1102541--3/16/2006--EARTHLINK

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{product, market, service}

{system, service, information}

{property, intellectual, protect}

{capital, credit, financial}

{acquisition, growth, future}

{personnel, key, retain}

{stock, price, operating}

{investment, property, distribution}

{provision, law, control}

{financial, litigation, operation}

{regulation, change, law}

{operation, international, foreign}

We may not successfully enhance existing or develop new products and services in a cost-effective manner to meet customer demand in the rapidly evolving market for Internet, wireless and IP-based communications services, including new products and services offered in connection with our voice and municipal broadband network initiatives. We may not realize the benefits we are seeking from our investments in the HELIO joint venture or other investment activities as a result of lower than predicted revenues or subscriber levels of the companies in which we invest, larger funding requirements for those companies or otherwise. Our service offerings may fail to be competitive with existing and new competitors. Competitive product, price or marketing pressures could cause us to lose existing customers to competitors (churn), or may cause us to reduce prices for our services which could adversely impact average revenue per user. We may experience significant fluctuations in our operating results and rate of growth and may not be profitable in the future. We may be unsuccessful in making and integrating acquisitions and investments into our business, which could result in operating difficulties, losses and other adverse consequences. The continued decline of our narrowband revenues would adversely affect our profitability. We may not be able to successfully execute our broadband strategy, which could adversely affect our ability to grow or sustain revenues and our profitability. Companies may not provide last mile broadband access to us on a wholesale basis or on terms or at prices that allow us to grow and be profitable. Our commercial and alliance arrangements may be terminated or may not be as beneficial as anticipated, which could adversely affect our ability to increase our subscriber base. The market for VoIP services may not develop as anticipated, which would adversely affect our ability to execute our voice strategy. We may not generate the returns anticipated on our investments to construct and deploy municipal wireless broadband networks. Our third-party network providers may be unwilling or unable to provide Internet, wireline and wireless telecommunications access. We utilize third-parties for technical and customer support and certain billing services, and our business may suffer if our partners are unable to provide these services, cannot expand to meet our needs or terminate their relationships with us. Service interruptions or impediments could harm our business. Business failures and mergers in the telecommunications industry may inhibit our ability to manage our telecommunications costs, which would adversely affect our profitability. Government regulations could force us to change our business practices. We may not be able to protect our proprietary technologies or successfully defend infringement claims and may be required to enter licensing arrangements on unfavorable terms. We may be accused of infringing upon the intellectual property rights of third parties, which is costly to defend and could limit our ability to use certain technologies in the future. If we are unable to successfully defend against legal actions, we could face substantial liabilities. Our business depends on the continued development of effective business support systems, processes and personnel. We may be unable to hire and retain sufficient qualified personnel, and the loss of any of our key executive officers could adversely affect us. Our stock price has been volatile historically and may continue to be volatile. Provisions in our second restated certificate of incorporation, amended and restated bylaws and other elements of our capital structure could limit our share price and delay a change of management.

Full 10-K form ▸

1102541--3/16/2006--EARTHLINK_INC