America Online 2009 Annual Report Download - page 28

Table of Contents
Federal, state and international governmental authorities continue to evaluate the privacy implications inherent in the use of third-party web "cookies"
for behavioral advertising. We use cookies, which are small text files placed in a consumer's browser, to facilitate authentication, preference management,
research and measurement, personalization and advertisement and content delivery. In the Third Party Network, cookies or similar technologies help present,
target and measure the effectiveness of advertisements. The regulation of these "cookies" and other current online advertising practices could adversely affect
our business.
Changes to products, technology and services made by third parties and consumers could adversely affect our business.
We are dependent on many products, technologies and services provided by third parties, including browsers, data and search indexes, in order for
consumers to use our content, products and services, as well as to deliver, measure, render and report advertising. Any changes made by these third parties or
consumers to functionality, features or settings of these products, technologies and services could adversely affect our business. For example, third parties
may develop, and consumers may install, software that is used to block advertisements or delete cookies, or consumers may elect to manually delete cookies
more frequently. Likewise, search services providers may adjust their algorithms and indexes, which may hinder the ability of consumers to reach and use our
content, products and services. This risk is increased because there are a small number of search services providers and any change made by one or more of
these providers could significantly affect our business. The widespread adoption of these products and technologies or changes to current products,
technologies and services could adversely affect our business.
Acquisitions of other businesses could adversely affect our operations and result in unanticipated liabilities.
Since January 1, 2008, we have acquired 12 businesses and we are likely to make additional acquisitions and strategic investments in the future. The
completion of acquisitions and strategic investments and the integration of acquired companies or assets involve a substantial commitment of resources. In
addition, past or future transactions may be accompanied by a number of risks, including:
• the uncertainty of our returns on investment due to the new and developing industries in which some of the acquired companies operate;
• the adverse effect of known potential liabilities or unknown liabilities, such as claims of patent or other intellectual property infringement,
associated with the companies acquired or in which we invest;
• the difficulty of integrating technology, administrative systems, personnel and operations of acquired companies into our services, systems and
operations and unanticipated expenses related to such integration;
• the potential loss or disengagement of key talent at acquired companies;
• the potential disruption of our ongoing business and distraction of our management;
• additional operating losses and expenses of the businesses we acquire or in which we invest and the failure of such businesses to perform as
expected;
• the failure to successfully further develop acquired technology, resulting in the impairment of amounts currently capitalized as intangible assets;
• the difficulty of reconciling potentially conflicting or overlapping contractual rights and duties; and
• the potential impairment of relationships with consumers, partners and employees as a result of the combination of acquired operations and new
management personnel.
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