Overstock.com 2010 Annual Report Download - page 34

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 services, which may harm our business or reputation among consumers.
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;
possible disruptions, computer viruses or other damage to the Internet servers or to users' computers;
significant increases in the costs of transportation of goods; and
governmental regulation.
Customers may be unwilling to use the Internet to purchase goods.
Our long-term future depends heavily upon the general public's willingness to use the Internet as a means to purchase goods. Though e-commerce is
widely accepted as a means of purchasing consumer goods and services, we cannot give any assurance that it will continue to be widely accepted. The
demand for and acceptance of products sold over the Internet are still uncertain and most e-commerce businesses have a short track record. If consumers are
unwilling to use the Internet to conduct business, it would materially adversely impact our business, prospects, financial condition and results of operations.
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