Overstock.com 2009 Annual Report Download - page 39

Table of Contents
Fraudulent activities using our car and real estate listing sites and disputes between users of our car and real estate listing sites may harm our
business.
We are aware that other companies operating online car and real estate listing services have periodically received complaints from users alleging
improprieties in connection with listings and occasionally these complaints may result in regulatory action. With any online listing service there is the
possibility that sellers may attempt to employ "bait and switch" techniques, attracting consumers with advertisements of low cost, good condition vehicles in
hopes of switching buyer interest to another less favorable vehicle or different property once a potential purchaser responds. Additionally, sellers may attempt
to sell vehicles and real estate without accurate descriptions of the condition of the vehicles or real estate. We have occasionally received complaints of this
nature regarding both our car and real estate listing services. In response to serious or repeat complaints concerning a car or real estate dealer, we may take
action to prohibit such persons from listing inventory, but we do not have the ability to require users of our services to fulfill their obligations to make
accurate disclosures or comply with consumer laws prohibiting "bait and switch" or other prohibited seller tactics. We are aware that other companies
providing similar services periodically are threatened or by or subject to legal actions against the listing service for damages because of user conduct. We may
encounter similar legal actions in connection with our cars and real estate listing businesses, which may harm our business or reputation among consumers.
Risks Relating to our Community Site
Our community site business is a new business
Our Community site began operation in February 2006 with the introduction of Omuse, an Overstock supported, collaborative writing platform. Omuse
allows Community site users to read about and or write "guides" about a universe of subjects in which they may have a particular expertise or interest. The
Community site is also expected to have services intended to establish user forum participation, provide customers access to recent news about Overstock and
allow users the opportunity to participate in forum reading and writing, to create weblogs or post comments to the weblogs or "blogs" of other site users, or in
our Omuse collaborative writing platform. Presently Omuse is the only operating platform on the Community site. We cannot ensure that our expansion into
this business will succeed. It is a business which allows persons to contribute content within certain guidelines and subject to terms and conditions. We cannot
assure that our community users will abide by these terms and conditions, or that we will be able to interdict or remove inappropriate or infringing material.
Our entry into this business will require us to devote substantial financial, technical, managerial and other resources to this site. It is uncertain whether we will
benefit financially from the Community site. The Community site will also expose us to additional risks, including legal and regulatory risks, including, but
not limited to, legal actions for possible intellectual property infringement, and claims for libel. Additionally, our entry into the Community site service will
require us to compete with established businesses having substantially greater experience in the Community site service business and which have substantially
greater resources than we have.
Risks Relating to the Internet Industry
Our success is tied to the continued use of the Internet and the adequacy of the Internet infrastructure.
Our future revenues and profits, if any, substantially depend upon the continued widespread use of the Internet as an effective medium of business and
communication. Factors which could reduce the widespread use of the Internet include:
actual or perceived lack of security of information or privacy protection;
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