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  As Of               Filer                 Filing     As/For/On Docs:Pgs              Issuer               Agent

 4/29/04  Planetout Inc                     S-1                   32:555                                    950149

Document/Exhibit                   Description                      Pages   Size 

 1: S-1         Registration Statement (General Form)               HTML  1,066K 
 2: EX-3.1      Articles of Incorporation/Organization or By-Laws     23     99K 
 3: EX-3.2      Articles of Incorporation/Organization or By-Laws      2     16K 
 4: EX-3.3      Articles of Incorporation/Organization or By-Laws      5     35K 
 5: EX-3.4      Articles of Incorporation/Organization or By-Laws     23    118K 
 6: EX-10.1     Material Contract                                     10     55K 
 7: EX-10.2     Material Contract                                     14     75K 
 8: EX-10.3     Material Contract                                      3     20K 
 9: EX-10.4     Material Contract                                     11     46K 
10: EX-10.5     Material Contract                                     14     73K 
11: EX-10.6     Material Contract                                     18     85K 
12: EX-10.7     Material Contract                                     23    100K 
13: EX-10.8     Material Contract                                     16     77K 
14: EX-10.9     Material Contract                                      5     29K 
15: EX-10.10    Material Contract                                     99    348K 
16: EX-10.11    Material Contract                                     13     47K 
17: EX-10.12    Ex-10.2                                                6     40K 
18: EX-10.13    Material Contract                                     10     45K 
19: EX-10.14    Material Contract                                     10     43K 
20: EX-10.15    Material Contract                                     10     44K 
21: EX-10.16    Material Contract                                      8     37K 
22: EX-10.17    Material Contract                                      8     37K 
23: EX-10.18    Material Contract                                     10     48K 
24: EX-10.19    Material Contract                                     10     48K 
25: EX-10.20    Material Contract                                     10     48K 
26: EX-10.21    Material Contract                                      7     30K 
27: EX-10.22    Material Contract                                      7     35K 
28: EX-10.24    Material Contract                                     10     54K 
29: EX-10.25    Material Contract                                     10     54K 
30: EX-10.26    Material Contract                                     11     64K 
31: EX-10.27    Material Contract                                     11     59K 
32: EX-23.1     Consent of Experts or Counsel                          1      9K 

Table of Contents

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

FORM S-1

PlanetOut Inc.

Lowell R. Selvin

Copies to:

          Approximate date of commencement of proposed sale to the public: As soon as practicable after the effective date of this Registration Statement.

          If the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933, check the following box.     o

          If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, please check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

          If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

          If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.     o

          If delivery of the prospectus is expected to be made pursuant to Rule 434, please check the following box.     o

CALCULATION OF REGISTRATION FEE

(1)	Estimated solely for the purpose of computing the amount of the registration fee pursuant to Rule 457(o) under the Securities Act of 1933.

     The Registrant hereby amends this Registration Statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this Registration Statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act of 1933 or until the Registration Statement shall become effective on such date as the Commission acting pursuant to said Section 8(a) may determine.

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The information in this prospectus is not complete and may be changed. We may not sell these securities until the registration statement filed with the Securities and Exchange Commission is effective. This prospectus is not an offer to sell these securities and is not soliciting an offer to buy these securities in any state where the offer or sale is not permitted.

                                    Shares

Common Stock

This is our initial public offering of shares of our common stock. We are offering                 shares of common stock. The initial offering price of common stock is expected to be between $          and $           per share.

No public market currently exists for our common stock. We have applied to list our common stock for quotation on the Nasdaq National Market under the symbol “LGBT.”

Investing in our common stock involves a high degree of risk. Before buying any shares, you should read the discussion of material risks of investing in our common stock in “Risk Factors” beginning on page 6.

Neither the Securities and Exchange Commission nor any state securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

The underwriters may also purchase up to an additional                      shares of common stock from us at the public offering price, less underwriting discounts and commissions, within 30 days from the date of this prospectus. The underwriters may exercise this option only to cover over-allotments, if any. If the underwriters exercise the option in full, the total underwriting discounts and commissions will be $                    , and the total proceeds, before expenses, to us will be $                    .

The underwriters are offering the shares of our common stock as set forth under “Underwriting.” Delivery of the shares of common stock will be made on or about                , 2004.

UBS Investment Bank

The date of this prospectus is                     , 2004

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          You should rely only on the information contained in this prospectus. We have not, and the underwriters have not, authorized any other person to provide you with different information. If anyone provides you with different or inconsistent information, you should not rely on it. We are not, and the underwriters are not, making an offer to sell these securities in any jurisdiction where the offer or sale is not permitted. You should assume that the information appearing in this prospectus is accurate only as of the date on the front cover of this prospectus or other data stated in this prospectus. Our business, financial condition, results of operations and prospects may have changed since that date.

          “PlanetOut,” “PlanetOut and Design,” “Gay.com and Design,” “Kleptomaniac,” and “OUT & ABOUT” are registered trademarks of PlanetOut Inc. Each trademark, trade name or service mark of any other company appearing in this prospectus belongs to its holder.

Terms Used in this Prospectus

          In this prospectus we refer to our “members,” “active members,” “active member profiles” and “subscribers.” The term “members” refers to those visitors who have affirmatively registered on our websites by providing us with a member name, email address and other personal data. Registration is free. The term “active members” as of a particular date refers to those members who have logged on at least once during the preceding twelve month period to the website on which they originally registered. In order to adjust for automated registrations created by third-party software programs, or “adbots,” we estimate the number of active members at any given time by reducing our raw active membership data by 15%. This discount is based on our management’s estimates of historical adbot activity on our websites. All references to active members in this prospectus reflect this discount. The term “active member profiles” refers to those profiles belonging to active members. Finally, unless otherwise indicated, the term “subscribers” refers to those members who have joined one of our paid premium membership services.

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SUMMARY

          This summary highlights information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before investing in our common stock. You should read the entire prospectus carefully, including “Risk Factors” and our financial statements and the notes to those financial statements appearing elsewhere in this prospectus before making an investment decision. References to “PlanetOut,” “we,” “us” and “our” refer to PlanetOut Inc. and its subsidiaries.

PlanetOut Inc.

          We are a leading global online media company serving the lesbian, gay, bisexual and transgendered, or LGBT, community, a market with reported buying power of approximately $485 billion annually in the United States alone. Our network of websites, including our flagship websites Gay.com and PlanetOut.com, allows our members to connect with other members of the LGBT community around the world. We generate most of our revenue from subscription fees for premium membership services that we offer in English, French, German, Italian, Portuguese and Spanish to our members who reside in more than 100 countries. We also generate revenue from online advertising and e-commerce targeted to the LGBT community.

          Our membership base is large and growing. We believe that our base of over 3.3 million active members constitutes the most extensive network of gay and lesbian people in the world. In the twelve month period ended March 31, 2004, we registered more than 2.2 million new members, or an average of over 6,000 new member registrations per day. Registration is free and allows access to integrated services, including profile creation and search, chat and instant messaging. By paying a fee, however, members may become subscribers with access to our premium membership services, including advanced search, unlimited access to profiles and photographs, enhanced chat and premium content. Since we introduced our premium membership services in 2001, our subscribers have grown rapidly to more than 105,000 as of March 31, 2004, with a weighted average monthly subscription fee of approximately $12.00 per subscriber.

          Through our global reach, we believe that we are able to provide advertisers with unparalleled access to the LGBT community. We generate revenue from run-of-site advertising, sponsorship of specialized content channels, advertising on our online-community areas, member-targeted emails and research for our advertisers. We have run advertising campaigns on our network for numerous Fortune 500 and other companies.

          We also offer our users access to specialized shopping and travel products and services through our transaction-based websites. Through Kleptomaniac.com, we offer fashion, video and music products. Through OutandAbout.com, we provide access to premium content targeted to gay and lesbian travelers.

          Our goal is to enhance our position as an LGBT-focused media market leader by connecting, enriching and illuminating the lives of gay and lesbian people worldwide. We intend to achieve this through the following strategies:

	•	growing traffic and membership through increased marketing, introducing compelling new features and international expansion;
	•	increasing our retention of subscribers;
	•	capitalizing on the growth of Internet advertising and the increased acceptance of the LGBT market; and
	•	leveraging our online reach and relationships with our members to expand into other media.

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          We were incorporated in Delaware in December 2000, and we began operations in April 2001 when we acquired all of the outstanding stock of Online Partners.com, Inc. and PlanetOut Corporation. The stockholders of Online Partners.com, Inc. received a majority of our stock in that transaction, and therefore for accounting purposes, we treat the operations and financial results of Online Partners.com, Inc. as our own for periods prior to April 2001. In April 2004, we changed our name from PlanetOut Partners, Inc. to PlanetOut Inc. Our principal executive offices are located at 300 California Street, San Francisco, CA 94104 and our telephone number at that address is (415) 834-6500. Our website can be found at www.planetoutinc.com. Information contained on, or accessed through, our website does not constitute a part of this prospectus.

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The Offering

          Unless we indicate otherwise, all information in this prospectus (1) assumes no exercise of the over-allotment option granted to the underwriters; (2) assumes the conversion of each outstanding share of our series C, series D and series E preferred stock into one share of our common stock, which will occur automatically upon completion of this offering; (3) assumes the conversion of each outstanding share of our series B preferred stock into 2.5 shares of our common stock, which will occur automatically upon completion of this offering; (4) is based upon 11,772,075 shares outstanding as of March 31, 2004; (5) gives effect to an assumed 11-for-one reverse stock split to be completed prior to this offering; and (6) excludes:

	•	1,719,574 shares issuable upon the exercise of options outstanding as of March 31, 2004 with a weighted average exercise price of $1.43 per share;
	•	377,818 shares issuable upon exercise of warrants outstanding as of March 31, 2004 with a weighted average exercise price of $13.02 per share; and
	•	1,350,447 shares authorized for issuance under our stock plans as of April 26, 2004.

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Summary Financial Data

          The summary historical consolidated statement of operations data for each of the three years ended December 31, 2003 and the summary historical consolidated balance sheet data as of December 31, 2003 have been derived from our audited consolidated financial statements included elsewhere in this prospectus. The summary financial data set forth below should be read in conjunction with “Selected Consolidated Financial Data,” “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and our financial statements and the notes to the financial statements included elsewhere in this prospectus. Our historical results are not necessarily indicative of results for any future period. The “Pro Forma” data in the table below give effect to the automatic conversion of all shares of our outstanding preferred stock into 10,045,155 shares of common stock upon the closing of this offering. The “Pro Forma as Adjusted” column in the table below reflects the application of the net proceeds from the sale by us of                      shares of common stock in this offering at an assumed public offering price of $           per share (the midpoint of the range set forth on the cover of this prospectus) after deducting the underwriting discount and estimated offering expenses.

footnotes on following page

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(1)	Represents a minority interest in Gay.it S.p.A., as further described in Note 3 to the financial statements.
(2)	Adjusted EBITDA consists of net income (loss) before interest, taxes, depreciation and amortization, stock-based compensation, equity in net loss of unconsolidated affiliate and other (income) expense, net. We believe that Adjusted EBITDA provides a useful alternative measure of cash flow from operations. You should not consider Adjusted EBITDA as a substitute for operating loss, as an indicator of our operating performance or as an alternative to cash flows from operating activities as a measure of liquidity. We may calculate Adjusted EBITDA differently from other companies. The following table reconciles the calculation of Adjusted EBITDA with net loss for the year ended December 31, 2001, 2002 and 2003:

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RISK FACTORS

          You should carefully consider the risks described below before purchasing shares in this offering. If any of the following risks actually occur, our business, financial condition or results of operations could be harmed, the trading price of our common stock could decline and you may lose all or part of your investment.

Risks Associated with Our Business

We have a history of significant losses. If we do not achieve or sustain profitability, our financial condition and stock price could suffer.

          We have experienced significant net losses and we may continue to incur losses for the foreseeable future given our anticipated increase in sales and marketing expenditures. We incurred net losses of approximately $16.5 million, $7.9 million and $0.8 million for the year ended December 31, 2001, 2002 and 2003, respectively. As of December 31, 2003, our accumulated deficit was approximately $36.8 million. We have not yet achieved profitability. If our revenue grows more slowly than we anticipate, or if our operating expenses are higher than we expect, we may not be able to achieve, sustain or increase profitability in the near future or at all, and our financial condition and stock price could be adversely affected.

If our efforts to attract and retain subscribers are not successful, our revenue will be affected adversely.

          Because most of our revenue is derived from our premium membership services, we must continue to attract and retain subscribers. Many of our new subscribers originate from word-of-mouth referrals from existing subscribers within the LGBT community. If our subscribers do not perceive our service offerings to be of high quality or sufficient breadth, if we introduce new services that are not favorably received or if we fail to introduce compelling new features or enhance our existing offerings, we may not be able to attract new subscribers or retain our current subscribers. As a result, our revenue will be affected adversely.

          While seeking to add new subscribers, we must also minimize the loss of existing subscribers. We lose our existing subscribers primarily as a result of cancellations and credit card failures due to expirations or exceeded credit limits. Subscribers cancel their subscription to our service for many reasons, including a perception, among some subscribers, that they do not use the service sufficiently, that the service is a poor value and that customer service issues are not satisfactorily resolved. We must continually add new subscribers both to replace subscribers who cancel or whose subscriptions are not renewed due to credit card failures and to continue to grow our business beyond our current subscriber base. If excessive numbers of subscribers cancel our service, we may be required to incur significantly higher marketing expenditures than we currently anticipate to replace these subscribers with new subscribers, which will harm our financial condition.

Our success depends, in part, upon the growth of Internet advertising and upon our ability to accurately predict the cost of customized campaigns.

          We compete with traditional media including television, radio and print, in addition to high-traffic websites, such as those operated by Yahoo!, Google, AOL and MSN, for a share of advertisers’ total online advertising expenditure. We face the risk that advertisers might find the Internet to be less effective than traditional media in promoting their products or services, and as a result they may reduce or eliminate their expenditures on Internet advertising. Many potential advertisers and advertising agencies have only limited experience advertising on the Internet and historically have not devoted a significant portion of their advertising expenditures to Internet advertising. Additionally, filter software programs that limit or prevent advertisements from being displayed on or delivered to a user’s computer are becoming increasingly available. If this type of software becomes widely accepted, it would negatively affect Internet advertising. Our business could be harmed if the market for Internet advertising does not grow.

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          Currently, we offer advertisers a number of alternatives to advertise their products or services on our websites and to our members, including banner advertisements, rich media advertisements, email campaigns, text links and sponsorships of our channels, topic sections, directories and other online databases and content. Frequently, advertisers request advertising campaigns consisting of a combination of these offerings, including some that may require custom development. If we are unable to accurately predict the cost of developing these custom campaigns for our advertisers, our expenses will increase and our margins will be reduced.

If advertisers do not find the LGBT market to be an attractive market, our business will be harmed.

          We focus our services exclusively on the LGBT community. Advertisers and advertising agencies may not consider the LGBT community to be a broad enough or attractive enough market for their advertising budgets, and they may prefer to direct their online advertising expenditures to larger high-traffic websites that focus on broader markets. If we are unable to attract new advertisers, if our advertising campaigns are unsuccessful with the LGBT community or if our existing advertisers do not renew their contracts with us, our operating results will be adversely affected.

Our limited operating history and volatility of our operating results makes it difficult to evaluate our business.

          As a result of our recent growth and limited operating history, it is difficult to forecast our revenue, gross profit, operating expenses, number of subscribers and other financial and operating data. Our inability, or the inability of the financial community at large, to accurately forecast our operating results could cause our net losses to be greater than expected, which could cause a decline in the trading price of our common stock.

          Our operating results have fluctuated in the past and may fluctuate significantly in the future due to a variety of factors, many of which are outside of our control. As a result, we believe that period-over-period comparisons of our operating results are not necessarily meaningful and that you should not rely on the results of one period as an indication of our future or long-term performance. Factors that may cause our operating results to fluctuate include the following:

	•	fluctuations in the demand for products and services such as those we offer through our websites or our inability to convert visitors into subscribers;
	•	our ability to achieve, measure and demonstrate to advertisers the breadth of Internet traffic using our websites and the value of our targeted advertising to attract and retain new and existing advertising relationships;
	•	the amount and timing of operating costs, including the effectiveness of our sales and marketing efforts, and capital expenditures relating to expansion of our business operations and infrastructure;
	•	technical difficulties, including system downtime or Internet disruptions;
	•	our ability to introduce, in a timely manner, new features and enhancements to our products and services that our members, subscribers, advertisers and other customers find compelling and to be of sufficiently high quality and breadth;
	•	new or enhanced services or product offerings by our competitors or by new market entrants, including competitors who may offer services at lower cost;
	•	our ability to expand internationally;
	•	our ability to manage the integration of operations and technology resulting from acquisitions, if any;
	•	changes in government regulations and taxation related to use of the Internet or otherwise applicable to our business;

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	•	the amount of compensation expense that we will have to recognize for options subject to variable accounting;
	•	our ability to offer attractive products and services through our transaction-based websites Kleptomaniac.com and OutandAbout.com, which meet consumers’ expectations and demands, including affordability and timely delivery;
	•	political or judicial developments affecting the LGBT community;
	•	negative publicity that may result from content available through our websites; and
	•	economic conditions, particularly those specific to the Internet, online membership-based services or e-commerce.

Any significant disruption in service on our websites or in our computer and communications hardware and software systems could harm our business.

          Our ability to attract new visitors, members, subscribers, advertisers and other customers to our websites is critical to our success and largely depends upon the efficient and uninterrupted operation of our computer and communications hardware and software systems. Our systems and operations are vulnerable to damage or interruption from power outages, computer and telecommunications failures, computer viruses, security breaches, catastrophic events and errors in usage by our employees and customers, which could lead to interruption in our service and operations, and loss, misuse or theft of data. Our websites could be also targeted by direct attacks intended to cause a disruption in service or to siphon off customers to other Internet services. Among other risks, our chat rooms may be vulnerable to infestation by software programs or scripts that we refer to as adbots. An adbot is a software program that creates a registration profile, enters a chat room and displays third-party advertisements. Any successful attempt by hackers to disrupt our websites services or our internal systems could harm our business, be expensive to remedy and damage our reputation, resulting in a loss of visitors, members, subscribers, advertisers and other customers.

The risks of transmitting confidential information online, including credit card information, may discourage customers from subscribing to our services or purchasing goods from us.

          In order for the online marketplace to be successful, we and other market participants must be able to transmit confidential information, including credit card information, securely over public networks. Third parties may have the technology or know-how to breach the security of our customer transaction data. Any breach could cause consumers to lose confidence in the security of our websites and choose not to subscribe to our services or purchase goods from us. We currently do not offer alternative payment options and cannot guarantee that our security measures will effectively prohibit others from obtaining improper access to our information or that of our users. If a person is able to circumvent our security measures, he or she could destroy or steal valuable information or disrupt our operations. Any security breach could expose us to risks of data loss, litigation and liability and may significantly disrupt our operations and harm our reputation, operating results or financial condition.

If we are unable to provide satisfactory customer service, we could lose subscribers.

          Our ability to provide satisfactory customer service depends, to a large degree, on the efficient and uninterrupted operation of our customer service center. Any significant disruption or slowdown in our ability to process customer calls resulting from telephone or Internet failures, power or service outages, natural disasters or other events could make it difficult or impossible to provide adequate customer service and support. Further, we may be unable to attract and retain adequate numbers of competent customer service representatives, which is essential in creating a favorable interactive customer experience. If we are unable to continually provide adequate staffing for our customer service operations, our reputation could be harmed and we may lose existing and potential subscribers. In addition, we cannot assure you that email and telephone call volumes will not exceed our present system capacities. If this occurs, we could

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If we are unable to compete effectively, our business will be affected adversely.

          Our markets are intensely competitive and subject to rapid change. We compete with a number of large and small companies, such as vertically integrated Internet portals and specialty focused media that provide online and offline products and services to the LGBT community. In our subscription business, we compete with other online services, such as those offered by Match.com and Yahoo! Personals, as well as a number of other smaller online companies focused specifically on the LGBT community. In our online advertising business, we compete with a broad variety of content providers. We also compete with offline LGBT media companies, including local newspapers, national and regional magazines, satellite radio and television shows. If we are unable to successfully compete with current and new competitors, we may not be able to achieve adequate market share, increase our revenue or achieve and maintain profitability.

          Some of these competitors have longer operating histories, larger customer bases, greater brand recognition and significantly greater financial, marketing and other resources than we do. Some of our competitors have adopted, and may continue to adopt, aggressive pricing policies and devote substantially more resources to marketing and technology development than we do. The rapid growth of our online subscription business since our inception may attract direct competition from larger companies with significantly greater financial resources and national brand recognition, such as InterActive Corp., Microsoft, Time Warner, Viacom or Yahoo! which may choose to increase their focus on the LGBT market. Increased competition may result in reduced operating margins, loss of market share and reduced revenue.

We may be the target of actions by advocacy groups because we serve the LGBT community.

          Advocacy groups may target our business, seeking to limit access to our services because we serve the LGBT community. In addition, negative publicity campaigns, lawsuits and boycotts could negatively affect our brand acceptance, result in decreased revenue, especially in the advertising business, and cause additional financial harm by requiring that we incur significant expenditures to defend our business and by diverting management’s attention. Further, some investors, investment banking entities, market makers, lenders and others in the investment community may decide not to invest in our securities or provide financing to us because we serve the LGBT community, which, in turn, may hurt the value of our stock.

If we are unable to protect our domain names, our reputation and brand could be affected adversely.

          We have registered various domain names relating to our brand, including Gay.com, PlanetOut.com, Kleptomaniac.com and OutandAbout.com. Failure to protect our domain names could adversely affect our reputation and brand, and make it more difficult for users to find our websites and our service. The acquisition and maintenance of domain names are generally regulated by governmental agencies and their designees. The regulation of domain names in the United States may change in the near future. Governing bodies may establish additional top-level domains, appoint additional domain name registrars or modify the requirements for holding domain names. As a result, we may be unable to acquire or maintain relevant domain names. Furthermore, the relationship between regulations governing domain names and laws protecting trademarks and similar proprietary rights is unclear. We may be unable to prevent third parties from acquiring domain names that are similar to, infringe upon or otherwise decrease the value of our trademarks and other proprietary rights.

If we fail to adequately protect our trademarks and other proprietary rights, or if we get involved in intellectual property litigation, our business may be adversely affected.

          We rely on a combination of confidentiality and license agreements with our employees, consultants and third parties with whom we have relationships, as well as trademark, copyright and trade

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          The Internet content delivery market is characterized by frequent litigation regarding patent and other intellectual property rights. As a publisher of online content, we face potential liability for negligence, copyright, patent or trademark infringement or other claims based on the nature and content of materials that we publish or distribute. For example, we have received, and may receive in the future, notices or offers from third parties claiming to have intellectual property rights in technologies that we use in our businesses and inviting us to license those rights. Litigation may be necessary in the future to enforce our intellectual property rights, to protect our trade secrets, to determine the validity and scope of the proprietary rights of others or to defend against claims of infringement or invalidity, and we may not prevail in any future litigation. Adverse determinations in litigation could result in the loss of our proprietary rights, subject us to significant liabilities, require us to seek licenses from third parties or prevent us from licensing our technology or selling our products, any of which could seriously harm our business. An adverse determination could also result in the issuance of a cease and desist order, which may force us to discontinue operations through our website or websites. Intellectual property litigation, whether or not determined in our favor or settled, could be costly, could harm our reputation and could divert the efforts and attention of our management and technical personnel from normal business operations.

If we fail to manage our growth, including through acquisitions and our planned international expansion, our business will suffer.

          We have significantly expanded our operations, and anticipate that further expansion, including the possible acquisition of third-party assets, technologies or businesses, will be required to address potential growth in our customer base and market opportunities. This expansion has placed, and is expected to continue to place, a significant strain on our management, operational and financial resources. If we make future acquisitions or continue to expand our marketing efforts, we may issue shares of stock that dilute the interests of our other stockholders, expend cash, incur debt, assume contingent liabilities, create additional expenses or face difficulties in integrating acquired assets or businesses into our operations, any of which might harm our financial condition or results of operations.

          In addition, we offer services and products to the LGBT community outside the United States, and we intend to continue to expand our international presence, which may be more difficult or take longer than anticipated especially due to international challenges, such as language barriers, currency exchange issues and the fact that Internet infrastructure in foreign countries may be less advanced than Internet infrastructure in the United States. Expansion into international markets requires significant resources that we may fail to recover by generating additional revenue.

          If we are unable to successfully expand our international operations, manage growth effectively or successfully integrate any assets, technologies or businesses that we may acquire, our business, financial condition and results of operations will be affected adversely.

Existing or future government regulation in the United States and other countries could harm our business.

          We are subject to federal, state, local and international laws affecting companies conducting business on the Internet, including user privacy laws, regulations prohibiting unfair and deceptive trade practices and laws addressing issues such as freedom of expression, pricing and access charges, quality of

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	•	provide notice to our customers of our policies on sharing non-public information with third parties;
	•	provide advance notice of any changes to our privacy policies;
	•	with limited exceptions, give consumers the right to prevent sharing of their non-public personal information with unaffiliated third parties;
	•	provide notice to residents in some states if their personal information was, or is reasonably believed to have been, obtained by an unauthorized person such as a computer hacker;
	•	comply with the recently enacted federal anti-spam legislation by limiting or modifying some of our marketing and advertising efforts, such as email campaigns;
	•	comply with the European Union privacy directive and other international regulatory requirements by modifying the ways in which we collect and share our users’ personal information;
	•	qualify to do business in various states and countries, in addition to jurisdictions where we are currently qualified, because our websites are accessible over the Internet in multiple states and countries;
	•	limit our domestic or international expansion because some jurisdictions may limit or prevent access to our services as a result of the availability of some content intended for mature viewing on some of our websites;
	•	limit or prevent access, from some jurisdictions, to some or all of the member-generated content available through our websites; and
	•	comply with laws of some states regulating contractual terms between a dating referral service and its clients, which while passed before the advent of the Internet, may apply to our premium membership services.

          The restrictions imposed by, an