Overstock.com 2009 Annual Report Download - page 38

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Table of Contents
Risks Relating to our Cars Site and Real Estate Businesses
Our cars site and real estate businesses are relatively new businesses that may not succeed.
Our car listing site and real estate listing businesses began operation in December 2006 and August 2008, respectively. The listing sites are listing
services for automobile and real estate sellers. The online car listing service and real estate listing service are relatively new businesses for us. We cannot
ensure that our expansion into these businesses will succeed. Our entry into these businesses will require us to devote substantial financial, technical,
managerial and other resources to this car listing and real estate listing sites. It also exposes us to additional risks, including legal and regulatory risks, and it
requires us to compete with established businesses having substantially greater experience in the online car listing and real estate listing service businesses
and substantially greater resources than we have.
Our car listing and real estate listing businesses may be subject to a variety of regulatory requirements.
Many states and other jurisdictions, including Utah, where we are located, have regulations governing the conduct of car sellers and real estate agents
and public advertisement for car and real estate sales. Generally, these regulations govern the conduct of those sellers advertising their automobiles for sale
and real estate listing for sale and are not directly applicable to those providing the medium through which the advertisement is made available to the public.
Sellers are often subject to regulations in the nature of "truth in advertising laws." The application of these regulations to online car listing service and real
estate listing providers is not clear. Although we do not expect these laws to have a significant effect on our listing businesses, we will incur costs in
complying with these laws, and we may from time to time be required to make changes in our businesses that may increase our costs, reduce our revenues,
cause us to prohibit certain listing or advertising practices, or make other changes that may adversely affect our car and real estate listing businesses.
Current and future laws could affect our car and real estate listing businesses.
Like our shopping business, our car and real estate listing services are subject to most of the same laws and regulations that apply to other companies
conducting business on and off the Internet. In addition, our car and real estate listing services may be affected by other laws and regulations, such as those
that expressly apply to advertising automobiles and real estate for sale. To the extent that such current or future laws or regulations prevent users from selling
items on our car and real estate listing sites, they could harm our business.
Our business may be harmed if our car and real estate listing sites are used for unlawful transactions.
The law regarding the potential liability of an online listing service for automobile sales and real estate is not clear. The platforms of the listing services
are accessible to subscribers who have the ability to feature their cars and real estate listings for sale and supply the descriptions of the vehicles and properties,
including the general condition of the vehicle or property and other important information. We have no ability to know whether the information sellers
provide is correct. While our site terms and conditions of usage prohibit unlawful acts, we cannot rule out the possibility that users of our car and real estate
listing sites will engage in unlawful transactions, or fail to comply with all laws and regulations applicable to them and their transactions. We may be subject
to allegations of civil or criminal liability for any unlawful activities conducted by such users. Any costs we incur as a result of any such allegations, as a
result of actual or alleged unlawful transactions using our site, or in our efforts to prevent any such transactions, may harm our business. In addition, any
negative publicity we receive regarding any such transactions or allegations may damage our reputation, our ability to attract new customers to our main
shopping site, and the Overstock.com brand name generally.
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