America Online 2011 Annual Report Download - page 21

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Table of Contents
Weak economic conditions could adversely affect our revenues.
Advertising businesses may be adversely affected by weak economic conditions. Because we derive a substantial portion of our revenues from the sale
of advertising, declines and delays in advertising spending that result from weak economic conditions have impacted our advertising revenues in the past and
could adversely affect our advertising revenues in the future.
Additionally, declines in consumer spending due to weak economic conditions may cause advertisers to reduce their spending if consumers are
purchasing fewer of their products or services, ultimately resulting in downward pricing pressure on our advertising inventory. As a result, declines in
consumer spending could indirectly adversely affect our advertising revenues.
While we do not believe that our subscription access service was adversely affected by past weak economic conditions, there is a risk that subscribers
may elect to cancel their subscriptions as a result of a weaker economic climate in the future. Should this occur, we may experience an accelerated decline in
our subscription revenues.
We are dependent on a third-party search provider.
We do not own or control a general text-based web search service. Instead, Google is, except in certain limited circumstances, the exclusive web search
provider for AOL Properties. For the year ended December 31, 2011, search and contextual advertising revenues comprised approximately 27% of our total
advertising revenues. Changes that Google has made and may unilaterally make in the future to its search service or advertising network, including changes in
pricing, algorithms or advertising relationships, could adversely affect our advertising revenues. Furthermore, except in certain limited circumstances, we
have agreed to use Google's algorithmic search and sponsored links on an exclusive basis in the United States through December 31, 2015. Additionally, a
decline or an unfavorable change in our relationship with Google could materially affect our advertising revenues.
Because we do not own or control such a search service, we are not able to package and sell search advertising along with display advertising services
outside of AOL Properties. As search advertising represents a significant portion of online advertising spending, we believe that our lack of a proprietary
search service could adversely affect our ability to maintain and increase advertising revenues.
We may need to raise additional capital, and we cannot be sure that additional financing will be available.
While subsequent to our separation from Time Warner we have funded our ongoing working capital, capital expenditure and financing requirements
through cash flows from operations and asset dispositions, we may require additional financing in the future. Our ability to obtain future financing will depend
on, among other things, our financial condition and results of operations as well as the condition of the capital markets or other credit markets at the time we
seek financing. We currently do not have any ratings from the credit rating agencies, so our access to capital markets may be limited. We may not be able to
obtain future financing on terms acceptable to us in a timely manner, or at all. Our ability to fund our working capital, capital expenditure and financing
requirements in the future may be adversely affected if we are unable to obtain financing on acceptable terms. If we are unable to enter into the necessary
financing arrangements or sufficient funds are not available on acceptable terms when required, we may not have sufficient liquidity and our business may be
adversely affected.
If we cannot continue to make our content, products and services available and attractive to consumers via devices other than personal computers, our
ability to attract consumers and maintain or increase their engagement could be adversely affected.
Global consumers are increasingly accessing and using the internet through devices other than personal computers, such as smartphones and tablet
computers. In order for consumers to access and use our content, products and services via these devices, we must continue to ensure that our content,
products and services are
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