Vistaprint 2013 Annual Report Download - page 22

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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 some 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 that our competitive position and results of operations will be adversely affected
as a result of such collaboration.
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, and changes in our pricing strategies have a
significant impact on our revenues and results of operations. Many factors can significantly impact our pricing
strategies, including the costs of running our business, our competitors' pricing and marketing strategies, and the
effects of inflation. We offer some free or discounted products and services as a means of attracting customers and
encouraging repeat purchases, but these free offers and discounts reduce our profit margins and may not result in
repeat business to increase our revenues. If we fail to meet our customers' price expectations, our business and
results of operations will suffer.
Failure to protect our networks and the confidential information of our customers against security
breaches could damage our reputation and brands and substantially harm our business and results of
operations.
Online commerce and communications depend on the secure transmission of confidential information over
public networks. Currently, a majority of our sales are billed to our customers' credit or debit card accounts directly,
and we retain our customers' payment information for a period of time that varies depending on the services we
provide to each customer.
We may need to expend significant resources to protect against security breaches or to address problems
caused by breaches. Any compromise or breach of our network or the technology that we use to protect our
network and our customer transaction data, including credit card information, could damage our reputation and
brand; expose us to losses, litigation, and possible liability; lead to the misappropriation of our proprietary
information; or cause interruptions in our operations. Although we maintain network security insurance, we cannot
be certain that our coverage will be adequate for liabilities actually incurred or that insurance will continue to be
available to us on reasonable terms, or at all. In addition, some of our partners also collect information from
transactions with our customers, and we may be liable or our reputation may be harmed if our partners fail to
protect our customers' information or use it in a manner that is inconsistent with our practices.
If we fail to address risks associated with payment fraud, our reputation and brands could be damaged, and
our business and results of operations could be harmed.
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.
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, our costs could increase, and fewer
customers may click through to our websites. If fewer customers click through to our websites, we could be required
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
Form 10-K