Overstock.com 2015 Annual Report Download - page 34

ordered or when the products received are materially different from the sellers’ descriptions. We also may be unable to prevent sellers on our sites or through
other seller sites from selling unlawful goods, selling goods in an unlawful manner, or violating the proprietary rights of others, and could face civil or
criminal liability for unlawful activities by our sellers.

Many states and other jurisdictions, including Utah, where we are located, have regulations governing the conduct of car sellers and public
advertisement for car sales. Generally, these regulations govern the conduct of those sellers advertising their automobiles for sale and are not directly
applicable to those providing the medium through which the advertisement is made available to the public. Sellers are often subject to regulations in the
nature of “truth in advertising laws.” We have no ability to know whether the information sellers provide is correct. While our site terms and conditions of
usage prohibit unlawful acts, we cannot assure that sellers will comply with all laws and regulations applicable to them and their transactions. The
application of these regulations to online car listing service providers is not clear. Although we do not expect these laws to have a significant effect on our
listing service, we will incur costs in complying with these laws, and we may from time to time be required to make changes in our service that may increase
our costs, reduce our revenues, cause us to prohibit certain listing or advertising practices, or make other changes that may adversely affect our car listing
service. Further, like our shopping business, our car listing service is subject to most of the same laws and regulations that apply to other companies
conducting business on and off the Internet. To the extent that current or future laws or regulations prevent users from selling items on our car listing site,
they could harm our business. In addition, any negative publicity we receive regarding any allegations of unlawful or deceptive conduct may damage our
reputation, our ability to attract new customers to our main shopping site, and our brand name generally. The occurrence of any of the foregoing could have a
material adverse effect on our business.

We recently launched Supplier Oasis, a single integration point through which partners can manage their products, inventory and sales channels,
which includes multi-channel fulfillment services to sellers, suppliers, and partners. The marketplace for these services is highly competitive, and many of our
current and potential competitors in this area have greater brand recognition, longer operating histories, larger customer bases and significantly greater
financial, marketing and other resources than we do. Our continued development of Supplier Oasis may require substantial investments over a lengthy period
of time. Further, most of the risks applicable to our business generally are also applicable to the business of Supplier Oasis. If we are unable to generate
sufficient revenues and gross profits from Supplier Oasis, it could have a material adverse effect on our business.

In late 2014 we launched Farmers Market, a tab within our website from which our customers can order locally grown fresh produce and other food
products. Farmers Market competes with a wide variety of businesses nationwide, many of which have greater brand recognition, longer operating histories,
larger customer bases and significantly greater financial, marketing and other resources than we do. Our continued development of Farmers Market may
involve delivery and other issues that may be different from those we face in connection with the sale and delivery of non-perishable products. Further, most
of the risks applicable to our business generally are also applicable to our Farmers Market business. Any significant difficulties we encounter with our
Farmers Market offering could have a material adverse effect on our business.

In 2014 we launched a tab offering insurance for vehicle, residential and small businesses on our website. The tab allows consumers to compare live
quotes for insurance on residential, vehicle, and small business insurance, and to bind (pay for and have go into effect) insurance policies. The insurance
business is highly competitive, and many of our current and potential competitors in this area have greater brand recognition, longer operating histories,
larger customer bases and significantly greater financial, marketing and other resources than we do. Further, most of the risks applicable to our business
generally are also applicable to our insurance offerings business. Any significant difficulties we encounter with our insurance offerings could have a material
adverse effect on our business.


33