1050446--3/10/2006--MICROSTRATEGY

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Our quarterly operating results, revenues and expenses may fluctuate significantly, which could have an adverse effect on the market price of our stock The trading price for our class A common stock has been and may continue to be volatile We face the risk of a decrease in our cash balances and losses in our investment portfolio Revenue recognition accounting pronouncements may adversely affect our reported results of operations We may have exposure to greater than anticipated tax liabilities If the market for business intelligence software fails to grow as we expect, or if businesses fail to adopt our products, our business, operating results and financial condition could be materially adversely affected Business disruptions could affect our operating results We use strategic channel partners and if we are unable to maintain successful relationships with them, our business, operating results and financial condition could be materially adversely affected Our recognition of deferred revenue and advance payments is subject to future performance obligations and may not be representative of revenues for succeeding periods We may not be able to sustain or increase profitability in the future Managing our international operations is complex and our failure to do so successfully or in a cost-effective manner could have a material adverse effect on our business, operating results and financial condition We may lose sales, or sales may be delayed, due to the long sales and implementation cycles for our products, which could reduce our revenues Our customers include the U.S. government and a number of other U.S. state and local governments or agencies We face intense competition, which may lead to lower prices for our products, reduced gross margins, loss of market share and reduced revenue We depend on technology licensed to us by third parties, and the loss of this technology could impair our software, delay implementation of our products, or force us to pay higher license fees We depend on revenue from a single suite of products If we are unable to recruit or retain skilled personnel, or if we lose the services of any of our key management personnel, our business, operating results and financial condition could be materially adversely affected Pending or future litigation could have a material adverse impact on our results of operation and financial condition If we are unable to develop and release product enhancements and new products to respond to rapid technological change in a timely and cost-effective manner, our business, operating results and financial condition could be materially adversely affected The emergence of new industry standards may adversely affect the demand for our existing products The nature of our products makes them particularly vulnerable to undetected errors, or bugs, which could cause problems with how the products perform and which could in turn reduce demand for our products, reduce our revenue and lead to product liability claims against us Our intellectual property rights are valuable, and any inability to protect them could reduce the value of our products, services and brand Third parties may claim we infringe their intellectual property rights Because of the rights of our two classes of common stock, and because we are controlled by our existing holders of class B common stock, these stockholders could transfer control of MicroStrategy to a third party without the approval of our Board of Directors or our other stockholders, prevent a third party from acquiring MicroStrategy, or limit your ability to influence corporate matters

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1050446--3/10/2006--MICROSTRATEGY_INC