Enom 2013 Annual Report Download - page 11

Customers
We currently deploy our content & media service offering
, including our content creation and distribution platform and our suite of social
media tools, to website publishers, brands and advertisers. We also sell our print-on-demand products through Society6 and our paid content
directly to individual consumers.
We provide our registrar services to a network of more than 20,000 active resellers including large e-commerce websites, Internet service
providers and web-hosting companies, as well as directly to over 225,000 customers. As of December 31, 2013, our three largest registrar resell
ers, in the aggregate, accounted for 32% of our total domain names under management. Each registry we operate will distribute domain names to
registrants exclusively through accredited registrars and their resellers.
Competition
Content & Media
The online content and media markets we participate in are rapidly evolving, fragmented and intensely competitive. Competition is
expected to intensify in the future as more companies enter the space. Our content creation and distribution platform competes for business on a
number of factors including return on marketing investment, price, access to targeted audiences and quality. The principal competitors for our
owned and operated websites 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, and we also compete with websites that focus on particular areas of consumer
interest. Our primary competitors for our content solutions service offering are Contently, Scripted and Newscred . We face competition in the
market for customized products from a wide range of companies including other online providers of customized products, such as RedBubble,
and small online providers of niche customization services and product offerings. We believe the principal competitive factors in this space are
user experience, favorable brand recognition and trust, the quality, breadth and uniqueness of the products sold, the ability to source products
efficiently and cost-effectively, the ability to recruit artists to upload their designs, competitive pricing and effective marketing. With respect to
our social media tools, we compete with companies such as Jive Software and Bazaarvoice.
Some of our current and potential competitors may have significantly greater financial, marketing and other resources than us, including
significant brand recognition, differentiated products and services, sales volume and customer bases. These resources may help some of our
competitors move more quickly than us as the industry evolves and focus more on product innovation. Some of our competitors may be able to
secure goods and materials from suppliers on more favorable terms, devote greater resources to marketing activities, adopt more aggressive
pricing policies and devote substantially more resources to website and system development than us.
Domain Name Services
The markets for domain name registration and web-based services are intensely competitive. For our registrar business, we compete on a
number of factors including price, customer service, reliability, available TLDs and value-added services, such as e-mail and web hosting. Our
principal competitors to our registrar business include existing registrars, such as GoDaddy, Tucows, Web.com and Melbourne IT, some of
which have more extensive value-added service offerings and larger advertising and marketing budgets than we do, as well as new registrars
who may enter the domain name registration business in the future. Once the New gTLD Program is fully implemented, our registry business
will compete with existing registry operators, including VeriSign, Afilias and the Public Interest Registry, country-code TLD operators, and new
registry operators that are delegated new gTLDS under the New gTLD Program. We expect to compete with these existing and new registry
operators on the basis of price, market relevance, availability of high-
quality second level domains, bundling with other TLDs and availability of
other registry-related services, such as the DPML.
Intellectual Property
Our intellectual property, which consists of trade secrets, trademarks, patents and copyrights, is, in the aggregate, important to our
business. We rely on a combination of trade secret, trademark, patent and copyright laws in the United States and other jurisdictions, together
with employee and third-party confidentiality and non-disclosure agreements and technical measures, to protect the confidentiality of our
proprietary rights. As of December 31, 2013, we have been granted 19 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 July 2022 and February 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, including our platforms, and enter into confidentiality and invention assignment agreements with our employees and consultants and
confidentiality and non-disclosure agreements with other third parties. As of December 31, 2013, we held over 50 U.S. trademark registrations
(some of which are registered in multiple classes), including “Demand Media,” “eHow” and “Cracked.” We have also registered certain
trademarks in various countries outside of the U.S. We generally do not register the copyrights associated with our content with the United States
Copyright Office due to the relatively high cost we would incur to register all of our copyrights.
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