Overstock.com 2007 Annual Report Download - page 15

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Competition
The online liquidation services market is new, rapidly evolving, intensely competitive and has relatively low barriers to entry, as new competitors can
launch new websites at relatively low cost. We believe that competition in the online liquidation market is based predominantly on:
price;
product quality and selection;
shopping convenience;
order processing and fulfillment;
customer service; and
company brand recognition.
Our liquidation services compete with other online retailers and traditional liquidation "brokers", some of which may specifically adopt our methods and
target our customers. We currently or potentially compete with a variety of companies that can be divided into several broad categories:
liquidation e-tailers such as SmartBargains;
online general retailers with discount departments such as Amazon.com, Inc., eBay, Inc. and Buy.com, Inc.;
online specialty retailers such as BlueNile and BackCountry; and
traditional retailers and liquidators such as Ross Stores, Inc., Walmart Stores, Inc., TJX Companies, Inc., Costco Wholesale Corporation, Target
Corporation, Best Buy Co., Inc. and Barnes and Noble, Inc., which may or may not also have an online presence.
As the market for online liquidation grows, we believe that companies involved in online retail, as well as traditional retailers and liquidation brokers,
will increase their efforts to develop services that compete with our online services. We also face potential competition from Internet companies not yet
focused on the liquidation market, and from retail companies who are currently operating or not yet operating online. We are unable to anticipate which other
companies are likely to offer services in the future that will compete with the services we provide.
In addition, many of our current and potential competitors have greater brand recognition, longer operating histories, larger customer bases and
significantly greater financial, marketing and other resources than we do, and may enter into strategic or commercial relationships with larger, more
established and well-financed companies. Some of our competitors could enter into exclusive distribution arrangements with our vendors and deny us access
to their products, devote greater resources to marketing and promotional campaigns and devote substantially more resources to their website and systems
development than our company. New technologies and the continued enhancement of existing technologies also may increase competitive pressures on our
company. We cannot ensure that we will be able to compete successfully against current and future competitors or address increased competitive pressures
(see Item 1A—"Risk Factors").
Intellectual Property
We regard our domain names and similar intellectual property as critical to our success. We rely on a combination of laws and contractual restrictions
with our employees, customers, suppliers, affiliates and others to establish and protect our proprietary rights. Despite these precautions, it may be possible for
a third party to copy or otherwise obtain and use our intellectual property without authorization. In addition, we cannot ensure that others will not
independently develop similar
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