Overstock.com 2009 Annual Report Download - page 17

Table of Contents
Corporation, Target Corporation, Best Buy Co., Inc. and Barnes and Noble, Inc., most of which 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 not yet operating online.
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. Further, any of them may enter into strategic or commercial relationships with larger, more established
and well-financed companies, including exclusive distribution arrangements with our vendors that could deny us access to their products. Many of them could
devote greater resources to marketing and promotional campaigns and devote substantially more resources to their website and systems development than we
do. New technologies and the continued enhancement of existing technologies also may increase competitive pressures on us. 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").
Seasonality
Our business is affected by seasonality, which historically has resulted in higher sales volume during our fourth quarter, which ends December 31. We
recognized 38.5%, 30.6% and 36.8% of our annual revenue during the fourth quarter of 2007, 2008, and 2009, respectively.
Financial Information about Geographic Areas
See Item 15 of Part IV, "Financial Statements"—Note 25—"Business Segments" for more information.
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 intellectual property. Although we have registered and are pursuing the registration of our key trademarks in the United States
and some internationally, some of our trade names may not be eligible to receive registered trademark protection. In addition, effective trademark protection
may not be available or we may not seek protection in every country in which we market or sell our products and services, including in the United States.
Third parties have in the past, and may in the future, recruit our employees who have had access to our proprietary technologies, processes and
operations. These recruiting efforts expose us to the risk that such employees and those hiring them will misappropriate and exploit our intellectual property.
Legal and Regulatory Matters
From time to time, we receive claims and become subject to regulatory investigations or actions, consumer protection, employment, intellectual property
and other commercial litigation related to the conduct of our business. Such litigation could be costly and time consuming and could divert our management
and key personnel from our business operations. The uncertainty of litigation increases
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