Yahoo 2004 Annual Report Download - page 16

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SALES AND MARKETING
We maintain three primary channels for selling our marketing services: direct, online, and telephone. Our telemarketing
channel focuses on sales of online marketing services to small and medium-size businesses. Our direct advertising sales
team focuses on selling our marketing services and solutions to leading agencies and marketers in the United States. As of
December 31, 2004, we employed advertising sales professionals in locations across the United States, including: Atlanta,
Boston, Chicago, Dallas, Detroit, the Los Angeles area, Miami, New York, San Francisco, and Sunnyvale. Our advertising
sales organization consults regularly with agencies and advertisers on design and placement of Web-based advertising, and
provides clients with measurements and analyses of advertising effectiveness. In addition to our geographic sales structure,
we have advertising sales teams for automotive, consumer packaged goods, entertainment, finance, retail, pharmaceuticals,
sports, technology, telecommunications and travel. In international markets, we have either our own internal sales
professionals or we have established sales agency relationships in 22 countries.
COMPETITION
We operate in the market for Internet services, which is a highly competitive market characterized by rapid change,
converging technologies, and increased competition from companies offering communication, information and entertain-
ment services integrated into other products and media properties.
Globally, our most significant competition is from Time Warner’s America Online business (‘‘AOL’’ or ‘‘America
Online’’), Google Inc. (‘‘Google’’) and Microsoft Corporation (‘‘Microsoft’’ or ‘‘MSN’’). Time Warner is an integrated
media and communications company engaged in online services, cable television, filmed entertainment, television net-
works, music and publishing. AOL has access to content from Time Warner’s movie, television, music, books, periodicals,
news, sports and other media holdings; access to a network of cable and other broadband users and delivery technologies;
and considerable resources for future growth and expansion. Google, in addition to search, offers many other services that
directly compete with our services, including a consumer email service, shopping services and Internet advertising
solutions. Microsoft is a leading software company and through its MSN network provides numerous Internet products
and services and has alliances with companies involved with broadband access and various forms of digital interactivity.
Microsoft has introduced its own search service and has announced plans to develop features that may make web search a
more integrated part of its Windows operating system. Microsoft’s presence on computer desktops through packaged
software products and their strategy to sell software through online subscriptions provides them a competitive advantage
in providing software and services to online users. In certain of these cases, most notably AOL, our competition has a
direct billing relationship with a more significant number of their users through access and other services than we have
with our users through our premium services. This relationship may permit these competitors to be more effective than
us in targeting services and advertisements to the specific preferences of their users thereby giving them a competitive
advantage.
We also compete directly with other providers of sponsored search advertising services, including FindWhat.com, Look-
Smart, Ltd., and Lycos Inc. In addition; we believe it is likely that there will be additional entrants to the sponsored
search market.
We also face competition from companies focused on markets where expertise in a particular segment of the market may
provide them a competitive advantage. Two of these competitors, Amazon.com, Inc. and eBay Inc., are expanding their
positions as e-commerce merchants to leverage advantages from the scale of their commerce platforms to offer informa-
tional and community features that are competitive with the services we provide.
Internationally, we compete with local portals that are predominantly supported by the local telecommunication provid-
ers, or local providers of specific Internet services locally designed and marketed, which give them a potential competitive
advantage because they typically already have a direct billing relationship with their users.
See the ‘‘Risk Factors’’ section below for additional information regarding competition.
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