1101239--3/16/2006--EQUINIX

related topics

{system, service, information}

{stock, price, operating}

{cost, operation, labor}

{operation, natural, condition}

{personnel, key, retain}

{control, financial, internal}

{product, market, service}

{acquisition, growth, future}

{competitive, industry, competition}

{regulation, change, law}

{customer, product, revenue}

{cost, regulation, environmental}

{operation, international, foreign}

{financial, litigation, operation}

{tax, income, asset}

{investment, property, distribution}

{condition, economic, financial}

{regulation, government, change}

Risks Related to Our Business We have incurred substantial losses in the past and may continue to incur additional losses in the future. We expect our operating results to fluctuate. If the market price of our stock continues to be highly volatile, the value of an investment in our common stock may decline. Our inability to use our tax net operating losses will cause us to pay taxes at an earlier date and in greater amounts which may harm our operating results. We are exposed to potential risks from recent legislation requiring companies to evaluate controls under Section 404 of the Sarbanes-Oxley Act of 2002. If we cannot effectively manage international operations, our revenues may not increase and our business and results of operations would be harmed. We are continuing to invest in our expansion efforts but may not have sufficient customer demand in the future to realize expected returns on these investments. We may begin construction of new IBX centers which could involve significant risks to our business. We may make acquisitions, which pose integration and other risks that could harm our business. The increased use of high power density equipment may limit our ability to fully utilize our IBX centers. Our business could be harmed by prolonged electrical power outages or shortages, increased costs of energy or general availability of electrical resources. Increases in property taxes could adversely affect our business, financial condition and results of operations. STT Communications has voting control over a substantial portion of our stock and has influence over matters requiring stockholder consent. We may be forced to take steps, and may be prevented from pursuing certain business opportunities, to ensure compliance with certain tax-related covenants agreed to by us in the combination agreement. If regulated materials are discovered at centers leased or owned by us, we may be required to remove or clean-up such materials, the cost of which could be substantial. Our non-U.S. customers include numerous related parties of STT Communications. We depend on a number of third parties to provide Internet connectivity to our IBX centers; if connectivity is interrupted or terminated, our operating results and cash flow could be materially adversely affected. Any failure of our physical infrastructure or services could lead to significant costs and disruptions that could reduce our revenue and harm our business reputation and financial results. We resell products and services of third parties that may require us to pay for such products and services even if our customers fail to pay us for the products and services, which may have a negative impact on our operating results. IBM accounts for a significant portion of our revenues, and the loss of IBM as a customer could significantly harm our business, financial condition and results of operations. We may not be able to compete successfully against current and future competitors. Because we depend on the retention of key employees, failure to maintain stock option incentives may be disruptive to our business. Because we depend on the development and growth of a balanced customer base, failure to attract and retain this base of customers could harm our business and operating results. Our products and services have a long sales cycle that may materially adversely affect our business, financial condition and results of operations. We are subject to securities class action litigation, which may harm our business and results of operations. Risks Related to Our Industry If the use of the Internet and electronic business does not grow, our revenues may not grow. Government regulation may adversely affect the use of the Internet and our business. Industry consolidation may have a negative impact on our business model. Terrorist activity throughout the world and military action to counter terrorism could adversely impact our business.

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1101239--3/16/2006--EQUINIX_INC