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RISK FACTORS
We have a history of losses and anticipate to incur losses for the foreseeable future
We have incurred net losses in our short operating history as a company as set out in the “Report
of the Independent Public Accountants” section of this Prospectus. We anticipate that we will continue
to incur substantial operating losses for the foreseeable future due to operating and capital expenditure,
increased sales and marketing costs, additional personnel hires, greater levels of product development
and our general growth objectives. We cannot assure you that our losses will not further increase in
the future or that we will ever achieve or sustain profitability.
We depend on advertising as a key source of our revenue
We rely heavily on advertising as a source of revenue as disclosed in the “Selected Financial Data”
and “Business – Business Model” sections of this Prospectus. Our business plan assumes that
online advertising in Asia will expand and that revenues generated by advertising will increase. We
anticipate that a substantial portion of our future revenues will be derived from our advertising network
as online advertising becomes more broadly accepted in Asia. However, online advertising is still a
relatively unproven business in Asia.
Advertisers and advertising agencies typically purchase advertising under agreements that run for a
limited time and can be terminated by the advertiser or advertising agency with little or no notice
and no penalty. We cannot be certain that current advertisers and advertising agencies will continue
to purchase advertising from us, that we will be able to attract additional advertisers and advertising
agencies successfully or that advertisers and advertising agencies will make timely payments due to
us.
The growth of our advertising revenues will depend on many factors, including:
• attractiveness of our advertising pricing schedules;
• the pricing of advertising on other websites;
• level of acceptance of Internet advertising;
• volume of traffic at our websites; and
• market recognition of our brand names.
There is no guarantee that we can maintain constantly growing pageviews in line with our projected
growth rate on advertising revenue. Any reduction in the pageviews of our websites may cause
advertisers to withdraw from our advertising network.
The development of web software that blocks Internet advertisements before they appear on a
user’s screen may hinder the growth of online advertising. The expansion of advertisement blocking
on the Internet may decrease our revenues because when an advertisement is blocked, it is not
downloaded from our advertisement server, which means that such advertisements are not tracked
as a delivered advertisement. Advertisers may choose not to advertise on the Internet and on our
advertising network because of the use of Internet advertisement blocking software. The use of web
software that blocks Internet advertising may materially and adversely affect our business.
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