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countries or our competitors are able to successfully penetrate geographic markets that we cannot access, our
ability to retain or increase our user base and user engagement may be adversely affected, we may not be able to
maintain or grow our revenue as anticipated, and our financial results could be adversely affected.
Our new products and changes to existing products could fail to attract or retain users or generate revenue.
Our ability to retain, increase, and engage our user base and to increase our revenue will depend heavily on
our ability to create successful new products, both independently and in conjunction with Platform developers or
other third parties. We may introduce significant changes to our existing products or develop and introduce new
and unproven products, including using technologies with which we have little or no prior development or
operating experience. If new or enhanced products fail to engage users, developers, or marketers, we may fail to
attract or retain users or to generate sufficient revenue, operating margin, or other value to justify our
investments, and our business may be adversely affected. In the future, we may invest in new products and
initiatives to generate revenue, but there is no guarantee these approaches will be successful. For example, in
2012, we launched our Gifts product that enables users to send physical or digital gifts to friends. We may not be
successful in generating meaningful revenue from this product. If we are not successful with new approaches to
monetization, we may not be able to maintain or grow our revenue as anticipated or recover any associated
development costs, and our financial results could be adversely affected.
Our culture emphasizes rapid innovation and prioritizes user engagement over short-term financial results.
We have a culture that encourages employees to quickly develop and launch new and innovative products.
As our business grows and becomes more complex, our cultural emphasis on moving quickly may result in
unintended outcomes or decisions that are poorly received by users, developers, or marketers. Our culture also
prioritizes user engagement over short-term financial results, and we frequently make product decisions that may
reduce our short-term revenue or profitability if we believe that the decisions are consistent with our mission and
benefit the aggregate user experience and will thereby improve our financial performance over the long term.
These decisions may not produce the long-term benefits that we expect, in which case our user growth and
engagement, our relationships with developers and marketers, and our business and results of operations could be
harmed.
If we are not able to maintain and enhance our brand, or if events occur that damage our reputation and
brand, our ability to expand our base of users, developers, and marketers may be impaired, and our business
and financial results may be harmed.
We believe that the Facebook brand has significantly contributed to the success of our business. We also
believe that maintaining and enhancing our brand is critical to expanding our base of users, developers, and
marketers. Many of our new users are referred by existing users. Maintaining and enhancing our brand will
depend largely on our ability to continue to provide useful, reliable, trustworthy, and innovative products, which
we may not do successfully. We may introduce new products or terms of service that users do not like, which
may negatively affect our brand. Additionally, the actions of our Platform developers may affect our brand if
users do not have a positive experience using third-party apps and websites integrated with Facebook. We have
in the past experienced, and we expect that in the future we will continue to experience, media, legislative, or
regulatory scrutiny of our decisions regarding user privacy or other issues, which may adversely affect our
reputation and brand. We also may fail to provide adequate customer service, which could erode confidence in
our brand. Our brand may also be negatively affected by the actions of users that are deemed to be hostile or
inappropriate to other users, or by users acting under false or inauthentic identities. Maintaining and enhancing
our brand may require us to make substantial investments and these investments may not be successful. If we fail
to successfully promote and maintain the Facebook brand or if we incur excessive expenses in this effort, our
business and financial results may be adversely affected.
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