Synacor Inc 's

The market for internet-based services and products in which we operate is highly competitive and involves rapidly-changing technologies and customer and consumer requirements, as well as evolving industry standards and frequent product introductions. While we believe that our technology offers considerable value and flexibility to our customers by helping them to extend their consumer relationships to a wide variety of internet-based services, we face competition at four levels:

When one of our prospective or existing customers considers another supplier, including one of our partners, for elements of the services or products which we provide.

When consumers choose to rely on other vendors for similar products and services.

When content and service providers prefer to establish direct relationships with one or more of our customers.

When one of our customers decides to make the significant headcount and technology investment to develop products and services in-house similar to those that we provide.

Our technology competes primarily with high-speed internet service providers that have internal information technology staff capable of developing similar solutions in-house.