Stamps.com 2008 Annual Report Download - page 16

Finally, any approved USPS market test or new service that benefits us could also ultimately be suspended or cancelled by
the USPS, causing disruptions to our business.
If we are unable to compete successfully, particularly against large, traditional providers of postage products, such as Pitney
Bowes, our revenues and operating results will suffer.
The PC Postage segment of the market for postage is relatively new and is competitive. At present, Pitney Bowes and
Endicia.com (a wholly owned subsidiary of Newell Rubbermaid) are authorized PC Postage providers with commercially
available software. If any more providers become authorized, or if Pitney Bowes or Endicia.com provide enhanced offerings, our
operations could be adversely impacted. We also compete with other forms of postage, including traditional postage meters
provided by companies such as Pitney Bowes, postage stamps and permit mail.
We may not be able to establish or maintain a competitive position against current or future competitors as they enter the
market. Many of our competitors have longer operating histories, larger customer bases, greater brand recognition, greater
financial, marketing, service, support, technical, intellectual property and other resources than us. As a result, our competitors
may be able to devote greater resources to marketing and promotional campaigns, adopt more aggressive pricing policies and
devote substantially more resources to
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web site and systems development. 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 USPS. 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 and products could become obsolete and our business
will suffer.
The development of our services, products 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 (i) license or acquire leading technologies useful in our business, (ii) enhance our
existing services, (iii) develop new services or features and technology that address the increasingly sophisticated and varied
needs of our current and prospective users, and (iv) 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.
Changes in the laws and regulations applicable to the Internet or us, including those relating to user privacy, pricing, content,
copyrights, distribution, characteristics and quality of products and services, and export controls, could seriously harm our
business, financial condition and results of operations. Moreover, the applicability of existing laws to the Internet is uncertain