Yahoo 2003 Annual Report Download - page 24

and other equipment to deliver our products and services. properties, such as news items, stock quotes, weather
Any errors, failures, interruptions, or delays experienced in reports, maps and audio and video content from third
connection with these third-party technologies and infor- parties. In particular, our music and entertainment proper-
mation services could negatively impact our relationship ties rely on major sports organizations, radio and televi-
with users and adversely affect our brand and our business sion stations, record labels, cable networks, businesses,
and could expose us to liabilities to third parties. colleges and universities, film producers and distributors,
and other organizations for a large portion of the content
Distribution Relationships. In addition to our relationships with available on our properties. Our ability to maintain and
SBC and BT, to increase traffic for our online properties build relationships with third-party content providers will
and services and make them more available and attractive be critical to our success. We may be unable to enter into
to advertisers and consumers, we have certain distribution or preserve relationships with the third parties whose con-
agreements and informal relationships with, operators of tent we seek to obtain. Many of our current licenses for
online networks and leading Websites, electronics compa- third-party content extend for a period of less than two
nies, and computer manufacturers. These distribution years and there can be no guarantee that they will be
arrangements typically are not exclusive and do not extend renewed upon their expiration. In addition, as competi-
over a significant amount of time. Further, some of our tion for compelling content increases both domestically
distributors are competitors or potential competitors who and abroad, our content providers may increase the prices
may not renew their distribution contracts with us. at which they offer their content to us and potential con-
Potential distributors may not offer distribution of our tent providers may not offer their content on terms agree-
properties and services on reasonable terms, or at all. In able to us. An increase in the prices charged to us by
addition, as new methods for accessing the Web become third-party content providers could harm our operating
available, including through alternative devices, we may results and financial condition. Further, many of our con-
need to enter into additional distribution relationships. If tent licenses with third parties are non-exclusive. Accord-
we fail to obtain distribution or to obtain distribution on ingly, other Webcasters may be able to offer similar or
terms that are reasonable, we may not be able to fully identical content. Likewise, most sports and entertainment
execute our business plan. content available on our online properties are also avail-
able on other media like radio or television. These media
Streaming Media Software. We rely on the two leading provid- are currently, and for the foreseeable future will be, much
ers of streaming media products, RealNetworks, Inc. and more widely adopted for listening or viewing such content
Microsoft, to license the software necessary to broadcast than the Web. These factors also increase the importance
streaming audio and video content to our users. There of our ability to deliver compelling editorial content and
can be no assurance that these providers will continue to personalization of this content for users in order to differ-
license these products to us on reasonable terms, or at all. entiate Yahoo! from other businesses. If we are unable to
Our users are currently able to electronically download license or acquire compelling content, if other companies
copies of the software to play streaming media free of broadcast content that is similar to or the same as that
charge, but providers of streaming media products may provided by Yahoo!, or if we do not develop compelling
begin charging users for copies of their player software or editorial content or personalization services, the number
otherwise change their business model in a manner that of users on our online properties may not grow at all or
slows the widespread acceptance of these products. In may grow at a slower rate than anticipated, which would
order for our rich media services to be successful, there harm our operating results.
must be a large base of users of these streaming media
products. We have limited or no control over the availa- As we provide more audio and video content, particularly
music, we may be required to spend significant amounts of
bility or acceptance of streaming media software, and to
money on content acquisition and content broadcasts.
the extent that any of these circumstances occur, our busi-
ness will be adversely affected. In the past, the majority of the content that we provided
to our users was in print, picture or graphical format and
Content and Search Service. Our future success depends upon was either created internally or licensed to us by third
our ability to aggregate compelling content and deliver parties for little or no charge. However, we have been
that content through our online properties. We license providing and intend to continue to provide increasing
much of the content that attracts users to our online
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