America Online 2010 Annual Report Download - page 30

Table of Contents
We face risks relating to doing business internationally that could adversely affect our business and we face risks from not doing more international
business.
Our business operates and serves consumers globally. There are certain risks inherent in doing business internationally, including:
• economic volatility and the current global economic recession;
• currency exchange rate fluctuations;
• the requirements of local laws and customs relating to the publication and distribution of content and the display and sale of advertising;
• uncertain protection and enforcement of our intellectual property rights;
• import or export restrictions and changes in trade regulations;
• difficulties in developing, staffing and simultaneously managing a large number of foreign operations as a result of distance as well as language
and cultural differences;
• issues related to occupational safety and adherence to local labor laws and regulations;
• potentially adverse tax developments;
• longer payment cycles;
• political or social unrest;
• seasonal volatility in business activity;
• risks related to government regulation;
• the existence in some countries of statutory stockholder minority rights and restrictions on foreign direct ownership;
• the presence of corruption in certain countries; and
• higher than anticipated costs of entry.
One or more of these factors could adversely affect our business.
We have expanded our international operations through the acquisition of goviral A/S, a company that distributes branded online video for media
agencies, creative agencies and content producers. International expansion involves significant investment as well as risks associated with doing business
abroad, as described above. Furthermore, investments in some regions can take a long period to generate an adequate return and in some cases there may not
be a developed or efficient legal system to protect foreign investment or intellectual property rights. In addition, as we expand into new international regions,
we may have limited experience in operating and marketing our products and services in such regions and could be at a disadvantage compared to competitors
with more experience.
As part of our recent restructuring activities, we have ceased or reduced operations in a number of countries. We could be at a competitive disadvantage
in the long term if we are not able to capitalize on international opportunities, especially as compared to our competitors who maintain a continuous expansive
global presence.
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