Travelzoo 2004 Annual Report Download - page 32

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Intense competition may adversely aÅect our ability to achieve or maintain market share and operate
proÑtably.
We compete with large Internet portal sites, such as About.com, America Online, Lycos, MSN and
Yahoo!, that oÅer listings or other advertising opportunities for travel companies. These companies have
signiÑcantly greater Ñnancial, technical, marketing and other resources and larger client bases. We also
compete with search engines like Google and Overture that oÅer pay-per-click listings. In addition, we
compete with newspapers, magazines and other traditional media companies that provide online advertising
opportunities. We expect to face additional competition as other established and emerging companies,
including print media companies, enter the online advertising market. Competition could result in reduced
margins on our services, loss of market share or less use of Travelzoo by travel companies and consumers. If
we are not able to compete eÅectively with current or future competitors as a result of these and other factors,
our business could be materially adversely aÅected.
Loss of any of our key management personnel could negatively impact our business.
Our future success depends to a signiÑcant extent on the continued service and coordination of our
management team, particularly Ralph Bartel, our Chairman, President, Chief Executive OÇcer, Chief
Financial OÇcer and Secretary. The loss or departure of any of our oÇcers or key employees could materially
adversely aÅect our ability to implement our business plan. We do not maintain key person life insurance for
any member of our management team. In addition, we expect new members to join our management team in
the future. These individuals will not previously have worked together and will be required to become
integrated into our management team. If our key management personnel are not able to work together
eÅectively or successfully, our business could be materially adversely aÅected.
We may not be able to access third party technology upon which we depend.
We use technology and software products from third parties including Microsoft. Technology from our
current or other vendors may not continue to be available to us on commercially reasonable terms, or at all.
Our business will suÅer if we are unable to access this technology, to gain access to additional products or to
integrate new technology with our existing systems. This could cause delays in our development and
introduction of new services and related products or enhancements of existing products until equivalent or
replacement technology can be accessed, if available, or developed internally, if feasible. If we experience
these delays, our business could be materially adversely aÅected.
Risks Related to the Market for our Shares
Our stock price has been volatile historically and may continue to be volatile.
The trading price of our common stock has been and may continue to be subject to wide Öuctuations.
During the Ñrst eight months of 2004, the sale prices of our common stock on the NASDAQ SmallCap
Market ranged from $7.10 to $34.98 per share. Since our inclusion on the NASDAQ National Market on
August 18, 2004, the sale prices of our common stock on the NASDAQ National Market ranged from $30.06
to $110.62. Our stock price may Öuctuate in response to a number of events and factors, such as quarterly
variations in operating results; announcements of technological innovations or new products by us or our
competitors; changes in Ñnancial estimates and recommendations by securities analysts; the operating and
stock price performance of other companies that investors may deem comparable to us; and news reports
relating to trends in our markets or general economic conditions.
In addition, the stock market in general, and the market prices for Internet-related companies in
particular, have experienced volatility that often has been unrelated to the operating performance of such
companies. These broad market and industry Öuctuations may adversely aÅect the price of our stock,
regardless of our operating performance.
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