Stamps.com 2009 Annual Report Download - page 19

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TABLE OF CONTENTS
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
with regard to many issues, including property ownership, export of specialized technology, sales tax, libel and personal privacy,
and changes in their interpretation could similarly harm us. 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.
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