Incredimail 2010 Annual Report Download - page 15

We currently rely solely on the Internet as a means to sell our products. Accordingly, if we, or our customers, are unable to utilize the
Internet due to a failure of technology or infrastructure, terrorist activity or other reasons, we could lose current or potential customers and
revenues. While we have backup systems for most aspects of our operations, our systems are not fully redundant and our disaster recovery
planning may not be sufficient for all eventualities. In addition, we may have inadequate insurance coverage or insurance limits to compensate us
for losses from a major interruption. Furthermore, interruptions in our website could materially impede our ability to attract new companies to
advertise on our website and to maintain relationships with current advertisers. Difficulties of this kind could damage our reputation, be
expensive to remedy and curtail our growth.
Our products operate in a variety of computer configurations and could contain undetected errors or defects that could result in
product failures, lost revenues and loss of market share.
Our software may contain undetected errors, failures or defects, especially when the products are first introduced or when new versions
are released. Our customers’ computer environments are often characterized by a wide variety of standard and non-
standard configurations that
make pre-release testing for programming or compatibility errors very difficult and time-
consuming. Therefore, there could be errors or failures
in our products. In addition, despite testing by us and beta testing by some of our registered users, errors, failures or bugs may not be found in
new products or releases until after commencement of commercial sales. In the past, we have discovered software errors, failures and defects in
certain of our product offerings after their introduction and have likely experienced delayed or lost revenues during the period required to correct
these errors.
Errors, failures or defects in products released by us could result in negative publicity, product returns, loss of or delay in market
acceptance of our products, loss of competitive position or claims by customers. Alleviating any of these problems could require significant
expense and could cause interruptions.
Due to our evolving business model and rapid changes in the Internet, we may not be able to predict our future performance or continue
our revenue growth or profitability.
Since beginning operations in 2000, we have introduced many new products and initiatives, some of which have been
unsuccessful. Consequently, we have a limited history of ongoing operations from which to predict our future performance. The future viability
of our business will depend on our ability to increase product sales, introduce new products appealing to the Internet market, increase search
generated, affiliate and advertising revenues, exploit our brand name and control our costs, which we may be unable to do. As a result, we may
not be able to continue our revenue growth or profitability.
We may have difficulty managing our growth, which could limit our ability to increase our sales and control our costs.
The growth of our operations has slowed in recent years. Accelerated growth is required in order to achieve our business objectives,
placing increased demands on our management and on our operational resources. This growth has, and continues to increase the challenges
involved in:
If we cannot scale and manage our business appropriately, we will not experience our projected growth and our financial results will
suffer.
A decline in market acceptance for Microsoft technologies on which our products rely could have a material adverse affect on us .
Our products currently run on Microsoft Windows operating systems. A decline in market acceptance for Microsoft technologies or the
increased acceptance of other operating systems could cause us to incur significant development costs and could have a material adverse effect
on our ability to market our current products. Although we believe that Microsoft technologies will continue to be widely used by consumers, we
cannot assure you that consumers will adopt these technologies as anticipated or will not in the future migrate to other computing technologies
that we do not currently support. Moreover, although Microsoft technologies are still very dominant, competing technolgies such as from Apple
and Linux are increasing their market share. In addition, our products and technologies must continue to be compatible with new developments
in Microsoft technologies. We cannot assure you that we can maintain such compatibility or that we will not incur significant expenses in
connection therewith.
• implementing appropriate operational and financial systems and controls;
•
expanding our sales and marketing infrastructure and capabilities; and
• maintaining the commitment of our employees.
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