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do not intend to update any of the forward-looking state- Yahoo! acquired in October 2003. In October 2002, Rob-
ments after the date of this Report to conform them to ert Novak, doing business as PetsWarehouse and
actual results. PetsWarehouse.com, filed a complaint in the United States
District Court for the Eastern District of New York
Item 2. Properties against Overture. In August 2003, Accor filed a complaint
in the Nanterre District Court in France against Overture
Our headquarters are located in Sunnyvale, California and and Overture S.A.R.L., Overture’s wholly-owned subsidi-
aggregate approximately one million square feet. Office ary in France. The plaintiffs in each of these cases claim,
space for our international subsidiaries is leased in Ban- among other things, that they have trademark rights in
galore, Beijing, Buenos Aires, Calgary, Copenhagen, Dub- certain search terms and that Overture violates these rights
lin, Dusseldorf, Hamburg, Hong Kong, London, Madrid, by allowing its advertisers to bid on these search terms.
Melbourne, Mexico City, Milan, Mumbai, Munich, New The complaints seek injunctive relief and damages. Over-
Delhi, Paris, S˜
ao Paulo, Seoul, Shanghai, Singapore, ture has also been named as a defendant in several other
Stockholm, Sydney, Taipei, Tokyo, Toronto and trade name infringement actions filed in Los Angeles, Cal-
Trondheim. We also lease offices in various locations in ifornia in which plaintiffs made similar claims. Yahoo! and
the United States, including Atlanta, Boston, Chicago, Overture believe that Overture has meritorious defenses to
Columbus, Dallas, Detroit, Irvine, the Los Angeles Area, liability and damages in each of these lawsuits and are
Miami, New York, Reston, Sacramento, the San Diego contesting them vigorously.
Area, San Francisco Bay Area, St. Louis, and Washington,
D.C. Our principal Web server equipment and operations We do not believe, based on current knowledge, that any
are maintained in Santa Clara, California and several of the foregoing legal proceedings or claims are likely to
other domestic and international locations. have a material adverse effect on our financial position,
results of operations or cash flows. However, we may
We believe that our existing facilities are adequate to meet incur substantial expenses in defending against third party
current requirements, and that suitable additional or sub- claims. In the event of a determination adverse to Yahoo!
stitute space will be available as needed to accommodate or our subsidiaries, we may incur substantial monetary
any further physical expansion of corporate operations and liability, and be required to change our business practices.
for any additional sales offices. Either of these could have a material adverse effect on our
financial position, results of operations or cash flows.
Item 3. Legal Proceedings
From time to time, third parties assert patent infringe- On May 24, 2001, Arista Records, Inc., Bad Boy Records,
ment claims against Yahoo! in the form of letters, lawsuits, BMG Music d/b/a The RCA Records Label, Capitol
and other forms of communication. Currently, we are Records, Inc., Virgin Records America, Inc., Sony Music
engaged in several lawsuits regarding patent issues and Entertainment Inc., UMG Recordings, Inc., Interscope
have been notified of a number of other potential patent Records, Motown Record Company, L.P., and Zomba
disputes. Recording Corporation filed a lawsuit alleging copyright
infringement against LAUNCH Media, Inc.
In addition, from time to time we are subject to other (‘‘LAUNCH’’) in the United States District Court for the
legal proceedings and claims in the ordinary course of Southern District of New York. After the lawsuit was
business, including claims of alleged infringement of commenced, Yahoo! entered into an agreement to acquire
trademarks, copyrights and other intellectual property LAUNCH. In June 2001, LAUNCH settled the
rights, and a variety of claims arising in connection with LAUNCH litigation as to UMG Recordings, Inc. Our
our email, message boards, auction sites, shopping ser- acquisition of LAUNCH closed in August 2001, and
vices, and other communications and community features, since that time LAUNCH has been a wholly owned sub-
such as claims alleging defamation or invasion of privacy. sidiary of Yahoo!. The plaintiffs allege, among other
things, that the consumer-influenced portion of
In October 2000, 800-JR-Cigar, Inc. filed a complaint in LAUNCH’s LAUNCHcast service is ‘‘interactive’’ within
the United States District Court for the District of New the meaning of Section 114 of the Copyright Act and
Jersey against Overture, a wholly-owned subsidiary of therefore does not qualify for the compulsory license pro-
vided for by the Copyright Act. The Complaint seeks
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