WebEx 2002 Annual Report Download - page 31

products, which may in turn negatively impact the world economy. Moreover, the prospect of future terrorists
attacks in the United States and elsewhere may have a further negative impact on the economy. In particular, the
technology and telecommunications sectors appear to have been particularly affected by the recent slowdown in
the economy. If poor economic conditions continue or worsen as a result of economic, political or social turmoil
or military conflict, or if there are further terrorist attacks in the United States or elsewhere, our customers may
not be able to pay for our services and our distribution partners may cease operations, which may harm our
operating results.
We may experience power blackouts and higher electricity prices as a result of energy shortages or electrical
system failures, which could disrupt our operations and increase our expenses.
In 2001, California experienced increased energy prices, energy shortages, and blackouts. We rely on the
major Northern California public utility, Pacific Gas & Electric Company (“PG&E) to supply electric power to
our headquarters in Northern California. PG&E has filed for protection under Chapter 11 of the Bankruptcy Act.
If power outages or energy price increases occur in the future in California or other locations where we maintain
operations, such events could disrupt our operations, prevent us from providing our services, harm our
reputation, and result in a loss of revenue and increase in our expenses, all of which could substantially harm our
business and results of operations.
Our stock price has been and will likely continue to be volatile because of stock market fluctuations that affect
the prices of technology stocks. A decline in our stock price could result in securities class action litigation
against us that could divert management’s attention and harm our business.
Our stock price has been and is likely to continue to be highly volatile. For example, between January 1,
2002 and December 31, 2002, our stock price has traded as high as $28.26 on January 4, 2002, and as low as
$8.91 on October 3, 2002. Our stock price could fluctuate significantly due to a number of factors, including:
ⳮvariations in our actual or anticipated operating results;
ⳮsales of substantial amounts of our stock;
ⳮannouncements by or about us or our competitors, including technological innovation, new products,
services or acquisitions;
ⳮlitigation and other developments relating to our patents or other proprietary rights or those of our
competitors;
ⳮconditions in the Internet industry;
ⳮgovernmental regulation and legislation; and
ⳮchanges in securities analysts’ estimates of our performance, or our failure to meet analysts’
expectations.
Many of these factors are beyond our control. In addition, the stock markets in general, and the Nasdaq
National Market and the market for Internet technology companies in particular, have experienced extreme price
and volume fluctuations recently. These fluctuations often have been unrelated or disproportionate to the
operating performance of these companies. These broad market and industry factors may decrease the market
price of our common stock, regardless of our actual operating performance. In the past, companies that have
experienced volatility in the market prices of their stock have been the objects of securities class action litigation.
If we were the object of securities class action litigation, we could face substantial costs and a diversion of
management’s attention and resources, which could harm our business.
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