1265888--3/1/2007--NEUSTAR

related topics

{system, service, information}

{product, market, service}

{regulation, government, change}

{provision, law, control}

{acquisition, growth, future}

{personnel, key, retain}

{property, intellectual, protect}

{customer, product, revenue}

{regulation, change, law}

{stock, price, share}

{stock, price, operating}

{cost, contract, operation}

The loss of, or damage to, a data center could interrupt our operations and materially harm our revenue and growth. The failure of the third-party software and equipment used by our customers or that we use to provide our services could cause interruptions or failures of our systems. 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. Our contracts with North American Portability Management LLC contain provisions that may restrict our ability to use data that we administer in our clearinghouse, which may limit our ability to offer services that we currently, or intend to, offer. 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 impair our growth. If we do not adapt to rapid technological change in the communications industry, 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 technology relies in part on the use of open standards, which makes us vulnerable to competition. Our intellectual property could be misappropriated, which could force us to become involved in expensive and time-consuming litigation. Our services and solutions may infringe the intellectual property rights of others, subjecting us to claims for infringement, payment of license royalties, or other damages. Our failure to achieve or sustain market acceptance at desired pricing levels could impact our ability to maintain profitability or positive cash flow. A 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 growth, our revenue and 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. 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. Our ability to access additional capital in the future may be limited. 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--3/1/2007--NEUSTAR_INC