1091801--3/16/2009--MARTHA_STEWART_LIVING_OMNIMEDIA

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Our success depends in part on the popularity of our brands and the reputation and popularity of Martha Stewart, our founder, and Emeril Lagasse. Any adverse reactions to publicity relating to Ms. Stewart or Mr. Lagasse, or the loss of either of their services, could adversely affect our revenues, results of operations and our ability to maintain or generate a consumer base. The crisis in the financial markets and sustained weakening of the economy could significantly impact our business, financial condition, results of operations and cash flows, and could adversely affect the value of our intellectual property assets, hamper our ability to refinance our existing debt or raise additional funds. Our Merchandising business and licensing programs may continue to suffer from downturns in the health and stability of the general economy and housing market, and their adverse impact on our consumers and business relationships. Our business is largely dependent on advertising revenues in our publications, online operations and broadcasts. The market for advertising has been adversely affected by the economic downturn. Our failure to attract or retain advertisers would have a material adverse effect on our business. We face significant competition for advertising and consumer demand. Acquiring or developing additional brands or businesses, and integrating acquired assets, poses inherent financial and other risks and challenges. Our Merchandising business has relied heavily on revenue from a single source, the loss of revenue from which has hurt and may continue to hurt our profitability. We are expanding our merchandising and licensing programs into new areas and products, the failure of any of which could diminish the perceived value of our brand, impair our ability to grow and adversely affect our prospects. If The Martha Stewart Show fails to maintain a sufficient audience, if adverse trends continue or develop in the television production business generally, or if Martha Stewart were to cease to be able to devote substantial time to our television business, that business would be adversely affected. We also anticipate deriving value from Mr. Lagasse s television shows, the popularity of which cannot be assured. We have placed emphasis on building an advertising-revenue-based website, dependent on high levels of consumer traffic and resulting page views. Failure to fulfill these undertakings would adversely affect our brand and business prospects. If we are unable to predict, respond to and influence trends in what the public finds appealing, our business will be adversely affected. New product launches may reduce our earnings or generate losses. Our principal Publishing vendors are consolidating and this may adversely affect our business and operations. We may be adversely affected by fluctuations in paper and postage costs. We may face increased costs for distribution of our magazines to newsstands and bookstores. We may be adversely affected by a continued weakening of newsstand sales. Our websites and networks may be vulnerable to unauthorized persons accessing our systems, which could disrupt our operations and result in the theft of our and our users proprietary or personal information. Martha Stewart controls our company through her stock ownership, enabling her to elect who sits on our board of directors, and potentially to block matters requiring stockholder approval, including any potential changes of control. Our intellectual property may be infringed upon or others may accuse us of infringing on their intellectual property, either of which could adversely affect our business and result in costly litigation. A loss of the services of other key personnel could have a material adverse effect on our business.

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1091801--3/16/2009--MARTHA_STEWART_LIVING_OMNIMEDIA_INC