Enom 2013 Annual Report Download - page 24

If any of these events occur, they could create instability in the domain name registration system and may make it difficult for us to
introduce new services in our registrar and registry services business. These events could also disrupt or suspend portions of our domain name
registration solution and subject us to additional restrictions on how the registrar and registry services businesses are conducted, which would
result in reduced revenue.
We may not be able to maintain our strategic relationships with third parties.
Some of our domain name business is conducted through NameJet, a joint venture with Web.com. In addition, we have formed strategic
alliances with certain business partners, such as Donuts. We cooperate with Donuts to acquire gTLD registry operator rights and have contracted
to provide Donuts with registry back-end infrastructure services. In addition, the gTLD application and acquisition process requires us to rely
upon or negotiate and collaborate with independent third par ties, including Donuts.
There can be no assurance that these strategic partners will continue their relationships with us in the future or that we will be able to
pursue our stated strategies with respect to these arrangements. Furthermore, our partners may (i) have economic or business interests or goals
that are inconsistent with ours; (ii) take actions contrary to our policies or objectives; (iii) undergo a change of control; (iv) experience financial
and other difficulties; or (v) be unable or unwillin
g to fulfill their obligations under our agreements, which may affect our financial conditions or
results of operations.
In addition, we have or intend to have agreements with some service providers or distribution partners who may partner with us in one
area of our business and compete with us in other areas of our business. There can be no assurance that we will be successful in establishing or
maintaining these relationships or that these relationships will be successful.
We face significant competition to our registrar service offering, which we expect will continue to intensify. We may not be able to maintain
or improve our competitive position or market share.
We face significant competition from existing registrars and from new registrars that continue to enter the market. ICANN currently has
approximately 1,000 registrars to register domain names in one or more of the gTLDs that it oversees. There are relatively few barriers to entry
in this market, so as this market c ontinues to develop we expect the number of competitors to increase. The continued entry into the domain
name registration market by competitive registrars and unaccredited entities that act as resellers for registrars, and the rapid growth of some
competitive registrars and resellers that have entered the market, may make it difficult for us to maintain our current market share.
The market for domain name registration and other related value-added web-based services is highly competitive and rapidly evolving.
We expect competition to increase from existing competitors as well as from new market entrants. These competitors include, among others,
domain name registrars, website design firms, website hosting companies, Internet service providers, Internet por tals and search engine
companies, and include companies such as GoDaddy, Web.com, Microsoft and Yahoo!. Some of these competitors have traditionally offered
more robust value-added services than we have, and some have greater resources, more brand recognition and consumer awareness, greater
international scope and larger bases of existing customers than we do. As a result, we may not be able to compete successfully against them in
future periods.
In addition, these and other large competitors, in an attempt to gain market share, may offer aggressive price discounts on the services
they offer. These pricing pressures may require us to match these discounts in order to remain competitive, which would reduce our margins, or
cause us to lose customers who decid e to purchase the discounted service offerings of our competitors. As a result of these factors, in the future
it may become increasingly difficult for us to compete successfully.
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legal, regulatory or other challenges could be brought, including challenges to the agreements governing our relationship with the
U.S. Department of Commerce or ICANN, or to the legal authority underlying the roles and actions of the U.S. Department of
Commerce, ICANN or us;
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the U.S. Congress or other legislative bodies in the United States could take action that is unfavorable to us or that influences
customers to move their business from our services to those located outside the United States;
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ICANN could fail to maintain its role, potentially resulting in instability in DNS services administration; and
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some governments and governmental authorities outside the United States have in the past disagreed, and may in the future disagree,
with the actions, policies or programs of ICANN, the U.S. government and registries relating to the DNS. The Affirmation of
Commitments established several multi-party review panels and contemplates a greater involvement by foreign governments and
governmental authorities in the oversight and review of ICANN. These periodic review panels may take positions that are unfavorable
to our business.