ServiceMagic 2014 Annual Report Download - page 27

Table of Contents
Any cyber attack or security breach we experience could prevent us from providing our products and services, damage our reputation, erode
our brands and/or be costly to remedy, as well as result in a degradation of our products and services and/or cause damage to our systems,
infrastructures, technologies and data. Even if we do not experience such events, the impact of any such events experienced by third parties with
whom we do business (or upon whom we otherwise rely in connection with our day to day operations) could have a similar effect. Moreover, even
cyber attacks and security breaches that do not impact us directly may result in a loss of consumer confidence generally, which could make
consumers and users less likely to use our products and services.
In addition, we may not have adequate insurance coverage to compensate for losses resulting from any of these events.
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
acquisitions. In addition, the anticipated benefits of one or more acquisitions may not be realized and future acquisitions could result in increased
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.
We operate in various international markets, some in which we have limited experience. As a result, we face additional risks in connection with
our international operations. Also, we may not be able to successfully expand into new, or further into our existing, international markets.
We currently operate in various 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 United States. Moreover, we must continue to successfully tailor our products and
services to the unique customs and cultures of foreign jurisdictions, which can be difficult and costly and the failure to do so could slow our
international growth and adversely impact our business, financial condition and results of operations.
Operating abroad, particularly in jurisdictions where we have limited experience, exposes us to additional risks. For example, we may
experience difficulties in managing international operations due to distance, language and cultural differences and political and/or economic
instability, including issues associated with establishing and maintaining effective management systems and infrastructures (including disclosure
controls and procedures and internal control over financial reporting), 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
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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;
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successfully identify and realize potential synergies among acquired and existing businesses;
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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 its businesses and/or
acquired businesses.