ServiceMagic 2010 Annual Report Download - page 21

Table of Contents
tax provisions and accruals. Any adverse outcome of any such audit or review could have a an adverse effect on our financial condition and
results of operations.
We may experience operational and financial risks in connection with acquisitions. In addition, some of the businesses we acquire may incur
significant losses from operations or experience impairment of carrying value.
We have made numerous acquisitions in the past and our future growth may depend, in part, on acquisitions. We may experience
operational and financial risks in connection with acquisitions. To the extent that we continue to grow through acquisitions, we will need to:
•
successfully integrate the operations, as well as the accounting, financial controls, management information, technology, human
resources and other administrative systems, of acquired businesses with our existing operations and systems;
• retain or hire senior management and other key personnel at acquired businesses; and
•
successfully manage acquisition
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related strain on the management, operations and financial resources of IAC and/or acquired
businesses.
We may not be successful in addressing these challenges or any other problems encountered in connection with historical and future
acquisitions. In addition, the anticipated benefits of one or more acquisitions may not be realized and future acquisitions could result in
potentially dilutive issuances of equity securities and the assumption of contingent liabilities. Also, the value of goodwill and other intangible
assets acquired could be impacted by one or more continuing unfavorable events and/or trends, which could result in significant impairment
charges. The occurrence of any these events could have an adverse effect on our business, financial condition and results of operations.
We operate in certain international markets in which we have limited experience, and as a result, face additional risks. We may not be able to
successfully expand into new, or further into existing, international markets.
We currently operate in a limited number of jurisdictions abroad and may continue to expand our international presence. In order for our
products and services in these jurisdictions to achieve widespread acceptance, commercial use and acceptance of the internet must continue to
grow, which growth may occur at slower rates than those experienced in the U.S. Moreover, we must continue to successfully tailor our services
to the unique customs and cultures of these jurisdictions, which can be difficult and costly and the failure to do so could slow our international
growth.
Operating abroad, where we have limited experience, exposes us to additional risks. For example, we may experience difficulties in
managing operations due to distance, language and cultural differences, including issues associated with the establishment of management
systems and infrastructures, the staffing of foreign operations, exchange rate fluctuations and online privacy and protection of personal
information. Our success in international markets will also depend, in part, on our ability to identify potential acquisition candidates, joint
venture or other partners, and to enter into arrangements with these parties on favorable terms, given that we could encounter significant barriers
to entry in connection with expansion efforts outside of these arrangements.
A variety of new laws, or new interpretations of existing laws, could subject us to claims or otherwise harm our business.
We are subject to a variety of laws in the U.S. and abroad that are costly to comply with, can result in negative publicity and diversion of
management time and effort and can subject us to claims or other remedies. Some of these laws, such as income, sales, use, value-added and
other tax laws and consumer protection laws, are applicable to businesses generally and others are unique to the type of businesses in which we
are engaged. Many of these laws were adopted prior to the advent of the
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