Overstock.com 2007 Annual Report Download - page 24

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 plan to begin selling products in international markets, and in the future we may expand into these markets 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;
price controls or other restrictions on foreign currency; and
difficulties in obtaining export and import licenses.
To the extent we generate international sales and transactions in the future, any negative impact on our international operations could negatively impact
our business. In particular, gains and losses on the conversion of foreign payments into United States dollars may contribute to fluctuations in our results of
operations and fluctuating exchange rates could cause reduced gross revenues and/or gross margins from non-dollar-denominated international sales.
In order to obtain future revenue growth and achieve and sustain profitability, we will have to attract and retain customers on cost-effective terms.
Our success depends on our ability to attract and retain customers on cost-effective terms. We have relationships with online services, search engines,
directories and other Website and e-commerce businesses to provide content, advertising banners and other links that direct customers to our Website. We
rely on these relationships as significant sources of traffic to our Website and to generate new customers. If we are unable to develop or maintain these
relationships on acceptable terms, our ability to attract new customers and our financial condition could be harmed. In addition, certain of our online
marketing agreements may require us to pay upfront fees and make other payments prior to the realization of the sales, if any, associated with those payments.
Accordingly, if these agreements or similar agreements that we may enter into in the future fail to produce the sales that we anticipate, our results of
operations will be adversely affected. We cannot assure you that we will be able to increase our revenues, if at all, in a cost-effective manner. We periodically
conduct national television and radio branding and advertising campaigns. Such campaigns are expensive and may not result in the cost effective acquisition
of customers.
Further, many of the parties with which we may have online-advertising arrangements could provide advertising services for other online or traditional
retailers and merchandise liquidators. As a result, these parties may be reluctant to enter into or maintain relationships with us. Failure to achieve sufficient
traffic or generate sufficient revenue from purchases originating from third parties may result in termination of these relationships by these third parties.
Without these relationships, our revenues, business, prospects, financial condition and results of operations could suffer.
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