Incredimail 2013 Annual Report Download - page 9

We rely heavily on the ability to offer our search properties to users of consumer downloadable software products and subsequently
retain our search properties. Should this offering be blocked, constrained, limited, materially changed, based on change of guidelines or
otherwise, or made redundant by any of our search engine providers, including Microsoft and Google, our ability to generate revenues
from our users' search activity could be significantly reduced.
The search services agreement with each of Microsoft, Google and other search partners of ours requires that we comply with certain
guidelines promulgated by them for the use of its brands and services, including the manner in which their paid listings are displayed within
search results, and that we establish guidelines to govern certain activities of third parties to whom we syndicate paid listings, including the
manner in which those parties drive search traffic to their websites and display paid listings. Subject to certain limitations, any one of our search
partners may unilaterally update its policies and guidelines, which could in turn require modifications to, or prohibit and/or render obsolete
certain of our products, services and/or practices, which could be costly to address or otherwise have an adverse effect on our business, our
financial condition and results of operations. Noncompliance with our search partners' guidelines, especially Microsoft’
s or Google's guidelines,
by us or by third parties to which we syndicate paid listings or by the publishers through whom we secure distribution arrangements for our
products could, if not cured, result in such companies' suspension of some or all of their services to the websites of our third party publishers,
the imposition of additional restrictions on our ability to syndicate paid listings or distribute our products or the termination of the services
agreement by our search partners.
The guidelines imposed pursuant to our agreement with Google, with respect to homepage resets, installing toolbars and default search
resets to Google services when providing downloadable applications were changed in February 2013, and this had negative revenue
implications. Since then, Google has continued instituting other less material changes to its policy governing its relationship with search
partners. Should Microsoft, Google or other companies providing Internet browsers, effectively further restrict, discourage, or otherwise hamper
companies, like us, from offering or changing the search properties, this would cause a material adverse effect on our revenue and our financial
results.
Should the providers of the underlying platforms, and browsers in particular, further block, constrain, limit, materially change their
guidelines or the way they operate, our ability to generate revenues from our users' search activity could be significantly reduced.
In December 2013, Google announced that it will restrict the ability to install multi-
purpose extensions onto its Chrome internet
browser starting in June 2014. As most of our offerings offer such multi-
purpose extensions, this policy decision is expected to adversely affect
our business. Should Microsoft, Google or other companies providing Internet browsers, or other underlying platforms effectively further
restrict, discourage, or otherwise hamper companies, like us, from offering or changing the search properties, this would cause a material adverse
effect on our revenue and our financial results.
If we are unable to successfully integrate the recently acquired ClientConnect business and our legacy business, our operating results
may be adversely affected.
On January 2, 2014, we completed the acquisition of the ClientConnect business, which is substantially larger than our legacy
business. Achieving the expected benefits of the ClientConnect Acquisition will depend on the timely and efficient integration of
ClientConnect's and our operations, technology, business culture and personnel. The integration may not be completed as expected, and if we fail
to effectively integrate the operations, we may not achieve the expected benefits of the acquisition. The challenges involved in completing this
integration include:
• effectively managing the ClientConnect business independently of Conduit;
•
transfer of the ClientConnect business to our brand by the end of the transition period during which we are permitted to utilize the
name "Conduit";
• completing the integration of the operations of the ClientConnect business with our legacy operations;
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