1091801--3/7/2006--MARTHA_STEWART_LIVING_OMNIMEDIA_INC

related topics
{product, market, service}
{customer, product, revenue}
{gas, price, oil}
{property, intellectual, protect}
{cost, operation, labor}
{personnel, key, retain}
{investment, property, distribution}
If we are unable to predict, respond to and influence trends in what the public finds appealing, our business will be adversely affected. 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 very expensive litigation. Termination of our licensing agreement with Kmart relating to products could adversely affect our revenues and results of operations. 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 daily television show fails to maintain a sufficient audience, if adverse trends 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 have placed emphasis on building our internet community. Failure to fulfill these undertakings would adversely affect our brand and business prospects. We are undertaking many new business ventures and expanding our business into new areas. We cannot assure that these new businesses will be successful or that the relationships through which we have entered these businesses will be successful. If we fail in any of these new businesses, or if our relationships fail, our image and business may be adversely affected. Our business is largely dependent on advertising revenues in our publications, online operations and broadcasts. Failure to attract or retain these advertisers would have a material adverse effect on our business. A loss of the services of other key personnel could have a material adverse effect on our business. We operate in four highly competitive businesses: Publishing, Broadcasting, Merchandising and Internet, each of which subjects us to competitive pressures.

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