Overstock.com 2011 Annual Report Download - page 32

Table of Contents
Fraudulent activities using our car listing site and disputes between users of our car listing site may harm our business.
We are aware that other companies operating online car listing service 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 once a potential purchaser responds. Additionally, sellers may attempt to sell vehicles without accurate
descriptions of the condition of the vehicles. We have occasionally received complaints of this nature regarding our car listing service. In response to serious
or repeat complaints concerning a car 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 listing service, which may harm our
business or reputation among consumers.
Our insurance coverage and indemnity rights may not adequately protect us against loss.
Although we maintain liability and other types of insurance, including but not limited to, property, workers compensation, general liability, product
liability, and security and privacy breach insurance, we cannot be certain that the types, coverage, or the amounts of coverage we maintain will be adequate
for losses actually incurred, or that the insurance will continue to be available to us on economically reasonable terms. Similarly, although we are indemnified
by most of our suppliers and vendors for product liability for products they supply us, and we have indemnification agreements with software and hardware
suppliers for losses we might incur as a result of the use of the technology products they supply, we are not indemnified by all our suppliers, nor can we be
certain that our indemnification rights are enforceable or adequate to cover actual losses we may incur as a result of the sale or use of products our
indemnitors provide to us. Actual losses for which we are not insured or indemnified, or which exceed our insurance coverage or the capacity of our
indemnitors, could harm our business, prospects, financial condition and results of operations.
Our travel site service is a relatively new business that may not succeed.
Our travel site began operation in April 2011. The listing site hosted by Priceline Partner Network Limited ("Priceline.com") is for travel and travel
related products and services. While we have offered vacation package services and products previously, the online travel business is a relatively new
business for us. We cannot ensure that our expansion into the business will succeed. Our entry into the business will require us to devote financial, technical,
managerial and other resources to this travel site. 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 travel service business and substantially greater resources than we have.
Current and future laws could affect our travel site business.
Like our shopping business, our travel site business is subject to most of the same laws and regulations that apply to other companies conducting
business on and off the Internet. In addition, our travel site business may be affected by other laws and regulations, such as those that expressly apply to sales
of travel-related products or services. Our failure or the failure of Priceline.com to follow current or future laws or regulations could harm our business.
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