1062530--2/19/2009--DIGITAL_RIVER_INC

related topics

{system, service, information}

{acquisition, growth, future}

{tax, income, asset}

{property, intellectual, protect}

{regulation, government, change}

{regulation, change, law}

{cost, contract, operation}

{operation, international, foreign}

{competitive, industry, competition}

{control, financial, internal}

{condition, economic, financial}

Failure to properly manage and sustain our expansion efforts could strain our management and other resources. Our international expansion efforts may not be successful in generating additional revenue. New obligations to collect or pay transaction taxes could substantially increase the cost to us of doing business. We could be liable for fraudulent, improper or illegal uses of our platforms and services. Loss of our credit card acceptance privileges, or changes to payment networks, fees, rules or practices, would seriously hamper our ability to process the sale of merchandise. Implementing our acquisition strategy could result in dilution and operating difficulties leading to a decline in revenue and operating profit. We may need to raise additional capital to achieve our business objectives, which could result in dilution to existing investors or increase our debt obligations. Security breaches could hinder our ability to securely transmit confidential information and could materially affect our reputation, business operations, operating results and financial condition. Protecting our intellectual property is critical to our success. Claims against us related to infringement of other parties intellectual property rights, or the products we deliver, could require us to expend significant resources, enter into unfavorable licenses or require us to change our business plans. If our internal control over financial reporting or disclosure controls and procedures are not effective, there may be errors in our financial statements that could require a restatement or our filings may not be timely and investors may lose confidence in our reported financial information, which could lead to a decline in our stock price. Political and economic conditions, and current turmoil in United States and global markets, may adversely affect our revenue and results of operations, and stock price. Because the e-commerce industry is highly competitive and has low barriers to entry, we may be unable to compete effectively. Compliance with laws, rules and regulations, and changes in applicable laws, rules and regulations, may substantially increase our costs of doing business, limit our Internet activities, or otherwise adversely affect our ability to offer our services. We are subject to regulations relating to consumer privacy. Failure to develop our technology to accommodate increased traffic could reduce demand for our services and impair the growth of our business. System failures could reduce the attractiveness of our service offerings. We may become liable to clients who are dissatisfied with our services. Our clients sales cycles and the implementation process for our commerce solution are time-consuming, which may cause us to incur substantial expenses and expend management time without generating corresponding consumer revenue, which would impair our cash flow. The listing of our network addresses on anti-spam lists could harm our ability to service our clients and deliver goods over the Internet. We are exposed to foreign currency exchange risk. Changes in our tax rates could affect our future results. Developments in accounting standards may cause us to increase our recorded expenses, which in turn would jeopardize our ability to demonstrate sustained profitability.

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1062530--2/19/2009--DIGITAL_RIVER_INC_/DE