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E-commerce may be subject to seasonal and cyclical patterns
User traffic levels on the Internet, which affect e-commerce, will be affected by the June and yearend
vacation and holiday periods. Also, sales of consumer goods will typically increase during the
fourth calendar quarter as a result of the holiday season and may decline during other periods. Such
phenomena are likely to introduce a seasonal element to our turnover, which could have a material
adverse effect on our liquidity and financial condition.
ECONOMIC RISKS
The economic climate in Asia
RISK FACTORS
Since 1997, many countries in Asia have experienced significant economic downturns and related
difficulties. Many Asian governments and companies experienced difficulties servicing foreign currency
denominated debt and many corporate borrowers defaulted on their debt payments due to the decline
in the value of the region’s currencies. As the economic crisis spread across the Asian region,
governments raised interest rates to defend their weakening currencies, which adversely affected
domestic growth rates. In addition, liquidity was substantially reduced as foreign investors curtailed
investments in the region and domestic banks restricted additional lending activity. The cumulative
effects of currency fluctuations, higher interest rates and other factors have materially and adversely
affected the economies of many countries in Asia. Estimated real GDP growth for many countries
comprising our potential advertising territory decreased. Economic downturns in countries throughout
Asia may have material adverse effect on our business and financial condition.
The economic crisis and its effect on the Asian economies described above has had and may
continue to have an adverse impact on our business in the following respects:
• spending levels by both Asian and non-Asian companies for advertising in the Asian markets
may be substantially reduced;
• our ability to access lines of credit or other financing may be restricted; and
• e-commerce revenues may be adversely affected by falling levels of consumer spending and
lower access to consumer credit, including credit cards.
A change in currency exchange rates could increase costs relative to revenues of the Group
Historically, substantially all our revenues, expenses and liabilities have been denominated in Singapore
dollars. In the future, we may conduct business in additional jurisdictions which could generate
revenues, expenses and liabilities in other currencies. As a result, we will be subject to the effects of
exchange rate fluctuations with respect to any of such currencies. We have not entered into
agreements or purchased instruments to hedge our exchange rate risks although we may do so in
the future.
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