1133311--3/15/2007--TRAVELZOO

related topics

{product, market, service}

{personnel, key, retain}

{stock, price, operating}

{acquisition, growth, future}

{system, service, information}

{property, intellectual, protect}

{condition, economic, financial}

{operation, international, foreign}

{operation, natural, condition}

{regulation, change, law}

{competitive, industry, competition}

{interest, director, officer}

{control, financial, internal}

{stock, price, share}

We depend on two clients for a substantial part of our revenues. Our business model may not be adaptable to a changing market. We may not be able to obtain sufficient funds to grow our business and any additional financing may be on terms adverse to your interests. Our business may be sensitive to recessions. Our operations could be significantly hindered by the occurrence of a natural disaster or other catastrophic event. Technological or other assaults on our service could harm our business. Risks Related to Our Markets and Strategy We may not be able to develop awareness of our brand name. Our business may be sensitive to events affecting the travel industry in general. We will not be able to attract travel companies or Internet users if we do not continually enhance and develop the content and features of our products and services. We may lose business if we fail to keep pace with rapidly changing technologies and clients needs. Our business and growth will suffer if we are unable to hire and retain highly skilled personnel. We may not be able to effectively manage our expanding operations. Our international operations are subject to increased risks which could harm our business, operating results and financial condition. Intense competition may adversely affect our ability to achieve or maintain market share and operate profitably. Loss of any of our key management personnel could negatively impact our business. We may not be able to access third party technology upon which we depend. Risks Related to the Market for our Shares Our stock price has been volatile historically and may continue to be volatile. We are controlled by a principal stockholder. Risks Related to Legal Uncertainty We may become subject to burdensome government regulations and legal uncertainties affecting the Internet which could adversely affect our business. We may be liable as a result of information retrieved from or transmitted over the Internet. Claims may be asserted against us relating to shares not issued in our 2002 merger. Our internal controls over financial reporting may not be effective, and our independent auditors may not be able to certify as to their effectiveness, which could have a significant and adverse effect on our business. We may be unable to protect our registered trademark or other proprietary intellectual property rights.

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1133311--3/15/2007--TRAVELZOO_INC