Yahoo 2003 Annual Report Download - page 4

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quality and breadth of our services.
As we made across-the-board
improvements in Yahoo!’s business,
we were rewarded with more users,
who visited more frequently,
consumed more pages, and used
more services, both free and fee-
based. Additionally, these user
relationships are key to building a
powerful and high impact
advertising environment.
In 2003, our global audience grew
to approximately 263 million
unique users, up 23 percent from
approximately 213 million at the
end of 2002. Approximately
133 million, or about half, were
active registered users (those
that log in with a username and
password at least once per month),
up more than 30 percent from
101 million in 2002.
In pursuing our philosophy of great
products equal great business, we
targeted four key user product areas
for focus and investment in 2003:
Web search and commerce:
Yahoo! has deployed its Yahoo!
Search Technology across our
network, which now relies
predominantly on Yahoo!
technology to deliver search results,
and is the culmination of our
ongoing commitment to build the
best search experience on the Web.
Key to this implementation was our
March 2003 acquisition of Inktomi
and our October 2003 acquisition of
Overture, through which we gained
a portfolio of algorithmic and
sponsored search technology and
patents and an outstanding team of
talented employees. These assets
put us in a much better position
to develop an innovative, high
quality search experience that
benefits both users and businesses.
In 2003, we also began the process
of integrating search throughout
vertical areas of Yahoo!’s network,
starting with product search, which
resulted in a dramatic increase in
the year-over-year growth rate of
referrals to Yahoo! Shopping, and
an early version of news search
within Yahoo! News.
Premium and fee-based services:
We ended the year approaching
5 million unique paying relationships,
a 123 percent increase from
approximately 2.2 million
unique paying users at the end of
2002. This is the fastest growing
subset of users on the Yahoo!
network. Access bundled with
Yahoo! content, through our
relationships with SBC
Communications Inc. (“SBC”) and
British Telecommunications plc
(“BT”), remains the largest
contributor to our paying
relationships. SBC Yahoo! DSL is
the only broadband service in the
United States to experience five
consecutive quarters of double-digit
subscriber growth. Our alliance with
SBC continues to lead the industry
as a truly integrated access and
content relationship. In 2003,
our two companies launched an
enhanced version of SBC Yahoo!
DSL, providing our members with
one of the most innovative
broadband experiences available.
We also extended our broadband
strategy globally, through the launch
of BT Yahoo! Broadband in the UK
in September 2003, and recently we
announced our first cable alliance
with Rogers Cable in Canada.
In addition, we experienced solid
contributions from Yahoo! Mail,
our suite of Yahoo! Small Business
services, Yahoo! Personals, and our
Yahoo! Fantasy Sports offerings in
football and baseball to our total
paying subscriber number.
Communications products:
We created a better experience for
Yahoo! Mail users by improving its
functionality, adding new features,
reducing spam, and providing more
aggressive anti-virus tools. As a
result, Yahoo! Mail has become
the No.1 Web-based email in
the United States according to
Nielsen//NetRatings. We have also
seen positive results in our other
communications products. For
example, after a dramatic overhaul
of Yahoo! Photos in December, we
witnessed a surge in new Photos
accounts, up 136 percent over the
previous three months. Look out
for more upgrades to our other
communications products, such as
Yahoo! Messenger, in 2004.
Media and Content: We invested
in our media and content sites by
making them more relevant and
comprehensive, and through the
introduction of features such as
community and broadband
content. Many of our media and
content offerings experienced
increases in users and time spent,
and Yahoo! Finance, Yahoo! Games,
and Yahoo! Movies are all ranked
No.1 in audience reach according
to Nielsen//NetRatings. Since its
redesign in 2003, Yahoo! Sports leads
in page views and has the largest base