Expedia 2012 Annual Report Download - page 32

• Use of cash resources and incurrence of debt and contingent liabilities in funding acquisitions,
including with regard to future payment obligations in connection with put/call rights, 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, including changes in fair value of contingent consideration;
• Expected and unexpected costs incurred in pursuing acquisitions, including identifying and performing
due diligence on potential acquisition targets that may or may not be successful;
• Diversion of management’s attention or other resources from our existing businesses;
• 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 of the acquired company to achieve anticipated traffic, revenues, earnings or cash flows or to
retain key management or employees;
• Failure to generate adequate returns on our acquisitions and investments, or returns in excess of
alternative uses of capital;
• Entrance into markets in which we have no direct prior experience and increased complexity in our
business;
• Challenges relating to the structure of an investment, such as governance, accountability and decision-
making conflicts that may arise in the context of a joint venture or majority ownership investment;
• Impairment of goodwill or other intangible assets such as trademarks or other intellectual property
arising from our acquisitions;
• Costs associated with litigation or other claims arising in connection with the acquired company; and
• Adverse market reaction to acquisitions or investments or failure to consummate such transactions.
Moreover, we rely heavily on the representations and warranties provided to us by the sellers of acquired
companies, including as they relate to creation, ownership and rights in intellectual property and compliance with
laws and contractual requirements. Our failure to address these risks or other problems encountered in connection
with past or future acquisitions and investments could cause us to fail to realize the anticipated benefits of such
acquisitions or investments, incur unanticipated liabilities and harm our business generally.
We cannot be sure that our intellectual property is protected from copying or use by others, including
potential competitors.
Our websites rely on content, brands and technology, much of which is proprietary. We protect our
intellectual property by relying on a combination of 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 the use and distribution of, our proprietary information. Even with these precautions, it may be
possible for another party to copy or otherwise obtain and use our intellectual property without our authorization
or to develop similar intellectual property independently. Effective trademark, copyright, patent and trade secret
protection may not be available in every jurisdiction in which our services are made available, and policing
unauthorized use of our intellectual property is difficult and expensive. We cannot be sure that the steps we have
taken will prevent misappropriation or infringement of intellectual property. Any misappropriation or violation of
our rights could have a material adverse effect on our business. Furthermore, we may need to go to court or other
tribunals to enforce our intellectual property rights, to protect our trade secrets or to determine the validity and
26