Stamps.com 2010 Annual Report Download - page 16

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TABLE OF CONTENTS
ITEM 1A. RISK FACTORS.
You should carefully consider the following risks and the other information in this Report and our other filings with the
Securities and Exchange Commission (the “SEC”) before you decide to invest in our company or to maintain or increase your
investment. The risks included in this section are not exhaustive, and additional factors could adversely affect our business and
financial performance. We operate in a very competitive and rapidly changing environment. New risk factors emerge from time
to time, and it is not possible for management to predict all such risk factors, nor can it assess the impact of all such risk factors
on our business or the extent to which any factor, or combination of factors, may cause actual results to differ materially from
those contained in any forward-looking statements. If any of the following risks actually occur, our business, results of
operations or financial condition would likely suffer. In that case, the trading price of our common stock could decline, and you
may lose all or part of your investment.
This Report contains forward-looking statements based on the current expectations, assumptions, estimates and projections
about us and the Internet. See the discussion of forward-looking statements on page 1 of Part I of this Report.
Risks Related to Our Business
We may not successfully implement strategies to increase the adoption of our services and products, which would limit
our growth, adversely affect our business and cause the price of our common stock to decline.
Our continuing profitability depends on our ability to successfully implement our strategy of increasing the adoption of our
services and products. Factors that might cause our revenues, margins and operating results to fluctuate include the factors
described below in this section as well as:
Our results are impacted by the macroeconomic environment which has experienced a severe global economic downturn
during the past few years.
We believe the performance of our PhotoStamps and PC Postage businesses are influenced by macro economic trends. The
United States economy has been experiencing a financial downturn characterized by high unemployment, limited availability of
credit, increased rates of default and bankruptcy and lower levels of consumer and business spending. A continuation of this
economic downturn could negatively affect our business, operating results and financial condition in a number of ways. For
example, customers may leave our service, and efforts to attract new customers may also be adversely impacted. In addition,
customers may delay or decrease spending with us or may not pay us, or may delay paying us.
We may implement pricing plans and promotions that may adversely affect our future revenues and margins.
Our ability to generate gross margins depends upon our 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
• The costs of our marketing programs to establish and promote our brands;
• The demand for our services and products;
• Our ability to develop and maintain strategic distribution relationships;
• The number, timing and significance of new products or services introduced by us and by our competitors;
• Our ability to develop, market and introduce new and enhanced products and services on a timely basis;
• The level of service and price competition;
• Our operating expenses;
• USPS regulation and policies relating to PC Postage and PhotoStamps; and
• General economic factors.
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