WebEx 2002 Annual Report Download - page 30

employed in building our web communications network, we may not be able to continue to maintain our market
leadership in the web conferencing market if Microsoft aggressively pursues this market. Microsoft’s competitive
activity in the web communications market could have a significantly harmful effect on our business.
Our future success depends on the broad market adoption and acceptance of web communications services.
The market for web communications services is relatively new and rapidly evolving. Market demand for
communications services over the Web is uncertain. If the market for web communications services does not
grow, our business and operating results will be harmed. Factors that might influence market acceptance of our
services include the following, all of which are beyond our control:
ⳮwillingness of businesses and end-users to use web communications services for websites;
ⳮthe growth of the Web and commercial on-line services;
ⳮthe willingness of our distribution partners to integrate web communications services for websites in
their service offerings; and
ⳮthe ongoing level of security and reliability for conducting business over the Web.
Our success depends on the continued growth of Web usage and the continued growth in reliability and
capacity of the Internet.
Because customers access our network through the Web, our revenue growth depends on the continued
development and maintenance of the Internet infrastructure. This continued development of the Web would
include maintenance of a reliable network with the necessary speed, data capacity and security, as well as timely
development of complementary products and services, including high-speed modems and other high bandwidth
communications technologies, for providing reliable, high-performance Internet access and services. Because
global commerce on the Web and the on-line exchange of information is new and evolving, we cannot predict
whether the Web will continue to be a viable commercial marketplace over the long term. The success of our
business will rely on the continued improvement of the Web as a convenient and reliable means of customer
interaction and commerce, as well as an efficient medium for the delivery and distribution of information by
businesses to their employees. If increases in Web usage or the continued growth in reliability and capacity of the
Internet fail to materialize, our ability to deliver our services may be adversely affected and our operating results
could suffer.
We face risks associated with government regulation of the Internet, and related legal uncertainties.
Currently, few existing laws or regulations specifically apply to the Internet, other than laws generally
applicable to businesses. Many Internet-related laws and regulations, however, are pending and may be adopted
in the United States, in individual states and local jurisdictions and in other countries. These laws may relate to
many areas that impact our business, including encryption, network and information security, the convergence of
traditional communication services, such as telephone services, with Internet communications, taxes and wireless
networks. These types of regulations are likely to differ between countries and other political and geographic
divisions. Non-U.S. countries and political organizations may impose, or favor, more and different regulation
than that which has been proposed in the United States, thus furthering the complexity of regulation. In addition,
state and local governments within the United States may impose regulations in addition to, inconsistent with, or
stricter than federal regulations. The adoption of such laws or regulations, and uncertainties associated with their
validity, interpretation, applicability and enforcement, may affect the available distribution channels for and costs
associated with our products and services. The adoption of such laws and regulations may harm our business.
Current and future economic and political conditions may adversely affect our business.
Economic growth in the United States and throughout most of the world continues to be slow, and it is
uncertain when economic conditions may improve. In addition, the war in Iraq and tensions throughout the
Middle East are having a negative effect on the economy and may impact the supply and price of petroleum
26