Yahoo 2003 Annual Report Download - page 23

than those with which we have a relationship), such as LAUNCH, and Overture) is an important aspect of our
AOL or MSN, or a computer or computing device manu- efforts to attract and expand our user and advertiser base.
facturer offers online services or properties that are com- We also believe that the importance of brand recognition
petitive with those of Yahoo!, the user may find it more will increase due to the relatively low barriers to entry. We
convenient to use the services or properties of that access have spent considerable money and resources to date on
provider or manufacturer. In addition, the access provider the establishment and maintenance of the Yahoo! brands.
or manufacturer may make it difficult to access our ser- We will spend increasing amounts of money on, and
vices by not listing them in the access provider’s or manu- devote greater resources to advertising, marketing and
facturer’s own directory. Also, because the access provider other brand-building efforts to preserve and enhance con-
gathers information from the user in connection with the sumer awareness of the Yahoo! brands. We may not be
establishment of the billing relationship, the access pro- able to successfully maintain or enhance consumer aware-
vider may be more effective than us in tailoring services ness of the Yahoo! brands and, even if we are successful in
and advertisements to the specific tastes of the user. To our branding efforts, such efforts may not be
the extent that a user opts to use the services offered by cost-effective. If we are unable to maintain or enhance
an access provider (other than those with which we have a customer awareness of the Yahoo! brands in a cost effec-
relationship) or those offered by computer or computing tive manner, our business, operating results and financial
device manufacturers rather than the services provided by condition would be harmed.
us, our revenues may decline.
The successful operation of our business depends upon the
supply of critical elements from other companies and any
More individuals are utilizing non-PC devices to access the
interruption in that supply could cause service interruptions or
Internet, and versions of our service developed or optimized
reduce the quality of our product offerings.
for these devices may not gain widespread adoption by users
of such devices.
We depend upon third parties, to a substantial extent, for
The number of individuals who access the Internet several critical elements of our business, including various
through devices other than a personal computer, such as technology, infrastructure, content development, software
personal digital assistants, mobile telephones and television and distribution components.
set-top devices, has increased dramatically. Our services
Technology and Infrastructure. We rely on private third-party
were originally designed for rich, graphical environments
providers for our principal Internet connections,
such as those available on desktop and laptop computers.
co-location of a significant portion of our data servers and
The lower resolution, functionality and memory associated
network access. Any disruption in the Internet or network
with alternative devices may make the use of our services
access or co-location services provided by these third-party
through such devices difficult, and the versions of our
providers or any failure of these third-party providers to
service developed for these devices may not be compelling
handle current or higher volumes of use could signifi-
to users of alternative devices. As we have limited experi-
cantly harm our business, operating results and financial
ence to date in operating versions of our service developed
condition. Any financial difficulties for our providers may
or optimized for users of alternative devices, it is difficult
have negative effects on our business, the nature and
to predict the problems we may encounter in doing so,
extent of which we cannot predict. We license technology
and we may need to devote significant resources to the
and related databases from third parties for certain ele-
creation, support and maintenance of such versions. If we
ments of our properties, including, among others, technol-
are unable to attract and retain a substantial number of
ogy underlying the delivery of news, stock quotes and
alternative device users to our online services, we will fail
current financial information, chat services, street mapping
to capture a sufficient share of an increasingly important
and telephone listings, streaming capabilities and similar
portion of the market for online services.
services. We have experienced and expect to continue to
We rely on the value of the Yahoo! brand, and the costs of
experience interruptions and delays in service and availa-
maintaining and enhancing our brand awareness are
bility for such elements. We also rely on a third-party
increasing.
manufacturer for key components of our email service.
Furthermore, we depend on hardware and software suppli-
We believe that maintaining and expanding the Yahoo! ers for prompt delivery, installation and service of servers
brand (and our other brands, including HotJobs, Inktomi,
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