Expedia 2014 Annual Report Download - page 20

continue to adversely affect, our ability to develop new site innovations. In addition, during the migration process
the sites may experience reduced functionality and decreases in conversion rates. Also, we may be unable to
devote financial resources to new technologies and systems, or enhancements to existing infrastructure,
technologies and systems, in the future. Overall, these implementations and systems enhancements may not
achieve the desired results in a timely manner, to the extent anticipated, or at all. If any of these events occur, our
business and financial performance could suffer.
Acquisitions, investments or significant commercial arrangements could result in operating and
financial difficulties.
We have acquired, invested in or entered into significant commercial arrangements with a number of
businesses in the past, and our future growth may depend, in part, on future acquisitions, investments or
significant commercial arrangements, any of which could be material to our financial condition and results of
operations. Certain financial and operational risks related to acquisitions, investments or significant commercial
arrangements that may have a material impact on our business are:
• 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, transactions, 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;
• Increased or unexpected costs or delays to obtain governmental approvals for acquisitions;
• Increased competition amongst potential acquirers for acquisition targets could result in a material
increase in the purchase price for such targets or otherwise limit our ability to consummate
acquisitions; and
• Adverse market reaction to acquisitions or investments or failure to consummate such transactions.
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