Incredimail 2011 Annual Report Download - page 28

In July 2006 a patent was awarded to the Company in the in the United States entitled “
System and Method for visual feedback of command execution in
electronic mail systems”.
In 2011 the Israeli Patent office concluded the examination and has notified the Company that it is willing to allow a patent of said application in Israel. A
correspondent application is still pending in the EPO.
In 2007 an international application was filed for an invention entitled "Interactive Message Editing System and Method". This application was filed as part
of the National Phase in the USA, Europe and China.
We enter into licensing arrangements with third parties for the use of graphic, sound and multimedia content integrated into our products.
We have registered: (i) IncrediMail, and PhotoJoy as trademarks in the United States, the European Community (a community Trademark) and China; (ii)
“Smilebox Teeth Design” in the United States; and (iii) “Smilebox”
in Australia, Canada, China, France, Germany, Japan, Korea, United Kingdom and the United
States.
We have pending trademark applications of “Perion” in Israel, United States the European Community (a community Trademark).
All professional employees and technical consultants are required to execute confidentiality covenants in connection with their employment and consulting
relationships with us. We also require them to agree to disclose and assign to us all inventions conceived in connection with their services to us. However, there can be
no assurance that these arrangements will be enforceable or that they will provide us with adequate protection.
Competition
The vertical markets we are active in are subject to intense competition. Our products compete in the specialized market for email software products, digital
photo services and PC safety and security, aiming to offer simple, safe and useful applications.
Perion was among the first companies to offer to the consumer email market a solution that combines an easy to use and intuitive email product with a gallery
of creative content. Providing this kind of solution and compiling content is a lengthy process and based on a prolonged relationship with our users, and we have been
doing it since 2000. We believe we have established ourselves with our unique demographic segment, as a provider of solutions answering to these needs, and we
believe that we have as such an advantage over many of our competitors.
In the digital photo sharing space, our Smilebox product is unique in that it is the only service that enables consumers to create a complete range of digital
creations that can be shared electronically via email, Facebook or Twitter complete with music, interactivity and animation or physically via print, DVD or photo
frame. Smilebox is unique in personalizing the photo sharing experience on smart-
phones, by easily enabling the user to personalize their photos with content, and
which can then be shared in a way that is personal via email, SMS or Facebook.
Our ability to compete effectively depends upon our ability to distinguish our Company and our products from our competitors and their products, and
includes the following factors:
With respect to our communication products, our main competition is with web-
based email software products, such as Google's Gmail™, Yahoo! Mail™
and Microsoft's Hotmail™. The web based email market is characterized with significant competition, changing technologies and evolving products and services
enhancements.
Google, Yahoo! and Microsoft each offer a web-based e-
mail service in addition to the many other services they provide, such as desktop search, local search,
instant messaging, photos, maps, video sharing, mobile applications, and so on. We expect these competitors to increasingly use their financial and engineering
resources to compete with our client-based e-
mail service, and if we are unable to successfully compete with them, our results of operations may be adversely affected.
• the simplicity of use
•
product quality;
•
product pricing;
•
the creativity, variety and volume of content accessible through our software;
• success and timing of new product development and introductions;
•
maintaining our reputation for safe and reliable products; and
•
development of successful marketing channels.
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