Enom 2015 Annual Report Download - page 10

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Content & Media. We face intense competition for our Content & Media service offering from a wide range of
competitors. These markets are rapidly evolving, fragmented and competition could increase in the future as more
companies enter the space. We compete for advertisers on the basis of a number of factors including return on marketing
expenditures, price of our offerings, and the ability to deliver large amounts, or precise types, of segmented customer
traffic. Our principal competitors in this space currently include various online media companies, ranging from large
Internet media companies to specialized and enthusiast properties that focus on particular areas of consumer interest, as
well as social media outlets such as Facebook, Snapchat and Pinterest, where brands and advertisers are focusing a
significant portion of their online advertising spend in order to connect with their customers. Some of our competitors
have larger audiences and more financial resources than we have and many of our competitors are making significant
investments, particularly in online video, in order to compete with various aspects of our business. Our primary
competitors for our content marketing and custom content services are other companies, such as Contently and Skyword,
that also provide content marketing services and/or employ a content creation model similar to our platform.
Marketplaces. Our art and design marketplaces compete with a wide variety of online and brick-and-mortar
companies selling comparable products. Society6 competes with companies, such as RedBubble, Zazzle and Minted,
that utilize a print-on-demand model whereby specialty products are produced and shipped to customers with selected
user or artist generated designs printed on them, as well as small online providers of niche customization services and
product offerings. Saatchi Art competes with traditional offline art galleries, art consultants and other online properties
selling original artwork, such as Artfinder, Artspace, Ugallery and Amazon Art. Our marketplaces must successfully
attract, retain and engage both buyers and sellers to use our platforms. We believe that the principal competitive factors
for our marketplaces include the quality, price and uniqueness of the products or artworks being offered; the selection of
goods and artists featured; the ability to source numerous products efficiently and cost-effectively with respect to our
print-on-demand products; customer service; the convenience and ease of the shopping experience we provide; and our
reputation and brand strength. We expect competition to continue to intensify as online and offline businesses
increasingly compete with each other and the barriers to enter online channels are reduced.
Many of our current Content & Media and Marketplaces competitors have, and potential competitors may have,
substantially greater financial, marketing and other resources than we have; greater technical capabilities; greater brand
recognition; longer operating histories; differentiated products and services; and larger customer bases. These resources
may help some of our competitors respond more quickly as the industry and technology evolves, focus more on product
innovation, adopt more aggressive pricing policies and devote substantially more resources to website and system
development than we do. Additional information regarding competition is included under the heading “Risk Factors” in
Part I, Item 1A of this Annual Report on Form 10-K.
Intellectual Property
Our intellectual property consists of trade secrets, trademarks, service marks, patents and copyrights and is, in the
aggregate, important to our business. To protect our proprietary rights, we rely on a combination of trade secret,
trademark, patent and copyright laws in the United States and other jurisdictions, together with contractual provisions
and technical measures. As of February 24, 2016, we held more than 30 U.S. trademark registrations (some of which are
registered in multiple classes), including “Demand Media,” “eHow,” “Society6” and “Cracked.” We have also registered
certain trademarks in various countries outside of the U.S. As of February 24, 2016, we held approximately 15 patents
granted by the United States Patent and Trademark Office and six patents granted by other jurisdictions, and we have
approximately 15 patent applications pending in the United States and other jurisdictions. 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 we enter into confidentiality and invention assignment agreements with our
employees and consultants, as well as confidentiality and non-disclosure agreements with other third parties. 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. In addition to the intellectual property we own, we
also have licenses to use the “Saatchi” and “Livestrong.com” names as permitted by the terms of intellectual property or
licensing agreements with the third parties who retain the ownership rights to such names. Additional information
regarding certain risks related to our intellectual property is included under the heading “Risk Factors” in Part I, Item 1A
of this Annual Report on Form 10-K.