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7
Competition
Content & Media
The online content and media market we participate in is new, rapidly evolving and intensely competitive. Competition is
expected to intensify in the future as more companies enter the space. We compete for business on a number of factors
including return on marketing investment, price, access to targeted audiences and quality. Our principal competitors in this
space include traditional Internet companies like Yahoo!, AOL and IAC, all of which are making significant investments in
order to compete with aspects of our business. Additionally, we compete with websites that focus on particular areas of
consumer interest such as WebMD, DailyBurn.com, and TheStreet.com. With respect to our social media tools we compete
with companies such as Jive Software and Bazaarvoice.
Registrar Services
The markets for domain name registration and web-based services are intensely competitive. We compete for business on
a number of factors including price, value-added services, such as e-mail and web-hosting, customer service and reliability. Our
principal competitors include existing registrars, such as GoDaddy, Tucows, Web.com and Melbourne IT, and new registrars
entering the domain name registration business. Once the New gTLD Program is fully implemented, we anticipate that we
would compete with registry operators, including VeriSign, Affilias, the Public Interest Registry, country-code TLD operators,
and others that are delegated new gTLDS under the New gTLD Program.
Intellectual Property
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 and technical measures, to protect the confidentiality of our proprietary
rights. As of December 31, 2012, we have been granted 18 patents by the United States Patent and Trademark Office and have
26 patent applications pending in the United States and other jurisdictions. Our patents expire between 2022 and 2031. We rely
more heavily on trade secret protection than patent protection. To protect our trade secrets, we control access to our proprietary
systems and technology and enter into confidentiality and invention assignment agreements with our employees and
consultants and confidentiality agreements with other third parties. In addition, because of the relatively high cost we would
experience in registering all of our copyrights with the United States Copyright Office, we generally do not register the
copyrights associated with our content with the United States Copyright Office.
Government Regulation
Advertising and promotional information presented to visitors on our websites and our other marketing activities are
subject to federal and state consumer protection laws that regulate unfair and deceptive practices. In the United States,
Congress has adopted legislation that regulates certain aspects of the Internet, including online content, user privacy, taxation,
liability for third-party activities and jurisdiction.
Federal, state, local and foreign governments are also considering other legislative and regulatory proposals that would
regulate the Internet in more and different ways than exist today. It is impossible to predict whether new taxes will be imposed
on our services, and depending upon the type of such taxes, whether and how we would be affected. Increased regulation of the
Internet both in the United States and abroad may decrease its growth and hinder technological development, which may
negatively impact the cost of doing business via the Internet or otherwise materially adversely affect our business, financial
condition or operational results.
Employees
As of December 31, 2012, we had over 700 employees. None of our employees is represented by a labor union or is
subject to a collective bargaining agreement. We believe that relations with our employees are good.
Available Information
We file reports with the SEC, including annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on
Form 8-K and any other filings required by the SEC. We make available free of charge in the investor relations section of our
corporate website (http://ir.demandmedia.com) our annual reports on Form 10-K, quarterly reports on Form 10-Q, current
reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically
filed with or furnished to the SEC. References to the Company's corporate website address in this report are intended to be
inactive textual references only, and none of the information contained on our website is part of this report or incorporated in
this report by reference.