Expedia 2010 Annual Report Download - page 25

relationships with employees and travelers as a result of changes in their ownership and management. Further,
the evaluation and negotiation of potential acquisitions, as well as the integration of an acquired business, may
divert management time and other resources. Some acquisitions may not be successful and their performance
may result in the impairment of their carrying value.
Certain financial and operational risks related to acquisitions that may have a material impact on our
business are:
• Use of cash resources and incurrence of debt and contingent liabilities in funding acquisitions may limit
other potential uses of our cash, including stock repurchases, dividend payments and retirement of
outstanding indebtedness;
• Amortization expenses related to acquired intangible assets and other adverse accounting consequences;
• Costs incurred in identifying and performing due diligence on potential acquisition targets that may or
may not be successful;
• Difficulties and expenses in assimilating the operations, products, technology, privacy protection systems,
information systems or personnel of the acquired company;
• Impairment of relationships with employees, suppliers and affiliates of our business and the acquired
business;
• The assumption of known and unknown debt and liabilities of the acquired company;
• Failure to generate adequate returns on our acquisitions and investments;
• Entrance into markets in which we have no direct prior experience; and
• Impairment of goodwill or other intangible assets arising from our acquisitions.
We cannot be sure that our intellectual property is protected from copying or use by others, including
potential competitors.
Our websites rely on content and technology intellectual property, much of which we regard as proprietary.
We protect our proprietary technology by relying on trademarks, copyrights, trade secret laws, patents and
confidentiality agreements. In connection with our license agreements with third parties, we seek to control
access to and distribution of our technology, documentation and other proprietary information. Even with all of
these precautions, it is possible for someone else to copy or otherwise obtain and use our proprietary technology
or content without our authorization or to develop similar technology independently. Effective trademark,
copyright, patent and trade secret protection may not be available in every country in which our services are
made available through the internet, and policing unauthorized use of our proprietary information is difficult and
expensive. We cannot be sure that the steps we have taken will prevent misappropriation of our proprietary
information. This misappropriation could have a material adverse effect on our business. In the future, we may
need to go to court to enforce our intellectual property rights, to protect our trade secrets or to determine the
validity and scope of the proprietary rights of others. This litigation might result in substantial costs and diversion
of resources and management attention.
We currently license from third parties some of the technologies incorporated into our websites. As we
continue to introduce new services that incorporate new technologies, we may be required to license additional
technology. We cannot be sure that such technology licenses will be available on commercially reasonable terms,
if at all.
Part I. Item 1B. Unresolved Staff Comments
None.
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