IID, Inc.

The CP Business operates web media, and its revenue depends on advertising and marketing income from client companies. Corporate marketing activities are highly susceptible to economic conditions, and if marketing activities contract due to an economic downturn, this could have a significant impact on the business and performance. Although the internet advertising market has grown to exceed the scale of the four mass media, demand fluctuation risk remains.

The web media and content operated by the Group rely heavily on traffic acquisition from search engines such as Google, and if the search engine changes its logic, the ranking of search results may fluctuate, potentially causing a significant impact on traffic acquisition. Although SEO measures are continuously implemented, algorithm changes are an external factor beyond the company's control. A decline in traffic directly leads to a decrease in advertising revenue, so the impact on performance could be significant.

The internet industry undergoes rapid changes in technology and business models, requiring timely and effective responses to new technologies, including AI utilization. If the technology and business models necessary for introducing new features to "iid-CMP (iid Content Marketing Platform)" or enhancing existing systems cannot be adopted and applied in a timely manner, competitiveness may decline, potentially having a material impact on performance. Responding to such changes requires considerable time and expense, which is also recognized as a risk factor.

The technical barriers to entry for the services provided are not particularly high, and an increase in major companies with financial strength and brand power, as well as companies offering similar services, is anticipated. If increased competition leads to a decline in PV and UU counts, this could adversely affect performance through a decrease in advertising revenue. There is also a risk that if competing services utilizing entirely new concepts or technologies gain market support, the relative competitive advantage of the Group's services could decline.

The Group has expanded its business through M&A of web media and content since its founding. If there are significant changes in the market or competitive environment, or if an acquired business does not develop as planned, there is a risk that invested funds cannot be recovered and additional expenses may arise. Such circumstances could have a significant impact on performance, growth outlook, and business development, and this is a critical risk for the company, which centers its strategy on M&A.

The Group holds a large amount of personal information, including web media membership information and panel member information for Research Solution, and if such personal information were to leak outside the company due to unauthorized external access or unforeseen circumstances, it could affect the business, performance, and social credibility. The Group strives to comply with its basic policy on personal information protection, thorough internal training for all employees, and the Personal Information Protection Act and related guidelines, but it is difficult to completely eliminate external threats such as cyberattacks.

If problems occur in core systems due to increased server load from surges in access, software malfunctions, unauthorized access, natural disasters, accidents, etc., it may become impossible to provide stable information to users and services to client companies. This poses a risk of significant impact not only on the business and performance but also on social credibility. Given the business model centered on operating web media, stable system operation forms the foundation of business continuity.

There is a possibility of plagiarism of news articles posted on web media, or infringement of third parties' patent rights, trademark rights, and other intellectual property rights without the Group's knowledge. If such infringement occurs, the Group could be subject to claims for damages, compensation payments, injunctions, etc., which could affect performance. The Group implements measures such as holding copyright seminars, introducing checking systems, and obtaining consent agreements on "rules for quoting copyrighted works" with external writers, but it is difficult to completely eliminate this risk.

The Group is subject to regulations under relevant laws such as the Act against Unjustifiable Premiums and Misleading Representations, the Act against Delay in Payment of Subcontract Proceeds, Etc. to Subcontractors, the Personal Information Protection Act, and the Basic Act on Intellectual Property. If legal amendments reveal deficiencies in the internal system or expand the scope of regulations and responsibilities, this could affect the business and performance. Although the necessary internal systems have been established, responding to legal amendments requires continuous costs and strengthening of the system.

While actively recruiting in line with business expansion, the Group is continuously promoting organizational restructuring and the development and enhancement of internal management systems to respond to the expansion of business scale and diversification of operations. If the development of these management systems does not proceed as planned, it could have a significant impact on performance. Balancing personnel expansion with organizational responsiveness is a challenge, and there is a risk that governance systems may lag behind in a phase of rapid business expansion.