Stamps.com 2015 Annual Report Download - page 26

TABLE OF CONTENTS
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.
Strategic business partners or private carriers could modify or terminate agreements and other financial compensation
arrangements.
Strategicbusinesspartners,suchasmulti-carriersoftwareproviders,e-commerceplatforms,privateshippingservices,shipping
serviceresellers,orothers,coulddecidetoamend,renegotiateorterminateagreementsorfinancialcompensationarrangementsthat
existnoworinthefuture.Forinstance,ifthesepartnersamend,renegotiateorterminateagreementsallowingustointegratetheir
serviceswithourproductsandservices,ourrevenuesandoperatingresultscouldsufferandourabilitytoattractcustomersthatrelyon
theseservicescouldsuffer.
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:
• issueadditionalequitysecuritiesthatwoulddiluteourstockholders;
• usecashthatwemayneedinthefuturetooperateourbusiness;and
• incuradditionaldebtorrefinanceexistingdebtthatcouldhavetermsunfavorabletousorthatwemightbeunabletorepay.
22