ServiceMagic 2011 Annual Report Download - page 15

Table of Contents
Item 1A. Risk Factors
Cautionary Statement Regarding Forward-Looking Information
This annual report on Form 10-K contains "forward-
looking statements" within the meaning of the Private Securities Litigation Reform Act
of 1995. The use of words such as "anticipates," "estimates," "expects," "intends," "plans" and "believes," among others, generally identify
forward-looking statements. These forward-
looking statements include, among others, statements relating to: IAC's future financial performance,
IAC's business prospects and strategy, anticipated trends and prospects in the industries in which IAC's businesses operate and other similar
matters. These forward-looking statements are based on IAC management's current expectations and assumptions about future events, which are
inherently subject to uncertainties, risks and changes in circumstances that are difficult to predict.
Actual results could differ materially from those contained in these forward-looking statements for a variety of reasons, including, among
others the risk factors set forth below. Other unknown or unpredictable factors that could also adversely affect IAC's business, financial
condition and results of operations may arise from time to time. In light of these risks and uncertainties, the forward-looking statements
discussed in this annual report may not prove to be accurate. Accordingly, you should not place undue reliance on these forward-looking
statements, which only reflect the views of IAC management as of the date of this annual report. IAC does not undertake to update these
forward-looking statements.
Risk Factors
Mr. Diller owns a significant percentage of the voting power of our stock and will be able to exercise significant influence over the
composition of our Board of Directors, matters subject to stockholder approval and our operations.
As of January 27, 2012, Mr. Diller owned 5,789,499 shares of IAC Class B common stock representing 100% of IAC's outstanding Class B
common stock and approximately 43.4% of the total outstanding voting power of IAC. As of this date, Mr. Diller also owned 705,734 vested
options to purchase IAC common stock and 300,000 unvested options to purchase IAC common stock.
In addition, under an amended and restated governance agreement between IAC and Mr. Diller, for so long as Mr. Diller serves as IAC's
Chairman and Senior Executive, he generally has the right to consent to limited matters in the event that IAC's ratio of total debt to EBITDA (as
defined in the governance agreement) equals or exceeds four to one over a continuous twelve-month period. While Mr. Diller may not currently
exercise this right, no assurances can be given that this right will not become exercisable in the future, and if so, that Mr. Diller will consent to
any of the limited matters at such time, in which case IAC would not be able to engage in transactions or take actions covered by this consent
right.
As a result of Mr. Diller's ownership interest, voting power and the contractual rights described above, Mr. Diller currently is in a position
to influence, subject to our organizational documents and Delaware law, the composition of IAC's Board of Directors and the outcome of
corporate actions requiring stockholder approval, such as mergers, business combinations and dispositions of assets, among other corporate
transactions. In addition, this concentration of voting power could discourage others from initiating a potential merger, takeover or other change
of control transaction that may otherwise be beneficial to IAC, which could adversely affect the market price of IAC securities.
We depend on our key personnel.
Our future success will depend upon our continued ability to identify, hire, develop, motivate and retain highly skilled individuals, with the
continued contributions of our senior management being
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