1062292--3/13/2007--KNOT

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{product, market, service}

{acquisition, growth, future}

{system, service, information}

{property, intellectual, protect}

{customer, product, revenue}

{stock, price, operating}

{stock, price, share}

{regulation, government, change}

{operation, natural, condition}

{control, financial, internal}

{provision, law, control}

{personnel, key, retain}

{product, liability, claim}

RISK FACTORS THAT MAY AFFECT FUTURE RESULTS Risks Related to Our Business Our online wedding-related and other websites may fail to generate sufficient revenues to survive over the long term. We incurred losses for many years following our inception and may incur losses in the future. We lack significant revenues and may be unable to adjust spending quickly enough to offset any unexpected revenue shortfall. If sales to sponsors or advertisers forecasted in a particular period are delayed or do not otherwise occur, our results of operations for a particular period would be materially and adversely affected. Our quarterly revenues and operating results are subject to significant fluctuation, and these fluctuations may adversely affect the trading price of our common stock. Because the frequency of weddings vary from quarter to quarter, our operating results may fluctuate due to seasonality. We depend on our strategic relationships with other websites. The market for Internet advertising is still developing, and if the Internet fails to gain further acceptance as a media for advertising, we would experience slower revenue growth than expected or a decrease in revenue and would incur greater than expected losses. We may be unable to continue to build awareness of The Knot, WeddingChannel and The Nest brand names, which would negatively impact our business and cause our revenues to decline. Our business could be adversely affected if we are not able to successfully integrate any future acquisitions or successfully operate under our strategic partnerships. The costs associated with potential acquisitions or strategic alliances could dilute your investment or adversely affect our results of operations. If we cannot protect our domain names, it will impair our ability to successfully brand The Knot. Our business and prospects would suffer if we are unable to protect and enforce our intellectual property rights. Our services and products may infringe the intellectual property rights of third parties, and any disputes with or claims by third parties alleging our infringement or misappropriation of their proprietary rights could require us to incur substantial costs and distract our management, and could otherwise have a negative impact on our business. Increased competition in our markets could reduce our market share, the number of our advertisers, our advertising revenues and our margins. Our potential inability to compete effectively in our industry for qualified personnel could hinder the success of our business. Terrorism and the uncertainty of war may have a material adverse effect on our operating results. We may not be able to obtain additional financing necessary to execute our business strategy. Systems disruptions and failures could cause advertiser or user dissatisfaction and could reduce the attractiveness of our sites. We may not be able to deliver various services if third parties fail to provide reliable software, systems and related services to us. Privacy concerns relating to elements of our technology could damage our reputation and deter current and potential users from using our products and services. If our security systems are breached we could incur liability, our services may be perceived as not being secure, and our business and reputation could suffer. We depend on a limited number of customers for some significant portion of our sales, and our financial success is linked to the success of our customers, our customers commitment to our services and products, and our ability to satisfy and retain our customers. We have not independently verified market share and industry data and forecasts. Risks Related to the Recent Acquisition of WeddingChannel We may not realize the anticipated benefits of acquiring WeddingChannel. We may experience difficulties integrating WeddingChannel with The Knot. Our acquisition of WeddingChannel may result in a loss of customers, advertisers or suppliers, or a reduction in revenues from existing customers or advertisers. We generate significant revenues from WeddingChannel s registry services business, in which we will face various risks. Our acquisition of WeddingChannel may adversely affect our financial results. Risks Related to the Internet Industry If the use of the Internet and commercial online services as media for commerce does not continue to grow, our business would be materially and adversely affected. We may be unable to respond to the rapid technological change in the Internet industry. Our online sponsorship and advertising revenues, as well as our merchandise revenues, could decline if we become subject to burdensome government regulation and legal uncertainties related to doing business online. We may be sued for information retrieved from our sites. We may incur potential product liability for products sold online. We may incur significant expenses related to the security of personal information online. Risks Related to Our Common Stock Our stock price has been highly volatile and is likely to experience significant price and volume fluctuations in the future, which could result in substantial losses for our stockholders and subject us to litigation. Future sales of shares of our common stock, or the perception that these shares might be sold, could cause the market price of our common stock to drop significantly. Provisions in our articles of incorporation, bylaws and Delaware law may make it more difficult to effect a change in control, which could adversely affect the price of our common stock. We have not paid cash dividends on our common stock and do not anticipate paying any dividends on our common stock in the foreseeable future. Our executive officers, directors and stockholders who each owned greater than 5% of our common stock exercise significant control over all matters requiring a stockholder vote.

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1062292--3/13/2007--KNOT_INC