ServiceMagic 2013 Annual Report Download - page 18

Download and view the complete annual report

Please find page 18 of the 2013 ServiceMagic annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 154

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154

Table of Contents
As privacy and data protection have become more sensitive issues, we may also become exposed to potential liabilities as a result of
differing views on the privacy of consumer and other user data collected by our businesses. Also, we cannot guarantee that our security
measures will prevent security breaches. In the case of security breaches involving personal credit card data, credit card companies could curtail
our ability to transact payments and impose fines for failure to comply with Payment Card Industry (PCI) Data Security Standards. Moreover,
any such breach could decrease consumer confidence in the case of the business that experienced the breach or our businesses generally, which
would decrease traffic to (and in turn, usage and transactions on) the relevant website and/or our various websites and which in turn, could
adversely affect our business, financial condition and results of operations. The failure of any of our businesses, or their various third party
and/or the unauthorized release of personal information or other user data for any reason could adversely affect our business, financial condition
and results of operations.
Our estimated income taxes could be materially different from income taxes that we ultimately pay.
We are subject to income taxes in both the United States and numerous jurisdictions abroad. Significant judgment and estimation is required
in determining our provision for income taxes and related matters. In the ordinary course of our business, there are many transactions and
calculations where the ultimate tax determinations are uncertain or otherwise subject to interpretation. Our determination of our income tax
liability is always subject to review by applicable tax authorities and we are currently subject to audits in a number of jurisdictions. Although we
believe our income tax estimates and related determinations are reasonable and appropriate, relevant taxing authorities may disagree. The
ultimate outcome of any such audits and reviews could be materially different from estimates and determinations reflected in our historical
income tax provisions and accruals. Any adverse outcome of any such audit or review could have an adverse effect on our financial condition
and results of operations.
We may not be able to identify suitable acquisition candidates and even if we are able to do so, 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 we continue to seek to identify potential acquisition candidates that will allow us to
apply our expertise to expand their capabilities, as well as maximize our existing assets. As a result, our future growth may depend, in part, on
acquisitions. We may not be able to identify suitable acquisition candidates or complete acquisitions on satisfactory pricing or other terms and
we expect to continue to experience competition in connection with our acquisition-related efforts.
Even if we identify what we believe to be suitable acquisition candidates and negotiate satisfactory terms, we may experience operational
and financial risks in connection with acquisitions, and to the extent that we continue to grow through acquisitions, we will need to:
We may not be successful in addressing these challenges or any other problems encountered in connection with historical and future
operating losses, 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.
15
• 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;
•
successfully identify and realize potential synergies among acquired and existing businesses;
•
retain or hire senior management and other key personnel at acquired businesses; and
• successfully manage acquisition
1
related strain on the management, operations and financial resources of IAC and its businesses and/or
acquired businesses.