Overstock.com 2006 Annual Report Download - page 21

however, we sometimes have difficulty retaining senior level personnel. If we are unable to retain our senior management with our
current compensation structure and incentive plans, we may lose members of senior management and/or be required to modify our
compensation structure and/or retention plans.
We have a rapidly evolving business model.
Our business model has evolved and continues to do so. In the past we have added additional types of services and product
offerings, and in some cases we have modified or discontinued those offerings. We may continue to try to offer additional types of
products or services, and we cannot offer any assurance that any of them will be successful. From time to time we have also modified
aspects of our business model relating to our product mix and the mix of direct/fulfillment partner sourcing of the products we offer.
We may continue to modify this aspect of our business as well as other significant aspects of our businiess. We cannot offer any
assurance that these or any other modifications will be successful.
We may be unable to manage expansion into new business areas which could harm our business operations and reputation.
Our long-term strategic plan involves expansion of our operations to offer additional types of products and services. We cannot
assure you that our efforts to expand our business in this manner will succeed. Because we were unable to generate significant traffic
for our former B2B site, in the third quarter of 2004, we merged the B2B site into our main website, and opened our Wholesale bulk
purchase program. We have also attempted to expand into other areas, such as the "Other Frontiers" listed under the "Other Stores"
link, and the results of these expansion efforts have not yet met our expectations. Our failure to succeed in these markets or businesses
or in other product or service offerings may harm our business, prospects, financial condition and results of operation. We cannot
assure you that we will be able to expand our operations in a cost-effective or timely manner or that our efforts to expand will be
successful. Furthermore, any new business or Website we launch that is not favorably received by consumers could damage our
reputation or the Overstock.com brand. We may expand the number of categories of products we carry on our Websites and these and
any other expansions of our operations would also require significant additional expenses and development and would strain our
management, financial and operational resources. The lack of market acceptance of such efforts or our inability to generate
satisfactory revenues from such expanded services or products to offset their cost could harm our business, prospects, financial
condition and results of operations.
We may expand our international business, causing our business to become increasingly susceptible to numerous international
business risks and challenges that could affect our profitability.
We have begun to expand into international markets, and in the future we may do so more aggressively. International sales and
transactions are subject to inherent risks and challenges that could adversely affect our profitability, including:
• the need to develop new supplier and manufacturer relationships;
• the need to comply with additional laws and regulations to the extent applicable;
• unexpected changes in international regulatory requirements and tariffs;
• difficulties in staffing and managing foreign operations;
• longer payment cycles from credit card companies;
• greater difficulty in accounts receivable collection;
• potential adverse tax consequences;
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