavorable economic conditions. These
developments could have an adverse effect on our business, revenue, financial condition and results of operations.
Risks Relating to Owning Our Common Stock
An active, liquid and orderly market for our common stock may not be sustained, and the trading price of our common stock is likely to be volatile.
An active trading market for our common stock may not be sustained, which could depress the market price of our common stock. The trading price of
our common stock has been, and is likely to be highly volatile and could be subject to wide fluctuations in response to various factors, some of which are
beyond our control. For example, since shares of our common stock were sold in our initial public offering in January 2011 at a price of $17.00 per share, our
closing stock price has ranged from $18.67 to $22.96 through February 28, 2011. In addition to the factors discussed in this "Risk Factors" section and
elsewhere in this Annual Report on Form 10-K, these factors include:
our operating performance and the operating performance of similar companies;
the overall performance of the equity markets;
the number of shares of our common stock publicly owned and available for trading;
threatened or actual litigation;
changes in laws or regulations relating to our solutions;
any major change in our board of directors or management;
publication of research reports about us or our industry or changes in recommendations or withdrawal of research coverage by securities analysts;
large volumes of sales of our shares of common stock by existing stockholders; and
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