Stamps.com 2002 Annual Report Download - page 19

Table of Contents
The evolving nature of the Internet or the Internet Postage markets could render our existing technology and systems obsolete. Our success will
depend, in part, on our ability to license or acquire leading technologies useful in our business; enhance our existing services; develop new
services or features and technology that address the increasingly sophisticated and varied needs of our current and prospective users; and
respond to technological advances and emerging industry and regulatory standards and practices in a cost-effective and timely manner.
Future advances in technology may not be beneficial to, or compatible with, our business. Furthermore, we may not be successful in using new
technologies effectively or adapting our technology and systems to user requirements or emerging industry standards on a timely basis. Our
ability to remain technologically competitive may require substantial expenditures and lead time. If we are unable to adapt in a timely manner to
changing market conditions or user requirements, our business, financial condition and results of operations could be seriously harmed.
The success of our business will depend on the acceptance by customers of the Internet as a means for purchasing postage services.
Our success depends in large part on widespread acceptance and use of the Internet as a way to purchase postage services. This practice is at an
early stage of development, and market acceptance of Internet Postage service is uncertain. We cannot predict the extent to which customers
will be willing to shift their purchasing habits from traditional to online postage services. To be successful, our customers must accept and
utilize electronic commerce to satisfy their product needs. Our future revenues and profits, if any, substantially depend upon the acceptance and
use of the Internet and other online services as an effective medium of commerce by our target users.
The Internet may not become a viable long-term commercial marketplace due to potentially inadequate development of the necessary network
infrastructure or delayed development of enabling technologies and performance improvements. The commercial acceptance and use of the
Internet may not continue to develop at rates sufficient to sustain or grow our business. Our business, financial condition and results of
operations would be seriously harmed if use of the Internet and other online services does not continue to increase or increases more slowly
than expected; the infrastructure for the Internet and other online services does not effectively support future expansion of electronic commerce
or our services; concerns over security and privacy inhibit the growth of the Internet; or the Internet and other online services do not become a
viable commercial marketplace.
Our operating results could be impaired if we or the Internet become subject to additional government regulation and legal
uncertainties.
With the exception of US Postal Service and Department of Commerce regulations, we are not currently subject to direct regulation by any
domestic or foreign governmental agency, other than regulations applicable to businesses generally, and laws or regulations directly applicable
to electronic commerce. However, due to the increasing popularity and use of the Internet, it is possible that a number of laws and regulations
may be adopted with respect to the Internet, relating to user privacy; pricing; content; copyrights; distribution; characteristics and quality of
products and services; and export controls.
The adoption of any additional laws or regulations may hinder the expansion of the Internet. A decline in the growth of the Internet could
decrease demand for our products and services and increase our cost of doing business. Moreover, the applicability of existing laws to the
Internet is uncertain with regard to many issues, including property ownership, export of specialized technology, sales tax, libel and personal
privacy. Our business, financial condition and results of operations could be seriously harmed by any new legislation or regulation. The
application of laws and regulations from jurisdictions whose laws do not currently apply to our business, or the application of existing laws and
regulations to the Internet and other online services could also harm our business.
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