Overstock.com 2011 Annual Report Download - page 23

Table of Contents
not occur as quickly as we had hoped. While we have returned domestically to the Overstock.com brand and principal domain address, there is no assurance
that the use of Overstock.com or O.co will gain acceptance or have success in foreign markets.
We may be unable to manage expansion into new business areas which could harm our business operations and reputation.
Our long-term strategic plan involves expansion of our operations to offer additional types of products and services. We may not be able to expand our
business in this manner. Our failure to succeed in these markets or businesses or in other product or service offerings may harm our business, prospects,
financial condition and results of operation. We cannot give any assurance that we will be able to expand our operations in a cost-effective or timely manner
or that our efforts to expand will be successful. Furthermore, any new business or website we launch that is not favorably received by consumers could
damage our reputation or the Overstock.com brand. We may expand the number of categories of products we carry on our Website and these and any other
expansions of our operations would also require significant additional expenses and development and would strain our management, financial and operational
resources. The lack of market acceptance of such efforts or our inability to generate satisfactory revenues from such expanded services or products to offset
their cost could harm our business, prospects, financial condition and results of operations.
We are attempting to expand our international business, which may cause our business to become increasingly susceptible to numerous international
business risks and challenges that could affect our profitability.
We sell 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 U.S. and foreign laws and regulations to the extent applicable, including but not limited to, restrictions on
advertising practices, regulations governing online services, restrictions on importation of specified or proscribed items, importation quotas,
consumer protection laws, enforcement of intellectual property rights, laws dealing with consumer and data protection, privacy, encryption, and
restrictions on pricing or discounts;
changes in international laws, regulatory requirements, taxes and tariffs; and
geopolitical events such as war and terrorist attacks.
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 U. S. dollars may contribute to fluctuations in our results of operations
and fluctuating exchange rates could cause reduced gross revenues and/or gross profit percentages from non-dollar-denominated international sales.
Additionally, penalties for non-compliance with laws applicable to international business and trade, such as the U.S. Foreign Corrupt Practices Act, could
negatively impact our business.
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,
affiliate marketing websites, 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
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