Stamps.com 2014 Annual Report Download - page 25

Download and view the complete annual report

Please find page 25 of the 2014 Stamps.com annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 99

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99

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 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 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.
We may expand through acquisitions of, or investments in, other companies or technologies, which may result in additional dilution to
our stockholders and consume resources that may be necessary to sustain our business.
As part of our business strategy to acquire complementary services, technologies or businesses we may:
Business acquisitions, such as the Auctane LLC and Interapptive, Inc. acquisitions we made during the second and third quarters of 2014,
respectively, (through which we acquired ShipStation and ShipWorks, respectively) also involve risks of unknown liabilities and potential
litigation associated with the acquired business. In addition, we may not realize the anticipated benefits of any acquisition, including securing the
services of key employees. Incurring unknown liabilities or the failure to realize the anticipated benefits of an acquisition could seriously harm
our business.
20
Table of Contents
• issue additional equity securities that would dilute our stockholders;
• use cash that we may need in the future to operate our business; and
• incur debt that could have terms unfavorable to us or that we might be unable to repay.