Vistaprint 2009 Annual Report Download - page 30

Download and view the complete annual report

Please find page 30 of the 2009 Vistaprint annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 160

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150
  • 151
  • 152
  • 153
  • 154
  • 155
  • 156
  • 157
  • 158
  • 159
  • 160

significantly greater financial, marketing and other resources. Many of our competitors work together.
For example, Taylor Corporation sells printed products through office superstores such as Staples and
Office Depot.
Some of our competitors who either already have an online presence or are seeking to establish
an online presence may be able to devote substantially more resources to website and systems
development than we can. In addition, larger, more established and better capitalized entities may
acquire, invest or partner with online competitors as use of the Internet and other online services
increases. Competitors may also seek to develop new products, technologies or capabilities that could
render many of the products, services and content we offer obsolete or less competitive, which could
harm our business and results of operations.
In addition, we have in the past and may in the future choose to collaborate with certain of our
existing and potential competitors in strategic partnerships that we believe will improve our competitive
position and results of operations, such as through a retail in-store or web-based collaborative offering.
It is possible, however, that such ventures will be unsuccessful and our competitive position and results
of operations will be adversely affected as a result of such collaboration.
Our failure to meet our customers’ price expectations would adversely affect our business and
results of operations.
Demand for our products and services is sensitive to price. Changes in our pricing strategies
have had, and are likely to continue to have, a significant impact on our revenues and results of
operations. We offer certain free products and services as a means of attracting customers and we
offer substantial pricing discounts as a means of encouraging repeat purchases. Such free offers and
discounts may not result in an increase in revenues or the optimization of profits. In addition, many
factors, including our production and personnel costs and our competitors’ pricing and marketing
strategies, can significantly impact our pricing strategies. If we fail to meet our customers’ price
expectations in any given period, our business and results of operations will suffer.
We depend on search engines to attract a substantial portion of the customers who visit our
websites, and losing these customers would adversely affect our business and results of
operations.
Many customers access our websites by clicking through on search results displayed by search
engines such as Google and Yahoo! Search engines typically provide two types of search results,
algorithmic and purchased listings. Algorithmic listings cannot be purchased, and instead are
determined and displayed solely by a set of formulas designed by the search engine. Purchased
listings can be purchased by companies and other entities in order to attract users to their websites.
We rely on both algorithmic and purchased listings to attract and direct a substantial portion of the
customers we serve. Search engines revise their algorithms from time to time in an attempt to optimize
their search result listings. If search engines on which we rely for algorithmic listings modify their
algorithms, this could result in fewer customers clicking through to our websites, requiring us to resort
to other more costly resources to replace this traffic, which, in turn, could reduce our operating and net
income or our revenues, prevent us from maintaining or increasing profitability and harm our business.
If one or more search engines on which we rely for purchased listings modifies or terminates its
relationship with us, our expenses could rise, our revenues could decline and our business may suffer.
The cost of purchased search listing advertising could increase as demand for these channels
continues to grow quickly, and further increases could have negative effects on our ability to maintain
or increase profitability. In addition, some of our competitors purchase the term “Vistaprint” and other
terms incorporating our proprietary trademarks from Google and other search engines as part of their
search listing advertising. European courts have, in certain cases, upheld the rights of trademark
owners to prevent such practices in certain European jurisdictions. However, U.S. courts generally
have not sided with the trademark owners in cases involving U.S. search engines, and Google has
24