Juno 2012 Annual Report Download - page 28

Table of Contents
the particular payment plan, may be maintained to facilitate future payment card transactions. We rely on third-party and internally-developed encryption
and authentication technology to provide the security and authentication to effectively secure transmission of confidential information, including
payment card numbers. Advances in computer capabilities, new discoveries in the field of cryptography or other developments may result in the
technology used by us to protect transaction data being breached or compromised. Non-technical means, for example, actions by an employee, can also
result in a data breach. Under payment card rules and our contracts with our card processors, if there is a breach of payment card information that we
store, we could be liable to the banks that issue the payment cards for their related expenses and penalties. In addition, if we fail to follow payment card
industry security standards, even if there is no compromise of customer information, we could incur significant fines or lose our ability to give our
members and customers the option of using payment cards. If we were unable to accept payment cards, our businesses would be seriously harmed.
We may need to expend significant resources to protect against security breaches or to address problems caused by breaches. Security breaches,
including any breach related to us or the parties with which we have commercial relationships, could damage our reputation and expose us to a risk of
loss, litigation and possible liability. We cannot assure you that the security measures we take will be effective in preventing these types of activities. We
also cannot assure you that the security measures of our third-party vendors, including network providers, providers of customer and billing support
services, and other vendors, will be adequate. In addition to potential legal liability, these activities may adversely impact our reputation or our revenues
and may interfere with our ability to provide our products and services, all of which could adversely impact our business. In addition, the coverages
and/or limits of our insurance policies may not be adequate to reimburse us for losses caused by security breaches.
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We are subject to a variety of international, federal, state, and local laws and regulations, including, without limitation, those relating to taxation,
bulk email or "spam," advertising, including, without limitation, targeted or behavioral advertising, user privacy and data protection, consumer
protection, antitrust, and unclaimed property. Compliance with the various laws and regulations, which in many instances are unclear or unsettled, is
complex. New laws and regulations, such as those being considered or recently enacted by certain states or the federal government related to automatic-
renewal practices, user privacy, targeted or behavioral advertising, floral-related fees and advertising, and taxation, could impact our revenues or certain
of our business practices or those of our advertisers. Any changes in the laws and regulations applicable to us, the enactment of any additional laws or
regulations, or the failure to comply with, or increased enforcement activity of, such laws and regulations, could significantly impact our products and
services, our costs, or the manner in which we or our advertisers conduct business, all of which could adversely impact our results of operations and
cause our business to suffer.
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Our emails have historically generated the majority of the traffic on our online nostalgia websites and are the most important driver of member
activity for our online loyalty marketing service. A significant number of members of our online nostalgia and online loyalty marketing services elect to
opt-out of receiving certain types of emails. Without the ability to email these members, we have very limited means of inducing these members to return
to our websites and utilize our services. In addition,
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