Yahoo 2003 Annual Report Download - page 14

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merchant sponsorship opportunities on targeted Yahoo! geographic sales structure, we have advertising sales teams
properties encouraging users to purchase the goods and for automotive, consumer packaged goods, entertainment,
services of our advertisers. Text-links and hypertext links finance, retail, pharmaceuticals, sports, technology, tele-
are links that are embedded in certain words, advertise- communications, travel and advertising agencies. In inter-
ments, sponsorships or directed emails, which provide the national markets, our own internal sales representatives
user with instant access to the advertiser’s Website, to handle our advertising sales. In some countries, where we
obtain additional information or to purchase products and have not established full operational capacity, we have
services. Additionally, we offer online research and data established sales agency relationships.
services, enabling marketers to better understand their cus-
Fees revenue consists of revenues generated from a variety
tomers profiles and behaviors. Transactions revenue
of consumer and business fee-based services, including
includes service fees for facilitating transactions through
SBC Yahoo! DSL and SBC Yahoo! Dial, Yahoo! Personals,
the Yahoo! network.
Small Business Services, Yahoo! Mail and Yahoo! Enter-
Although a significant amount of advertising purchases on prise Solutions.
our properties are for general rotation on pages within the
Listings revenue consists of revenues generated from a
Yahoo! network, we also offer highly-targeted marketing
variety of consumer and business listings-based services,
opportunities that are designed to deliver greater value to
including access to the HotJobs database and classifieds,
advertisers through more focused audiences. By developing
such as Yahoo! Autos, Yahoo! Real Estate and other search
an extended family of Yahoo!-branded properties, we seek
services. HotJobs career offerings are handled by a desig-
to offer advertisers a wide range of placement options and
nated sales team.
promotional opportunities. For example, through our
pay-for-performance search advertisements, advertisers can COMPETITION
bid for priority placement in search results. We also offer
an integrated set of sales and marketing tools built on the We operate in the market for Internet products and ser-
Yahoo! network and delivered in an integrated manner to vices, which is a highly competitive market characterized
our global audience. They consist of innovative, interactive by rapid change, converging technologies, and increased
marketing programs designed to provide one-stop shop- competition from companies offering communication,
ping for companies seeking to secure a measurable information and entertainment integrated into other prod-
Internet presence. ucts and media properties.
We maintain three primary channels for selling our mar- Globally, our most significant competition is from Time
keting services: online, telephone and direct. Our Spon- Warner and Microsoft (‘‘Microsoft’’ or ‘‘MSN’’). Time
sored Matches service, which provides enhanced visibility Warner is an integrated media and communications com-
for Websites within Yahoo!’s search results, is primarily pany engaged in online services, cable, filmed entertain-
sold through our online and direct channels. Under this ment, television network, music and publishing. Time
program, search results pages feature up to the top six Warner has access to a large potential customer base
pay-for-performance search listings sold to advertisers. Our through its America Online (‘‘AOL’’), cable and publish-
telemarketing channel focuses on sales of online marketing ing business units. Microsoft is the largest software com-
services to small and medium-size businesses. Our direct pany in the world and through its MSN network provides
advertising sales team focuses on selling our marketing numerous Internet products and services and has alliances
services and solutions to leading agencies and marketers in with companies involved with broadband access and vari-
the United States. As of December 31, 2003, we ous forms of digital interactivity. Microsoft’s presence on
employed advertising sales professionals in 10 locations computer desktops through packaged software products
across the U.S., including: Atlanta, Boston, Chicago, Dal- and their strategy to sell software through online subscrip-
las, Detroit, the Los Angeles Area, Miami, New York, the tions provides them a competitive advantage over us in
San Francisco Bay Area and Washington D.C. Our adver- providing software and services to online users. Both AOL
tising sales organization consults regularly with agencies and MSN have a direct billing relationship with a greater
and advertisers on design and placement of Web-based number of their users through access and other services
advertising, and provides clients with measurements and
analyses of advertising effectiveness. In addition to our
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