1084048--3/12/2007--J2_GLOBAL_COMMUNICATIONS

related topics

{system, service, information}

{regulation, government, change}

{property, intellectual, protect}

{product, market, service}

{customer, product, revenue}

{tax, income, asset}

{operation, international, foreign}

{stock, price, share}

{acquisition, growth, future}

{condition, economic, financial}

{provision, law, control}

{financial, litigation, operation}

{control, financial, internal}

{capital, credit, financial}

{personnel, key, retain}

{stock, price, operating}

Risks Related To Our Business In order to continue sustaining our growth, we must continue to attract new paid subscribers at a greater rate and with at least an equal amount of revenues per subscriber than we lose existing paid subscribers. Price increases could decrease new subscriber sign up rates or increase cancellation rates, which could adversely affect our financial results. Our financial results may be adversely impacted by higher than expected tax rates or exposure to additional income tax liabilities. A system failure or breach of system or network security could delay or interrupt service to our customers, harm our reputation or subject us to significant liability. Our business is dependent on a small number of telecommunications carriers in each region and our inability to maintain agreements at attractive rates with such carriers may negatively impact our business. Increased cost of email transmissions could have a material adverse effect on our business. If we experience excessive fraudulent credit card charges or cannot meet evolving credit card company merchant standards imposed by credit card companies, we could lose the right to accept credit cards for payment and our subscriber base could decrease significantly. Our business could suffer if we cannot obtain telephone numbers, are prohibited from obtaining local numbers or are limited to distributing local numbers to only certain customers. Inadequate intellectual property protections could prevent us from enforcing or defending our proprietary technology. If our trademarks are not adequately protected or we are unable to protect our domain names, our reputation and brand could be adversely affected. Our growth will depend on our ability to develop our brands and market new brands, and these efforts may be costly. We may be found to have infringed the intellectual property rights of others, which could expose us to substantial damages or restrict our operations. The successful operation of our business depends upon the supply of critical elements and marketing relationships from other companies. Our business is highly dependent on our billing system. Our failure to properly manage growth could harm our business. Future acquisitions could result in dilution, operating difficulties and other harmful consequences. Our success depends on our retention of our executive officers, senior management and our ability to hire and retain additional key personnel. We may be subject to risks from international operations. As we continue to grow our international operations, adverse currency fluctuations and foreign exchange controls could have a material adverse effect on our balance sheet and results of operations. Our business and users may be subject to sales tax and other taxes. We may be engaged in legal proceedings that could cause us to incur unforeseen expenses and could occupy a significant amount of our management s time and attention. The markets in which we operate are highly competitive and our competitors may have greater resources to commit to growth, superior technologies, cheaper pricing or more effective marketing strategies. We are exposed to risk if we cannot maintain or adhere to our internal controls and procedures. Risks Related To Our Industry Our services may become subject to burdensome telecommunications regulation, which could increase our costs or restrict our service offerings. The value-added messaging and communications services industry is undergoing rapid technological changes and we may not be able to keep up. We rely heavily on the revenue generated by our fax services. We are subject to regulations relating to consumer privacy. New and existing regulations could harm our business. Risks Related To Our Stock Future sales of our common stock may negatively affect our stock price. Anti-takeover provisions could negatively impact our stockholders. Our stock price may be volatile or may decline.

Full 10-K form ▸

1084048--3/12/2007--J2_GLOBAL_COMMUNICATIONS_INC