1095291--3/9/2007--WEBSITE_PROS

related topics

{product, market, service}

{acquisition, growth, future}

{system, service, information}

{personnel, key, retain}

{control, financial, internal}

{customer, product, revenue}

{property, intellectual, protect}

{regulation, change, law}

{provision, law, control}

{stock, price, operating}

We depend primarily on a small number of strategic marketing relationships and one key strategic marketing relationship in particular to identify prospective customers. The loss of one or more of our strategic marketing relationships, or a reduction in the referrals and leads they generate, would significantly reduce our future revenue and increase our expenses. Most of our Web services are sold on a month-to-month basis, and if our customers either are unable or choose not to subscribe to our Web services, our revenue may decrease. If economic or other factors negatively affect the small and medium-sized business sector, our customers may become unwilling or unable to purchase our Web services and products, which could cause our revenue to decline and impair our ability to operate profitably. Our growth will be adversely affected if we cannot continue to successfully retain, hire, train, and manage our key employees, particularly in the telesales and customer service areas. We may expand through acquisitions of, or investments in, other companies or technologies, which may result in additional dilution to our stockholders and consume resources that may be necessary to sustain our business. We may find it difficult to integrate recent and potential future business combinations, which could disrupt our business, dilute stockholder value, and adversely affect our operating results. Accounting for acquisitions under generally accepted accounting principles could adversely affect our reported financial results. We have only recently become profitable and may not maintain our level of profitability. Our operating results are difficult to predict and fluctuations in our performance may result in volatility in the market price of our common stock. Our business depends in part on our ability to continue to provide value-added Web services and products, many of which we provide through agreements with third parties, and our business will be harmed if we are unable to provide these Web services and products in a cost-effective manner. Our systems, and those of our co-location provider, are vulnerable to natural disasters and other unexpected problems that could lead to interruptions, delays, loss of data, or the inability to accept and fulfill customer subscriptions. We rely heavily on the reliability, security, and performance of our internally developed systems and operations, and any difficulties in maintaining these systems may result in service interruptions, decreased customer service, or increased expenditures. We face intense and growing competition. If we are unable to compete successfully, our business will be seriously harmed. Our failure to build brand awareness quickly could compromise our ability to compete and to grow our business. If our security measures are breached, our services may be perceived as not being secure, and our business and reputation could suffer. If we cannot adapt to technological advances, our Web services and products may become obsolete and our ability to compete would be impaired. Providing Web services and products to small and medium-sized businesses designed to allow them to Internet-enable their businesses is a new and emerging market; if this market fails to develop, we will not be able to grow our business. We are dependent on our executive officers, and the loss of any key member of this team may compromise our ability to successfully manage our business and pursue our growth strategy. Our growth could strain our resources and our business may suffer if we fail to implement appropriate controls and procedures to manage our growth. We may be unable to protect our intellectual property adequately or cost-effectively, which may cause us to lose market share or force us to reduce our prices. If we fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial results, which could cause our stock price to fall or result in our stock being delisted. We might require additional capital to support business growth, and this capital might not be available on acceptable terms, or at all. Provisions in our amended and restated certificate of incorporation and bylaws or under Delaware law might discourage, delay, or prevent a change of control of our company or changes in our management and, therefore, depress the trading price of our common stock.

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1095291--3/9/2007--WEBSITE_PROS_INC