Enom 2012 Annual Report Download - page 29

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• changes in our pricing policies or those of our competitors, changes in domain name fees charged to us by Internet
registries or the Internet Corporation for Assigned Names and Numbers, or ICANN, or other competitive pressures on
our prices;
• our ability to identify, develop and successfully launch new products and services;
• the timing and success of new services and technology enhancements introduced by our competitors, which could
impact both new customer growth and renewal rates;
• the entry of new competitors in our markets;
• our ability to keep our platform, domain name registration services and our owned and operated websites operational
at a reasonable cost and without service interruptions;
• increased product development expenses relating to the development of new services;
• the amount and timing of operating costs and capital expenditures related to the maintenance and expansion of our
services, operations and infrastructure;
• changes in generally accepted accounting principles;
• our focus on long-term goals over short-term results;
• federal, state or foreign regulation affecting our business; and
• weakness or uncertainty in general economic or industry conditions.
It is possible that in one or more future quarters, due to any of the factors listed above, a combination of those factors or
other reasons, our operating results may be below our expectations and the expectations of public market analysts and
investors. In that event, the price of our shares of common stock could decline substantially.
Changes in our business model or external developments in our industry could negatively impact our operating margins.
Our operating margins may experience downward pressure as a result of increasing competition and increased
expenditures for many aspects of our business, including expenses related to content creation. For example, historically, we
have focused on the creation of shorter-form text articles or standard videos for our owned and operated websites, including
"how to" articles for eHow. However, if we increase the number of longer-form or "feature" articles or premium videos or
choose to create other forms of content formats, and in turn reduce our investment in the shorter-form types of content, our
operating margins may suffer as these other forms of content may be more expensive to create and the corresponding return on
investment, if any, could be reduced. In addition, we intend to enter into additional revenue sharing arrangements with our
customers which could cause our operating margins to experience downward pressure if a greater percentage of our revenue
comes from advertisements placed on our network of customer websites compared to advertisements placed on our owned and
operated websites. Additionally, the percentage of advertising fees that we pay to our customers may increase, which would
reduce the margin we earn on revenue generated from those customers.
Our historic revenue growth rate may not be sustainable.
Our revenue increased rapidly in each of the fiscal years ended December 31, 2008 through December 31, 2012. We may
not be able to sustain our revenue growth rate in future periods and you should not rely on the revenue growth of any prior
quarterly or annual period as an indication of our future performance. If our future growth fails to meet investor or analyst
expectations, it could have a materially negative effect on our stock price. If our growth rate were to decline significantly or
become negative, it would adversely affect our business, financial condition and results of operations.