Travelzoo 2013 Annual Report Download - page 54

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19
Our business may be sensitive to events affecting the travel industry in general.
Events like the Middle East conflicts or the terrorist attacks on the U.S. in 2001 or the recent global financial crisis have a
negative impact on the travel industry. We are not in a position to evaluate the net effect of these circumstances on our business.
In the longer term, our business might be negatively affected by financial pressures on the travel industry. However, our
business may also benefit if travel companies increase their efforts to promote special offers or other marketing programs. If
such events result in a long-term negative impact on the travel industry, such impact could have a material adverse effect on our
business.
We may not be able to attract travel and entertainment 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 and entertainment companies
and Internet users find attractive. This could reduce the number of travel and entertainment companies and Internet users using
our products and materially adversely affect our business.
We may lose business if we fail to keep pace with rapidly changing technologies and client 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 and entertainment companies. Trends that could have a critical impact on our success include:
• rapidly changing technology in online advertising, including a significant shift of business to mobile
platforms;
• 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 offer increased functionality; and
• changes in travel company, entertainment 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, 2013, we had 436 employees, up from 417
employees as of December 31, 2012. 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.