Vistaprint 2011 Annual Report Download - page 31

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If we are unable to acquire or maintain domain names for our websites, then we could lose
customers, which would substantially harm our business and results of operations.
We sell our products and services primarily through our websites. We currently own or control
a number of Internet domain names used in connection with our various websites, including
Vistaprint.com and similar names with alternate URL names, such as .net, .de and .co.uk. Domain
names are generally regulated by Internet regulatory bodies. If we are unable to use a domain name
in a particular country, then we would be forced to purchase the domain name from the entity that
owns or controls it, which we may not be able to do on commercially acceptable terms or at all; incur
significant additional expenses to market our products within that country, including the development
of a new brand and the creation of new promotional materials and packaging; or elect not to sell
products in that country. Any of these results could substantially harm our business and results of
operations. Furthermore, the relationship between regulations governing domain names and laws
protecting trademarks and similar proprietary rights is unclear and subject to change. We might not be
able to prevent third parties from acquiring domain names that infringe or otherwise decrease the
value of our trademarks and other proprietary rights. Regulatory bodies could establish additional top-
level domains, appoint additional domain name registrars or modify the requirements for holding
domain names. As a result, we may not be able to acquire or maintain the domain names that utilize
the name Vistaprint in all of the countries in which we currently or intend to conduct business.
Our results of operations may be negatively affected if we are required to charge sales, value
added or other taxes on Internet sales.
In many jurisdictions where we sell products and services, we do not collect or have imposed
upon us sales, value added or other consumption taxes, which we refer to as indirect taxes. The
application of indirect taxes to e-commerce businesses such as Vistaprint is a complex and evolving
issue. Many of the fundamental statutes and regulations that impose these taxes were established
before the growth of the Internet and e-commerce, and in many cases, it is not clear how existing
statutes apply to the Internet or e-commerce. Bills have been introduced in the U.S. Congress that
could affect the ability of state governments to require out of state Internet retailers to collect and
remit indirect taxes on goods and certain services, and some state governments have imposed or are
seeking to impose indirect taxes on Internet sales. The imposition by national, state or local
governments, whether within or outside the United States, of various taxes upon Internet commerce
could create administrative burdens for us and could decrease our revenue. Additionally, a successful
assertion by one or more governments in jurisdictions where we are not currently collecting sales or
value added taxes that we should be, or should have been, collecting indirect taxes on the sale of our
products could result in substantial tax liabilities for past sales, discourage customers from purchasing
products from us, decrease our ability to compete with traditional retailers or otherwise negatively
impact our results of operations.
Our business is dependent on the Internet, and unfavorable changes in government regulation
of the Internet, e-commerce and email marketing could substantially harm our business and
results of operations.
Due to our dependence on the Internet for our sales, regulations and laws specifically
governing the Internet, e-commerce and email marketing may have a greater impact on our
operations than other more traditional businesses. Existing and future laws and regulations may
impede the growth of e-commerce and our ability to compete with traditional graphic designers,
printers and small business marketing companies, as well as desktop printing products. These
regulations and laws may cover taxation, restrictions on imports and exports, customs, tariffs, user
privacy, data protection, commercial email, pricing, content, copyrights, distribution, electronic
contracts and other communications, consumer protection, the provision of online payment services,
broadband residential Internet access and the characteristics and quality of products and services. It
is not clear how existing laws governing many of these issues apply to the Internet and e-commerce,
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