Travelzoo 2002 Annual Report Download - page 27

adversely aÅect our network's performance. Our clients may become dissatisÑed by any system failure that
interrupts our ability to provide our products and services to them or results in slower response times. We do
not maintain business interruption insurance. Any system failure, including network, software or hardware
failure, that causes an interruption in the delivery of our products and services or a decrease in responsiveness
of our services could result in reduced revenue and could materially adversely aÅect our reputation and brand.
We may not be able to develop awareness of our brand name.
We believe that continuing to build awareness of the Travelzoo brand name is critical to achieving
widespread acceptance of our business. Brand recognition is a key diÅerentiating factor among providers of
online advertising opportunities, and we believe it could become more important as competition in our industry
increases. In order to maintain and build brand awareness, we must succeed in our marketing eÅorts, provide
high quality service and increase the number of Internet users with favorable demographics using Travelzoo.
If we fail to successfully promote and maintain our brand, incur signiÑcant expenses in promoting our brand
and fail to generate a corresponding increase in revenue as a result of our branding eÅorts, or encounter legal
obstacles which prevent our continued use of our brand name, our business could be materially adversely
aÅected.
Our business may be sensitive to events aÅecting the travel industry in general.
Events like the current war with Iraq or the terrorist attacks on the United States in 2001 have a negative
impact on the travel industry. We are not in a position to evaluate the net eÅect of these circumstances on our
business. In the longer term, our business might be negatively aÅected by Ñnancial pressures on the travel
industry. However, our business may also beneÑt if travel companies increase their eÅorts to promote special
oÅers or other marketing programs. If the events result in a long-term negative impact on the travel industry,
such impact could have a material adverse eÅect on our business.
We will not be able to attract travel companies or Internet users if we do not continually enhance and
develop the content and features of our products and services.
To remain competitive, we must continually improve the responsiveness, functionality and features of our
products and services. We may not succeed in developing features, functions, products or services that travel
companies and Internet users Ñnd attractive. This could reduce the number of travel companies and Internet
users using our products and materially adversely aÅect our business.
We may lose business if we fail to keep pace with rapidly changing technologies and clients needs.
Our success is dependent on our ability to develop new and enhanced software, services and related
products to meet rapidly evolving technological requirements for online advertising. Our current technology
may not meet the future technical requirements of travel companies. Trends that could have a critical impact
on our success include:
‚ rapidly changing technology in online advertising;
‚ evolving industry standards, including both formal and de facto standards relating to online advertising;
‚ developments and changes relating to the Internet;
‚ competing products and services that oÅer increased functionality; and
‚ changes in travel company and Internet user requirements.
If we are unable to timely and successfully develop and introduce new products and enhancements to
existing products in response to our industry's changing technological requirements, our business could be
materially adversely aÅected.
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