Stamps.com 2004 Annual Report Download - page 14

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than us. This increased competition may result in reduced operating margins, loss of market share and a
diminished brand. We may from time to time make pricing, service or marketing decisions or acquisitions as a
strategic response to changes in the competitive environment. These actions could result in reduced margins and
seriously harm our business.
We could face competitive pressures from new technologies or the expansion of existing technologies
approved for use by the US Postal Service. We may also face competition from a number of indirect competitors
that specialize in electronic commerce and other companies with substantial customer bases in the computer and
other technical fields. Additionally, companies that control access to transactions through a network or Web
browsers could also promote our competitors or charge us a substantial fee for inclusion. In addition, changes in
postal regulations could adversely affect our service and significantly impact our competitive position. We may be
unable to compete successfully against current and future competitors, and the competitive pressures we face could
seriously harm our business.
If we do not respond effectively to technological change, our services could become obsolete and our
business will suffer.
The development of our services and other technology entails significant technical and business risks. To
remain competitive, we must continue to enhance and improve the responsiveness, functionality and features of our
online operations. The Internet and the electronic commerce industry are characterized by rapid technological
change; changes in user and customer requirements and preferences; frequent new product and service introductions
embodying new technologies; and the emergence of new industry standards and practices.
The evolving nature of the Internet or the 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.
Our operating results could be impaired if we or the Internet become subject to additional government
regulation and legal uncertainties.
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.
We have employees and offer our services in multiple states, and we may in the future expand
internationally. These jurisdictions may claim that we are required to qualify to do business as a foreign corporation
in each state or foreign country. Our failure to qualify as a foreign corporation in a jurisdiction where we are
required to do so could subject us to taxes and penalties. Other states and foreign countries may also attempt to
regulate our services or prosecute us for violations of their laws. Further, we might unintentionally violate the laws
of foreign jurisdictions and those laws may be modified and new laws may be enacted in the future.