America Online 2011 Annual Report Download - page 24

Table of Contents
need to rely on distribution channels that require us to pay significant fees to third parties. Furthermore, these fees have been increasing as internet companies
compete for a limited number of premium distribution channels. Any increased reliance on these third-party distribution channels could adversely affect our
business.
If we cannot continue to develop and offer effective advertising products and services, our advertising revenues could be adversely affected.
Growth in our advertising revenues depends on our ability to continue offering effective products and services for advertisers and publishers.
Continuing to develop and improve these products and services may require significant time and costs. If we cannot continue to develop and improve our
advertising products and services, our advertising revenues could be adversely affected. Furthermore, if we cannot enhance our existing advertising offerings
or develop new advertising offerings or technologies to keep pace with market trends, including new technologies that more effectively or efficiently plan,
price or target advertising, our advertising revenues could be adversely affected.
Our access service subscriber base could decline faster than we currently anticipate.
Our access service subscriber base has declined and is expected to continue to decline. This decline is the result of several factors, including the
increased availability of high-speed internet broadband connections, the fact that a significant amount of online content, products and services has been
optimized for use with broadband internet connections and the effects of our strategic shift to focus on generating advertising revenues, which resulted in us
essentially eliminating our marketing efforts for our subscription access service and the free availability of the vast majority of our content, products and
services. Also, a substantial number of the subscribers to our subscription access service do not use the service to access the internet on a regular basis and
may terminate their subscription at any time. In addition, we must maintain the current payment method information of our subscribers and, if we fail to do so,
we may lose paid relationships with some of our access subscribers. If any of these factors result in our access subscriber base declining faster than we
currently anticipate, our subscription revenues and business could be adversely affected.
A disruption or failure of our networks and information systems, the internet or other technology may disrupt our business.
Our business is heavily dependent on the availability of network and information systems, the internet and other technologies. Shutdowns or service
disruptions caused by events such as criminal activity, sabotage or espionage, computer viruses, hacking and other cyber-security attacks, router disruption,
automated attacks such as denial of service attacks, power outages, natural disasters, accidents, terrorism, equipment failure or other events within or outside
our control could adversely affect us and our consumers, including loss or compromise of data, service disruption, damage to equipment and data and
excessive call volume to call centers. Furthermore, such attacks are not always able to be immediately detected, which means that we may not be in a position
to promptly address the attacks or to implement adequate preventative measures. Such events could result in large expenditures necessary to recover data, or
repair or replace such networks or information systems or to protect them from similar events in the future. As not all of our systems are fully redundant, some
data or systems might not be recoverable after such events. Significant incidents could result in a disruption of our business, consumer dissatisfaction, damage
to the AOL brand, legal costs or liability, and a loss of consumers or revenues.
We are dependent on third-party providers of telecommunications services.
Although we currently have agreements with several different third-party telecommunications service providers, there are only a limited number of such
providers that are capable of providing our network services. To the extent that we cannot renew or extend our contracts with these providers on similar terms
or to the extent that we cannot acquire similar network capacity from other providers on similar terms, the cost of obtaining network services may increase
and our financial results could be adversely affected. In addition, because of the limited number of telecommunications services providers, in the event that a
provider decides to exit the business
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