Overstock.com 2012 Annual Report Download - page 26

Table of Contents
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 transactions in the future, any negative impact on our international operations could negatively impact
our business. To date, most of our international sales have been denominated in U.S. dollars, and we have not had significant foreign currency risk on
those sales. However, in the future, 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.
Our foreign brand domain name may cause confusion.
In July 2010, we undertook an effort to associate our brand globally with the domain address: www.O.co. We did this in part because in many
foreign markets the word "Overstock" lacked a good foreign cognate. Following a period of testing for the O.co brand and domain address, we returned
to the Overstock.com name as our primary brand domestically because domestic consumer acceptance did 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 incur substantial indebtedness.
At December 31, 2012, we had no indebtedness for borrowed money, and our only credit facility was a $3 million facility for the issuance of
letters of credit. Although we have reduced our indebtedness substantially over the last several years, in the future we may again incur substantial
indebtedness. Any such indebtedness would increase our business risks, including our vulnerability to industry downturns and competitive pressures.
Further, financing may not be available to us on acceptable terms, or at all.
Existing or future government regulation could harm our business.
We are subject to regulation at the federal, state and international levels, including regulation relating to privacy, security, retention, transfer and use
of personal user information and telemarketing laws. Increasing regulation, along with increased governmental or private enforcement, may increase the
cost of our business. Compliance with existing and new privacy and security laws may be difficult and costly and may further restrict our ability to
collect demographic and personal information from
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