Tucows 2012 Annual Report Download - page 24

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19
• the continued development of our global distribution channel and our ability to compete in multiple countries
successfully as part of our sales and marketing strategy;
• the number and significance of service enhancements and new service and technology announcements by ou
r
competitors;
• our ability to identify, develop, deliver and introduce in a timely manner new and enhanced versions of ou
r
current service offerings that anticipate market demand and address customer needs;
• changes in foreign currency exchange rates and issues relating to the conversion to the Canadian dollar;
• foreign, federal or state regulation affecting our business;
• our ability to continue to attract users to our website;
• our ability to attract software developers to participate in our Author Resource Center;
• our ability to continue to attract advertisers to place content on our website;
• technical difficulties or other factors that result in system downtime;
• seasonality of the markets and businesses of our customers;
• news relating to our industry as a whole;
• our ability to enforce our intellectual property rights;
• our ability to manage Internet fraud and information theft; and
• current economic conditions.
Our operating expenses may increase. We base our operating expense budgets on expected revenue trends that
are more difficult to predict in periods of economic uncertainty. We intend to continue our efforts to control
discretionary spending; however, we will continue to selectively incur expenditures in areas that we believe will
strengthen our position in the marketplace. If we do not meet revenue goals, we may not be able to meet reduced
operating expense levels and our operating results will suffer. It is possible that in one or more future quarters, our
operating results may be below our expectations and the expectations of public market analysts and investors. In that
event, the price of our common stock may fall.
Risks Related To the Internet and Our Technology
Our business could be materially harmed if the administration and operation of the Internet no longer rely upon the
existing domain system.
The domain registration industry continues to develop and adapt to changing technology. This development
may include changes in the administration or operation of the Internet, including the creation and institution of alternate
systems for directing Internet traffic without the use of the existing domain system. Some of our competitors have begun
registering domains with extensions that rely on such alternate systems. These competitors are not subject to ICANN
accreditation requirements and restrictions. Other competitors have attempted to introduce naming systems that use
keywords rather than traditional domains. The widespread acceptance of any alternative systems could eliminate the
need to register a domain to establish an online presence and could materially adversely affect our business, financial
condition and results of operations.