Travelzoo 2014 Annual Report Download - page 71

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We do not know what our general and administrative expenses as a percentage of revenue will be in future periods.
There may be fluctuations that have a material impact on our results of operations. We expect our headcount to continue to
increase in the future. The Company’s headcount is one of the main drivers of general and administrative expenses. Therefore,
we expect our absolute general and administrative expenses to continue to increase. We expect our continued expansion into
foreign markets over time and development of new advertising formats to result in a significant additional increase in our
general and administrative expenses. Our general and administrative expenses as a percentage of revenue may also fluctuate
depending on the number of requests received related to a program under which the Company intends to make cash payments
to people who establish that they were former stockholders of Travelzoo.com Corporation, whose claims were not escheated to
states and who failed to submit requests to convert shares into Travelzoo Inc. within the required time period. We expect an
increase in professional fees for various initiatives. In addition, we expect to incur additional costs related to the development
of our hotel booking platform capabilities, which we are developing, in part, to address the shift to mobile devices.
We do not know what our income taxes will be in future periods. There may be fluctuations that have a material impact
on our results of operations. Our income taxes are dependent on numerous factors such as the geographic mix of our taxable
income, federal and state and foreign country tax law and regulations and changes thereto, the determination of whether
valuation allowances for certain tax assets are required or not, audits of prior years' tax returns resulting in adjustments,
resolution of uncertain tax positions and different treatment for certain items for tax versus books such as the disposition of our
Asia business in 2009 or our State of Delaware settlement during 2011. We expect fluctuations in our income taxes from year to
year and from quarter to quarter. Some of the fluctuations may be significant and have a material impact on our results of
operations.
The key elements of our growth strategy include building a travel and lifestyle brand with a large, high-quality user base
and offering our users products that keep pace with consumer preference and technology, such as the trend toward mobile usage
by consumers. We expect to continue our efforts to grow; however, we may not grow or we may experience slower growth.
Some examples of our efforts to expand our business internationally since our inception in the U.S. have been expansion to the
U.K. in 2005, Canada in 2006, Germany in 2006, France in 2007 and Spain in 2008. We also have launched new products to
grow our revenue such as the introduction of Fly.com in 2009, Local Deals in 2010, Getaway in 2011 as well as our mobile
application launches in 2011 and 2012. In late 2012, we bought an online hotel booking platform to assist in our development
of a product to better serve hotels and to facilitate the development of our hotel booking platform. We have also increased our
spending on addressing the shift of our audience to mobile devices and social media.
We believe that we can sell more advertising if the market for online advertising continues to grow and if we can
maintain or increase our market share. We believe that the market for advertising continues to shift from offline to online. We
do not know if we will be able to maintain or increase our market share. We do not know if we will be able to increase the
number of our advertisers in the future. We do not know if we will have market acceptance of our new products or whether the
market will continue to accept our existing products.