1265888--2/26/2010--NEUSTAR

related topics

{product, market, service}

{system, service, information}

{provision, law, control}

{acquisition, growth, future}

{regulation, government, change}

{tax, income, asset}

{personnel, key, retain}

{property, intellectual, protect}

{condition, economic, financial}

{regulation, change, law}

{customer, product, revenue}

{operation, natural, condition}

{stock, price, operating}

{stock, price, share}

Security breaches could result in significant liabilities, interruptions of service or reduced quality of service, which could increase our costs or result in a reduction in the use of our services by our customers. Our seven contracts with North American Portability Management LLC represent in the aggregate a substantial portion of our revenue, are not exclusive and could be terminated or modified in ways unfavorable to us, and we may be unable to renew these contracts at the end of their term. Certain of our other contracts may be terminated or we may be unable to renew these contracts, which may reduce the number of services we can offer and damage our reputation. Failure to comply with neutrality requirements could result in loss of significant contracts. Regulatory and statutory changes that affect us or the communications industry in general may increase our costs or otherwise adversely affect our business. If we do not adapt to rapid technological change, we could lose customers or market share. Our customers face implementation and support challenges in introducing IP-based services, which may slow their rate of adoption or implementation of our solutions. The market for certain of our addressing, interoperability, and infrastructure services is competitive, which could result in fewer customer orders, reduced revenue or margins or loss of market share. Our strategic initiatives relating to mobile instant messaging may be hampered by the actions of other industry participants with strategic objectives that are different than ours, as well as those of our competitors. If we were unable to protect our intellectual property rights adequately, the value of our services and solutions could be diminished. Our intellectual property could be misappropriated, which could force us to become involved in expensive and time-consuming litigation. Our failure to achieve or sustain market acceptance for our services at desired pricing levels could impact our ability to maintain profitability or positive cash flow. A significant decline in the volume of transactions we handle could have a material adverse effect on our results of operations. If we are unable to manage our costs, our profits could be adversely affected. We may be unable to complete suitable acquisitions, or we may undertake acquisitions that could increase our costs or liabilities or be disruptive to our business. An impairment in the carrying value of goodwill or long-lived assets could negatively impact our consolidated results of operations and net worth. Our expansion into international markets may be subject to uncertainties that could increase our costs to comply with regulatory requirements in foreign jurisdictions, disrupt our operations, and require increased focus from our management. Our senior management is important to our customer relationships, and the loss of one or more of our senior managers could have a negative impact on our business. We must recruit and retain skilled employees to succeed in our business, and our failure to recruit and retain qualified employees could harm our ability to maintain and grow our business. Health epidemics or other events such as wars, acts of terrorism, political unrest or other man-made or natural disasters could severely disrupt our business operations. Risks Related to the Financial Market Conditions The recent financial crisis could negatively affect market utilization of our existing and new services and may harm our financial results. Funds invested in auction rate securities that we hold may not be accessible in the short term, and we may be required to adjust the carrying value of these securities through an asset impairment charge. We may need additional capital in the future and it may not be available on acceptable terms. Risks Related to Our Common Stock Our common stock price may be volatile. Delaware law and provisions in our certificate of incorporation and bylaws could make a merger, tender offer or proxy contest difficult, and the market price of our Class A common stock may be lower as a result. In order to comply with our neutrality requirements, our certificate of incorporation contains ownership and transfer restrictions relating to telecommunications service providers and their affiliates, which may inhibit potential acquisition bids that our stockholders may consider favorable, and the market price of our Class A common stock may be lower as a result.

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1265888--2/26/2010--NEUSTAR_INC