Stamps.com 2002 Annual Report Download - page 14

Table of Contents
are no guarantees that we will reach profitability in the future. Overall, we will need to generate significant revenues and successfully
implement our new business strategy to achieve and maintain profitability in the future.
We implemented pricing plans that may adversely affect our future revenues and margins.
Our ability to generate gross margins depends upon the ability to generate significant revenues from a large base of active customers. In order to
attract customers in the future, we may run special promotions and offers such as discounts on fees, postage and supplies. We cannot be sure
that customers will be receptive to future fee structures and special promotions that we may implement. Even though we have established a
sizeable base of users, we still may not generate sufficient gross margins to become profitable. In addition, our ability to generate revenues or
achieve profitability could be adversely affected by the special promotions or additional changes to our pricing plans.
If our business strategy is not successful, our financial condition and results of operations will be adversely affected.
Our current business strategy is focused on enhancing our core business of Internet Postage services. This business strategy entails risks relating
to our ability to attract our targeted customers to offset potential customer losses in other areas as a result of our reduction of fixed-cost
marketing arrangements and the reduction of our marketing spending generally. There is no guarantee we will be able to effectively or
efficiently implement our business strategy or that, if effectively implemented, our strategy will help us achieve profitability. Failure to execute
our plan to attract new customers in high margin lines of business in significant numbers will adversely effect our financial condition and results
of operations.
If we do not successfully attract and retain skilled personnel for permanent management and other key personnel positions, we may
not be able to effectively implement our business plan.
Our success depends largely on the skills, experience and performance of the members of our senior management and other key personnel. Any
of the individuals can terminate his or her employment with us at any time. If we lose key employees and are unable to replace them with
qualified individuals, our business and operating results could be seriously harmed. In addition, our future success will depend largely on our
ability to continue attracting and retaining highly skilled personnel. As a result, we may be unable to successfully attract, assimilate or retain
qualified personnel. Further, we may be unable to retain the employees we currently employ or attract additional qualified personnel to replace
those key employees that may depart. The failure to attract and retain the necessary personnel could seriously harm our business, financial
condition and results of operations.
The success of our business will depend upon acceptance by customers of our Internet Postage services.
We expect that our Internet Postage services will generate virtually all of our future revenues. Accordingly, we depend heavily on the
commercial acceptance of our Internet Postage services. To date, a substantial market for Internet Postage has not developed, and we cannot
assure you that it will develop. More specifically, we cannot predict if our target customers will choose the Internet as a means of purchasing
postage, or if customers will be willing to pay a fee to use our service, or if potential users will select our system over our competitors’ systems
or over alternative methods such as online invoicing, bill payment and financial transactions.
If we fail to effectively market and sell our Internet Postage service, our business will be substantially harmed and could fail.
In order to acquire customers and achieve wide distribution and use of our services, we must develop and execute cost-effective marketing
campaigns and sales programs. However, as a result of our limited marketing and sales activities, we cannot predict our ability to attract
customers for our services, and we may fail to
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2003. EDGAR Online, Inc.