1023364--3/13/2009--AUTOBYTEL_

related topics

{property, intellectual, protect}

{regulation, change, law}

{regulation, government, change}

{system, service, information}

{control, financial, internal}

{product, market, service}

{stock, price, operating}

{customer, product, revenue}

{capital, credit, financial}

{financial, litigation, operation}

{condition, economic, financial}

{stock, price, share}

{provision, law, control}

{acquisition, growth, future}

{competitive, industry, competition}

Except for fiscal years 2003 and 2004, we have had a history of net annual losses. We may not be profitable in the future. If we are unable to achieve profitability in the future and we continue to lose money, our operations will not be financially viable. If we are not successful in shifting our strategic emphasis from a media centric advertising business model to our core revenue lines of Lead referral, we may not achieve profitability in the future. If our Dealer attrition increases, our Dealer network and revenues derived from this network will decrease. We are particularly affected by general economic conditions and in particular the automotive industry. Competition could affect our market share, pricing, cost structure and Lead supply. Our quarterly financial results are subject to significant fluctuations that may make it difficult for investors to predict our future performance. Risks Associated with Governmental Regulation Uncertainty exists in the application of various laws and regulations to our business. New laws or regulations applicable to our business, or expansion or interpretation of existing laws and regulations to apply to our business, could subject us to licensing, claims, judgments and remedies, including monetary liabilities and limitations on our business practices, and could increase administrative costs or adversely affect our business. If automotive dealer and/or broker laws apply to us we may be required to modify or eliminate our marketing programs. If we are unable to market our services in the manner we currently do, our revenues may decrease and our business may suffer. If franchise laws apply to us we may be required to modify or eliminate our marketing programs. If we are unable to market our services in the manner we currently do, our revenues may decrease and our business may suffer. If financial broker licensing requirements apply to us in states where we are not currently licensed, we will be required to obtain additional licenses and our business may suffer If insurance licensing requirements apply to us in states where we are not currently licensed, we will be required to obtain additional licenses and our business may suffer. Changes in the taxation of internet commerce may result in increased costs. Data Security and Privacy and Technology Risks Compliance with anti-spam laws and regulations may impose significant costs and burdens on our e-mail marketing activities, and violations of these laws and regulations could subject us to fines or other enforcement actions Failure to comply with data privacy laws and regulations may significantly impact our internet Leads referral business Increased security risks of on-line Leads collection and referral, advertising and e-commerce may cause us to incur significant expenses and may negatively impact our credibility and business. If we fail to detect click-through fraud, we could lose the confidence of our advertisers, thereby causing our business to suffer. Our success is dependent on keeping pace with advances in technology. If we are unable to keep pace with advances in technology, consumers may stop using our services and our revenues will decrease. If we are required to invest substantial amounts in technology, our results of operations will suffer. The public market for our common stock may be volatile, especially since market prices for internet-related and technology stocks have often been unrelated to operating performance. Our common stock could be delisted from the NASDAQ Global Market if we are not able to satisfy continued listing requirements, and if this were to occur, the price of our common stock and our ability to raise additional capital may be adversely affected and the ability to buy and sell our stock may be less orderly and efficient. We rely on third-party providers for our primary internet connections and technologies, and environmental controls, and any errors, failures or disruption in the services provided by these third parties could significantly harm our business and operating results. Risks Associated with Intellectual Property Misappropriation or infringement of our intellectual property and proprietary rights could impair our competitive position. Enforcement actions to protect our intellectual property could materially and adversely affect our business, results of operations and financial condition. We face risk of claims from third parties relating to intellectual property. These claims and liabilities could harm our business. We could be adversely affected by other litigation. If we were subject to a significant adverse litigation outcome, our financial condition could be materially and adversely affected. We could be adversely affected by actions of third parties that could subject us to litigation that could significantly and adversely affect our business. We are uncertain of our ability to obtain additional financing for our future capital needs. If we are unable to obtain additional financing we may not be able to continue to operate our business. Our certificate of incorporation and bylaws, stockholder rights plan and Delaware law contain provisions that could discourage a third party from acquiring us or limit the price third parties are willing to pay for our stock. Our decision to evaluate strategic alternatives may have a negative impact on employee retention, as well as customer and supplier relationships. If our internal controls and procedures fail, our financial condition, results of operations and cash flow could be materially and adversely affected

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1023364--3/13/2009--AUTOBYTEL__INC