Marin Software Inc (MRIN) 2013年年度報告「NYSE」.pdf

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1、MARIN SOFTWARE INCFORM 10-K(Annual Report)Filed 02/28/14 for the Period Ending 12/31/13 Address123 MISSION ST25TH FLOORSAN FRANCISCO,CA 94105Telephone415-399-2580CIK0001389002SymbolMRINSIC Code7374-Computer Processing and Data Preparation and Processing ServicesIndustryComputer ServicesSectorTechnol

2、ogyFiscal Year12/31http:/www.edgar- Copyright 2015,EDGAR Online,Inc.All Rights Reserved.Distribution and use of this document restricted under EDGAR Online,Inc.Terms of Use.Table of Contents Index to Financial Statements UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington,D.C.20549 FORM 10-K

3、 For the fiscal year ended December 31,2013 OR Commission File Number:001-32224 Marin Software Incorporated (Exact name of registrant as specified in its charter)123 Mission Street,25th Floor San Francisco,CA 94105 (415)399-2580 (Address,including zip code,and telephone number,including area code,of

4、 registrants principal executive offices)Securities registered pursuant to Section 12(b)of the Act:Securities registered pursuant to section 12(g)of the Act:Not applicable Indicate by check mark if the Registrant is a well-known seasoned issuer,as defined in Rule 405 of the Securities Act.Yes?No Ind

5、icate by check mark if the Registrant is not required to file reports pursuant to Section 13 or Section 15(d)of Act.Yes?No Indicate by check mark whether the Registrant(1)has filed all reports required to be filed by Section 13 or 15(d)of the Securities Exchange Act of 1934 during the preceding 12 m

6、onths(or for such shorter period that the Registrant was required to file such reports),and(2)has been subject to such filing requirements for the past 90 days:Yes No?Indicate by check mark whether the Registrant has submitted electronically and posted on its corporate Web site,if any,every Interact

7、ive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T(232.405 of this chapter)during the preceding 12 months(or for such shorter period that the Registrant was required to submit and post such files).Yes No?Indicate by check mark if disclosure of delinquent filers

8、pursuant to Item 405 of Regulation S-K(229.405 of this chapter)is not contained herein,and will not be contained,to the best of Registrants knowledge,in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K.?Indicate by

9、check mark whether the Registrant is a large accelerated filer,an accelerated filer,a non-accelerated filer or a smaller reporting company.See the definitions of“large accelerated filer,”“accelerated filer”and“smaller reporting company”in Rule 12b-2 of the Exchange Act.(Check one):Indicate by check

10、mark whether the Registrant is a shell company(as defined in Rule 12b-2 of the Act).Yes?No Based on the closing price of the Registrants Common Stock on the New York Stock Exchange of$10.24 on the last business day of the Registrants most recently completed second fiscal quarter,which was June 28,20

11、13,the aggregate market value of its shares held by non-affiliates was approximately$195 million.Shares of the Registrants Common Stock held by each executive officer and director and by each entity or person that owned 5 percent or more of the Registrants outstanding Common Stock were excluded in t

12、hat such persons may be deemed to be affiliates.This determination of affiliate status is not Annual Report pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934?Transition report pursuant to Section 13 or 15(d)of the Securities Exchange Act of 1934 Delaware 20-4647180(State or other

13、 jurisdiction of incorporation or organization)(I.R.S.Employer Identification Number)Title of each class Name of each exchange on which registered Common stock,par value$0.001 per share New York Stock Exchange,Inc.Large accelerated filer?Accelerated filer?Non-accelerated filer Smaller reporting comp

14、any?necessarily a conclusive determination for other purposes.As of January 31,2014,there were approximately 33.0 million shares of the Registrants Common Stock outstanding.DOCUMENTS INCORPORATED BY REFERENCE Portions of the Registrants definitive proxy statement for its 2014 Annual Meeting of Stock

15、holders(the“Proxy Statement”),to be filed within 120 days of the Registrants fiscal year ended December 31,2013,are incorporated by reference in Part III of this Report on Form 10-K.Except with respect to information specifically incorporated by reference in this Form 10-K,the Proxy Statement is not

16、 deemed to be filed as part of this Form 10-K.Table of Contents Index to Financial Statements MARIN SOFTWARE INCORPORATED FORM 10-K For the Fiscal Year Ended December 31,2013 TABLE OF CONTENTS Page PART I.1 Item 1.Business 1 Item 1A.Risk Factors 8 Item 1B.Unresolved Staff Comments 27 Item 2.Properti

17、es 27 Item 3.Legal Proceedings 27 Item 4.Mine Safety Disclosures 27 PART II.27 Item 5.Market for Registrants Common Equity,Related Stockholder Matters and Issuer Purchases of Equity Securities 27 Item 6.Selected Financial Data 29 Item 7.Managements Discussion and Analysis of Financial Condition and

18、Results of Operations 32 Item 7A.Quantitative and Qualitative Disclosures About Market Risk 52 Item 8.Financial Statements and Supplementary Data 53 Item 9.Changes in and Disagreements with Accountants on Accounting and Financial Disclosure 53 Item 9A.Controls and Procedures 54 Item 9B.Other Informa

19、tion 54 PART III.54 Item 10.Directors,Executive Officers and Corporate Governance 54 Item 11.Executive Compensation 54 Item 12.Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters 55 Item 13.Certain Relationships and Related Transactions,and Director Indepen

20、dence 55 Item 14.Principal Accountant Fees and Services 55 PART IV.55 Item 15.Exhibits and Financial Statement Schedules 55 Index to Consolidated Financial Statements F-1 Signatures Table of Contents Index to Financial Statements FORWARD-LOOKING STATEMENTS This Annual Report on Form 10-K,including t

21、he“Managements Discussion and Analysis of Financial Condition and Results of Operations,”contains forward-looking statements regarding future events and our future results that are subject to the safe harbors created under the Securities Act of 1933 and the Securities Exchange Act of 1934.All statem

22、ents contained in this Annual Report on Form 10-K other than statements of historical fact,including statements regarding our future results of operations and financial position,our business strategy and plans,and our objectives for future operations,are forward-looking statements within the meaning

23、 of the Private Securities Litigation Reform Act of 1995.The words“believe,”“may,”“will,”“estimate,”“continue,”“anticipate,”“intend,”“expect,”and similar expressions are intended to identify forward-looking statements.We have based these forward-looking statements largely on our current expectations

24、 and projections about future events and trends that we believe may affect our financial condition,results of operations,business strategy,short-term and long-term business operations and objectives,and financial needs.These forward-looking statements are subject to a number of risks,uncertainties a

25、nd assumptions,including those described in the“Risk Factors”section.Moreover,we operate in a very competitive and rapidly changing environment.New risks emerge from time to time.It is not possible for our management to predict all risks,nor can we assess the impact of all factors on our business or

26、 the extent to which any factor,or combination of factors,may cause actual results to differ materially from those contained in any forward-looking statements we may make.In light of these risks,uncertainties and assumptions,the future events and trends discussed in this report may not occur and act

27、ual results could differ materially and adversely from those anticipated or implied in the forward-looking statements.We undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements,except as required by law.Given these risks and uncertainties

28、,readers are cautioned not to place undue reliance on such forward-looking statements.As used in this report,the terms“Marin,”“Registrant,”“we,”“us,”“our,”and“the Company”mean Marin Software Incorporated and its subsidiaries unless the context indicates otherwise.Table of Contents Index to Financial

29、 Statements PART I We provide a leading cloud-based digital advertising management platform that enables advertisers and agencies to improve the performance of their online advertising campaigns.Our Revenue Acquisition Management platform is an analytics,workflow,and optimization solution for market

30、ing professionals,enabling them to effectively manage digital advertising campaigns across search,display,social and mobile.With our platform,customers can:Our platform is integrated with leading publishers such as Baidu,Bing,Facebook,Google,Yandex and Yahoo!Japan.Additionally,we have integrations w

31、ith more than 30 leading web analytics and ad-serving solutions,and key enterprise applications,enabling our customers to more accurately measure the return on investment of their marketing programs.Our software platform serves as a system-of-record for advertising performance,sales and revenue data

32、,allowing advertisers to connect the dots between advertising spend and revenue outcomes.Through an intuitive interface,we enable our customers to simultaneously run large-scale digital advertising campaigns across multiple publishers and channels,making it easy for marketers to create,publish,modif

33、y and optimize campaigns in real time.Our predictive bid management and optimization technology also allows advertisers to forecast outcomes and optimize campaigns across multiple publishers and channels to achieve their business goals.Our optimization technology enables advertisers to easily and ra

34、pidly increase ad spend on those campaigns,publishers and channels that are performing well while reducing investment in those that are not.This category of solutions,which we refer to as Revenue Acquisition Management,enables businesses to intelligently and efficiently measure,manage,and optimize t

35、heir digital advertising spend to achieve desired business results.Headquartered in San Francisco,we were founded in 2006.The mailing address of our headquarters is 123 Mission Street,25th Floor,San Francisco,California 94105 and our telephone number at that location is(415)399-2580.Today our custom

36、ers collectively manage more than$6 billion in annualized ad spend on our platform,making us the largest independent digital advertising management solution.Benefits of our Solution Our Revenue Acquisition Management platform helps advertisers improve their ability to acquire customers and revenue b

37、y optimizing their digital advertising campaigns.Business Benefits Financial lift.The combination of optimized digital ad campaigns,workflow efficiencies and better decision making enables our customers to increase volume of revenues or leads,gain higher profits,improve advertising return on investm

38、ent,and lower costs of customer acquisition.Efficiencies and time savings.Utilizing our software solution,customers are able to automate manual and time-intensive tasks such as reporting,analysis,campaign creation and bidding,allowing advertisers to focus on campaign strategy,expansion and optimizat

39、ion.1 ITEM 1.BUSINESS measure the effectiveness of their advertising campaigns through our proprietary reporting and analytics capabilities;manage and execute campaigns through our intuitive user interface and underlying technology that streamlines and automates key functions,such as ad creation and

40、 bidding,across multiple publishers and channels;and optimize campaigns across multiple publishers and channels in real time based on market and business data to achieve desired revenue outcomes using our predictive bid management technology.Table of Contents Index to Financial Statements Better bus

41、iness decision making.Our Revenue Acquisition Management platform enables advertisers to manage campaigns to focus on higher order business objectives,such as profit margin,and quickly filter and compare large data sets to uncover valuable insights and improve business outcomes.Key Strengths Robust

42、and flexible integration.Our Revenue Acquisition Management platform enables marketers to aggregate and analyze key data from large-scale digital advertising campaigns and related business information systems.This allows marketers to create a system-of-record that can be used to reliably attribute r

43、evenue to specific programs,understand the purchase path,and assess customer lifetime value.Big data analytics.Advertisers often have to manually parse through large data sets to uncover opportunity and waste in their digital programs.We provide sophisticated analytics capabilities,which enables adv

44、ertisers to quickly and programmatically review large data sets,identify outliers and trends,and take appropriate action.Real-time,cross-publisher campaign management.Our software solution enables customers to simultaneously run large-scale digital advertising campaigns across multiple publishers an

45、d channels,making it easy for marketers to create,publish,modify and optimize campaigns in real time using a single interface.Predictive bid management and optimization.Our bid management technology allows marketers to optimize campaigns across multiple publishers and channels to achieve their busin

46、ess goals,such as increasing revenues or decreasing the cost per lead or cost per customer acquired.Advertisers can also forecast and adjust outcomes using our predictive bidding technology.Intuitive interface offering visibility and control.Our intuitive interface is designed to simplify the daily

47、workflow requirements of online marketers,including managing multiple campaigns,performing real-time analytics and collaborating with multi-user teams.Experienced team committed to customer success.With offices in nine countries,we have a global team experienced in both digital advertising and enter

48、prise software,enabling us to effectively meet the needs of large and sophisticated advertisers.Scalable cloud-based architecture.We deliver our cloud-based platform using a purpose-built technology foundation designed to support enterprise-scale data sets and transaction volumes.Our technology allo

49、ws customers to aggregate,store and process large amounts of data while maintaining high levels of application availability and responsiveness.Offered Solutions Our cloud-based digital advertising management platform enables our customers to measure,manage and optimize their digital marketing campai

50、gns to improve performance of their online advertising campaigns,realize efficiencies and time savings,and make better business decisions.We currently offer two editions of our platform that leverage the same underlying technology.2 Enterprise Edition.Targeting large advertisers and agencies,Marin E

51、nterprise is designed to provide digital advertisers with the power,scale and flexibility required to manage large-scale advertising campaigns.Professional Edition.Targeting mid-market advertisers and agencies,Marin Professional is designed for rapid deployment and offers customers a complete workfl

52、ow,analysis and optimization solution for managing digital advertising.Table of Contents Index to Financial Statements Marins Revenue Acquisition Management Platform Product Schematic Our software platform is comprised of the following modules:Optimization.Our Optimization module helps advertisers m

53、anage bids across publishers to meet revenue goals and identify opportunities for campaign improvements leading to improved financial performance and efficiencies.Key capabilities of our Optimization module include:3 Predictive Bidding.Our predictive bid management solution allows advertisers to cal

54、culate bids across any number of ad units,including ads with little or no data,using statistical methods.Users can set business level goals,such as meeting a given return on advertising investment,and bids can be optimized down to a granular ad unit level.Multi-Event Conversion.Many online advertise

55、rs have multi-step purchase funnels where an online user might first fill out a lead form and then make a purchase.We provide advertisers the flexibility to measure multiple conversion events,and calculate discrete bids based on the value of each event in the conversion funnel.Revenue Attribution.A

56、customer purchasing a product online may have been exposed to digital ads across search,social,display and mobile,making revenue attribution difficult.Our Optimization module enables advertisers to accurately attribute revenue across multiple channels,leading to deeper insights and better bidding ou

57、tcomes.Financial Forecasting.Our Optimization module enables advertisers to run what-if scenarios so they can change their bidding strategies or budget allocations,and understand the impact on the overall program.Table of Contents Index to Financial Statements Reporting and Analytics.Our Reporting a

58、nd Analytics module enables advertisers to report results at a business level and analyze cross-channel performance trends,leading to improved visibility and significant time savings.Key capabilities of our Reporting and Analytics module include:Campaign Management.Our Campaign Management module pro

59、vides the digital advertiser with a unified interface to create,manage and optimize campaigns across a broad range of publishers,leading to greater efficiencies and increased flexibility.Key capabilities of our Campaign Management module include:Connect.Our Connect module helps advertisers automate

60、and streamline their ability to capture revenue,cost and audience data from a range of sources such as ad servers,analytics systems,CRM platforms,publishers and third party databases.Through proprietary integrations across multiple data sources,our Connect module enables advertisers to have a holist

61、ic picture of their digital advertising campaigns leading to financial lift and time savings.Key capabilities of our Connect module include:Technology&Supporting Platform We designed our cloud-based platform to support large global advertisers.The majority of our software is written in Java.Our hard

62、ware consists of industry-standard servers and network infrastructure.Our standard 4 Executive Dashboards.Our dashboards provide an at-a-glance view of digital campaign performance with key performance indicators(KPIs),such as conversions,revenue or profits,as well as performance and budget trends.A

63、utomated Reporting and Alerts.Users can set up automated reports to simplify reporting and analysis workflows,including triggers that notify advertisers when key metrics vary outside of optimal ranges.Dimension Reporting.Advertisers can tie digital campaigns to higher-level constructs such as busine

64、ss lines,product categories and geographic regions,resulting in clear visibility into business level metrics and KPIs,such as the profitability of a product category.Cross-Channel Analysis.Our cross-channel analysis capabilities enable advertisers to understand the consumer path to purchase,leading

65、to better insights into channel performance and the value of cross-channel advertising.Cross-Publisher Editing.Allows advertisers to create and edit campaigns,creative,bids,and budgets in bulk across publishers and accounts.Audience Targeting.Allows advertisers to target specific audiences across a

66、variety of dimensions such as age,gender,region,interests,device and the social graph.Creative Optimization.Enables advertisers to test ad copy,images,and landing pages to identify combinations that maximize revenue outcomes.Campaign Expansion.Provides users with unique insights to rapidly grow mark

67、eting programs through ad unit expansion workflow and automated generation of new campaigns based on client defined rules.Revenue Connect.With Revenue Connect,performance marketers can see into their purchase funnels,bridge offline sales to online advertising,and optimize to customer lifetime value.

68、Audience Connect.Powered by our partner ecosystem,Audience Connect,combines an advertisers first party data with thousands of attributes of audience data such as purchase intent,demographics and behavioral insights,enabling advertisers to build customer-centric programs across all digital marketing

69、channels Channel Connect.Using Channel Connect,advertisers can incorporate data from multiple publishers,including new and smaller publisher networks into our platform thereby gaining a single source from which to measure performance,track revenue,and optimize bidding.Table of Contents Index to Fina

70、ncial Statements operating system is Linux.Our software platform is character-set,language,currency,and time-zone independent.Our technology platform has the following key benefits:Scalability.Our software platform is designed to handle billions of ad units across thousands of advertisers,while deli

71、vering a responsive browsing and editing experience.As the number of advertisers and resulting computing and storage requirements grow,we can add hardware to the platform to accommodate growing demand.We believe the hardware we use is available from multiple sources and hence we do not expect to hav

72、e any temporal delays,or sourcing challenges.Further,we do not expect any liquidity or capital limitations that would materially impact our ability to scale our platform.Availability.Our customers are highly dependent on the availability of our platform,which is designed to be available 24x7,365 day

73、s a year.We operate our own hardware and use third-party data centers that offer server redundancy,back-up communications and power and physical security.Security.Our software platform manages a large quantity of customer data.We employ technologies,policies and procedures to protect customer data.O

74、ur third-party data center has SSAE 16 attestations.Customers We market and sell our solutions to advertisers directly and through advertising agencies that use our platform on behalf of their customers.Advertisers that we serve through our relationships with agencies have historically represented a

75、bout half our revenues.There were no customers that accounted for greater than 10%of our revenues in 2013,2012 or 2011.Competition The digital advertising platform market is highly competitive,fragmented,and subject to changes in both technology and customer behavior.We face significant competition

76、today and expect competition to intensify in the future.To maintain and improve our competitive position,we must keep pace with the evolving needs of our customers and continue to develop and introduce new modules,features and services in a timely and efficient manner.We currently compete with large

77、,well-established companies,such as Adobe Systems Incorporated and Google Inc.(through its wholly-owned subsidiary DoubleClick),and privately-held companies,such as Acquisio Inc.,which focuses solely on agencies,and Kenshoo Ltd.We also compete with in-house proprietary tools and custom solutions,inc

78、luding spreadsheets.We believe the principal competitive factors in our market include the following:Our ability to remain competitive will largely depend on our ongoing performance in the areas of our solution breadth and customer support.5 solution quality,breadth,flexibility and functionality;tan

79、gible platform benefits;level of customer satisfaction and our ability to respond to customer needs rapidly;breadth and quality of advertiser and agency relationships;ability to innovate and develop new or improved products and modules;ability to respond to changes in publishers application program

80、interfaces,or APIs;brand awareness and reputation;and size of customer base.Table of Contents Index to Financial Statements Sales and Marketing We sell our solutions directly to advertisers and to agencies in a wide range of industries through our global sales team.Our sales cycle can vary substanti

81、ally by advertiser and agency,but typically is one to nine months.We have a number of account executive sales teams organized by geography and market segments.We also have account managers who are responsible for long-term customer satisfaction and retention,renewal,and driving the expansion of the

82、use of our platform.Our marketing team is focused on driving awareness and demand generation across major markets.This team provides thought leadership in the form of white papers,benchmarking reports,bylines,presenting at industry conferences and speaking to the press.In addition,they are responsib

83、le for the creation of field enablement assets such as case studies,blog posts and corporate collateral.Research and Development Innovation is key to our success.Our research and development team is responsible for the design,development,and maintenance of our platform.Our research and development p

84、rocess emphasizes frequent,iterative and incremental development cycles,and we typically release new features every month.Within the research and development team,we have several highly aligned,independent sub-teams comprised of six to twelve team members that focus on particular feature sets of our

85、 solutions.Each of these sub-teams includes engineers,quality assurance specialists and product managers responsible for the initial and ongoing development of each sub-teams feature sets.Total research and development expense was$20.7 million,$14.0 million and$7.1 million for the years ended Decemb

86、er 31,2013,2012 and 2011.Employees As of December 31,2013,we had a total of 500 regular full-time employees,including 154 employees located outside the United States.None of our employees is represented by a labor union or covered by a collective bargaining agreement.We have not experienced any work

87、 stoppages,and we consider our relations with our employees to be good.Intellectual Property Our intellectual property rights are a key component of our success.We rely on a combination of patent,trademark,copyright,unfair competition and trade secret laws,as well as confidentiality procedures and c

88、ontractual restrictions,to establish,maintain and protect our proprietary rights.As of December 31,2013,we had two issued patents and two patent applications pending in the United States.We own and use trademarks on or in connection with our products and services,including one trademark registered w

89、ith the European Union and Australia and unregistered common law marks and pending trademark applications in the United States,China,Japan and Singapore.We have also registered numerous Internet domain names.Available Information The mailing address of our headquarters is 123 Mission Street,25th Flo

90、or,San Francisco,California 94105 and our telephone number at that location is(415)399-2580.Our website is .Through a link on the Investor Center section of our website,we make available the following filings as soon as reasonably practicable after they are electronically filed with or furnished to

91、the Securities and Exchange Commission(the“SEC”):our Annual Report on Form 10-K,Quarterly Reports on Form 10-Q,Current Reports on Form 8-K,and any amendments to those reports filed or furnished pursuant to Section 13(a)or 15(d)of the Securities Exchange 6 Table of Contents Index to Financial Stateme

92、nts Act of 1934.All such filings are free of charge.The information posted to our website is not incorporated into this Annual Report on Form 10-K.The public may read and copy any materials that we file with the SEC at the SECs Public Reference Room at 100 F Street,NE,Washington,DC 20549.The public

93、may obtain information on the operation of the Public Reference Room by calling the SEC at 1-800-SEC-0330.The SEC also maintains an internet site that contains reports,proxy and information statements,and other information regarding issuers that file electronically with the SEC at www.sec.gov.7 Tabl

94、e of Contents Index to Financial Statements Our operations and financial results are subject to various risks and uncertainties,including those described below,which could adversely affect our business,results of operations,cash flows,financial conditions,and the trading price of our common stock.Ri

95、sks Related to Our Business We have a history of losses and we may not achieve or sustain profitability in the future.We have incurred significant losses in each fiscal year since our incorporation in 2006.We experienced net losses of$35.9 million during 2013.As of December 31,2013,we had an accumul

96、ated deficit of$113.2 million.The losses and accumulated deficit were due to the substantial investments we made to grow our business and acquire customers.We anticipate that our cost of revenues and operating expenses will increase substantially in the foreseeable future as we continue to invest to

97、 grow our business and acquire customers and develop our platform and new functionality.These efforts may prove more expensive than we currently anticipate,and we may not succeed in increasing our revenues sufficiently to offset these higher expenses.Many of our efforts to generate revenues from our

98、 business are new and unproven,and any failure to increase our revenues or generate revenues from new solutions could prevent us from attaining or increasing profitability.Furthermore,to the extent we are successful in increasing our customer base,we could also incur increased losses because costs a

99、ssociated with entering into customer contracts are generally incurred up front,while customers are billed over the term of the contract generally through our usage-based pricing model.We do not expect to be profitable in 2014 and we cannot be certain that we will be able to attain profitability on

100、a quarterly or annual basis,or if we do,that we will sustain profitability.Our limited operating history makes it difficult to evaluate our current business and future prospects.Although we began our operations in March 2006,we did not begin generating substantial revenues until 2009.Our limited ope

101、rating history may make it difficult to evaluate our current business and our future prospects.We have encountered and will continue to encounter risks and difficulties frequently experienced by growing companies in rapidly developing and changing industries,including challenges in forecasting accur

102、acy,determining appropriate investments of our limited resources,market acceptance of our existing and future solutions,competition from established companies with greater financial and technical resources,acquiring and retaining customers,managing customer deployments and developing new solutions.O

103、ur current operations infrastructure may require changes in order for us to achieve profitability and scale our operations efficiently.For example,we may need to automate portions of our solution to decrease our costs,ensure our marketing infrastructure is designed to drive highly qualified leads co

104、st effectively and implement changes in our sales model to improve the predictability of our sales and reduce our sales cycle.If we fail to implement these changes on a timely basis or are unable to implement them due to factors beyond our control,our business may suffer.We cannot assure you that we

105、 will be successful in addressing these and other challenges we may face in the future.Our usage-based pricing model makes it difficult to forecast revenues from our current customers and future prospects.We have a usage-based pricing model where most of our fees are calculated as a percentage of cu

106、stomers advertising spend managed on our platform.This pricing model makes it difficult to accurately forecast revenues because our customers advertising spend managed by our platform may vary from month to month based on the variety of industries in which our advertisers operate,the seasonality of

107、those industries and fluctuations in our customers advertising budgets or other factors.Our contracts with our direct advertiser customers generally contain a minimum monthly fee,which is generally greater than one-half of our estimated monthly revenues from the customer at the time the contract is

108、signed,and,as a result,the monthly minimum may not be a good indicator of our revenues from that customer.In addition,advertisers that use our platform through our agency customers typically do not have a minimum monthly spend amount or a minimum term during which they must 8 ITEM 1A.RISK FACTORS Ta

109、ble of Contents Index to Financial Statements use our platform and,as a result,the ability to forecast revenues from these advertisers is difficult.Additionally,if we overestimate usage,we may incur additional expenses in adding infrastructure,without a commensurate increase in revenues,which would

110、harm our gross margins and other operating results.The market for digital advertising management solutions is relatively new and dependent on growth in various digital advertising channels.If this market develops more slowly or differently than we expect,our business,growth prospects and financial c

111、ondition would be adversely affected.The market for digital advertising management solutions such as ours is relatively new and these solutions may not achieve or sustain high levels of demand and market acceptance.While search and display advertising has been used successfully for several years,mar

112、keting via new digital advertising channels such as mobile and social media is not as well established.The future growth of our business could be constrained by both the level of acceptance and expansion of emerging digital advertising channels,as well as the continued use and growth of existing cha

113、nnels,such as search and display advertising.Even if these channels become widely adopted,advertisers and agencies may not make significant investments in solutions such as ours that help them manage their digital advertising spend across publisher platforms and advertising channels.It is difficult

114、to predict customer adoption rates,customer demand for our platform,the future growth rate and size of the digital advertising management solutions market or the entry of competitive solutions.Any expansion of the market for digital advertising management solutions depends on a number of factors,inc

115、luding the growth of the digital advertising market,the growth of social and mobile as advertising channels and the cost,performance and perceived value associated with digital advertising management solutions.If digital advertising management solutions do not achieve widespread adoption,or there is

116、 a reduction in demand for digital advertising caused by weakening economic conditions,decreases in corporate spending or otherwise,it could result in reduced usage,which could decrease revenues or otherwise adversely affect our business.If we are unable to maintain our relationships with,and access

117、 to,publishers,our business will suffer.We currently depend on relationships with various publishers,including Baidu,Bing,Criteo,Facebook,Google,Yandex and Yahoo!Japan.Our subscription services interface with these publishers platforms through APIs,such as the Google AdWords API.We are subject to th

118、e publishers standard API terms and conditions,which govern the use and distribution of data from these publishers platforms.Our business significantly depends on having access to these APIs,particularly the Google AdWords API,which the substantial majority of our customers use,on commercially reaso

119、nable terms and our business would be harmed if any of these publishers discontinue or limit access to their platforms,modify their terms of use or other policies or place additional restrictions on us as API users,or charge API license fees for API access.Moreover,some of these publishers,such as G

120、oogle,market competitive solutions for their platforms.Because the publishers control their APIs,they may develop competitive offerings that are not subject to the limits imposed on us through the API terms and conditions.Currently,restrictions in these API agreements limit our ability to implement

121、certain functionality,require us to implement functionality in a particular manner or require us to implement certain required minimum functionality,causing us to devote development resources to implement certain functionality that we would not otherwise include in our subscription services and to i

122、ncur costs for personnel to provide services to implement functionality that we are prohibited from automating.Publishers update their API terms of use from time to time and new versions of these terms could impose additional restrictions on us.In addition,publishers continually update their APIs an

123、d may update or modify functionality,which requires us to modify our software to accommodate these changes and to devote technical resources and personnel to these efforts which could otherwise be used to focus on other priorities.Any of these outcomes could cause demand for our products to decrease

124、,our research and development costs to increase,and our results of operations and financial condition to be harmed.Our growth depends in part on the success of our relationships with advertising agencies.Our future growth will depend,in part,on our ability to enter into successful relationships with

125、 advertising agencies.Identifying agencies and negotiating and documenting relationships with them requires significant time 9 Table of Contents Index to Financial Statements and resources.These relationships may not result in additional customers or enable us to generate significant revenues.Our co

126、ntracts for these relationships are typically non-exclusive and do not prohibit the agency from working with our competitors or from offering competing services.We generally bill agencies for their customers use of our platform,but the agencys customer has no direct contractual commitment to make pa

127、yment to us.Furthermore,some of these agency contracts include provisions whereby the agency is not liable for making payment to us for our subscription services if the agency does not receive a corresponding payment from its client on whose behalf the subscription services were rendered.These provi

128、sions may result in longer collections periods or our inability to collect payment for some of our subscription services.If we are unsuccessful in establishing or maintaining our relationships with these agencies on commercially reasonable terms,or if these relationships are not profitable for us,ou

129、r ability to compete in the marketplace or to grow our revenues could be impaired and our operating results would suffer.We may not be able to compete successfully against current and future competitors.The overall market for digital advertising management solutions is rapidly evolving,highly compet

130、itive,complex,fragmented,and subject to changing technology and shifting customer needs.We face significant competition in this market and we expect competition to intensify in the future.We currently compete with large,well-established companies,such as Adobe Systems Incorporated and Google Inc.(th

131、rough its wholly-owned subsidiary DoubleClick),and privately-held companies,such as Acquisio Inc.,which focuses solely on agencies,and Kenshoo Ltd.We also compete with in-house proprietary tools and custom solutions,including spreadsheets.Increased competition may result in reduced pricing for our s

132、olutions,longer sales cycles or a decrease of our market share,any of which could negatively affect our revenues and future operating results and our ability to grow our business.A number of competitive factors could cause us to lose potential sales or to sell our solutions at lower prices or at red

133、uced margins,including,among others:We cannot assure you that we will be able to compete successfully against current and future competitors.If we cannot compete successfully,our business,results of operations and financial condition could be negatively impacted.Our business depends on our customers

134、 continued willingness to manage advertising spend on our platform.In order for us to improve our operating results,it is important that our customers continue to manage their advertising spend on our platform,increase their usage and also purchase additional solutions from us.In the case of our dir

135、ect advertiser customers,we offer our solutions primarily through subscription contracts and generally bill customers over the related subscription period,which is generally one year or longer.During the term of their contracts,our direct advertiser customers generally have no obligation to maintain

136、 or increase their advertising spend on our platform beyond a specified minimum monthly fee,which is typically set at the time the contract is 10 potential customers may choose to develop or continue to use internal solutions rather than paying for our solutions or may choose to use a competitors so

137、lution that has different or additional technical capabilities;companies may enter our market by expanding their platforms or acquiring a competitor;some of our competitors,such as Adobe and Google,have greater financial,marketing and technical resources than we do,allowing them to leverage a larger

138、 installed customer base,adopt more aggressive pricing policies,and devote greater resources to the development,promotion and sale of their products and services than we can;and companies marketing search,social,display,mobile or web analytics services could bundle digital advertising management sol

139、utions or offer such products at a lower price as part of a larger product sale.Table of Contents Index to Financial Statements signed and is generally greater than half of the monthly amount we anticipate the customer will spend.Our direct advertiser customers have no renewal obligation after the i

140、nitial or then-current renewal subscription period expires,and even if customers renew contracts,they may decrease the level of their digital advertising spend managed through our platform,resulting in lower revenues from that customer.Advertisers that we serve through our arrangements with our adve

141、rtising agencies generally do not have any contractual commitment to use our platform.Our customers usage may decline or fluctuate as a result of a number of factors,including,but not limited to,their satisfaction with our platform and our customer support,the frequency and severity of outages,the p

142、ricing of our,or competing,solutions,the effects of global economic conditions and reductions in spending levels or changes in our customers strategies regarding digital advertising.Due to our limited historical experience,we may not be able to accurately predict future usage trends.If our customers

143、 renew on less favorable terms or reduce their advertising spend on our platform,our revenues may grow more slowly than expected or decline.We incur upfront costs associated with onboarding advertisers to our platform and may not recoup our investment if we do not maintain the advertiser relationshi

144、p over time.Our operating results may be negatively affected if we are unable to recoup our upfront costs for onboarding new advertisers to our platform.Upfront costs when adding new advertisers generally include sales commissions for our sales force,expenses associated with entering customer data i

145、nto our platform and other implementation-related costs.Because our customers,including direct advertisers and agencies,are billed over the term of the contract,if new customers sign contracts with short initial subscription periods and do not renew their subscriptions,or otherwise do not continue t

146、o use our platform to a level that generates revenues in excess of our upfront expenses,our operating results could be negatively impacted.In cases in which the implementation process is particularly complex,the revenues resulting from the customer under our contract may not cover the upfront invest

147、ment,so if a significant number of these customers do not renew their contracts,it could negatively affect our operating results.Because we generally bill our customers over the term of the contract,near term decline in new or renewed subscriptions may not be reflected immediately in our operating r

148、esults.Most of our revenues in each quarter are derived from contracts entered into with our customers during previous quarters.Consequently,a decline in new or renewed subscriptions in any one quarter may not be fully reflected in our revenues for that quarter.Such declines,however,would negatively

149、 affect our revenues in future periods and the effect of significant downturns in sales and market acceptance of our solutions,and potential changes in our rate of renewals or renewal terms,may not be fully reflected in our results of operations until future periods.In addition,we may be unable to a

150、djust our cost structure rapidly,or at all,to take account of reduced revenues.Our subscription model also makes it difficult for us to rapidly increase our total revenues through additional sales in any period,as revenues from new customers must be earned over the applicable subscription term based

151、 on the value of their monthly advertising spend.We have been dependent on our customers use of search advertising.Any decrease in the use of search advertising or our inability to further penetrate mobile,social and display advertising channels would harm our business,growth prospects,operating res

152、ults and financial condition.Historically,our customers have primarily used our solutions for managing their search advertising,including mobile search advertising,and the substantial majority of our revenues are derived from advertisers that use our platform to manage their search advertising.We ex

153、pect that search advertising will continue to be the primary channel used by our customers for the foreseeable future.Should our customers lose confidence in the value or effectiveness of search advertising,the demand for our solutions may decline.In addition,our failure to achieve market acceptance

154、 of our solution for the management of mobile,social and display advertising spend would harm our growth prospects,operating results and financial condition.11 Table of Contents Index to Financial Statements Our sales cycle can be long and unpredictable and require considerable time and expense,whic

155、h may cause our operating results to fluctuate.The sales cycle for our solutions,from initial contact with a potential lead to contract execution and implementation,varies widely by customer,but is typically one to nine months.Some of our customers undertake a significant evaluation process that fre

156、quently involves not only our solutions but also those of our competitors,which has in the past resulted in extended sales cycles.Our sales efforts involve educating our customers about the use,technical capabilities and benefits of our platform.In addition,under certain circumstances,we sometimes o

157、ffer an initial term,typically of a few months in duration,to new customers who may terminate their subscription at any time during this initial period before the fixed term contract commences.We have no assurance that the substantial time and money spent on our sales efforts will produce any sales.

158、If our sales efforts result in a new customer subscription,the customer may terminate its subscription during the initial period,after we have incurred the expenses associated with entering the customers data in our platform and related training and support.If sales expected from a customer are not

159、realized in the time period expected or not realized at all,or if a customer terminates during the initial period,our business,operating results and financial condition could be adversely affected.Material defects or errors in our software platform could harm our reputation,result in significant cos

160、ts to us and impair our ability to sell our subscription services.The software applications underlying our subscription services are inherently complex and may contain material defects or errors,which may cause disruptions in availability,misallocation of advertising spend or other performance probl

161、ems.Any such errors,defects,disruptions in service or other performance problems with our software platform could negatively impact our customers businesses or the success of their advertising campaigns and cause harm to our reputation.If we have any errors,defects,disruptions in service or other pe

162、rformance problems with our software platform,customers could elect not to renew or reduce their usage or delay or withhold payment to us,which could result in an increase in our provision for doubtful accounts or an increase in the length of collection cycles for accounts receivable.Errors,defects,

163、disruptions in service or other performance problems could also result in customers making warranty or other claims against us,our giving credits to our customers toward future advertising spend or costly litigation.As a result,material defects or errors in our platform could have a material adverse

164、 impact on our business and financial performance.The costs incurred in correcting any material defects or errors in our software platform may be substantial and could adversely affect our operating results.After the release of new versions of our software,defects or errors may be identified from ti

165、me to time by our internal team and by our customers.We implement bug fixes and upgrades as part of our regularly scheduled system maintenance.If we do not complete this maintenance according to schedule or if customers are otherwise dissatisfied with the frequency and/or duration of our maintenance

166、 services,customers could elect not to renew,or delay or withhold payment to us,or cause us to issue credits,make refunds or pay penalties.We derive our revenues from a single software platform and any factor adversely affecting subscriptions to our platform could harm our business and operating res

167、ults.We derive our revenues from sales of a single software platform.As such,any factor adversely affecting subscriptions to our platform,including product release cycles,market acceptance,product competition,performance and reliability,reputation,price competition,and economic and market conditions

168、,could harm our business and operating results.We primarily use a single third-party data center to deliver our services.Any disruption of service at this facility could harm our business.We manage a significant portion of our services and serve substantially all of our customers from a single third

169、-party data center facility.While we control the actual computer,network and storage systems upon which 12 Table of Contents Index to Financial Statements our platform runs,and deploy them to the data center facility,we do not control the operation of the facility.The owner of the facility has no ob

170、ligation to renew the agreement with us on commercially reasonable terms,or at all.If we are unable to renew the agreement on commercially reasonable terms,we may be required to transfer to a new facility or facilities,and we may incur significant costs and possible service interruption in connectio

171、n with doing so.The facility is vulnerable to damage or service interruption resulting from human error,intentional bad acts,earthquakes,hurricanes,floods,fires,war,terrorist attacks,power losses,hardware failures,systems failures,telecommunications failures and similar events.Moreover,while we have

172、 a disaster recovery plan in place,we do not maintain a“hot failover”instance of our software platform permitting us to immediately switch over in the event of damage or service interruption at our data center.The occurrence of a natural disaster or an act of terrorism,any outages or vandalism or ot

173、her misconduct,or a decision to close the facility without adequate notice or other unanticipated problems could result in lengthy interruptions in our services.Any changes in service levels at the facility or any errors,defects,disruptions or other performance problems at or related to the facility

174、 that affect our services could harm our reputation and may damage our customers businesses.Interruptions in our services might reduce our revenues,subject us to potential liability,or result in reduced usage of our platform.In addition,some of our customer contracts require us to issue credits for

175、downtime in excess of certain levels and in some instances give our customers the ability to terminate their subscriptions.We also depend on third-party Internet-hosting providers and continuous and uninterrupted access to the Internet through third-party bandwidth providers to operate our business.

176、If we lose the services of one or more of our Internet-hosting or bandwidth providers for any reason or if their services are disrupted,for example due to viruses or“denial-of-service”or other attacks on their systems,or due to human error,intentional bad acts,power loss,hardware failures,telecommun

177、ications failures,fires,wars,terrorist attacks,floods,earthquakes,hurricanes,tornadoes or similar events,we could experience disruption in our ability to offer our solutions or we could be required to retain the services of replacement providers,which could increase our operating costs and harm our

178、business and reputation.If we cannot efficiently implement our solutions for customers,we may lose customers.Our customers have a variety of different data formats,enterprise applications and infrastructure and our platform must support our customers data formats and integrate with complex enterpris

179、e applications and infrastructures.If our platform does not currently support a customers required data format or appropriately integrate with a customers applications and infrastructure,then we may choose to configure our platform to do so,which would increase our expenses.Additionally,we do not co

180、ntrol our customers implementation schedules.As a result,as we have experienced in the past,if our customers do not allocate internal resources necessary to meet their implementation responsibilities or if we face unanticipated implementation difficulties,the implementation may be delayed.Further,in

181、 the past,our implementation capacity has at times constrained our ability to successfully implement our solutions for our customers in a timely manner,particularly during periods of high demand.If the customer implementation process is not executed successfully or if execution is delayed,we could i

182、ncur significant costs,customers could become dissatisfied and decide not to increase usage of our platform,not to use our platform beyond an initial period prior to their term commitment and revenue recognition could be delayed.In addition,competitors with more efficient operating models with lower

183、 implementation costs could penetrate our customer relationships.Additionally,large customers may request or require specific features or functions unique to their particular business processes,which increase our upfront investment in sales and deployment efforts and the revenues resulting from the

184、customers under our typical contract length may not cover the upfront investments.If prospective large customers require specific features or functions that we do not offer,then the market for our solution will be more limited and our business could suffer.In addition,supporting large customers coul

185、d require us to devote significant development services and support personnel and strain our personnel resources and 13 Table of Contents Index to Financial Statements infrastructure.If we are unable to address the needs of these customers in a timely fashion or further develop and enhance our solut

186、ion,these customers may not renew their subscriptions,seek to terminate their relationship with us,renew on less favorable terms,or reduce their advertising spend on our platform.If any of these were to occur,our revenues may decline and our operating results could be adversely affected.If we are un

187、able to maintain or expand our sales and marketing capabilities,we may not be able to generate anticipated revenues.Increasing our customer base and achieving broader market acceptance of our software platform will depend to a significant extent on our ability to expand our sales and marketing opera

188、tions and activities.We expect to be substantially dependent on our sales force to obtain new customers.We currently plan to expand our sales team in order to increase revenues from new and existing customers and to further penetrate our existing markets and expand into new markets.Our solutions req

189、uire a sophisticated sales force with specific sales skills and technical knowledge.Competition for qualified sales personnel is intense,and we may not be able to retain our existing sales personnel or attract,integrate or retain sufficient highly qualified sales personnel.Our ability to achieve rev

190、enue growth in the future will depend,in large part,on our success in recruiting,training and retaining sufficient numbers of sales personnel.These new employees require significant training and experience before they achieve full productivity.For internal planning purposes,we assume that it will ta

191、ke approximately three months before a newly hired sales representative is fully trained and productive in selling our solutions.This amount of time may be longer for sales personnel focused on new geographies or specific market segments.As a result,the cost of hiring and carrying new representative

192、s cannot be offset by the revenues they produce for a significant period of time.Our recent hires and planned hires may not become productive as quickly as we would like,and we may not be able to hire or retain sufficient numbers of qualified individuals in the markets where we do business.Our busin

193、ess will be seriously harmed if these expansion efforts do not work as planned or generate a corresponding significant increase in revenues.Any failure to offer high-quality technical support services may adversely affect our relationships with our customers and harm our financial results.Our custom

194、ers depend on our support organization to resolve any technical issues relating to our solutions.In addition,our sales process is highly dependent on the quality of our solutions,our business reputation and on strong recommendations from our existing customers.Any failure to maintain high-quality te

195、chnical support,or a market perception that we do not maintain high-quality support,could harm our reputation,adversely affect our ability to sell our solutions to existing and prospective customers,and harm our business,operating results and financial condition.We offer technical support services w

196、ith our solutions and may be unable to respond quickly enough to accommodate short-term increases in customer demand for support services.We also may be unable to modify the format of our support services to compete with changes in support services provided by competitors.It is difficult to predict

197、customer demand for technical support services and if customer demand increases significantly,we may be unable to provide satisfactory support services to our customers.Additionally,increased customer demand for these services,without corresponding revenues,could increase costs and adversely affect

198、our operating results.If our security measures are breached or unauthorized access to customer data or our data is otherwise obtained,our solutions may be perceived as not being secure,customers may reduce the use of or stop using our solutions and we may incur significant liabilities.Security breac

199、hes could result in the loss of information,litigation,indemnity obligations and other liability.While we have security measures in place,our systems and networks are subject to ongoing threats and therefore these security measures may be breached as a result of third-party action,including cyber-at

200、tacks or other 14 Table of Contents Index to Financial Statements intentional misconduct by computer hackers,employee error,malfeasance or otherwise.This could result in one or more third parties obtaining unauthorized access to our customers data or our data,including intellectual property and othe

201、r confidential business information.Because techniques used to obtain unauthorized access or to sabotage systems change frequently and generally are not recognized until launched against a target,we may be unable to anticipate these techniques or to implement adequate preventative measures.Third par

202、ties may also attempt to fraudulently induce employees or customers into disclosing sensitive information such as user names,passwords or other information in order to gain access to our customers data or our data,including intellectual property and other confidential business information.If an actu

203、al or perceived breach of our security occurs,the market perception of the effectiveness of our security measures could be harmed,we could lose potential sales and existing customers or we could incur other liabilities,which could adversely affect our business.We must develop and introduce enhanceme

204、nts and new features that achieve market acceptance or that keep pace with technological developments to remain competitive in our evolving industry.We operate in a dynamic market characterized by rapidly changing technologies and industry and legal standards.The introduction of new Revenue Acquisit

205、ion Management solutions by our competitors,the market acceptance of solutions based on new or alternative technologies,or the emergence of new industry standards could render our platform obsolete.Our ability to compete successfully,attract new customers and increase revenues from existing customer

206、s depends in large part on our ability to enhance and improve our existing Revenue Acquisition Management platform and to continually introduce or acquire new features that are in demand by the market we serve.We also must update our software to reflect changes in publishers APIs and terms of use.Th

207、e success of any enhancement or new solution depends on several factors,including timely completion,adequate quality testing,appropriate introduction and market acceptance.Any new platform or feature that we develop or acquire may not be introduced in a timely or cost-effective manner,may contain de

208、fects or may not achieve the broad market acceptance necessary to generate significant revenues.If we are unable to anticipate or timely and successfully develop or acquire new offerings or features or enhance our existing platform to meet customer requirements,our business and operating results wil

209、l be adversely affected.Our growth depends in part on the success of our strategic relationships with third parties.Our future growth will depend on our ability to enter into successful strategic relationships with third parties.For example,we are seeking to establish relationships with third partie

210、s to develop integrations with complementary technology and content.These relationships may not result in additional customers or enable us to generate significant revenues.Identifying partners and negotiating and documenting relationships with them require significant time and resources.Our contrac

211、ts for these relationships are typically non-exclusive and do not prohibit the other party from working with our competitors or from offering competing services.If we are unsuccessful in establishing or maintaining our relationships with these third parties,our ability to compete in the marketplace

212、or to grow our revenues could be impaired and our operating results would suffer.As a result of our customers increased usage of our software platform,we will need to continually improve our hosting infrastructure to avoid service interruptions or slower system performance.We have experienced contin

213、ued growth in the number of advertisers,transactions and data that our hosting infrastructure supports.We seek to maintain sufficient excess capacity in our infrastructure to meet the needs of all of our customers.We also seek to maintain excess capacity to facilitate the rapid provision of new cust

214、omer deployments and the expansion of existing customer deployments.For example,if we secure a large customer or a group of customers that require significant amounts of bandwidth or storage,we may need to increase bandwidth,storage,power or other elements of our application architecture and our inf

215、rastructure,and our existing systems may not be able to scale in a manner satisfactory to our existing or prospective customers.The amount of infrastructure needed to support our customers is based on our estimates of anticipated usage.If we were to experience unforeseen increases in usage,we could

216、be required to increase our infrastructure 15 Table of Contents Index to Financial Statements investments resulting in increased costs or reduced gross margins,and if we do not accurately predict our infrastructure capacity requirements,our customers could experience service outages that may subject

217、 us to financial penalties and liabilities and result in customer losses.If our hosting infrastructure capacity fails to keep pace with increased sales,customers may experience service interruptions or slower system performance as we seek to obtain additional capacity,which could harm our reputation

218、 and adversely affect our revenue growth.As use of our software platform grows and as customers use it for more complicated tasks,we will need to devote additional resources to improving our application architecture and our infrastructure in order to maintain the performance of our software platform

219、.We may need to incur additional costs to upgrade or expand our computer systems and architecture in order to accommodate increased demand if our systems cannot handle current or higher volumes of usage.In addition,increasing our systems and infrastructure in advance of new customers would cause us

220、to have increased cost of revenues,which can adversely affect our gross margins until we increase revenues that are spread over the increased costs.Any failure to protect our intellectual property rights could impair our ability to protect our proprietary technology and our brand.Our success and abi

221、lity to compete depend in part upon our intellectual property.We primarily rely on a combination of copyright,trade secret and trademark laws,as well as confidentiality procedures and contractual restrictions with our employees,customers,partners and others to establish and protect our intellectual

222、property rights.However,the steps we take to protect our intellectual property rights may be inadequate or we may be unable to secure intellectual property protection for all of our solutions.In particular,we have two issued U.S.patents.If we are unable to protect our intellectual property,our compe

223、titors could use our intellectual property to market products and services similar to ours and our ability to compete effectively would be impaired.Moreover,others may independently develop technologies that are competitive to ours or infringe our intellectual property.The enforcement of our intelle

224、ctual property rights depends on our legal actions against these infringers being successful,but we cannot be sure these actions will be successful,even when our rights have been infringed.In addition,defending our intellectual property rights might entail significant expense and diversion of manage

225、ment resources.Any of our intellectual property rights may be challenged by others or invalidated through administrative processes or litigation.Any patents issued in the future may not provide us with competitive advantages or may be successfully challenged by third parties.Furthermore,legal standa

226、rds relating to the validity,enforceability and scope of protection of intellectual property rights are uncertain.Effective protection of our intellectual property may not be available to us in every country in which our solutions are available.The laws of some foreign countries may not be as protec

227、tive of intellectual property rights as those in the United States,and mechanisms for enforcement of intellectual property rights may be inadequate.Accordingly,despite our efforts,we may be unable to prevent third parties from infringing upon or misappropriating our intellectual property.We might be

228、 required to spend significant resources to monitor and protect our intellectual property rights,and our efforts to enforce our intellectual property rights may be met with defenses,counterclaims and countersuits attacking the validity and enforceability of our intellectual property rights.Litigatio

229、n to protect and enforce our intellectual property rights could be costly,time-consuming and distracting to management,whether or not it is resolved in our favor,and could ultimately result in the impairment or loss of portions of our intellectual property.We could incur substantial costs as a resul

230、t of any claim of infringement of another partys intellectual property rights.In recent years,there has been significant litigation in the United States involving patents and other intellectual property rights.Companies in the Internet and technology industries are increasingly bringing and 16 Table

231、 of Contents Index to Financial Statements becoming subject to suits alleging infringement of proprietary rights,particularly patent rights,and our competitors may hold patents or have pending patent applications,which could be related to our business.These risks have been amplified by the increase

232、in third parties,which we refer to as non-practicing entities,whose sole primary business is to assert such claims.We have received in the past,and expect to receive in the future,notices that claim we or our customers using our solutions have misappropriated or misused other parties intellectual pr

233、operty rights.If we are sued by a third party that claims that our technology infringes its rights,the litigation could be expensive and could divert our management resources.We do not currently have an extensive patent portfolio of our own,which may limit the defenses available to us in any such li

234、tigation.In addition,in most instances,we have agreed to indemnify our customers against certain claims that our subscription services infringe the intellectual property rights of third parties.Our business could be adversely affected by any significant disputes between us and our customers as to th

235、e applicability or scope of our indemnification obligations to them.The results of any intellectual property litigation to which we might become a party,or for which we are required to provide indemnification,may require us to do one or more of the following:If we are required to make substantial pa

236、yments or undertake any of the other actions noted above as a result of any intellectual property infringement claims against us or any obligation to indemnify our customers for such claims,such payments or costs could have a material adverse effect upon our business and financial results.Our use of

237、 open source technology could impose limitations on our ability to commercialize our software platform.We use open source software in our platform.Some open source software licenses require users who distribute open source software as part of their software to publicly disclose all or part of the so

238、urce code to such software and/or make available any derivative works of the open source code on unfavorable terms or at no cost.The terms of various open source licenses have not been interpreted by the U.S.courts,and there is a risk that such licenses could be construed in a manner that imposes un

239、anticipated conditions or restrictions on our ability to market our software platform.While we monitor our use of open source software and try to ensure that none is used in a manner that would require us to disclose our source code or that would otherwise breach the terms of an open source agreemen

240、t,such use could inadvertently occur and we may be required to release our proprietary source code,pay damages for breach of contract,re-engineer our applications,discontinue sales in the event re-engineering cannot be accomplished on a timely basis or take other remedial action that may divert reso

241、urces away from our development efforts,any of which could cause us to breach customer contracts,harm our reputation,result in customer losses or claims,increase our costs or otherwise adversely affect our business and operating results.If the market for cloud-based software develops more slowly tha

242、n we expect or declines,our business could be harmed.The cloud computing market is not as mature as the market for on-premise software,and it is uncertain whether cloud computing will achieve and sustain high levels of customer demand and market acceptance.If other cloud computing providers experien

243、ce security incidents,loss of customer data,disruptions in delivery or other problems,the market for cloud computing as a whole,including our solution,may be negatively affected.If cloud computing does not achieve widespread adoption,or there is a reduction in demand for cloud computing 17 cease off

244、ering or using technologies that incorporate the challenged intellectual property;make substantial payments for legal fees,settlement payments or other costs or damages;obtain a license,which may not be available on reasonable terms,to sell or use the relevant technology;or redesign technology to av

245、oid infringement.Table of Contents Index to Financial Statements caused by a lack of customer acceptance,technological challenges,weakening economic conditions,security or privacy concerns,competing technologies and products,decreases in corporate spending or otherwise,it could result in decreased r

246、evenues or increased expenses from development of alternative on-premise solutions and our business could be adversely affected.Because our long-term success depends,in part,on our ability to expand our sales to customers outside the United States,our business will be susceptible to risks associated

247、 with international operations.We currently maintain offices and/or have sales personnel in Australia,Canada,China,England,France,Germany,Ireland,Japan and Singapore,as well as the United States.As we continue to expand our customer base outside the United States,our business will be increasingly su

248、sceptible to risks associated with international operations.However,we have a limited operating history outside the United States,and our ability to manage our business and conduct our operations internationally requires considerable management attention and resources and is subject to particular ch

249、allenges of supporting a rapidly growing business in an environment of diverse cultures,languages,customs,tax laws,legal systems,alternate dispute systems and regulatory systems.The risks and challenges associated with international expansion include:We have limited experience marketing,selling and

250、supporting our subscription services internationally,which increases the risk that any potential future expansion efforts that we may undertake will not be successful.Fluctuations in the exchange rate of foreign currencies could result in currency transactions losses.We currently have foreign sales

251、denominated in Australian Dollars,British Pound Sterling,Canadian Dollars,Chinese Yuan,Euros,Japanese Yen and Singapore Dollars.In addition,we incur a portion of our operating expenses in the currencies of the countries where we have offices.We face exposure to adverse movements in currency exchange

252、 rates,which may cause our revenues and operating results to differ materially from expectations.A decline in the U.S.dollar relative to foreign currencies would increase our non-U.S.revenues when translated into U.S.dollars.Conversely,if the U.S.dollar strengthens relative to foreign currencies,our

253、 non-U.S.revenues would be adversely affected.Our operating results could be negatively impacted depending on the amount of expense denominated in foreign currencies.As exchange rates vary,18 the need to support and integrate with local publishers and partners;continued localization of our platform,

254、including translation into foreign languages and associated expenses;competition with companies that have greater experience in the local markets than we do or who have pre-existing relationships with potential customers in those markets;compliance with multiple,potentially conflicting and changing

255、governmental laws and regulations,including employment,tax,privacy and data protection laws and regulations;compliance with anti-bribery laws,including compliance with the Foreign Corrupt Practices Act;difficulties in invoicing and collecting in foreign currencies and associated foreign currency exp

256、osure;difficulties in staffing and managing foreign operations and the increased travel,infrastructure and legal compliance costs associated with international operations;different or lesser protection of our intellectual property rights;difficulties in enforcing contracts and collecting accounts re

257、ceivable,longer payment cycles and other collection difficulties;restrictions on repatriation of earnings;and regional economic and political conditions.Table of Contents Index to Financial Statements revenues,cost of revenues,operating expenses and other operating results,when translated,may differ

258、 materially from expectations.In addition,our revenues and operating results are subject to fluctuation if our mix of U.S.and foreign currency denominated transactions or expenses changes in the future because we do not currently hedge our foreign currency exposure.Even if we were to implement hedgi

259、ng strategies to mitigate foreign currency risk,these strategies might not eliminate our exposure to foreign exchange rate fluctuations and would involve costs and risks of their own,such as ongoing management time and expertise,external costs to implement the strategies and potential accounting imp

260、lications.If we fail to develop widespread brand awareness cost-effectively,our business may suffer.We believe that developing and maintaining widespread awareness of our brand in a cost-effective manner is critical to achieving widespread acceptance of our solution and attracting new customers.We e

261、xpect sales and marketing expenses to increase as a result of our marketing and brand promotion activities.We may not generate customer awareness or increase revenues enough to offset the increased expenses we incur in building our brand.If we fail to successfully promote and maintain our brand,or i

262、ncur substantial marketing and sales expenses,which are not offset by increased revenues,we may fail to attract or retain customers necessary to realize a sufficient return on our brand-building efforts,or to achieve the widespread brand awareness that is essential for broad customer adoption of our

263、 solution.Unfavorable conditions in the market for digital advertising or the global economy or reductions in digital advertising spend could limit our ability to grow our business and negatively affect our operating results.Revenue growth and potential profitability of our business depends on digit

264、al advertising spend by advertisers in the markets we serve.Our operating results may vary based on changes in the market for digital advertising or the global economy.To the extent that weak economic conditions cause our customers and potential customers to freeze or reduce their advertising budget

265、s,particularly digital advertising,demand for our solution may be negatively affected.Historically,economic downturns have resulted in overall reductions in advertising spend.If economic conditions deteriorate,including as the result of concerns over future U.S.budgetary negotiations,our customers a

266、nd potential customers may elect to decrease their advertising budgets or defer or reconsider software and service purchases,which would limit our ability to grow our business and negatively affect our operating results.Our business and operations have experienced rapid growth in recent periods,whic

267、h has placed,and may continue to place,significant demands on our management and infrastructure.If we fail to manage our growth effectively,we may be unable to execute our business plan,maintain high levels of service or address competitive challenges adequately.We increased our number of full-time

268、employees from 285 as of December 31,2011 to 500 as of December 31,2013.Our growth has placed,and may continue to place,a significant strain on our managerial,administrative,operational,financial and other resources.We intend to further expand our overall headcount and operations both domestically a

269、nd internationally,with no assurance that our business or revenues will continue to grow.Creating a global organization and managing a geographically dispersed workforce will require substantial management effort,the allocation of valuable management resources and significant additional investment i

270、n our infrastructure.We will be required to continue to improve our operational,financial and management controls and our reporting procedures and we may not be able to do so effectively.Further,to accommodate our expected growth we must continually improve and maintain our technology,systems and ne

271、twork infrastructure.As such,we may be unable to manage our expenses effectively in the future,which may negatively impact our gross margins or operating expenses in any particular quarter.If we fail to manage our anticipated growth or change in a manner that does not preserve the key aspects of our

272、 corporate culture,the quality of our solutions may suffer,which could negatively affect our brand and reputation and harm our ability to retain and attract customers.19 Table of Contents Index to Financial Statements Our business depends on retaining and attracting qualified management and technica

273、l personnel.Our success depends upon the continued service of our founders and senior management team and key technical employees,as well as our ability to continue to attract and retain additional highly qualified management and operating personnel.We do not maintain key person life insurance polic

274、ies on any of our employees.Each of our founders,executive officers,key technical personnel and other employees could terminate his or her relationship with us at any time.Our business also requires skilled technical and sales personnel,who are in high demand and are often subject to competing offer

275、s.As we expand into additional geographic markets,we will require personnel with expertise in these new areas.Competition for qualified employees is intense in our industry and particularly in San Francisco,California,where most of our technical employees are based.The loss of our founders or any ot

276、her member of our senior management team or,even a few qualified employees,or an inability to retain,attract,relocate and motivate additional highly skilled employees required for the planned expansion of our business,could delay or prevent the achievement of our business objectives and could materi

277、ally harm our business and our customer relationships.Domestic and foreign government regulation and enforcement of data practices and data tracking technologies is expansive,not clearly defined and rapidly evolving.Such regulation could directly restrict portions of our business or indirectly affec

278、t our business by constraining our customers use of our platform or limiting the growth of our markets.Federal,state,municipal and/or foreign governments and agencies have adopted and could in the future adopt,modify,apply or enforce laws,policies,and regulations covering user privacy,data security,

279、technologies such as cookies that are used to collect,store and/or process data,the taxation of products and services,unfair and deceptive practices,and/or the collection,use,processing,transfer,storage and/or disclosure of data associated with a unique individual.The categories of data regulated un

280、der these laws vary widely and are often ill-defined and subject to new applications or interpretation by regulators.Our subscription services enable our customers to collect,manage and store data regarding the measurement and valuation of their digital advertising and marketing campaigns,which may

281、include data that is directly or indirectly obtained or derived through the activities of online or mobile visitors.The uncertainty and inconsistency among these laws,coupled with a lack of guidance as to how these laws will be applied to current and emerging Internet and mobile analytics technologi

282、es,creates a risk that regulators,lawmakers or other third parties,such as potential plaintiffs,may assert claims,pursue investigations or audits,or engage in civil or criminal enforcement.These actions could limit the market for our subscription services or impose burdensome requirements on our ser

283、vices and/or customers use of our services,thereby rendering our business unprofitable.Some features of our subscription services use cookies,which trigger the data protection requirements of certain foreign jurisdictions,such as the EU Cookie Directive.In addition,although our subscription services

284、 do not involve the collection or use of personally identifiable information from visitors,our services collect anonymous data about visitors interactions with our advertiser clients that may be subject to regulation under current or future laws or regulations.If our privacy or data security measure

285、s fail to comply with these current or future laws and regulations in any of the jurisdictions in which we collect information,we may be subject to litigation,regulatory investigations,civil or criminal enforcement,audits or other liabilities in such jurisdictions,or our advertisers may terminate th

286、eir relationships with us.This area of the law is currently under intense government scrutiny and many governments,including the U.S.government,are considering a variety of proposed regulations that would restrict or impact the conditions under which data obtained from or through the activities of v

287、isitors could be collected,processed or stored.In addition,regulators such as the Federal Trade Commission and the California Attorney General are continually proposing new regulations and interpreting and applying existing regulations in new ways.Changes to existing laws or new laws regulating the

288、solicitation,collection or processing of personal and consumer information,truth-in-advertising and consumer protection could affect our customers utilization of digital advertising and marketing,potentially reducing demand for our subscription services,or impose restrictions that make it more diffi

289、cult or expensive for us to provide our services.20 Table of Contents Index to Financial Statements If legislation dampens the growth in web and mobile usage or access to the Internet,our results of operations could be harmed.Legislation enacted in the future could dampen the growth in web and mobil

290、e usage and decrease its acceptance as a medium of communications and commerce or result in increased adoption of new modes of communication and commerce that may not be serviced by our products.In addition,government agencies or private organizations may begin to impose taxes,fees or other charges

291、for accessing the Internet,which could result in slower growth or a decrease in ecommerce,use of social media and/or use of mobile devices.Any of these outcomes could cause demand for our platform to decrease,our costs to increase,and our results of operations and financial condition to be harmed.If

292、 our customers fail to abide by applicable privacy laws or to provide adequate notice and/or obtain consent from online or mobile visitors,we could be subject to litigation or enforcement action or reduced demand for our services.Industry self-regulatory standards or technologies may be implemented

293、in the future that could affect demand for our platform and our ability to access data we use to provide our platform.Our customers utilize our services to support and measure their direct interactions with visitors and we must rely on our customers to implement and administer any notice or choice m

294、echanisms required under applicable laws.If customers fail to abide by these laws,it could result in litigation or regulatory or enforcement action against our customers or against us directly.In addition,self-regulatory organizations(such as the Network Advertising Initiative)to which our customers

295、 may belong may impose opt-in or opt-out requirements on our customers,which may in the future require our customers to provide various mechanisms for users to opt-in or opt-out of the collection of any data,including anonymous data,with respect to such users web or mobile activities.The online and/

296、or mobile industries may adopt technical or industry standards or federal,state,local or foreign laws may be enacted that allow users to opt-in or opt-out of data that is necessary to our business.In particular,over the past three years,some government regulators and privacy advocates have suggested

297、 creating a“Do Not Track”standard that would allow users to express a preference,independent of cookie setting settings in their browser,not to have website browsing recorded.All the major internet browsers have implemented some version of a“Do Not Track”setting and the“Do-Not-Track Online Act of 20

298、13”was introduced in the United States Senate in February 2013.Furthermore,publishers may implement alternative tracking technologies that make it more difficult to access the data necessary to our business or make it more difficult for us to compete with the publishers own advertising management so

299、lutions.If any of these events were to occur in the future,it could have a material effect on our ability to provide services and for our customers to collect the data that is necessary to use our services.Our revenues may be adversely affected if we are required to charge sales taxes in additional

300、jurisdictions or other taxes for our solutions.We collect or have imposed upon us sales or other taxes related to the solutions we sell in certain states and other jurisdictions.Additional states,countries or other jurisdictions may seek to impose sales or other tax collection obligations on us in t

301、he future,or states or jurisdictions in which we already pay tax may increase the amount of taxes we are required to pay.A successful assertion by any state,country or other jurisdiction in which we do business that we should be collecting sales or other taxes on the sale of our products and service

302、s could,among other things,create significant administrative burdens for us,result in substantial tax liabilities for past sales,discourage clients from purchasing solutions from us or otherwise substantially harm our business and results of operations.We may experience quarterly fluctuations in our

303、 operating results due to a number of factors which make our future results difficult to predict and could cause our operating results to fall below expectations or our guidance.Our quarterly operating results may fluctuate due to a variety of factors,many of which are outside of our control.As a re

304、sult,comparing our operating results on a period-to-period basis may not be meaningful.You 21 Table of Contents Index to Financial Statements should not rely on our past results as indicative of our future performance.If our revenues or operating results fall below the expectations of investors or s

305、ecurities analysts,or below any guidance we may provide to the market,the price of our common stock could decline substantially.In addition to other risk factors listed in this section,factors that may affect our quarterly operating results include the following:Based upon all of the factors describ

306、ed above,we have a limited ability to forecast our future revenues,costs and expenses,and as a result,our operating results may from time to time fall below our estimates or the expectations of public market analysts and investors.We might require additional capital to support business growth,and th

307、is capital might not be available on acceptable terms,if at all.We intend to continue to make investments to support our business growth and may require additional funds to respond to business challenges,including the need to develop new features or enhance our existing platform,improve our operatin

308、g infrastructure or acquire complementary businesses and technologies.Accordingly,we may need to engage in equity or debt financings to secure additional funds.If we raise additional funds through further issuances of equity or convertible debt securities,our existing stockholders could suffer signi

309、ficant dilution,and any new equity securities we issue could have rights,preferences and privileges superior to those of holders of our common stock.Any debt financing secured by us in the future could involve restrictive covenants relating to our capital raising activities and other financial and o

310、perational matters,which may make it more difficult for us to obtain additional capital and to pursue business opportunities,including potential acquisitions.In addition,we may not be able to obtain additional financing on terms favorable to us,if at all.If we are unable to obtain adequate financing

311、 or financing on terms satisfactory to us,when we require it,our ability to continue to support our business growth and to respond to business challenges could be significantly impaired.22 the level of advertising spend managed through our platform for a particular quarter;customer renewal rates,and

312、 the pricing and usage of our platform in any renewal term;demand for our platform and the size and timing of our sales;customers delaying purchasing decisions in anticipation of new releases by us or of new products by our competitors;network outages or security breaches and any associated expenses

313、;changes in the competitive dynamics of our industry,including consolidation among competitors or customers;market acceptance of our current and future solutions;changes in spending on digital advertising or information technology and software by our current and/or prospective customers;budgeting cy

314、cles of our customers;our potentially lengthy sales cycle;our ability to control costs,including our operating expenses;the amount and timing of infrastructure costs and operating expenses related to the maintenance and expansion of our business,operations and infrastructure;foreign currency exchang

315、e rate fluctuations;and general economic and political conditions in our domestic and international markets.Table of Contents Index to Financial Statements We will selectively pursue acquisitions of complementary businesses and technologies,which could divert our managements attention,result in addi

316、tional dilution to our stockholders and otherwise disrupt our operations and adversely affect our operating results.We will selectively pursue acquisitions of complementary businesses and technologies that we believe could complement or expand our applications,enhance our technical capabilities or o

317、therwise offer growth opportunities.The pursuit of potential acquisitions may divert the attention of management and cause us to incur various expenses in identifying,investigating and pursuing suitable acquisitions,whether or not they are consummated.In addition,we have never acquired another busin

318、ess.If we acquire businesses or technologies,we may not be able to integrate the acquired personnel,operations and technologies successfully,or effectively manage the combined business following the acquisition.We also may not achieve the anticipated benefits from the acquired business due to a numb

319、er of factors,including:In addition,a significant portion of the purchase price of companies we acquire may be allocated to acquired goodwill and other intangible assets,which must be assessed for impairment at least annually.In the future,if our acquisitions do not yield expected returns,we may be

320、required to take charges to our operating results based on this impairment assessment process,which could adversely affect our results of operations.Acquisitions could also result in dilutive issuances of equity securities or the incurrence of debt,which could adversely affect our operating results.

321、In addition,if an acquired business fails to meet our expectations,our operating results,business and financial position may suffer.If we are unable to implement and maintain effective internal control over financial reporting in the future,investors may lose confidence in the accuracy and completen

322、ess of our financial reports and the market price of our common stock may be negatively affected.As a public company,we are required to maintain internal control over financial reporting and to report any material weaknesses in such internal control.Section 404 of the Sarbanes-Oxley Act of 2002(the

323、Sarbanes-Oxley Act)requires that we evaluate and determine the effectiveness of our internal control over financial reporting and,beginning with our annual report for the fiscal year ending December 31,2014,provide a 23 inability to integrate or benefit from acquired technologies or services in a pr

324、ofitable manner;unanticipated costs or liabilities associated with the acquisition;incurrence of acquisition-related costs;difficulty integrating the accounting systems,operations and personnel of the acquired business;difficulties and additional expenses associated with supporting legacy products a

325、nd hosting infrastructure of the acquired business;difficulty converting the customers of the acquired business onto our applications and contract terms,including disparities in the revenues,licensing,support or professional services model of the acquired company;diversion of managements attention f

326、rom other business concerns;adverse effects to our existing business relationships with business partners and customers as a result of the acquisition;the potential loss of key employees;use of resources that are needed in other parts of our business;and use of substantial portions of our available

327、cash to consummate the acquisition.Table of Contents Index to Financial Statements management report on the internal control over financial reporting,and a report by our independent registered public accounting firm to the extent we decide not to avail ourselves of the exemption provided to an emerg

328、ing growth company,as defined by The Jumpstart Our Businesses Act of 2012(the JOBS Act).If we have a material weakness in our internal control over financial reporting,we may not detect errors on a timely basis and our financial statements may be materially misstated.We are in the process of designi

329、ng and implementing the internal control over financial reporting required to comply with this obligation,which process will be time consuming,costly,and complicated.If we identify material weaknesses in our internal control over financial reporting,if we are unable to comply with the requirements o

330、f Section 404 in a timely manner,if we are unable to assert that our internal control over financial reporting are effective,or if our independent registered public accounting firm is unable to express an opinion as to the effectiveness of our internal control over financial reporting,investors may

331、lose confidence in the accuracy and completeness of our financial reports and the market price of our common stock could be negatively affected,and we could become subject to investigations by the stock exchange on which our securities are listed,the SEC,or other regulatory authorities,which could r

332、equire additional financial and management resources.We are an emerging growth company and we cannot be certain if the reduced disclosure requirements applicable to emerging growth companies will make our common stock less attractive to investors.For as long as we continue to be an emerging growth c

333、ompany,we intend to take advantage of certain exemptions from various reporting requirements that are applicable to other public companies including,but not limited to,reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements,and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and stockholder approv