Vistaprint 2011 Annual Report Download - page 27

In addition, we may be liable for fraudulent transactions conducted on our websites, such as
through the use of stolen credit card numbers. To date, quarterly losses from payment fraud have not
exceeded 1% of total revenues in any quarter, but we continue to face the risk of significant losses
from this type of fraud. Our failure to limit fraudulent credit card transactions could damage our
reputation and brand and substantially harm our business and results of operations.
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, Bing and Yahoo!. If the search engines on which we rely modify their algorithms,
terminate their relationships with us or increase the prices at which we may purchase listings, this could
increase our costs and result in fewer customers clicking through to our websites, requiring us to resort to
other more costly resources to replace this traffic, which could adversely affect our revenues and operating
and net income and could harm our business. 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. Courts do not always side with the trademark owners in cases
involving search engines, and Google has refused to prevent companies from purchasing search results
that use the trademark “Vistaprint.” As a result, we may not be able to prevent our competitors from
advertising to, and directly competing for, customers who search for the term “Vistaprint” on search engines.
Various private ‘spam’ blacklisting and similar entities have in the past, and may in the future,
interfere with our e-mail solicitation, the operation of our websites and our ability to conduct
business.
We depend significantly on e-mail to market to and communicate with our customers. Various
private entities attempt to regulate the use of e-mail for commercial solicitation. These entities often
advocate standards of conduct or practice that significantly exceed current legal requirements and classify
certain e-mail solicitations that comply with current legal requirements as unsolicited bulk e-mails, or
“spam.” Some of these entities maintain “blacklists” of companies and individuals, as well as the websites,
Internet service providers and Internet protocol addresses associated with those companies and
individuals, that do not adhere to what the blacklisting entity believes are appropriate standards of conduct
or practices for commercial e-mail solicitations. If a company’s Internet protocol addresses are listed by a
blacklisting entity, e-mails sent from those addresses may be blocked if they are sent to any Internet
domain or Internet address that subscribes to the blacklisting entity’s service or purchases its blacklist.
Some of our Internet protocol addresses are currently listed with one or more blacklisting
entities despite our belief that our commercial e-mail solicitations comply with all applicable laws. In
the future, our other Internet protocol addresses may also be listed with one or more blacklisting
entities. We may not be successful in convincing the blacklisting entities to remove us from their lists.
Although the blacklisting we have experienced in the past has not had a significant impact on our
ability to operate our websites, send commercial e-mail solicitations, or manage or operate our
corporate email accounts, it has, from time to time, interfered with our ability to send operational
e-mails — such as password reminders, invoices and electronically delivered products — to customers
and others, and to send and receive emails to and from our corporate email accounts. In addition, as
a result of being blacklisted, we have had disputes with, or concerns raised by, various service
providers who perform services for us, including co-location and hosting services, Internet service
providers and electronic mail distribution services. We are currently on certain blacklists and there can
be no guarantee that we will not be put on additional blacklists in the future or that we will succeed in
removing ourselves from blacklists. Blacklisting of this type could interfere with our ability to market
our products and services, communicate with our customers and otherwise operate our websites, and
operate and manage our corporate email accounts, all of which could have a material negative impact
on our business and results of operations.
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