−Removed: Before deciding to invest in J2 Global or to maintain or increase your investment, you should carefully consider the risks described below in addition to the other cautionary statements and risks described elsewhere in this Annual Report on Form 10-K and our other filings with the SEC, including our subsequent reports on Forms 10-Q and 8-K.
+Added: Before deciding to invest in Ziff Davis or to maintain or increase your investment, you should carefully consider the risks described below in addition to the other cautionary statements and risks described elsewhere in this Annual Report on Form 10-K and our other filings with the SEC, including our subsequent reports on Forms 10-Q and 8-K.
The risks and uncertainties described below are not the only ones we face.
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• We face risks associated with system failures, security breaches and other technological issues.
−Removed: • COVID-19 pandemic and related governmental response could negatively affect our business, operations and financial performance.
+Added: • We face risks associated with changes in our tax rates, changes in tax treatment of companies engaged in e-commerce, the adoption of new U.S.
+Added: or international tax legislation, assessments or audits by taxing authorities and potential exposure to additional tax liabilities (including with respect to sales and use, telecommunications or similar taxes).
• We face risks associated with political instability and volatility in the economy.
−Removed: • Our cloud fax services constitute a significant percentage of our revenue.
−Removed: • Our business is highly dependent on our billing systems functioning properly, and we face risks associated with card declines and merchant standards imposed by card companies.
• The markets in which we operate are highly competitive, and we may not be successful in growing our brands or revenue.
+Added: • If the distribution of Consensus, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S.
+Added: federal income tax purposes, Ziff Davis, Consensus and Ziff Davis stockholders could be subject to significant tax liabilities.
+Added: • Our business is highly dependent on our billing systems functioning properly, and we face risks associated with credit and debit card declines and merchant standards imposed by credit and debit card companies.
• We face potential liability for various types of legal claims, and we may be engaged in legal proceedings that could cause us to incur unforeseen expenses and could divert significant operational resources and our management’s time and attention.
−Removed: • We face risks associated with changes in our tax rates, changes in tax treatment of companies engaged in e-commerce, the adoption of new U.S.
−Removed: or international tax legislation, assessments or audits by taxing authorities and potential exposure to additional tax liabilities (including with respect to sales and use, telecommunications or similar taxes).
−Removed: • We may be subject to risks from international operations, including risks associated with currency fluctuations and foreign exchange controls, the United Kingdom’s decision to end its membership in the European Union and other adverse changes in global financial markets, including unforeseen global crises such as war, strife, strikes, global health pandemics.
−Removed: • We may be found to infringe the intellectual property rights of others, and we may be unable to adequately protect of our own intellectual property rights.
+Added: • Our businesses depend in part on attracting visitors to our websites from search engines.
+Added: • The COVID-19 pandemic and related governmental response, and related labor shortages, supply chain disruptions, and inflation, could negatively affect our business, operations and financial performance.
+Added: • We may be subject to risks from international operations, including risks associated with currency fluctuations and foreign exchange controls and other adverse changes in global financial markets, including unforeseen global crises such as war, strife, strikes, global health pandemics, as well as risks associated with international laws and regulations.
+Added: • We may be found to infringe the intellectual property rights of others, and we may be unable to adequately protect our own intellectual property rights.
• Our business is dependent on the supply of services and other business requirements from other companies.
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• We are exposed to risk if we cannot maintain or adhere to our internal controls and procedures.
−Removed: • We face risks associated with our Convertible Notes, including the possibility of changes in interest deductions, triggering of the conditional conversion feature, lack of funds to settle conversions or repurchase notes, use of particular accounting methods, and imposition of restrictions on future debt.
−Removed: • Our businesses depend in part on attracting visitors to our websites from search engines.
+Added: • We identified a material weakness which could adversely affect our business, reputation, results of operations and stock price.
+Added: • We face risks associated with our 1.75% Convertible Notes and 4.625% Senior Notes, including the possibility of changes in interest deductions, triggering of the conditional conversion feature, lack of funds to settle conversions, redemptions or repurchase of the notes, use of particular accounting methods, and imposition of restrictions on future debt.
+Added: • Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial statements.
+Added: • Potential indemnification liabilities to Consensus pursuant to the separation agreement could materially and adversely affect our businesses, financial condition, results of operations, and cash flows.
Risks Related To Our Industries
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• We operate across many different markets and may be exposed to a variety of government and private actions or self-regulatory developments regarding data privacy and security.
−Removed: • Data privacy and security regulations such as the GDPR and the CCPA impose significant compliance costs and expose us to substantial risks, particularly with respect to health data or other sensitive data.
+Added: • Data privacy and security regulations such as the GDPR and the CCPA impose significant compliance costs and expose us to substantial risks, particularly with respect to health data and other sensitive data.
• Developments in the healthcare industry and associated regulations could adversely affect our business, including our Everyday Health Group set of brands.
• Our business could suffer if providers of broadband internet access services block, impair or degrade our services.
−Removed: • Our business could suffer if we cannot obtain or retain numbers, are prohibited from obtaining local numbers or are limited to distributing local numbers to only certain customers.
−Removed: • Rate increases by regulated carriers could require us to either raise the retail prices of our offerings and lose customers or reduce our profit margins.
• Our business faces risks associated with advertisement blocking technologies and advertising click fraud.
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• Features of the 1.75% Convertible Notes and 4.625% Senior Notes may delay or prevent an otherwise beneficial attempt to take over our company.
−Removed: • Conversions of the Convertible Notes will dilute the ownership interest of our existing stockholders, including holders who had previously converted their Convertible Notes.
−Removed: • We are a holding company and our operations are conducted through, and substantially all of our assets held by, subsidiaries, which are subject to restrictions on their ability to pay dividends to us to fund our dividends and interest payments and other holding company expenses.
+Added: • Conversions of the 1.75% Convertible Notes would dilute the ownership interest of our existing stockholders, including holders who had previously converted their 1.75% Convertible Notes.
+Added: • We are a holding company and our operations are conducted through, and substantially all of our assets are held by, subsidiaries, which may be subject to restrictions on their ability to pay dividends to us to fund our dividends, if any, and interest payments and other holding company expenses.
• Future sales of our common stock may negatively affect our stock price.
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Mergers and acquisitions are inherently risky and subject to many factors outside of our control.
−Removed: We cannot give assurance that our previous or future acquisitions will be successful and will not materially adversely affect our business, operating results or financial condition.
+Added: We cannot give assurances that our previous or future acquisitions will be successful and will not materially adversely affect our business, operating results or financial condition.
Failure to manage and successfully integrate acquisitions could materially harm our business and operating results.
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Advertising agreements often provide that we receive payment based on “served” impressions but the online ad industry has started to shift so that payment will be made based on “viewable” impressions, and that change in basis could have a negative effect on available impressions thereby reducing our revenue potential.
−Removed: Accordingly, it is difficult to forecast display revenue accurately.
+Added: Accordingly, it is difficult to accurately forecast display revenue.
In addition, our expense levels are based in part on expectations of future revenue.
Moreover, we believe that advertising on the internet, as in traditional media, fluctuates significantly as a result of a variety of factors, many of which are outside of our control.
−Removed: Some of these factors include budget constraints of our advertisers, cancellations or delays of projects by our advertisers, the cyclical and discretionary nature of advertising spending, general economic, internet-related and media industry conditions, as well as extraordinary events.
−Removed: Further, our inability to produce “live events” for an indefinite period of time due to the COVID-19 pandemic may result in a reduction of spending or loss of current or potential advertisers.
+Added: Some of these factors include (a) budget constraints of our advertisers, (b) cancellations or delays of projects by our advertisers due to numerous factors, including but not limited to, supply chain issues, (c) the cyclical and discretionary nature of advertising spending, (d) general economic, internet-related and media industry conditions, (e) tax and other legislation and regulation, as well as (f) extraordinary events, such as war, acts of terrorism or aggression, extreme weather events including as exacerbated by climate change, and pandemics or other public health crises.
+Added: Further, impairment of our ability to produce and/or participate in “live events” for an indefinite period of time as occurred during the COVID-19 pandemic, due to any such extraordinary or other circumstances may result in a reduction of spending or loss of current or potential advertisers.
The state of the global economy and availability of capital has impacted and could further impact the advertising spending patterns of existing and potential advertisers.
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Further, we may be unable to adjust our expenses and capital expenditures quickly enough to compensate for any unexpected revenue shortfall.
−Removed: If we are unable to develop, commission or acquire compelling content in our Digital Media business at acceptable prices, our expenses may increase, the number of visitors to our online properties may not grow as anticipated, or may decline, and/or visitors’ level of engagement with our websites may decline, any of which could harm our operating results.
+Added: If we are unable to develop, commission or acquire compelling content in our Digital Media business at acceptable prices, our expenses may increase, the number of visitors to our online properties may not grow, or may decline, and/or visitors’ level of engagement with our websites may decline, any of which could harm our operating results.
Our future success depends in part on the ability of our Digital Media business to aggregate compelling content and deliver that content through our online properties.
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In addition, as new methods for accessing the internet become available, including through alternative devices, we may need to enter into amended agreements with existing third-party providers to cover the new devices.
−Removed: We may be unable to monetize the activity on these alternative devices including mobile devices which may supplant current traffic that we monetize.
We may be unable to enter into new, or preserve existing, relationships with the third-parties whose content or services we seek to obtain.
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This increases the importance of our ability to deliver compelling content and personalization of this content for users in order to differentiate our properties from other businesses.
−Removed: Although we generally develop compelling content of our own, when are unable to do so we engage freelance services or obtain licensed content which may not be at reasonable prices and which could harm our operating results.
−Removed: Users are increasingly using mobile devices to access our content within our Digital Media business and if we are unsuccessful in attracting new users to our mobile offerings, and expanding the capabilities of our content and other offerings with respect to our mobile platforms, our net revenues could decline.
−Removed: Web usage and the consumption of digital content are increasingly shifting to mobile platforms such as smartphones and other connected devices.
−Removed: Visits to our mobile websites and applications have increased but if the percentage of visits to our mobile websites does not continue to grow or we are unable to effectively monetize our mobile content, net revenue will be impacted.
−Removed: In addition, we are less effective at monetizing digital content on our mobile websites and applications compared to our desktop websites.
−Removed: The growth of our business depends in part on our ability to continue to adapt to the mobile environment and to deliver compelling solutions to consumers and retailers through these new mobile marketing channels.
−Removed: In addition, our success on mobile platforms will be dependent on our interoperability with popular mobile operating systems that we do not control, and any changes in such systems that degrade our functionality or give preferential treatment to competitive services could adversely affect usage of our services through mobile devices.
−Removed: A system failure, security breach or other technological risk could delay or interrupt service to our customers, harm our reputation or subject us to significant liability.
−Removed: Our operations are dependent on our network being free from material interruption by damage from fire, earthquake, power loss, telecommunications failure, unauthorized entry, computer viruses, cyber-attacks or any other events beyond our control.
+Added: Although we generally develop compelling content of our own, when we are unable to do so, we engage freelance services or obtain licensed content which may not be at reasonable prices and which could harm our operating results.
+Added: In our Digital Media business, if we are unable to prove that our advertising and sponsorship solutions provide an attractive return on investment for our customers, our financial results could be harmed.
+Added: Our ability to grow revenue from our Digital Media business is dependent on our ability to demonstrate to marketers that their marketing campaigns with us provide a meaningful return on investment (“ROI”) relative to offline and other online opportunities.
+Added: Certain of the marketing campaigns with respect to our Digital Media business are designed such that the revenues received are based entirely upon the ROI delivered for customers.
+Added: Our Digital Media business has invested significant resources in developing its research, analytics, and campaign effectiveness capabilities and expects to continue to do so in the future.
+Added: Our ability, however, to demonstrate the value of advertising and sponsorship on Digital Media business properties will depend, in part, on the sophistication of the analytics and measurement capabilities, the actions taken by our competitors to enhance their offerings, whether we meet the ROI expectations of our customers, and a number of other factors.
+Added: If we are unable to maintain sophisticated marketing and communications solutions that provide value to our customers or demonstrate our ability to provide value to our customers, our financial results will be harmed.
+Added: A system failure, security breach or other technological risk could delay or interrupt service to our customers, harm our reputation, lead to a loss of customers, or subject us to significant liability.
+Added: Our operations are dependent on our network being free from material interruption by damage from fire, earthquake, or other natural disaster, power loss, telecommunications failure, unauthorized entry, computer viruses, cyber-attacks, or any other events beyond our control.
Similarly, the operations of our partners and other third parties with which we work are also susceptible to the same risks.
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Moreover, a significant portion of our operations relies heavily on the secure processing, storage, and transmission of confidential and other sensitive data.
−Removed: For example, a significant number of our Cloud Services customers authorize us to bill their credit or debit card accounts directly for all transaction fees charged by us.
+Added: For example, a significant number of our Cybersecurity and Martech customers authorize us to bill their credit or debit card accounts directly for all transaction fees charged by us.
We rely on encryption and authentication technology to effect secure transmission of confidential information, including customer credit and debit card numbers.
−Removed: Advances in computer capabilities, new discoveries in the field of cryptography or other developments may result in a material compromise or breach of the technology used by us, our partners, vendors, or other third parties, to protect transaction and other confidential data.
−Removed: Any system failure or security breach that causes interruptions or data loss in our operations, our partners, vendors, or other third parties, or in the computer systems of our customers or leads to the misappropriation of our or our customers’ confidential information could result in a significant liability to us (including in the form of judicial decisions and/or settlements, regulatory findings and/or forfeitures, and other means), cause considerable harm to us and our reputation (including requiring notification to customers, regulators, and/or the media), cause a loss of confidence in our products and services, and deter current and potential customers from using our services.
−Removed: Our Board is briefed on cybersecurity risks and we implement cybersecurity risk management under our Board’s oversight.
+Added: Advances in computer capabilities, new discoveries in the field of cryptography, or other developments may result in a material compromise or breach of the technology used by us, our partners, our vendors, or other third parties to protect transaction and other confidential data.
+Added: Any system failure or security breach that causes interruptions or data loss in and to our operations and systems or those of our partners, vendors, customers, or other third parties, or which leads to the misappropriation of our or our customers’ confidential information, could result in a significant liability to us (including in the form of judicial decisions and/or settlements, regulatory findings and/or forfeitures, and other means), cause considerable harm to us and our reputation (including requiring notification to customers, regulators, and/or the media), cause a loss of confidence in our products and services, and deter current and potential customers from using our services.
We use vendors to assist with cybersecurity risks, but these vendors may not be able to assist us adequately in preparing for or responding to a cybersecurity incident.
We maintain insurance related to cybersecurity risks, but this insurance may not be sufficient to cover all of our losses from any breaches or other adverse consequences related to a cybersecurity-event.
−Removed: Any of these events could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows, or cause us to suffer other negative consequences.
+Added: Any of these events could have a material adverse effect on our business, prospects, financial condition, operating results, and cash flows, or our reputation could cause us to suffer other negative consequences.
For example, we may incur remediation costs (such as liability for stolen assets or information, repairs of system damage, and incentives to customers or business partners in an effort to maintain relationships after an attack);
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and damage to the company’s competitiveness, stock price, and diminished long-term shareholder value.
−Removed: To date, these events have not resulted in the material impairment of any business operations.
−Removed: In our Digital Media business, if we are unable to prove that our advertising and sponsorship solutions provide an attractive return on investment for our customers, our financial results could be harmed.
−Removed: Our ability to grow revenue from our Digital Media business is dependent on our ability to demonstrate to marketers that their marketing campaigns with us provide a meaningful return on investment (“ROI”) relative to offline and other online opportunities.
−Removed: Certain of the marketing campaigns with respect to our Digital Media business are designed such that the revenues received are based entirely upon the ROI delivered for customers.
−Removed: Our Digital Media business has invested significant resources in developing its research, analytics and campaign effectiveness capabilities and expects to continue to do so in the future.
−Removed: Our ability, however, to demonstrate the value of advertising and sponsorship on Digital Media business properties will depend, in part, on the sophistication of the analytics and measurement capabilities, the actions taken by our competitors to enhance their offerings, whether we meet the ROI expectations of our customers and a number of other factors.
−Removed: If we are unable to maintain sophisticated marketing and communications solutions that provide value to our customers or demonstrate our ability to provide value to our customers, our financial results will be harmed.
+Added: To date, such events have not resulted in the material impairment of any business operations.
+Added: Changes in our tax rates, changes in tax treatment of companies engaged in e-commerce, the adoption of new U.S.
+Added: or international tax legislation, or exposure to additional tax liabilities may adversely impact our financial results.
+Added: We are a U.S.-based multinational company subject to taxes in the U.S.
+Added: and numerous foreign jurisdictions, including Ireland, where a number of our subsidiaries are organized.
+Added: Our provision for income taxes is based on a jurisdictional mix of earnings, statutory tax rates, and enacted tax rules, including transfer pricing.
+Added: Due to economic and political conditions, tax rates in various jurisdictions may be subject to significant change.
+Added: As a result, our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation.
+Added: These changes may adversely impact our effective tax rate and harm our financial position and results of operations.
+Added: We are subject to examination by the U.S.
+Added: Internal Revenue Service (“IRS”) and other domestic and foreign tax authorities and government bodies.
+Added: We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our income tax and other tax reserves.
+Added: If our reserves are not sufficient to cover these contingencies, such inadequacy could materially adversely affect our business, prospects, financial condition, operating results, and cash flows.
+Added: In addition, due to the global nature of the internet, it is possible that various states or foreign countries might attempt to impose additional or new regulation on our business or levy additional or new sales, income, or other taxes relating to our activities.
+Added: Tax authorities at the international, federal, state, and local levels are currently reviewing the appropriate treatment of companies engaged in e-commerce and online advertising.
+Added: New or revised international, federal, state, or local tax regulations or court decisions may subject us or our customers to additional sales, income, and other taxes.
+Added: For example, the European Union, certain member states, and other countries, as well as states within the United States, have proposed or enacted taxes on online advertising and marketplace service revenues.
+Added: The application of existing, new or revised taxes on our business, in particular, sales taxes, VAT, and similar taxes would likely increase the cost of doing business online and decrease the attractiveness of selling products and advertising over the internet.
+Added: The application of these taxes on our business could also create significant increases in internal costs necessary to capture data and collect and remit taxes.
+Added: Any of these events could have a material adverse effect on our business, financial condition, and operating results.
+Added: Moreover, we are currently under or subject to examination for indirect taxes in various states, municipalities and foreign jurisdictions.
+Added: We currently have a $24.0 million reserve established for these matters.
+Added: If a material indirect tax liability associated with prior periods were to be recorded, for which there is not a reserve, it could materially affect our financial results for the period in which it is recorded.
+Added: Furthermore, much of our Digital Media e-commerce revenue comes from arrangements in which we are paid by retailers to promote their digital product and service offers on our sites.
+Added: Certain states have implemented regulations that require retailers to collect and remit sales taxes on sales made to residents of such states if a publisher, such as us, that facilitated that sale is a resident of such state.
+Added: Paid retailers in our marketplace that do not currently have sales tax nexus in any state that subsequently passes similar regulations and in which we have operations, employees, or contractors now or in the future, may significantly alter the manner in which they pay us, cease paying us for sales we facilitate for that retailer in such state, or cease using our marketplace, each of which could adversely impact our business, financial condition, and operating results.
+Added: Taxing authorities may successfully assert that we should have collected, or in the future should collect sales and use, telecommunications, or similar taxes, and we could be subject to liability with respect to past or future tax, which could adversely affect our operating results.
+Added: We believe we remit state and local sales and use, excise, utility user, and ad valorem taxes, as well as fees and surcharges or other similar obligations, in all relevant jurisdictions in which we generate sales, based on our understanding of the applicable laws in those jurisdictions.
+Added: Such tax, fee, and surcharge laws and rates vary greatly by jurisdiction, and the application of each of them to e-commerce businesses, such as ours, is a complex and evolving area.
+Added: The jurisdictions where we have sales may apply more rigorous enforcement efforts or take more aggressive positions in the future that could result in greater tax liability.
+Added: In addition, in the future we may also decide to engage in activities that would require us to pay sales and use, telecommunications, or similar taxes in new jurisdictions.
+Added: Such tax assessments, penalties and interest or future requirements may materially adversely affect our business, financial condition, and operating results.
Political instability and volatility in the economy may adversely affect segments of our customers, which may result in decreased usage and advertising levels, customer acquisition and customer retention rates and, in turn, could lead to a decrease in our revenues or rate of revenue growth.
−Removed: Certain segments of our customers may be adversely affected by political instability and volatility in the general economy or renewed downturns.
+Added: Certain segments of our customers may be adversely affected by political instability and volatility in the general economy or any downturns.
To the extent these customers’ businesses are adversely affected by political instability or volatility, their usage of our services and/or our customer retention rates could decline.
This may result in decreased cloud services subscription and/or usage revenues and decreased advertising, e-commerce or other revenues, which may adversely impact our revenues and profitability.
−Removed: The COVID-19 pandemic and related governmental response could negatively affect our business, operations and financial performance.
−Removed: In March 2020, the World Health Organization declared the COVID-19 outbreak as a pandemic.
−Removed: The impact of the COVID-19 pandemic has had a negative effect on the global economy, disrupting the financial markets and creating increasing volatility and overall uncertainty.
−Removed: Among other things, the COVID-19 pandemic has resulted in travel bans around the world, declarations of states of emergency, stay- or shelter-at-home requirements, business and school closures and manufacturing restrictions.
−Removed: In addition, the COVID-19 pandemic has contributed to (i) increased unemployment and decreased consumer confidence and business generally;
−Removed: (ii) sudden and significant declines, and significant increases in volatility, in financial and capital markets;
−Removed: (iii) increased spending on our business continuity efforts, which has required and may further require that we cut costs or investments in other areas;
−Removed: and (iv) heightened cybersecurity, information security and operational risks as a result of work-from-home arrangements.
−Removed: We have adjusted certain aspects of our operations to protect our employees and customers while still seeking to meet customers’ needs for our vital cloud internet services and digital media services.
−Removed: We cannot predict at this time the extent to which the COVID-19 pandemic could negatively affect our business, operations and financial performance.
−Removed: The extent of any continued or future adverse effects of the COVID-19 pandemic will depend on future developments, which are highly uncertain and outside our control, including the scope and duration of the pandemic, the direct and indirect impact of the pandemic on our employees, customers, counterparties and service providers, as well as other market participants, and actions taken by governmental authorities and other third parties in response to the pandemic.
−Removed: Nonetheless, we believe that it is likely that our business, operations and financial performance will continue to be adversely affected until the pandemic subsides and the U.S.
−Removed: and worldwide economies begin to recover.
−Removed: Further, the COVID-19 pandemic may also have the effect of heightening many of the other risks described in this section entitled “Risk Factors” or in the “Risk Factors” section of any subsequent Quarterly Report on Form 10-Q.
−Removed: Even after the pandemic subsides, it is possible that the U.S, and other major economies continue to experience a prolonged recession, which we expect would materially and adversely affect our business, operations and financial performance.
−Removed: Our cloud fax services constitute a significant percentage of our revenue.
−Removed: Currently, cloud fax revenue constitutes approximately 22% of our consolidated revenues.
−Removed: The success of our business is therefore dependent upon the continued use of fax as a messaging medium and/or our ability to diversify our service offerings and derive more revenue from other services, such as cybersecurity, SMB enablement solutions and services related to our Digital Media business.
−Removed: If the demand for cloud fax decreases, and we are unable to replace lost revenues from decreased usage or cancellation of our cloud fax services with a proportional increase in our customer base or with revenues from our other services, our business, financial condition, operating results and cash flows could be materially and adversely affected.
−Removed: We believe that one of the attractive features of our eFax® and similar products is that fax signatures are a generally accepted method of executing contracts and a method of transmitting confidential information in a secure manner especially in the healthcare field in the United States.
−Removed: There are ongoing efforts by governmental and non-governmental entities to create a universally accepted method for electronically signing documents.
−Removed: Widespread adoption of so-called “digital signatures” could reduce demand for our fax services and, as a result, could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows.
+Added: For example, in connection with the conflict between Russia and Ukraine, the U.S.
+Added: governments have imposed severe economic sanctions and export controls and have threatened additional sanctions and controls.
+Added: The full impact of these measures, or of any potential responses to them by Russia or other countries, on the businesses and results of operations or our customers or us is unknown.
+Added: The markets in which we operate are highly competitive and some of our competitors may have greater resources to commit to growth, superior technologies, cheaper pricing, or more effective marketing strategies.
+Added: Also, we face significant competition for users, advertisers, publishers, developers, and distributors.
+Added: For information regarding our competition, and the risks arising out of the competitive environment in which we operate, see the subsection entitled “Competition” with respect to each of our Digital Media and Cybersecurity and Martech businesses contained in Item 1 of this Annual Report on Form 10-K.
+Added: In addition, some of our competitors include major companies with much greater resources and significantly larger customer bases than we have.
+Added: Some of these competitors offer their services at lower prices than we do.
+Added: These companies may be able to develop and expand their network infrastructures and capabilities more quickly, adapt more swiftly to new or emerging technologies and changes in customer requirements, take advantage of acquisition and other opportunities more readily, and devote greater resources to the marketing and sale of their products and services than we can.
+Added: There can be no assurance that additional competitors will not enter markets that we are currently serving and plan to serve or that we will be able to compete effectively.
+Added: Competitive pressures may reduce our revenue, operating profits, or both.
+Added: Our Digital Media business faces significant competition from online media companies as well as from social networking sites, mobile applications, traditional print and broadcast media, general purpose and search engines, and various e-commerce sites.
+Added: Our Cybersecurity and Martech business faces competition from cloud software services and applications across several categories including secured communications, cybersecurity, and marketing technology.
+Added: Several of our competitors offer an integrated variety of software and internet products, advertising services, technologies, online services, and content.
+Added: We compete against these and other companies to attract and retain subscribers, users, advertisers, partners, and developers.
+Added: We also compete with social media and networking sites which are attracting a substantial and increasing share of users and users’ online time, and may continue to attract an increasing share of online advertising dollars.
+Added: In addition, several competitors offer products and services that directly compete for users with our Digital Media business offerings.
+Added: Similarly, the advertising networks operated by our competitors or by other participants in the display marketplace offer services that directly compete with our offerings for advertisers, including advertising exchanges, ad networks, demand side platforms, ad serving technologies, and sponsored search offerings.
+Added: We also compete with traditional print and broadcast media companies to attract advertising spending.
+Added: Some of our existing competitors and possible entrants may have greater brand recognition for certain products and services, more expertise in a particular segment of the market, and greater operational, strategic, technological, financial, personnel, or other resources than we do.
+Added: Many of our competitors have access to considerable financial and technical resources with which to compete aggressively, including by funding future growth and expansion and investing in acquisitions, technologies, and research and development.
+Added: Further, emerging start-ups may be able to innovate and provide new products and services faster than we can.
+Added: In addition, competitors may consolidate with each other or collaborate, and new competitors may enter the market.
+Added: Some of the competitors of our Cybersecurity and Martech business in international markets have a substantial competitive advantage over us because they have dominant market share in their territories, are owned by local telecommunications providers, have greater brand recognition, are focused on a single market, are more familiar with local tastes and preferences, or have greater regulatory and operational flexibility due to the fact that we may be subject to both U.S.
+Added: and foreign regulatory requirements.
+Added: If our competitors are more successful than we are in developing and deploying compelling products or in attracting and retaining users, advertisers, publishers, developers, or distributors, our revenue and growth rates could decline.
Our growth will depend on our ability to develop, strengthen, and protect our brands, and these efforts may be costly and have varying degrees of success.
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Strengthening our current brands and launching competitive new brands will be critical to achieving widespread commercial acceptance of our products and services.
−Removed: This will require our continued focus on active marketing, the costs of which have been increasing and may continue
+Added: This will require our continued focus on active marketing, the costs of which have been increasing and may continue to increase.
In addition, substantial initial investments may be required to launch new brands and expand existing brands to cover new geographic territories and technology fields.
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Our brand recognition depends, in part, on our ability to protect our trademark portfolio and establish trademark rights covering new brands and territories.
−Removed: Some regulators and competitors have taken the view that certain of our brands, such as eFax and eVoice, are descriptive or generic when applied to the products and services offered by our Cloud Services business.
+Added: Some regulators and competitors have taken the view that certain of our brands, such as eVoice, are descriptive or generic when applied to the products and services offered by our Cybersecurity and Martech business.
Nevertheless, we have obtained U.S.
−Removed: and foreign trademark registrations for our brand names, logos, and other brand identifiers, including, eFax and eVoice.
+Added: and foreign trademark registrations for our brand names, logos, and other brand identifiers, including eVoice.
If we are unable to obtain, maintain or protect trademark rights covering our brands across the territories in which they are or may be offered, the value of these brands may be diminished, competitors may be able to dilute, harm, or take advantage of our brand recognition and reputation, and our ability to attract subscribers may be adversely affected.
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In addition, failure to secure or maintain domain names relevant to our brands could adversely affect our reputation and make it more difficult for users to find our websites and services.
+Added: If the distribution of Consensus equity, together with certain related transactions, does not qualify as a transaction that is generally tax-free for U.S.
+Added: federal income tax purposes, Ziff Davis, Consensus and Ziff Davis stockholders could be subject to significant tax liabilities.
+Added: The separation of Consensus was effected by a pro rata distribution to our shareholders of 80.1% of the stock of Consensus, comprising our prior cloud fax business.
+Added: We obtained (i) a private letter ruling from the IRS, satisfactory to our Board of Directors, regarding certain U.S.
+Added: federal income tax matters relating to the separation and related transactions and (ii) an opinion of outside counsel, satisfactory to our Board of Directors, regarding the qualification of the distribution, together with certain related transactions, as generally tax-free, for U.S.
+Added: federal income tax purposes, under Sections 355 and 368(a)(1)(D) of the Internal Revenue Code (the “Code”).
+Added: The opinion of outside counsel and the IRS private letter ruling were based, among other things, on various facts and assumptions, as well as certain representations, statements and undertakings of Ziff Davis and Consensus (including those relating to the past and future conduct of Ziff Davis and Consensus).
+Added: If any of these facts, assumptions, representations, statements or undertakings is, or becomes, inaccurate or incomplete, or if Ziff Davis or Consensus breach any of their respective covenants contained in any of the separation-related agreements or in the documents relating to the IRS private letter ruling and/or any opinion, the IRS private letter ruling and/or any opinion may be invalid.
+Added: Accordingly, notwithstanding receipt of the IRS private letter ruling and/or opinions of counsel or other external tax advisors, the IRS could determine that the distribution and certain related transactions should be treated as taxable transactions for U.S.
+Added: federal income tax purposes if it determines that any of the facts, assumptions, representations, statements or undertakings that were included in the request for the IRS private letter ruling or on which any opinion was based are false or have been violated.
+Added: In addition, the IRS private letter ruling does not address all of the issues that are relevant to determining whether the distribution, together with certain related transactions, qualifies as a transaction that is generally tax-free for U.S.
+Added: federal income tax purposes, and an opinion of outside counsel or other external tax advisor represents the judgment of such counsel or advisor which is not binding on the IRS or any court.
+Added: Accordingly, notwithstanding receipt by Ziff Davis of the IRS private letter ruling and the tax opinions referred to above, there can be no assurance that the IRS will not assert that the distribution and/or certain related transactions do not qualify for tax-free treatment for U.S.
+Added: federal income tax purposes or that a court would not sustain such a challenge.
+Added: In the event the IRS were to prevail with such a challenge, Ziff Davis, Consensus and Ziff Davis’s stockholders could be subject to significant U.S.
+Added: federal income tax liability.
+Added: If the distribution, together with certain related transactions, fails to qualify as a transaction that is generally tax-free under Sections 355 and 368(a)(1)(D) of the Code, in general, for U.S.
+Added: federal income tax purposes, Ziff Davis would recognize taxable gain as if it had sold the Consensus common stock in a taxable sale for its fair market value and Ziff Davis stockholders who receive shares of Consensus common stock in the distribution would be subject to tax as if they had received a taxable distribution equal to the fair market value of such shares.
+Added: In addition, we may incur certain tax costs in connection with the separation, including non-U.S.
+Added: tax costs resulting from separations in multiple non-U.S.
+Added: jurisdictions that do not legally provide for tax-free separations, which may be material.
+Added: As a result of requirements of Section 355 of the Code or other applicable tax laws, in order to avoid the risk of incurring material tax-related liabilities, for a period of time after the separation we may determine to forego certain strategic transactions, equity issuances or repurchases or other transactions that we would otherwise believe to be in the best interests of our stockholders or that might increase the value of our business.
+Added: Our business is highly dependent on our billing systems.
+Added: A significant part of our revenues depends on prompt and accurate billing processes.
+Added: Customer billing is a highly complex process, and our billing systems must efficiently interface with third-party systems, such as those of credit card processing companies.
+Added: Our ability to accurately and efficiently bill our customers is dependent on the successful operation of our billing systems and the third-party systems upon which we rely, such as our credit card processor, and our ability to provide these third parties the information required to process transactions.
+Added: In addition, our ability to offer new services or alternative-billing plans is dependent on our ability to customize our billing systems.
+Added: Any failures or errors in our billing systems or procedures could impair our ability to properly bill our current customers or attract and service new customers, and thereby could materially and adversely affect our business and financial results.
Increased numbers of credit and debit card declines in our business could lead to a decrease in our revenues or rate of revenue growth.
−Removed: A significant number of our paid Cloud Services subscribers and certain Digital Media subscribers pay for our services through credit and debit cards.
+Added: A significant number of our paid Cybersecurity and Martech subscribers and certain Digital Media subscribers pay for our services through credit and debit cards.
Weakness in certain segments of the credit markets and in the U.S.
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If our business experiences excessive fraudulent activity or cannot meet evolving credit card company merchant standards, we could incur substantial costs and lose the right to accept credit cards for payment and our subscriber base could decrease significantly.
−Removed: A significant number of our paid Cloud Services subscribers and certain Digital Media subscribers authorize us to bill their credit card accounts directly for all service fees charged by us.
+Added: A significant number of our paid Cybersecurity and Martech subscribers and certain Digital Media subscribers authorize us to bill their credit card accounts directly for all service fees charged by us.
If people pay for these services with stolen credit cards, we could incur substantial unreimbursed third-party vendor costs.
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Substantial losses due to fraud or our inability to accept credit card payments, which could cause our paid subscriber base to significantly decrease, could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows.
−Removed: The markets in which we operate are highly competitive and our competitors may have greater resources to commit to growth, superior technologies, cheaper pricing or more effective marketing strategies.
−Removed: Also, we face significant competition for users, advertisers, publishers, developers and distributors.
−Removed: For information regarding our competition, and the risks arising out of the competitive environment in which we operate, see the section entitled Competition contained in Item 1 of this Annual Report on Form 10-K.
−Removed: In addition, some of our competitors include major companies with much greater resources and significantly larger subscriber bases than we have.
−Removed: Some of these competitors offer their services at lower prices than we do.
−Removed: These companies may be able to develop and expand their network infrastructures and capabilities more quickly, adapt more swiftly to new or emerging technologies and changes in customer requirements, take advantage of acquisition and other opportunities more readily and devote greater resources to the marketing and sale of their products and services than we can.
−Removed: There can be no assurance that additional competitors will not enter markets that we are currently serving and plan to serve or that we will be able to compete effectively.
−Removed: Competitive pressures may reduce our revenue, operating profits or both.
−Removed: Our Digital Media business faces significant competition from online media companies as well as from social networking sites, mobile application, traditional print and broadcast media, general purpose and search engines and various e-commerce sites.
−Removed: Our Cloud Services business faces competition from cloud software services and applications across several categories including secured communications, cybersecurity and marketing technology.
−Removed: Several of our competitors offer an integrated variety of software and internet products, advertising services, technologies, online services and content.
−Removed: We compete against these and other companies to attract and retain subscribers, users, advertisers and developers.
−Removed: We also compete with social media and networking sites which are attracting a substantial and increasing share of users and users’ online time, and may continue to attract an increasing share of online advertising dollars.
−Removed: In addition, several competitors offer products and services that directly compete for users with our Digital Media business offerings.
−Removed: Similarly, the advertising networks operated by our competitors or by other participants in the display marketplace offer services that directly compete with our offerings for advertisers, including advertising exchanges, ad networks, demand side platforms, ad serving technologies and sponsored search offerings.
−Removed: We also compete with traditional print and broadcast media companies to attract advertising spending.
−Removed: Some of our existing competitors and possible entrants may have greater brand recognition for certain products and services, more expertise in a particular segment of the market, and greater operational, strategic, technological, financial, personnel, or other resources than we do.
−Removed: Many of our competitors have access to considerable financial and technical resources with which to compete aggressively, including by funding future growth and expansion and investing in acquisitions, technologies, and research and development.
−Removed: Further, emerging start-ups may be able to innovate and provide new products and services faster than we can.
−Removed: In addition, competitors may consolidate with each other or collaborate, and new competitors may enter the market.
−Removed: Some of the competitors for our Cloud Services business in international markets have a substantial competitive advantage over us because they have dominant market share in their territories, are owned by local telecommunications providers, have greater brand recognition, are focused on a single market, are more familiar with local tastes and preferences, or have greater regulatory and operational flexibility due to the fact that we may be subject to both U.S.
−Removed: and foreign regulatory requirements.
−Removed: If our competitors are more successful than we are in developing and deploying compelling products or in attracting and retaining users, advertisers, publishers, developers, or distributors, our revenue and growth rates could decline.
As a creator and a distributor of content over the internet, we face potential liability for legal claims based on the nature and content of the materials that we create or distribute.
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We may be engaged in legal proceedings that could cause us to incur unforeseen expenses and could divert significant operational resources and our management’s time and attention.
−Removed: From time to time, we are subject to litigation or claims or are involved in other legal disputes or regulatory inquiries, including in the areas of patent infringement and anti-trust, that could negatively affect our business operations and financial condition.
+Added: From time to time, we are subject to litigation or claims or are involved in other legal disputes or regulatory inquiries, including in the areas of patent infringement and antitrust, that could negatively affect our business operations and financial condition.
Such disputes could cause us to incur unforeseen expenses, divert operational resources, occupy a significant amount of our management’s time and attention and negatively affect our business operations and financial condition.
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Legal Proceedings.
−Removed: Our business is highly dependent on our billing systems.
−Removed: A significant part of our revenues depends on prompt and accurate billing processes.
−Removed: Customer billing is a highly complex process, and our billing systems must efficiently interface with third-party systems, such as those of credit card processing companies.
−Removed: Our ability to accurately and efficiently bill our customers is dependent on the successful operation of our billing systems and the third-party systems upon which we rely, such as our credit card processor, and our ability to provide these third parties the information required to process transactions.
−Removed: In addition, our ability to offer new services or alternative-billing plans is dependent on our ability to customize our billing systems.
−Removed: Any failures or errors in our billing systems or procedures could impair our ability to properly bill our current customers or attract and service new customers, and thereby could materially and adversely affect our business and financial results.
+Added: If we are unable to continue to attract visitors to our websites from search engines, then consumer traffic to our websites could decrease, which could negatively impact the sales of our products and services, our advertising revenue and the number of purchases generated for our retailers through our Digital Media marketplace.
+Added: We generate consumer traffic to our websites using various methods, including search engine marketing, or SEM, search engine optimization, or SEO, email campaigns and social media referrals.
+Added: Our net revenues and profitability levels are dependent upon our continued ability to use a combination of these methods to generate consumer traffic to our websites in a cost-efficient manner.
+Added: We have experienced and continue to experience fluctuations in search result rankings for a number of our websites.
+Added: There can be no assurances that we will be able to grow or maintain current levels of consumer traffic.
+Added: Our SEM and SEO techniques have been developed to work with existing search algorithms utilized by the major search engines.
+Added: Major search engines frequently modify their search algorithms.
+Added: Changes in these algorithms could cause our websites to receive less favorable placements, which could reduce the number of users who visit our websites.
+Added: In addition, we use keyword advertising to improve our search ranking and to attract users to our sites.
+Added: If we fail to follow legal requirements regarding the use of keywords or search engine guidelines and policies properly, search engines may rank our content lower in search results or could remove our content altogether from their indices.
+Added: Any decline in consumer traffic to our websites could adversely impact the amount of ads that are displayed and the number of purchases we generate for our retailers, which could adversely affect our net revenues.
+Added: An attempt to replace this traffic through other channels may require us to increase our sales and marketing expenditures, which would adversely affect our operating results and which may not be offset by additional net revenues.
+Added: Pandemics, such as the COVID-19 pandemic, or other public health crises and related governmental response could negatively affect our business, operations and financial performance.
+Added: The impact of the COVID-19 pandemic has had a negative effect on the global economy, disrupting the financial markets and creating increasing volatility and overall uncertainty.
+Added: Among other things, the COVID-19 pandemic resulted in travel bans around the world, declarations of states of emergency, stay- or shelter-at-home requirements, business and school closures and manufacturing restrictions.
+Added: In addition, the COVID-19 pandemic contributed to (i) increased unemployment and decreased consumer confidence and business generally;
+Added: (ii) sudden and significant declines, and significant increases in volatility, in financial and capital markets;
+Added: (iii) strain on global supply chains;
+Added: (iv) inflation;
+Added: (v) increased spending on our business continuity efforts, which has required and may further require that we cut costs or investments in other areas;
+Added: and (vi) heightened cybersecurity, information security and operational risks as a result of work-from-home arrangements.
+Added: In addition, even as the initial effects of the pandemic and related governmental responses have begun to subside, others have arisen such as labor shortages, supply chain disruptions, and inflation.
+Added: Although certain of the measures taken to mitigate the pandemic have eased, overall measures to contain the COVID-19 pandemic may remain in place for a significant period of time, and certain geographic regions are experiencing resurgences of COVID-19 infections.
+Added: The extent of any continued or future adverse effects of the COVID-19 pandemic will depend on future developments, which are highly uncertain and outside our control, including the scope and duration of the pandemic, the direct and indirect impact of the pandemic on our employees, customers, counterparties and service providers, as well as other market participants, and actions taken by governmental authorities and other third parties in response to the pandemic.
+Added: Further, the COVID-19 pandemic may also have the effect of heightening many of the other risks described in this section entitled “Risk Factors” or in the “Risk Factors” section of any subsequent Quarterly Report on Form 10-Q.
+Added: We cannot predict at this time the extent to which the COVID-19 pandemic or any other pandemic or public health crisis might negatively affect our business, operations and financial performance.
+Added: As we continue to grow our international operations, adverse currency fluctuations and foreign exchange controls could have a material adverse effect on our financial condition and results of operations.
+Added: As we expand our international operations, we could be exposed to significant risks of currency fluctuations.
+Added: In some countries outside the U.S., we offer our services in the applicable local currency, including but not limited to the Australian Dollar, the Canadian Dollar, the Euro, the Hong Kong Dollar, the Japanese Yen, the New Zealand Dollar, the Norwegian Kroner, and the British Pound Sterling, among others.
+Added: As a result, fluctuations in foreign currency exchange rates affect the results of our operations, which in turn may materially adversely affect reported earnings and the comparability of period to period results of operations.
+Added: Changes in currency exchange rates may also affect the relative prices at which we and foreign competitors sell our services in the same market.
+Added: In addition, changes in the value of the relevant currencies may affect the cost of certain items required in our operations.
+Added: Furthermore, we may become subject to exchange control regulations, which might restrict or prohibit our conversion of other currencies into U.S.
+Added: We cannot assure you that future exchange rate movements will not have a material adverse effect on our future business, prospects, financial condition, operating results, and cash flows.
+Added: To date, we have not entered into foreign currency hedging transactions to control or minimize these risks.
+Added: We may be subject to risks from international operations.
+Added: As we continue to expand our business operations in countries outside the U.S., our future results could be materially adversely affected by a variety of uncontrollable and changing factors including, among others, foreign currency exchange rates;
+Added: political or social unrest or economic instability in a specific country or region;
+Added: trade protection measures and other regulatory requirements which may affect our ability to provide our services;
+Added: difficulties in staffing and managing international operations;
+Added: compliance with international labor and employment laws and regulations;
+Added: and adverse tax consequences, including imposition of withholding or other taxes on payments by subsidiaries and affiliates.
+Added: Any or all of these factors could have a material adverse impact on our future business, prospects, financial condition, operating results, and cash flows.
+Added: We have only limited experience in marketing and operating our services in certain international markets.
+Added: Moreover, we have in some cases experienced and expect to continue to experience in some cases higher costs as a percentage of revenues in connection with establishing and providing services in international markets versus in the U.S.
+Added: In addition, certain international markets may be slower than the U.S.
+Added: in adopting the internet and/or outsourced messaging and communications solutions and so our operations in international markets may not develop at a rate that supports our level of investments.
+Added: Further, the impact on the global economy as a result of unforeseen global crises such as war, acts of terrorism or aggression or strife, strikes, global health pandemics, earthquakes or major weather events, including as exacerbated by climate changes, or other events outside of our control could negatively impact our revenue and operating results.
Inadequate intellectual property protections could prevent us from defending our proprietary technology and intellectual property.
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Further, we may not have been and may not be able to detect unauthorized use of our technology or intellectual property, or to take appropriate steps to enforce our intellectual property rights.
−Removed: Companies that operate in the same industry as our Cloud Services and Digital Media businesses have experienced substantial litigation regarding intellectual property.
+Added: Companies that operate in the same industry as our Cybersecurity and Martech and Digital Media businesses have experienced substantial litigation regarding intellectual property.
Currently, we have pending patent infringement lawsuits, both offensive and defensive, against several companies in this industry.
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This or any other litigation to enforce or defend our intellectual property rights may be expensive and time-consuming, could divert management resources and may not be adequate to protect our business.
−Removed: As we continue to grow our international operations, adverse currency fluctuations and foreign exchange controls could have a material adverse effect on our financial condition and results of operations.
−Removed: As we expand our international operations, we could be exposed to significant risks of currency fluctuations.
−Removed: In some countries outside the U.S., we offer our services in the applicable local currency, including but not limited to the Australian Dollar, the Canadian Dollar, the Euro, the Hong Kong Dollar, the Japanese Yen, the New Zealand Dollar, the Norwegian Kroner and the British Pound Sterling, among others.
−Removed: As a result, fluctuations in foreign currency exchange rates affect the results of our operations, which in turn may materially adversely affect reported earnings and the comparability of period to period results of operations.
−Removed: Changes in currency exchange rates may also affect the relative prices at which we and foreign competitors sell our services in the same market.
−Removed: In addition, changes in the value of the relevant currencies may affect the cost of certain items required in our operations.
−Removed: Furthermore, we may become subject to exchange control regulations, which might restrict or prohibit our conversion of other currencies into U.S.
−Removed: We cannot assure you that future exchange rate movements will not have a material adverse effect on our future business, prospects, financial condition, operating results and cash flows.
−Removed: To date, we have not entered into foreign currency hedging transactions to control or minimize these risks.
−Removed: Changes in our tax rates, changes in tax treatment of companies engaged in e-commerce, the adoption of new U.S.
−Removed: or international tax legislation, or exposure to additional tax liabilities may adversely impact our financial results.
−Removed: We are a U.S.-based multinational company subject to taxes in the U.S.
−Removed: and numerous foreign jurisdictions, including Ireland, where a number of our subsidiaries are organized.
−Removed: Our provision for income taxes is based on a jurisdictional mix of earnings, statutory tax rates and enacted tax rules, including transfer pricing.
−Removed: Due to economic and political conditions, tax rates in various jurisdictions may be subject to significant change.
−Removed: As a result, our future effective tax rates could be affected by changes in the mix of earnings in countries with differing statutory tax rates, changes in the valuation of deferred tax assets and liabilities, or changes in tax laws or their interpretation.
−Removed: These changes may adversely impact our effective tax rate and harm our financial position and results of operations.
−Removed: We are subject to examination by the U.S.
−Removed: Internal Revenue Service (“IRS”) and other domestic and foreign tax authorities and government bodies.
−Removed: We regularly assess the likelihood of adverse outcomes resulting from these examinations to determine the adequacy of our income tax and other tax reserves.
−Removed: If our reserves are not sufficient to cover these contingencies, such inadequacy could materially adversely affect our business, prospects, financial condition, operating results, and cash flows.
−Removed: In addition, due to the global nature of the internet, it is possible that various states or foreign countries might attempt to impose additional or new regulation on our business or levy additional or new sales, income or other taxes relating to our activities.
−Removed: Tax authorities at the international, federal, state and local levels are currently reviewing the appropriate treatment of companies engaged in e-commerce.
−Removed: New or revised international, federal, state or local tax regulations or court decisions may subject us or our customers to additional sales, income and other taxes.
−Removed: For example, the European Union, certain member states, and other countries, as well as states within the United States, have proposed or enacted taxes on online advertising and marketplace service revenues.
−Removed: The application of existing, new or revised taxes on our business, in particular, sales taxes, VAT and similar taxes would likely increase the cost of doing business online and decrease the attractiveness of selling products over the internet.
−Removed: The application of these taxes on our business could also create significant increases in internal costs necessary to capture data and collect and remit taxes.
−Removed: Any of these events could have a material adverse effect on our business, financial condition, and operating results.
−Removed: Moreover, we are currently under or subject to examination for indirect taxes in various states, municipalities and foreign jurisdictions.
−Removed: We currently have a $22.5 million reserve established for these matters.
−Removed: If a material indirect tax liability associated with prior periods were to be recorded, for which there is not a reserve, it could materially affect our financial results for the period in which it is recorded.
−Removed: Furthermore, much of our Digital Media e-commerce revenue comes from arrangements in which we are paid by retailers to promote their digital product and service offers on our sites.
−Removed: Certain states have implemented regulations that require retailers to collect and remit sales taxes on sales made to residents of such states if a publisher, such as us, that facilitated that sale is a resident of such state.
−Removed: Paid retailers in our marketplace that do not currently have sales tax nexus in any state that subsequently passes similar regulations and in which we have operations, employees or contractors now or in the future, may significantly alter the manner in which they pay us, cease paying us for sales we facilitate for that retailer in such state, or cease using our marketplace, each of which could adversely impact our business, financial condition, and operating results.
−Removed: We may be subject to risks from international operations.
−Removed: As we continue to expand our business operations in countries outside the U.S., our future results could be materially adversely affected by a variety of uncontrollable and changing factors including, among others, foreign currency exchange rates;
−Removed: political or social unrest or economic instability in a specific country or region;
−Removed: trade protection measures and other regulatory requirements which may affect our ability to provide our services;
−Removed: difficulties in staffing and managing international operations;
−Removed: and adverse tax consequences, including imposition of withholding or other taxes on payments by subsidiaries and affiliates.
−Removed: Any or all of these factors could have a material adverse impact on our future business, prospects, financial condition, operating results and cash flows.
−Removed: We have only limited experience in marketing and operating our services in certain international markets.
−Removed: Moreover, we have in some cases experienced and expect to continue to experience in some cases higher costs as a percentage of revenues in connection with establishing and providing services in international markets versus in the U.S.
−Removed: In addition, certain international markets may be slower than the U.S.
−Removed: in adopting the internet and/or outsourced messaging and communications solutions and so our operations in international markets may not develop at a rate that supports our level of investments.
−Removed: Further, the impact on the global economy as a result of unforeseen global crises such as war, strife, strikes, global health pandemics, earthquakes or major weather events or other uncontrollable events could negatively impact our revenue and operating results.
We may be found to have infringed the intellectual property rights of others, which could expose us to substantial damages or restrict our operations.
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We depend upon third parties for critical elements of our business, including technology, infrastructure, customer service and sales and marketing components.
−Removed: We rely on private third-party providers for our internet, telecommunications, website traffic and other connections and for co-location of a significant portion of our servers.
+Added: We rely on private third-party providers for our internet, telecommunications, website traffic, and other connections and services and for co-location of a significant portion of our servers and other hosting services.
In addition, we rely on third-party platforms to facilitate and provide access to products sold through our sites.
Any disruption in the services provided by any of these suppliers, any adverse change in access to their platforms or services or in their terms and conditions of use or services, or any failure by them to handle current or higher volumes of activity could have a material adverse effect on our business, prospects, financial condition, operating results, and cash flows.
−Removed: To obtain new Cloud Services customers, we have marketing agreements with operators of leading search engines and websites and employ the use of resellers to sell our products.
+Added: To obtain new Cybersecurity and Martech customers, we have marketing agreements with operators of leading search engines and websites and employ the use of resellers to sell our products.
These arrangements typically are not exclusive and do not extend over a significant period of time.
Failure to continue these relationships on terms that are acceptable to us or to continue to create additional relationships could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows.
−Removed: Our success depends on our retention of our executive officers, senior management and our ability to hire and retain key personnel.
+Added: Our success depends on our retention of our executive officers and senior management and our ability to hire and retain key personnel.
Our success depends on the skills, experience, and performance of executive officers, senior management, and other key personnel.
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For example, it could:
−Removed: • make it more difficult for us to satisfy our obligations, including our current indebtedness and any other indebtedness we may incur in the future;
+Added: • make it more difficult for us to satisfy our obligations, including those related to our current indebtedness and any other indebtedness we may incur in the future;
• increase our vulnerability to adverse changes in general economic, industry, and competitive conditions;
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• limit our ability to borrow additional funds for working capital, capital expenditures, acquisitions, debt service requirements, execution of our business strategy, or other general corporate purposes.
−Removed: In addition, the indenture governing the 4.625% Senior Notes of our subsidiary contains, and the agreements evidencing or governing other future indebtedness may contain, restrictive covenants that may limit our ability to engage in activities that may be in our long-term best interests.
+Added: In addition, the indenture governing our 4.625% Senior Notes (the “4.625 Senior Notes”) contains, and the agreements evidencing or governing other future indebtedness may contain, restrictive covenants that may limit our ability to engage in activities that may be in our long-term best interests.
Our failure to comply with those covenants could result in an event of default which, if not cured or waived, could result in the acceleration of all of our indebtedness.
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• effect a consolidation or merger.
−Removed: A breach of the covenants under the indenture governing the 4.625% Senior Notes could result in an event of default.
−Removed: Such a default may allow the note holders to accelerate the Senior Notes and may result in the acceleration of any other indebtedness to which a cross-acceleration or cross-default provision applies.
−Removed: In the event the holders of our 4.625% Senior Notes accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness or our other indebtedness.
+Added: A breach of the covenants under the indenture governing the 1.75% convertible senior notes due November 1, 2026 (the “1.75% Convertible Notes”) or the 4.625% Senior Notes could result in an event of default.
+Added: Such a default may allow the note holders to accelerate the 1.75% Convertible Notes or 4.625% Senior Notes and may result in the acceleration of any other indebtedness to which a cross-acceleration or cross-default provision applies.
+Added: In the event the holders of our 1.75% Convertible Notes or 4.625% Senior Notes accelerate the repayment of our borrowings, we and our subsidiaries may not have sufficient assets to repay that indebtedness or our other indebtedness.
We are exposed to risk if we cannot maintain or adhere to our internal controls and procedures.
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To the extent our internal controls are inadequate or not adhered to by our employees, our business, financial condition, and operating results could be materially adversely affected.
−Removed: If we are not able to maintain internal controls and procedures in a timely manner, or without adequate compliance, we may be unable to accurately report our financial results or prevent fraud and may be subject to sanctions or investigations by regulatory authorities such as the SEC or Nasdaq.
−Removed: Any such action or restatement of prior-period financial results as a result could harm our business or investors’ confidence in J2 Global, and could cause our stock price to fall.
+Added: As reported elsewhere in this Annual Report on Form 10-K, we experienced a material weakness in our internal control related to our accounting for the Consensus Spin-Off.
+Added: Although this control weakness did not result in any material misstatement of our consolidated financial statements for the periods presented, it is reasonably possible that it could have led to a material misstatement of account balances or disclosures.
+Added: We cannot assure you that additional significant deficiencies or material weaknesses in our internal control over financial reporting will not be identified in the future.
+Added: If we are not able to maintain internal controls and procedures in a timely manner, or without adequate compliance, we may be unable to accurately or timely report our financial results or prevent fraud and may be subject to sanctions or investigations by regulatory authorities such as the SEC or Nasdaq.
+Added: Any such action or restatement of prior-period financial results as a result could harm our business or investors’ confidence in the Company, and could cause our stock price to fall.
To service our debt and fund our other capital requirements, we will require a significant amount of cash, and our ability to generate cash will depend on many factors beyond our control.
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Our inability to generate sufficient cash flows to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms, or at all, would materially and adversely affect our financial position and results of operations.
−Removed: We may not have the ability to raise the funds necessary to settle conversions of the Convertible Notes or to repurchase the Convertible Notes upon a fundamental change or on a repurchase date or the Senior Notes upon a change in control, and our future debt may contain limitations on our ability to pay cash upon conversion or repurchase of the Convertible Notes or the Senior Notes.
−Removed: Holders of the 3.25% convertible senior notes due June 15, 2029 (the “3.25% Convertible Notes”) will have the right to require us to repurchase their 3.25% Convertible Notes on each of June 15, 2021 and June 15, 2024 and upon the occurrence of a fundamental change (as defined in the indenture governing the 3.25% Convertible Notes), in each case, at a repurchase price equal to 100% of the principal amount of the 3.25% Convertible Notes to be repurchased, plus accrued and unpaid interest, if any.
−Removed: Holders of the Senior Notes also have the right to require us to repurchase the Senior Notes upon the occurrence of a change in control (as defined in the indenture governing the Senior Notes) at a repurchase price equal to 101% of the principal amount of the Senior Notes to be repurchased, plus accrued and unpaid interest, if any.
−Removed: Holders of our 1.75% convertible senior notes due November 1, 2026 (the “1.75% Convertible Notes,” and together with the 3.25% Convertible Notes, the “Convertible Notes”) also will have the right to require us to repurchase their 1.75% Convertible Notes upon the occurrence of a fundamental change (as defined in the indenture governing the 1.75% Convertible Notes) at a repurchase price equal to 100% of the principal amount of the 1.75% Convertible Notes to be repurchased, plus accrued and unpaid interest, if any.
+Added: We may not have the ability to raise the funds necessary to settle conversions of the 1.75% Convertible Notes or to repurchase the 1.75% Convertible Notes upon a fundamental change or on a repurchase date or repurchase the 4.625% Senior Notes upon a change in control, and our future debt may contain limitations on our ability to pay cash upon conversion, redemption or repurchase of either the 1.75% Convertible Notes or the 4.625% Senior Notes as the case may be.
+Added: Holders of our 1.75% Convertible Notes have the right to require us to repurchase their 1.75% Convertible Notes upon the occurrence of a fundamental change (as defined in the indenture governing the 1.75% Convertible Notes) at a repurchase price equal to 100% of the principal amount of the 1.75% Convertible Notes to be repurchased, plus accrued and unpaid interest, if any.
In addition, upon conversion of the 1.75% Convertible Notes, unless we elect to deliver solely shares of our common stock to settle such conversion (other than paying cash in lieu of delivering any fractional share), we will be required to make cash payments in respect of the 1.75% Convertible Notes being converted.
It is our intention to satisfy our conversion obligation by paying and delivering a combination of cash and shares of our common stock, where cash will be used to settle each $1,000 of principal and the remainder, if any, will be settled via shares of our common stock.
−Removed: However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases of Convertible Notes or Senior Notes surrendered therefor or Convertible Notes being converted.
−Removed: In addition, our ability to repurchase the Convertible Notes or Senior Notes or to pay cash upon conversions of the Convertible Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness.
−Removed: Our failure to repurchase Convertible Notes or Senior Notes at a time when the repurchase is required by the applicable indenture or to pay any cash payable on future conversions of the Convertible Notes as required by the applicable Convertible Notes indenture would constitute a default under the Convertible Notes indenture.
+Added: However, we may not have enough available cash or be able to obtain financing at the time we are required to make repurchases or redemptions of the 1.75% Convertible Notes or the 4.625% Senior Notes surrendered therefor or 1.75% Convertible Notes being converted.
+Added: In addition, our ability to repurchase or redeem the 1.75% Convertible Notes or the 4.625% Senior Notes or to pay cash upon conversions of the 1.75% Convertible Notes may be limited by law, by regulatory authority or by agreements governing our future indebtedness.
+Added: Our failure to repurchase or redeem 1.75% Convertible Notes or 4.625% Senior Notes at a time when the repurchase or redemption is required by the applicable indenture or to pay any cash payable on future conversions of the 1.75% Convertible Notes as required by the applicable 1.75% Convertible Notes indenture would constitute a default under the applicable indenture.
A default under any indenture or the fundamental change or change of control itself could also lead to a default under agreements governing our future indebtedness.
−Removed: If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase the Convertible Notes or the Senior Notes or make cash payments upon conversions of the Convertible Notes.
+Added: If the repayment of the related indebtedness were to be accelerated after any applicable notice or grace periods, we may not have sufficient funds to repay the indebtedness and repurchase or redeem the 1.75% Convertible Notes or the 4.625% Senior Notes or make cash payments upon conversions of the 1.75% Convertible Notes.
The conditional conversion feature of the 1.75% Convertible Notes, if triggered, may adversely affect our financial condition and operating results.
−Removed: In the event the conditional conversion feature of the Convertible Notes is triggered, holders of Convertible Notes will be entitled to convert the Convertible Notes at any time during specified periods at their option.
+Added: In the event the conditional conversion feature of the 1.75% Convertible Notes is triggered, holders of the 1.75% Convertible Notes will be entitled to convert the 1.75% Convertible Notes at any time during specified periods at their option.
If one or more holders elect to convert their 1.75% Convertible Notes, unless we elect to satisfy our conversion obligation by delivering solely shares of our common stock (other than paying cash in lieu of delivering any fractional share), we would be required to settle a portion or all of our conversion obligation through the payment of cash, which could adversely affect our liquidity.
In addition, even if holders do not elect to convert their 1.75% Convertible Notes, we could be required under applicable accounting rules to reclassify all or a portion of the outstanding principal of the notes as a current rather than long-term liability, which would result in a material reduction of our net working capital.
−Removed: The conditional conversion feature of the 3.25% Convertible Notes was triggered for the quarter ended December 31, 2020 and it is reasonably likely that it will be triggered in subsequent quarters.
−Removed: If J2 elects to convert all or a portion of the 3.25% Convertible Notes into shares of the Company’s common stock, our common stock will be diluted which could adversely affect our stock price.
−Removed: Our interest deductions attributable to the 3.25% Convertible Notes may be deferred, limited or eliminated under certain conditions.
−Removed: We believe that the 3.25% Convertible Notes are subject to the IRS contingent payment debt instrument regulations.
−Removed: This conclusion is subject to complex factual and legal uncertainty and is not binding on the IRS or the courts.
−Removed: If the IRS takes a contrary position and a court sustains the IRS’ position, our tax deductions would be severely diminished with a resulting adverse effect on our cash flow and ability to service the 3.25% Convertible Notes.
−Removed: The accounting method for convertible debt securities that may be settled in cash, such as the 1.75% Convertible Notes and the 3.25% Convertible Notes, could have a material effect on our reported financial results.
−Removed: In May 2008, the Financial Accounting Standards Board (“FASB”), issued FASB Staff Position No.
−Removed: APB 14-1, Accounting for Convertible Debt Instruments That May Be Settled in Cash Upon Conversion (Including Partial Cash Settlement), which has subsequently been codified as Accounting Standards Codification 470-20, Debt with Conversion and Other Options (“ASC 470-20”).
−Removed: Under ASC 470-20, an entity must separately account for the liability and equity components of the convertible debt instruments (such as the 1.75% Convertible Notes and the 3.25% Convertible Notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost.
−Removed: The effect of ASC 470-20 on the accounting for the 1.75% Convertible Notes and the 3.25% Convertible Notes is that the equity component is required to be included in the additional paid-in capital section of stockholders’ equity on our Consolidated Balance Sheet, and the value of the equity component would be treated as an original issue discount for purposes of accounting for the debt component of the 1.75% Convertible Notes and the 3.25% Convertible Notes.
−Removed: As a result, we will be required to record a greater amount of non-cash interest expense in current periods presented as a result of the amortization of the discounted carrying value of the 1.75% Convertible Notes and the 3.25% Convertible Notes to their face amount over the respective terms of the 1.75% Convertible Notes and the 3.25% Convertible Notes.
−Removed: We will report larger net losses or lower net income in our financial results because ASC 470-20 will require interest to include both the current period’s amortization of the debt discount and the instrument’s coupon interest, which could adversely affect our reported or future financial results and the trading price of our common stock and other securities.
−Removed: In addition, under certain circumstances, convertible debt instruments (such as the 1.75% Convertible Notes and the 3.25% Convertible Notes) that may be settled entirely or partly in cash are currently accounted for utilizing the treasury stock method, the effect of which is that the shares issuable upon conversion of the notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the 1.75% Convertible Notes and the 3.25% Convertible Notes exceeds their principal amount.
−Removed: Under the treasury stock method, for diluted earnings per share purposes, the transaction is accounted for as if the number of shares of common stock that would be necessary to settle such excess, if we elected to settle such excess in shares, are issued.
−Removed: In July 2019, the FASB issued an exposure draft that proposes to change the accounting for the convertible debt instruments described above.
−Removed: Under the current exposure draft, an entity may no longer be required to separately account for the liability and equity components of convertible debt instruments.
−Removed: If the exposure draft is adopted in its current form, this could have the impact of reducing non-cash interest expense, and thereby increasing net income.
−Removed: Additionally, as currently proposed, the treasury stock method for calculating earnings per share will no longer be allowed for convertible debt instruments whose principal amount may be settled using shares.
−Removed: Rather, the if-converted method may be required.
−Removed: Application of the “if-converted” method may reduce our reported diluted earnings per share.
−Removed: The comment period for the current exposure draft concluded in October 2019, and, following deliberations, the FASB reaffirmed the changes described above.
−Removed: As of February 5, 2020, the FASB is drafting the final accounting standards update, which is scheduled to go into effect for us for fiscal years beginning after December 15, 2021, with option early adoption for fiscal periods beginning after December 15, 2020.
−Removed: We cannot be sure when or if the final accounting standards update will be issued, or whether it will be issued in its current format.
−Removed: We also cannot be sure whether other changes may be made to the current accounting standards related to the 1.75% Convertible Notes or the 3.25% Convertible Notes, or otherwise, that could have an adverse impact on our financial statements.
+Added: Changes in the accounting method for convertible debt securities that may be settled in cash, such as the 1.75% Convertible Notes, could have a material effect on our reported financial results.
+Added: Under Accounting Standards Codification 470-20, Debt with Conversion and Other Options (“ASC 470-20”), an entity must separately account for the liability and equity components of convertible debt instruments (such as the 1.75% Convertible Notes) that may be settled entirely or partially in cash upon conversion in a manner that reflects the issuer’s economic interest cost.
+Added: The effect of ASC 470-20 on the accounting for the 1.75% Convertible Notes is that the equity component is required to be included in the additional paid-in capital section of stockholders’ equity on our Consolidated Balance Sheet, and the value of the equity component would be treated as an original issue discount for purposes of accounting for the debt component of the 1.75% Convertible Notes.
+Added: As a result, we recorded non-cash interest expense in current periods presented as a result of the amortization of the discounted carrying value of the 1.75% Convertible Notes to their face amount over the respective term of the 1.75% Convertible Notes.
+Added: We plan to adopt Accounting Standards Update 2020-06 - Debt - Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging - Contracts in Entity’s Own Equity (Subtopic 815-40) - Accounting for Convertible Instruments and Contracts in an Entity’s Own Equity (“ASU 2020-06”) as of January 1, 2022 which we expect will result in our recognizing less non-cash interest expense relating to the 1.75% Convertible Notes in future periods.
+Added: In addition, under the accounting standard applied to the financial statements included in this report, our 1.75% Convertible notes which may be settled entirely or partly in cash are currently accounted for utilizing the treasury stock method.
+Added: Under the treasury stock method, shares issuable upon conversion of the 1.75% Convertible Notes are not included in the calculation of diluted earnings per share except to the extent that the conversion value of the 1.75% Convertible Notes exceeds its principal amount.
+Added: In connection with our adoption of ASU 2020-06 we will be required to adopt the if-converted method for computing diluted earnings per share which will result in the inclusion of additional shares in the calculation of and may adversely impact our diluted earnings per share.
+Added: For a discussion of certain other expected impacts of adoption of this ASU, see Note 2, “Basis of Presentation and Summary of Significant Accounting Policies” of the notes to consolidated financial statements.
+Added: Divestitures or other dispositions could negatively impact our business, and contingent liabilities from businesses that we have sold could adversely affect our financial statements.
+Added: We continually assess the strategic fit of our existing businesses and may divest or otherwise dispose of businesses that are deemed not to fit with our strategic plan or are not achieving the desired return on investment.
+Added: For example, in 2021, we spun off our online fax business and sold our B2B backup business.
+Added: These transactions pose risks and challenges that could negatively impact our business.
+Added: For example, when we decide to sell or otherwise dispose of a business or assets, we may be unable to do so on satisfactory terms within our anticipated timeframe or at all, and even after reaching a definitive agreement to sell or dispose a business the sale is typically subject to satisfaction of pre-closing conditions which may not become satisfied.
+Added: In addition, divestitures or other dispositions may dilute our earnings per share, have other adverse financial and accounting impacts, and distract management, and disputes may arise with buyers.
+Added: In addition, we have retained responsibility for and/or have agreed to indemnify buyers against some known and unknown contingent liabilities related to a number of businesses we have sold or disposed of.
+Added: The resolution of these contingencies has not had a material effect on our financial statements but we cannot be certain that this favorable pattern will continue.
+Added: Potential indemnification liabilities to Consensus pursuant to the separation agreement could materially and adversely affect our businesses, financial condition, results of operations, and cash flows.
+Added: We entered into a separation and distribution agreement and related agreements with Consensus to govern the separation and distribution of Consensus and the relationship between the two companies going forward.
+Added: These agreements provide for specific indemnity and liability obligations of each party and could lead to disputes between the parties.
+Added: If we are required to indemnify Consensus under the circumstances set forth in these agreements, we may be subject to substantial liabilities.
+Added: In addition, with respect to the liabilities for which Consensus has agreed to indemnify us under these agreements, there can be no assurance that the indemnity rights we have against Consensus will be sufficient to protect us against the full amount of the liabilities, or that Consensus will be able to fully satisfy its indemnification obligations.
+Added: Each of these risks could negatively affect our businesses, financial condition, results of operations, and cash flows.
+Added: Risks Related To Our Industries
The Company is subject to laws and regulations worldwide, changes to which could increase the Company’s costs and individually or in the aggregate adversely affect the Company’s business.
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The Company has implemented policies and procedures designed to ensure compliance with applicable laws and regulations, but there can be no assurance that the Company’s employees, contractors, or agents will not violate such laws and regulations or the Company’s policies and procedures.
−Removed: The United Kingdom’s decision to end its membership in the European Union and other adverse changes in global financial markets could materially and adversely impact our results of operations, financial condition and cash flows.
−Removed: In June 2016, a majority of voters in the United Kingdom elected to withdraw from the European Union (“EU”) in a national referendum (“BREXIT”), and on January 31, 2020 the United Kingdom exited the EU and, on December 31, 2020, the transition period under the withdrawal agreement between the U.K.
−Removed: and the EU ended.
−Removed: The results of the United Kingdom’s BREXIT have caused, and may continue to cause, volatility in global stock markets, currency exchange rate fluctuations and global economic uncertainty.
−Removed: We are continuing to evaluate the effects of BREXIT, which could potentially disrupt our access to human capital and some of our target markets and jurisdictions in which we operate, and adversely change tax benefits or liabilities in these or other jurisdictions.
−Removed: In addition, BREXIT could lead to legal uncertainty and potentially divergent national laws and regulations.
−Removed: Any of these effects of BREXIT, among others, and other adverse changes in global financial markets could have a materially adverse impact on our results of operations, financial condition, cash flows and could render us either unable to access global financial markets or able to access these markets only at higher interest costs and with restrictive financial or other conditions.
−Removed: Taxing authorities may successfully assert that we should have collected, or in the future should collect sales and use, telecommunications or similar taxes, and we could be subject to liability with respect to past or future tax, which could adversely affect our operating results.
−Removed: We believe we remit state and local sales and use tax, excise, utility user, and ad valorem taxes, fees and surcharges or other similar obligations in all relevant jurisdictions in which we generate sales, based on our understanding of the applicable laws in those jurisdictions.
−Removed: Such tax, fees and surcharge laws and rates vary greatly by jurisdiction, and the application of such taxes to e-commerce businesses, such as ours, is a complex and evolving area.
−Removed: The jurisdictions where we have sales may apply more rigorous enforcement efforts or take more aggressive positions in the future that could result in greater tax liability.
−Removed: In addition, in the future we may also decide to engage in activities that would require us to pay sales and use, telecommunications, or similar taxes in new jurisdictions.
−Removed: Such tax assessments, penalties and interest or future requirements may materially adversely affect our business, financial condition and operating results.
−Removed: Risks Related To Our Industries
Our services may become subject to burdensome regulation, which could increase our costs or restrict our service offerings.
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telecommunications services regulation at both the federal and state levels.
−Removed: In connection with our Cloud Services business, we utilize data transmissions over public telephone lines and other facilities provided by third-party carriers.
+Added: In connection with our Cybersecurity and Martech business, we utilize data transmissions over public telephone lines and other facilities provided by third-party carriers.
These transmissions are subject to foreign and domestic laws and regulation by the Federal Communications Commission (the “FCC”), state public utility commissions and foreign governmental authorities.
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Any of these results could lead to a decrease in our revenues and net income and could materially adversely affect our business, prospects, financial condition, operating results and cash flows.
−Removed: The Telephone Consumer Protection Act (the “TCPA”) and FCC rules implementing the TCPA, as amended by the Junk Fax Act, prohibit sending unsolicited facsimile advertisements to telephone fax machines.
−Removed: The FCC, the Federal Trade Commission (“FTC”), or both may initiate enforcement action against companies that send “junk faxes” and individuals also may have a private cause of action.
−Removed: Although entities that merely transmit facsimile messages on behalf of others are not liable for compliance with the prohibition on faxing unsolicited advertisements, the exemption from liability does not apply to fax transmitters that have a high degree of involvement or actual notice of an illegal use and have failed to take steps to prevent such transmissions.
−Removed: We take significant steps to ensure that our services are not used to send unsolicited faxes on a large scale, and we do not believe that we have a high degree of involvement in or notice of the use of our service to broadcast junk faxes.
−Removed: However, because fax transmitters do not enjoy an absolute exemption from liability under the TCPA and related FCC and FTC rules, we could face inquiries from the FCC and FTC or enforcement actions by these agencies, or private causes of action, if someone uses our service for such impermissible purposes.
−Removed: If this were to occur and we were to be held liable for someone’s use of our service for transmitting unsolicited faxes, the financial penalties could cause a material adverse effect on our operations and harm our business reputation.
−Removed: Likewise, the TCPA also prohibits placing calls or sending text messages to mobile phones without “prior express consent” subject to limited exceptions.
+Added: In addition, due to the number of text messages, phone calls and other communications we send or make on behalf of our customers in connection with the services we provide, communication-related privacy laws could result in particularly significant damage awards or fines.
+Added: For example, in the United States, the Telephone Consumer Protection Act (“TCPA”) prohibits placing calls or sending text messages to mobile phones without “prior express consent” subject to limited exceptions, and a plaintiff may seek actual monetary loss or statutory damages of $500 per violation, whichever is greater, and courts may treble the damage award for willful or knowing violations.
Parties that solely enable calling or text messaging are only directly liable under the TCPA pursuant to federal common law vicarious liability principles.
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If this were to occur and we were to be held liable for someone’s use of our service for unauthorized calling or text messaging mobile users, the financial penalties could cause a material adverse effect on our operations and harm our business reputation.
−Removed: Also, in the U.S., the Communications Assistance to Law Enforcement Act (“CALEA”) requires any telecommunications carriers to be capable of performing wiretaps and recording other call identifying information in cooperation with law enforcement.
+Added: Also, in the United States, the Communications Assistance to Law Enforcement Act (“CALEA”) requires any telecommunications carriers to be capable of performing wiretaps and recording other call identifying information in cooperation with law enforcement.
In September 2005, the FCC expanded the definition of “telecommunications carriers” to include facilities-based broadband internet access providers and Voice-over-Internet-Protocol (“VoIP”) providers that interconnect with the public switched telephone network.
−Removed: As a result of this definition, J2 Global’s VoIP offerings are subject to CALEA, which has impacted our operations.
+Added: As a result of this definition, the Company’s VoIP offerings are subject to CALEA, which has impacted our operations.
We are subject to a variety of new and existing laws and regulations which could subject us to claims, judgments, monetary liabilities and other remedies, and to limitations on our business practices.
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Internationally, we may also be subject to laws regulating our activities in foreign countries and to foreign laws and regulations that are inconsistent from country to country.
−Removed: Our Digital Media and Cloud Services businesses utilize contractors, freelancers and/or staff from third party outsourcers to provide content and other services.
−Removed: However, in the future, arrangements with such individuals may not be deemed appropriate by the relevant government authority, which could result in additional costs and expenses.
+Added: Our Digital Media and Cybersecurity and Martech businesses utilize contractors, freelancers and/or staff from third party outsourcers to provide content and other services.
+Added: However, in the future, arrangements with such individuals may not be deemed appropriate by a relevant government authority, which could result in additional costs and expenses.
We may incur substantial liabilities for expenses necessary to defend such litigation or to comply with these laws and regulations, as well as potential substantial penalties for any failure to comply.
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We rely on the protections provided by both the DMCA and the CDA in conducting our business.
−Removed: If these or other laws or judicial interpretations are changed to narrow their protections, or if international jurisdictions refuse to apply similar provisions in foreign lawsuits, we will be subject to greater risk of liability, our costs of compliance with these regulations or to defend litigation may increase, or our ability to operate certain lines of business may be limited.
+Added: If these or other laws or judicial interpretations are changed to narrow their protections, or if international jurisdictions refuse to apply similar provisions in international lawsuits, we will be subject to a greater risk of liability, our costs of compliance with these regulations or to defend litigation may increase, or our ability to operate certain lines of business may be limited.
The Children’s Online Privacy Protection Act (“COPPA”) is intended to impose restrictions on the ability of online services to collect some types of information from children under the age of 13.
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Certain appellate circuits have found that websites standing alone are subject to the ADA and therefore must be accessible to people with disabilities.
−Removed: Other circuits, including the Ninth Circuit, which has appellate jurisdiction over federal district courts in California and is where our company is headquartered, have found that in order for websites to be places of public accommodation, and therefore subject to the ADA, there must be both a nexus between the website and the goods and services the website provides as well as a physical brick and mortar location for consumers.
+Added: Other circuits, including the Ninth Circuit, which has appellate jurisdiction over federal district courts in California have found that in order for websites to be places of public accommodation, and therefore subject to the ADA, there must be both a nexus between the website and the goods and services the website provides as well as a physical brick and mortar location for consumers.
We cannot predict how the ADA will ultimately be interpreted as applied to websites and mobile applications.
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As discussed in more detail below, the GDPR prohibits data transfers from the EU to other countries outside of the EU, including the U.S., without appropriate security safeguards and practices in place.
−Removed: Previously, for certain data transfers from and between the EU and the U.S., J2 Global, like many other companies, had relied on what is referred to as the “EU-U.S.
+Added: Previously, for certain data transfers from and between the EU and the U.S., the Company, like many other companies, had relied on what is referred to as the “EU-U.S.
Safe Harbor,” in order to comply with privacy obligations imposed by EU countries.
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We cannot predict how or if these issues will be resolved nor can we evaluate any potential liability at this time.
−Removed: The Company has put into place various alternative frameworks and grounds on which to rely in order to be in compliance with relevant law for the transfer of data from overseas locations to the U.S.
−Removed: including reviewing Company’s data collection process, procedures and putting into place Data Processing Agreements that incorporate Standard Contractual Clauses as well as supplementary measures with vendors, partners and other third parties.
+Added: The Company has put into place various alternative frameworks and grounds on which to rely in order to be in compliance with relevant law for the transfer of data from overseas locations to the U.S., including reviewing Company’s data collection process, procedures and putting into place Data Processing Agreements that incorporate Standard Contractual Clauses as well as supplementary measures with vendors, partners and other third parties.
Some independent data regulators have adopted the position that other forms of compliance are also invalid, though the legal grounds for these findings remain unclear at this time.
−Removed: We cannot predict at this time whether the alternative grounds that J2 Global continues to implement will be found to be consistent with relevant laws nor can we evaluate what, if any, potential liability may be at this time.
+Added: We cannot predict at this time whether the alternative grounds that the Company continues to implement will be found to be consistent with relevant laws nor can we evaluate what, if any, potential liability may be at this time.
On June 28, 2018, the California legislature enacted the CCPA, which took effect on January 1, 2020 and became enforceable starting July 1, 2020.
−Removed: The CCPA, which covers business that obtain or access personal information on California resident consumers, grants consumers enhanced privacy rights and control over their personal information and imposes significant requirements on covered companies with respect to consumer data privacy rights.
+Added: The CCPA, which covers businesses that obtain or access personal information of California resident consumers, grants consumers enhanced privacy rights and control over their personal information and imposes significant requirements on covered companies with respect to consumer data privacy rights.
The CCPA provides consumers with the right to opt out of the sale of their personal information including the requirement to include a “Do Not Sell” link on our websites and applications that sell personal data of California resident consumers.
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Further, any failure on our part to comply with any relevant laws or regulations may subject us to significant civil or criminal liabilities.
−Removed: Moreover, our Everyday Health Group business may be subject to government oversight or regulation by Congress, the FDA, the U.S.
+Added: Moreover, our Everyday Health Group business may be subject to additional government oversight or regulation by Congress, the FTC, the FDA, the U.S.
Department of Health and Human Services and state legislatures and regulatory agencies.
−Removed: In addition, certain services provided by Everyday Health Group constituent businesses are also subject to private regulation both directly by accrediting bodies and indirectly by industry codes followed by commercial supporters of CME and CE programs.
+Added: In addition, certain services provided by Everyday Health Group constituent businesses are also subject to private regulation both directly by accrediting bodies and indirectly by industry codes followed by commercial supporters and providers of continuing education programs for healthcare professionals.
If we are subject to burdensome laws or regulations or if we fail to adhere to the requirements of public or private regulations, our business, financial condition and results of operations could suffer.
−Removed: If we are unable to continue to attract visitors to our websites from search engines, then consumer traffic to our websites could decrease, which could negatively impact the sales of our products and services, our advertising revenue and the number of purchases generated for our retailers through our Digital Media marketplace.
−Removed: We generate consumer traffic to our websites using various methods, including search engine marketing, or SEM, search engine optimization, or SEO, email campaigns and social media referrals.
−Removed: Our net revenues and profitability levels are dependent upon our continued ability to use a combination of these methods to generate consumer traffic to our websites in a cost-efficient manner.
−Removed: We have experienced and continue to experience fluctuations in search result rankings for a number of our websites.
−Removed: There can be no assurances that we will be able to grow or maintain current levels of consumer traffic.
−Removed: Our SEM and SEO techniques have been developed to work with existing search algorithms utilized by the major search engines.
−Removed: Major search engines frequently modify their search algorithms.
−Removed: Changes in these algorithms could cause our websites to receive less favorable placements, which could reduce the number of users who visit our websites.
−Removed: In addition, we use keyword advertising to improve our search ranking and to attract users to our sites.
−Removed: If we fail to follow legal requirements regarding the use of keywords or search engine guidelines and policies properly, search engines may rank our content lower in search results or could remove our content altogether from their indices.
−Removed: Any decline in consumer traffic to our websites could adversely impact the amount of ads that are displayed and the number of purchases we generate for our retailers, which could adversely affect our net revenues.
−Removed: An attempt to replace this traffic through other channels may require us to increase our sales and marketing expenditures, which would adversely affect our operating results and which may not be offset by additional net revenues.
Government and private actions or self-regulatory developments regarding internet privacy matters could adversely affect our ability to conduct our business.
−Removed: Our Digital Media business collects and sells data about its users’ online behavior and the revenue associated with this activity could be impacted by government regulation and enforcement, industry trends, self-regulation, technology changes, consumer behavior and attitude, and private action.
+Added: Certain business units within our Digital Media business collect and sell data about their users’ online behavior and the revenue associated with this activity could be impacted by government regulation and enforcement, industry trends, self-regulation, technology changes, consumer behavior and attitude, and private action.
We also use such information to work with our advertisers to more effectively target ads to relevant users and consumers, which ads command a higher rate.
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These laws and regulations could have a significant impact on the operation of our advertising and data businesses.
−Removed: regulatory agencies have also placed an increased focus on online privacy matters and, in particular, on online advertising activities that utilizes cookies or other tracking tools.
+Added: regulatory agencies have also placed an increased focus on online privacy matters and, in particular, on online advertising activities that utilize cookies or other tracking tools.
Consumer and industry groups have expressed concerns about online data collection and use by companies, which has resulted in the release of various industry self-regulatory codes of conduct and best practice guidelines that are binding for member companies and that govern, among other things, the ways in which companies can collect, use and disclose user information, how companies must give notice of these practices and what choices companies must provide to consumers regarding these practices.
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This could cause our net revenues to decline and adversely affect our operating results.
−Removed: and foreign governments have enacted or considered or are considering legislation or regulations that could significantly restrict our ability to collect, augment, analyze, use and share deidentified or anonymous data, which could increase our costs and reduce our revenue.
+Added: and foreign governments have enacted or considered or are considering legislation or regulations that could significantly restrict our ability to collect, augment, analyze, use, and share de-identified or anonymous data, which could increase our costs and reduce our revenue.
We operate across many different markets both domestically and internationally which may subject us to cybersecurity, privacy, data security and data protection laws with uncertain interpretations as well as impose conflicting obligations on us.
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as well as similar laws in a variety of international jurisdictions.
−Removed: The interpretation of these laws may be uncertain and may also impose confliction obligations on us.
+Added: The interpretation of these laws may be uncertain and may also impose conflicting obligations on us.
While we work to comply with all applicable law and relevant “best practices” addressing cybersecurity, privacy, data security and data protection, this is an area of the law that is constantly evolving as are the relevant industry codes and threat matrix.
Further it is possible that applicable law and “best practices” are interpreted in an inconsistent or conflicting manner either by differing federal, state or international authorities or across the jurisdictions in which we operate.
−Removed: Any failure or perceived failure by us, our partners, our vendors, or third parties on which we rely could result in a significant liability to us (including in the form of judicial decisions and/or settlements, regulatory findings and/or forfeitures, and other means), cause considerable harm to us and our reputation (including requiring notification to customers, regulators, and/or the media), cause a loss of confidence in our products and services, and deter current and potential customers from using our services.
+Added: Any failure or perceived failure by us, our partners, our vendors, or third parties on which we rely for our operations could result in a significant liability to us (including in the form of judicial decisions and/or settlements, regulatory findings and/or forfeitures, and other means), cause considerable harm to us and our reputation (including requiring notification to customers, regulators, and/or the media), cause a loss of confidence in our products and services, and deter current and potential customers from using our services.
Any of these events could have a material adverse effect on our business, prospects, financial condition, operating results and cash flows.
−Removed: The GDPR and the CCPA impose significant compliance costs and exposes the Company to substantial risks.
−Removed: The EU has traditionally imposed more strict obligations under data privacy laws and regulations.
+Added: The GDPR and the CCPA impose significant compliance costs and expose the Company to substantial risks.
+Added: The EU has traditionally imposed strict obligations under data privacy laws and regulations.
Individual EU member countries have had discretion with respect to their interpretation and implementation of EU data privacy laws, resulting in a variation of privacy standards from country to country.
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We face potential liability related to the privacy and security of health-related information we collect from, or on behalf of, our consumers and customers.
−Removed: The privacy and security of information about the physical or mental health or condition of an individual is an area of significant focus in the U.S.
−Removed: because of heightened privacy concerns and the potential for significant consumer harm from the misuse of such sensitive data.
+Added: The privacy and security of information about the physical or mental health or condition of an individual is an area of significant focus in the United States and in other jurisdictions because of heightened privacy concerns and the potential for significant consumer harm from the misuse of such sensitive data.
We have procedures and technology in place intended to safeguard the information we receive from customers and users of our services from unauthorized access or use.
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In addition, we may sign business associate agreements in connection with the provision of the products and services developed for other third parties or in connection with certain of our other services that may transmit or store protected health information.
−Removed: Failure to comply with the requirements of HIPAA or HITECH or any of the applicable federal and state laws regarding patient privacy, identity theft prevention and detection, breach notification and data security may subject us to penalties, including civil monetary penalties and, in some circumstances, criminal penalties or contractual liability under agreements with our customers and clients.
+Added: Failure to comply with the requirements of HIPAA, HITECH, regulations promulgated under HIPAA and HITECH (including but not limited to the HIPAA Privacy and Security Rules and the Health Breach Notification Rule), or any of the applicable federal and state laws and regulations regarding patient privacy, identity theft prevention and detection, breach notification and data security may subject us to penalties, including civil monetary penalties and, in some circumstances, criminal penalties or contractual liability under agreements with our customers and clients.
Any failure or perception of failure of our products or services to meet HIPAA, HITECH and related regulatory requirements could expose us to risks of investigation, notification, litigation, penalty or enforcement, adversely affect demand for our products and services and force us to expend significant capital and other resources to modify our products or services to address the privacy and security requirements of our clients and HIPAA and HITECH.
+Added: These laws and regulations are subject to interpretation by courts and regulators that might expand their scope of coverage.
+Added: For example, the FTC recently adopted a Policy Statement offering guidance on the scope of its Health Breach Notification Rule, and issued related guidance, stating that consumer mobile applications that draw health information from one source and health or non-health information from one or more other sources are covered by the Rule, and that breaches of security under the Rule include disclosures of sensitive health information without user authorization.
+Added: Any changes in these or any other laws and regulations or the interpretation of them could increase our future compliance costs, limit the amount and type of data we can collect, transfer, share, or sell, make our products and services less attractive to our users, or cause us to change or limit our business practices.
+Added: Further, any failure on our part to comply with any relevant laws or regulations may subject us to significant civil or criminal liabilities.
Developments in the healthcare industry could adversely affect our business.
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• government regulation or private initiatives that affect the manner in which healthcare industry participants interact with consumers and the general public;
+Added: • changes to federal and state tax rates and allowed expense deductions;
• consolidation of healthcare industry participants;
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Many states also have similar anti-kickback laws that are not necessarily limited to items or services for which payment is made by a federal healthcare program.
−Removed: Our sale of advertising and sponsorships to healthcare providers implicates these laws.
+Added: Our sale of advertising and sponsorships to healthcare providers potentially implicates these laws.
However, we review our practices to ensure that we comply with all applicable laws.
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Any determination by a state or federal regulatory agency that any of our practices violate any of these laws could subject us to liability and require us to change or terminate some portions of our business.
−Removed: Further, we derive revenues from the sale of advertising and promotion of prescription and over-the-counter drugs and medical devices.
+Added: Further, we derive revenues from the sale of advertising and promotion of prescription and over-the-counter drugs and medical devices, as well as non-drug consumer health and wellness products.
If the FDA or the FTC finds that any of the information provided on our properties violates FDA or FTC regulations, they may take regulatory or judicial action against us and/or the advertiser of that information.
State attorneys general may also take similar action based on their state’s consumer protection statutes.
−Removed: Any increase or change in regulation of
−Removed: advertising and promotion in the healthcare industry could make it more difficult for us to generate and grow our advertising and sponsorship revenues.
+Added: Any increase or change in regulation of advertising and promotion in the healthcare industry could make it more difficult for us to generate and grow our advertising and sponsorship revenues.
In addition, the practice of most healthcare professions requires licensing under applicable state law and state laws may further prohibit business entities from practicing medicine, which is referred to as the prohibition against the corporate practice of medicine.
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Our business could suffer if providers of broadband internet access services block, impair or degrade our services.
−Removed: Our business is dependent on the ability of our cloud services customers and visitors to our digital media properties to access our services and applications over broadband internet connections.
+Added: Our business is dependent on the ability of our customers and visitors to our digital media properties to access our services and applications over broadband internet connections.
Internet access providers and internet backbone providers may be able to block, degrade or charge for access or bandwidth use of certain of our products and services, which could lead to additional expenses and the loss of users.
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Broadband internet access providers may also attempt to charge us or our customers additional fees to access services like ours that may result in the loss of customers and revenue, decreased profitability, or increased costs to our retail offerings that may make our services less competitive.
−Removed: Our business could suffer if we cannot obtain or retain numbers, are prohibited from obtaining local numbers or are limited to distributing local numbers to only certain customers.
−Removed: The future success of our number-based cloud services business depends on our ability to procure large quantities of local numbers in the U.S.
−Removed: and foreign countries in desirable locations at a reasonable cost and offer our services to our prospective customers without restrictions.
−Removed: Our ability to procure and distribute numbers depends on factors such as applicable regulations, the practices of telecommunications carriers that provide numbers, the cost of these numbers and the level of demand for new numbers.
−Removed: For example, several years ago the FCC conditionally granted petitions by Connecticut and California to adopt specialized “unified messaging” area codes, but neither state has adopted such a code.
−Removed: Adoption of a specialized area code within a state or nation could harm our ability to compete in that state or nation if it materially affects our ability to acquire numbers for our operations or makes our services less attractive due to the unavailability of numbers with a local geographic area.
−Removed: In addition, although we are the customer of record for all of our U.S.
−Removed: numbers, from time to time, certain U.S.
−Removed: telephone carriers inhibit our ability to port numbers or port our numbers away from us to other carriers.
−Removed: If a federal or regulatory agency determines that our customers should have the ability to port numbers without our consent, we may lose customers at a faster rate than what we have experienced historically, potentially resulting in lower revenues.
−Removed: Also, in some foreign jurisdictions, under certain circumstances, our customers are permitted to port their numbers to another carrier.
−Removed: These factors could lead to increased cancellations by our Cloud Services customers and loss of our number inventory.
−Removed: These factors may have a material adverse effect on our business, prospects, financial condition, operating results, cash flows and growth in or entry into foreign or domestic markets.
−Removed: In addition, future growth in our number-based cloud services subscriber base, together with growth in the subscriber bases of other providers of number-based services, has increased and may continue to increase the demand for large quantities of numbers, which could lead to insufficient capacity and our inability to acquire sufficient numbers to accommodate our future growth.
−Removed: We may be subject to increased rates for the telecommunications services we purchase from regulated carriers which could require us to either raise the retail prices of our offerings and lose customers or reduce our profit margins.
−Removed: The FCC adopted wide-ranging reforms to the system under which regulated providers of telecommunications services compensate each other for the exchange of various kinds of traffic.
−Removed: While we are not a provider of regulated telecommunications services, we rely on such providers to offer our cloud services to our customers.
−Removed: As a result of the FCC’s reforms, regulated providers of telecommunications services are determining how the rates they charge customers like us will change in order to comply with the new rules.
−Removed: It is possible that some or all of our underlying carriers will increase the rates we pay for certain telecommunications services.
−Removed: Should this occur, the costs we incur to provide number-based cloud services may increase which may require us to increase the retail price of our services.
−Removed: Increased prices could, in turn, cause us to lose customers, or, if we do not pass on such higher costs to our subscribers, our profit margins may decrease.
−Removed: New technologies have been developed that are able to block certain of our advertisements or impair our ability to serve interest-based advertising which could harm our operating results.
+Added: Technologies have been developed that are able to block certain of our advertisements or impair our ability to serve interest-based advertising which could harm our operating results.
Technologies have been developed and are likely to continue to be developed that can block internet or mobile display advertising.
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Undetected click fraud could damage our brands and lead to a loss of advertisers and revenue.
+Added: We obtain third-party certification that certain of our products apply “best practices” to detect and prevent click fraud.
+Added: If we are unable to maintain such certification, advertisers might refuse to pay, demand refunds, and withdraw future business, and our business reputation might be harmed.
The industries in which we operate are undergoing rapid technological changes and we may not be able to keep up.
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The fundamental change purchase features of the 1.75% Convertible Notes and the change of control features of the Senior Notes may delay or prevent an otherwise beneficial attempt to take over our company.
−Removed: The terms of the Convertible Notes require us to offer to purchase the Convertible Notes for cash in the event of a fundamental change (as defined in the indenture governing the 3.25% Convertible Notes and the indenture governing the 1.75% Convertible Notes), and the terms of the Senior Notes require us to offer to repurchase the Senior Notes for cash in the event of a change of control (as defined in the indenture governing the Senior Notes).
+Added: The terms of the 1.75% Convertible Notes require us to offer to purchase the 1.75% Convertible Notes for cash in the event of a fundamental change (as defined in the indenture governing the 1.75% Convertible Notes), and the terms of the 4.625% Senior Notes require us to offer to repurchase the 4.625% Senior Notes for cash in the event of a change of control (as defined in the indenture governing the 4.625% Senior Notes).
These features may have the effect of delaying or preventing a takeover of our company that would otherwise be beneficial to investors.
−Removed: Conversions of the Convertible Notes will dilute the ownership interest of our existing stockholders, including holders who had previously converted their Convertible Notes.
−Removed: The conversion of some or all of the Convertible Notes will dilute the ownership interests of our existing stockholders.
+Added: Conversions of the 1.75% Convertible Notes could dilute the ownership interest of our existing stockholders, including holders who had previously converted their 1.75% Convertible Notes.
+Added: The conversion of some or all of the 1.75% Convertible Notes could dilute the ownership interests of our existing stockholders.
Any sales in the public market of our common stock issuable upon such conversion could adversely affect prevailing market prices of our common stock.
In addition, the existence of the 1.75% Convertible Notes may encourage short selling by market participants because the conversion of the 1.75% Convertible Notes could depress the price of our common stock.
−Removed: We are a holding company and our operations are conducted through, and substantially all of our consolidated assets are held by, our subsidiaries, which are subject to certain restrictions on their ability to pay dividends to us to fund dividends on our stock, pay interest on the Convertible Notes and fund other holding company expenses.
+Added: We are a holding company and our operations are conducted through, and substantially all of our consolidated assets are held by, our subsidiaries, which may be subject to certain restrictions on their ability to pay dividends to us to fund dividends on our stock, pay interest on the 1.75% Convertible Notes or 4.625% Senior Notes and fund other holding company expenses.
We are a holding company.
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A substantial portion of our consolidated assets is held by our subsidiaries.
−Removed: Accordingly, our ability to pay dividends on our stock, service our debt, including the Convertible Notes and fund other holding company expenses depends on the results of operations of our subsidiaries and upon the ability of such subsidiaries to provide us with cash, whether in the form of dividends, loans or otherwise.
+Added: Accordingly, our ability to pay dividends on our stock, service our debt, including the 1.75% Convertible Notes and 4.625% Senior Notes, and fund other holding company expenses depends on the results of operations of our subsidiaries and upon the ability of such subsidiaries to provide us with cash, whether in the form of dividends, loans or otherwise.
Dividends, loans or other distributions to us from such subsidiaries could be subject to future contractual and other restrictions.
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Our stock price and trading volumes have been volatile and we expect that this volatility will continue in the future due to factors, such as:
−Removed: • Assessments of the size of our subscriber base and our average revenue per subscriber, and comparisons of our results in these and other areas versus prior performance and that of our competitors;
+Added: • Assessments of the size of our advertiser, user and subscriber bases, our average revenue per user and subscriber, and comparisons of our results in these and other areas versus prior performance and that of our competitors;
+Added: • Our growth and profitability;
• Variations between our actual results and investor expectations;
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• Investor perceptions of us and comparable public companies;
−Removed: • Conditions and trends in the communications, messaging and internet-related industries;
+Added: • Conditions and trends in the industries in which we operate;
• Announcements of technological innovations and acquisitions;
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• Rumors, gossip, or speculation published on public chat or bulletin boards;
−Removed: • General market conditions;
+Added: • General market conditions, including prolonged or increased inflation;
• Geopolitical events such as war, threat of war, or terrorist actions;
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.