879437--8/8/2008--infoGROUP

related topics

{product, market, service}

{regulation, government, change}

{acquisition, growth, future}

{financial, litigation, operation}

{system, service, information}

{competitive, industry, competition}

{personnel, key, retain}

{control, financial, internal}

{stock, price, operating}

{regulation, change, law}

{operation, international, foreign}

{debt, indebtedness, cash}

We have identified material weaknesses in our internal control over financial reporting and expect to incur substantial additional costs to address these control deficiencies and in connection with our ongoing efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002. The Special Litigation Committee s investigation, the SEC s informal investigation and the pending Derivative Litigation have resulted in significant fees, costs and expenses, diverted management time and resources, and could have a material adverse effect on our business, financial condition and results of operations. Our potential indemnification obligations and limitations of our director and officer liability insurance may have a material adverse impact on our financial condition and results of operations. Our business would be harmed if we do not continue successfully to implement our Internet strategy. Our markets are highly competitive and many of our competitors have greater resources than we do. Changes in the direct marketing industry and in the industries in which our customers operate may adversely affect our business. We are highly dependent on key personnel. We are leveraged. If we are unable to service our debt as it becomes due, our business would be harmed. Fluctuations in our operating results may result in decreases in the market price of our common stock. If we do not adapt our products and services to respond to changes in technology, they could become obsolete. Our ability to increase our revenues will depend to some extent upon introducing new products and services, and if the marketplace does not accept these new products and services, our revenues may decline. Changes in laws and regulations relating to data privacy could adversely affect our business. Our business would be harmed if we do not successfully integrate future acquisitions. Future acquisitions may also harm our operating results, dilute our stockholders equity and create other financial difficulties for us. A failure in the integrity of our database could harm our brand and result in a loss of sales and an increase in legal claims. We may lose key business assets, including loss of data center capacity or the interruption of telecommunications links, the Internet, or power sources, which could significantly impede our ability to operate our business. Our international operations subject us to additional risks and challenges that could harm our business and our profitability. Our contracts with the U.S. federal government grant the government rights that are typically not found in commercial contracts and that could adversely affect our revenues and income. The U.S. federal government has the right to terminate its contracts with us at any time and such terminations could adversely affect our revenues and income. As a contractor to the U.S. federal government, we are subject to restrictions and compliance requirements that could divert the attention of our management, drain our resources and/or result in additional costs, fines or other penalties.

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879437--8/8/2008--infoGROUP_Inc.