America Online 2014 Annual Report Download - page 35

We rely on legacy technology infrastructure and a failure to update, scale or replace this technology
infrastructure could adversely affect our business.
While we continue our efforts to update our technology infrastructure to minimize costs and maximize
efficiencies, many of our products and services are dependent on technology infrastructure that was developed a
number of years ago. The technology infrastructure utilized for our consumer offerings and advertising services
is highly complex and may not provide satisfactory support as usage increases and products and services expand,
change and become more complex in the future. In addition, we incur significant costs operating our business
with multiple technology platforms and infrastructure. Updating and replacing our technology infrastructure may
be challenging to implement and manage, may take time to test and deploy, may cause us to incur substantial
costs and may cause us to suffer data loss or delays or interruptions in service which could adversely affect our
business. Competitors with newer technology infrastructure may have greater flexibility and be in a position to
respond more quickly than us to new opportunities, which could impact our competitive position in certain
markets and adversely affect our business.
If we are unable to hire, engage and retain key management and other personnel, our business could be
adversely affected.
Our future success depends in large part upon the continued service of key members of our management
team and other personnel. If we do not succeed in retaining and engaging our key employees and in attracting
new key personnel, we may be unable to meet our strategic objectives, including maintaining or building our
most valuable brands and developing our end-to-end open programmatic platform, and, as a result, our business
could be adversely affected. In particular, Tim Armstrong, our CEO, is critical to our overall management, as
well as the development of our strategic direction and culture. We do not maintain any key-person life insurance
policies.
If we cannot effectively distribute our content, products and services, our ability to attract new customers and
maintain the engagement of existing consumers could be adversely affected.
As the behavior of internet consumers continues to change, distribution of our content, products and services
via traditional methods may become less effective, and new distribution strategies may need to be developed.
Consumers are increasingly using social networking sites to communicate and to acquire and disseminate
information rather than through instant messaging, electronic mail and portals. As consumers migrate towards
social networks, we continue to build social elements into our content, products and services in order to make
them available on social networks and to attract and engage consumers on our properties, for example by
allowing consumers to contribute comments or their own original content. There is no guarantee that we will be
able to successfully integrate our content with such social networking or other new consumer trends. Even if we
are able to distribute our content, products and services effectively through social networking or other new or
developing distribution channels, this does not assure that we will be able to attract new consumers.
Currently, an important distribution channel for AOL Properties is through our subscription services.
However, our subscriber base has declined and is expected to continue to decline. This continued decline is likely
to reduce the effectiveness of our subscription services as a distribution channel. In addition, certain of our
websites, including the AOL home page portal and The Huffington Post, act as valuable distribution channels for
other AOL Properties. If we are unable to grow organically by attracting new consumers directly to our content,
products and services or if traffic to our portals declines or our portals are less successful as a distribution vehicle
for other AOL Properties, we may need to rely on distribution channels that require us to pay significant fees to
third parties such as operators of third-party websites, online networks, software companies, device
manufacturers, and others to promote or supply our services to their users.
Previously, we entered into distribution agreements with computer manufacturers to install our products and
services on their personal computers and laptops. We no longer regularly enter into such agreements and as
consumers upgrade their hardware, our products and services may not be as easily accessible. Additionally, our
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