1142512--3/17/2008--ZIPREALTY

related topics

{system, service, information}

{loan, real, estate}

{product, market, service}

{regulation, government, change}

{stock, price, operating}

{stock, price, share}

{regulation, change, law}

{customer, product, revenue}

{property, intellectual, protect}

{personnel, key, retain}

{acquisition, growth, future}

{provision, law, control}

{tax, income, asset}

{gas, price, oil}

{operation, natural, condition}

{financial, litigation, operation}

Our business could be harmed by transitions in the real estate markets and economic events that are out of our control and may be difficult to predict. We may not be able to continue to grow market share to offset the impact of the current contraction in the residential real estate market. If the percentage of our business that is composed of representing home sellers, as opposed to home buyers, increases, we may incur additional costs and achieve lower profit margins, particularly in a softened market. The recent tightening in the availability of credit, particularly with respect to lenders in the mortgage market, has and may continue to negatively impact the housing market. Softness in the residential real estate market may reduce the availability of home loans, which may further negatively impact the housing market. Foreclosures and short sales may cause significant disruption in our business. Recently adopted federal legislation designed to bolster the market for nonconforming mortgage loans may result in short or long-term fluctuations in the number of residential real estate transactions, which could negatively impact our operating results. We may be unable to integrate our technology with each MLS on a cost-effective basis, which may harm our operating results and adversely affect our ability to service clients. Our business model is relatively new and unproven, and we cannot guarantee our future success. If we fail to recruit, hire and retain qualified agents, we would be less able to service our clients and our growth would most likely be impaired. We would likely incur additional expenses or liabilities if our current or former compensation plans, including expense allowance or reimbursement policies, are found to violate federal or state wage and hour laws. Our failure to effectively manage the growth of our ZipAgents and related technology could adversely affect our ability to service our clients and harm operating results. Our failure to effectively manage the growth of our control systems could adversely affect our ability to maintain legal compliance. If we fail to comply with real estate brokerage laws and regulations, we may incur significant financial penalties or lose our licenses to operate. We may have liabilities in connection with real estate brokerage activities. We may have liabilities if any of our employees violates laws concerning settlement procedures. If any of our core services fails to comply with applicable federal and state law and regulations, we may incur significant financial penalties or lose licenses required to provide these services. We may have liabilities in connection with our performance of core services. If our arrangements for providing core services become impaired, we may lose sources of revenue that may be difficult to replace and we may be less likely to engage in related transactions with our clients. If consumers do not continue to use the Internet as a tool in their residential real estate buying or selling process, we may be unable to attract new clients and our growth and financial results may suffer. Our success depends in part on our ability to expand successfully into additional real estate markets. Unless we develop, maintain and protect a strong brand identity, our business may not grow and our financial results would suffer. We have numerous competitors, many of which have valuable industry relationships, innovative business models and access to greater resources than we do. Changes in federal and state real estate laws and regulations, and rules of industry organizations such as the National Association of REALTORS , could adversely affect our business. We derive a significant portion of our leads through third parties, and if any of our significant lead generation relationships are terminated, impaired or become more expensive, our ability to attract new clients and grow our business may be adversely affected. Our ability to expand our business may be limited by state laws governing cash rebates to home buyers. We have undergone significant management transitions recently and need to successfully integrate new members of the management team as well as retain key personnel or our business could be harmed. As we implement changes in our agent compensation policies, we may incent behaviors that cause an increase in our expenses and potentially a decrease in our profit margin with the goal of increasing our sales and overall profitability. We monitor and evaluate the use of our website by our registered users, which could raise privacy concerns. The value of our services could be diminished if anti-spam software filters out an increasing portion of the emails we send. We may be subject to liability for the Internet content that we publish. We may need to change the manner in which we conduct our business if government regulation of the Internet increases. Our operating results are subject to seasonality and vary significantly among quarters during each calendar year, making meaningful comparisons of successive quarters difficult. Our reputation and client and agent service offerings may be harmed by system failures and computer viruses. Our business is geographically concentrated, which makes us more susceptible to business interruption and financial loss due to natural disasters, inclement weather, economic or market conditions or other regional events outside of our control. Our intellectual property rights are valuable and our failure to protect those rights could adversely affect our business. We may in the future be subject to intellectual property rights disputes, which could divert management attention, be costly to defend and require us to limit our service offerings. We intend to evaluate acquisitions or investments in complementary technologies and businesses and we may not realize the anticipated benefits from, and may have to pay substantial costs related to, any acquisitions or investments that we undertake. OTHER RISKS RELATED TO OUR STOCK PRICE Our stock price may be volatile. Our share price could decline due to the large number of outstanding shares of our common stock eligible for future sale. The relatively small average daily trading volume of our stock could result in volatility in our trading prices, particularly if a large block of our stock is traded. Our principal stockholders, executive officers and directors own a significant percentage of our stock, and as a result, the trading price for our shares may be depressed and these stockholders can take actions that may be adverse to your interests. Our charter documents and Delaware law could prevent a takeover that stockholders consider favorable and could also reduce the market price of our stock.

Full 10-K form ▸

1142512--3/17/2008--ZIPREALTY_INC