Travelzoo 2007 Annual Report Download - page 45

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• 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 affected.
Our business and growth will suffer if we are unable to hire and retain highly skilled personnel.
Our future success depends on our ability to attract, train, motivate and retain highly skilled employees. We
may be unable to retain our skilled employees, or attract, assimilate and retain other highly skilled employees in the
future. We have from time to time in the past experienced, and we expect to continue to experience in the future,
difficulty in hiring and retaining highly skilled employees with appropriate qualifications. If we are unable to hire
and retain skilled personnel, our growth may be restricted, which could adversely affect our future success.
We may not be able to effectively manage our expanding operations.
Since the commencement of our operations, we have experienced a period of rapid growth. In order to execute
our business plan, we must continue to grow significantly. As of December 31, 2007, we had 157 employees. We
expect that the number of our employees will continue to increase for the foreseeable future. This growth has
placed, and our anticipated future growth will continue to place, a significant strain on our management, systems
and resources. We expect that we will need to continue to improve our financial and managerial controls and
reporting systems and procedures. We will also need to continue to expand and maintain close coordination among
our sales, production, marketing, IT, and finance departments. We may not succeed in these efforts. Our inability to
expand our operations in an efficient manner could cause our expenses to grow disproportionately to revenues, our
revenues to decline or grow more slowly than expected and could otherwise have a material adverse effect on our
business.
Intense competition may adversely affect our ability to achieve or maintain market share and operate
profitably.
We face intense competition. We compete for advertising dollars with large Internet portal sites, such as
America Online, MSN and Yahoo!, that offer listings or other advertising opportunities for travel companies. These
companies have significantly greater financial, technical, marketing and other resources and larger client bases. We
compete with search engines like Google and Yahoo! Search that offer pay-per-click listings. We also compete with
travel meta-search engines and online travel deal publishers. We also compete with large online travel agencies like
Expedia and Priceline that also offer advertising placements. In addition, we compete with newspapers, magazines
and other traditional media companies that operate Web sites which 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
effectively with current or future competitors as a result of these and other factors, our business could be materially
adversely affected.
Loss of any of our key management personnel could negatively impact our business.
Our future success depends to a significant extent on the continued service and coordination of our
management team, particularly Ralph Bartel, our Chairman, President, and Chief Executive Officer. The loss
or departure of any of our officers or key employees could materially adversely affect 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 effectively or successfully, our business could be materially adversely
affected.
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