Yahoo 2004 Annual Report Download - page 28

We may not be successful in expanding the number of users of our e-commerce offerings which could result in a decline in our
revenues.
The success of our e-commerce offerings depends on our ability to generate traffic to Yahoo! Shopping, and similar
services and the rate at which users either purchase products or click through to search results. The revenue that we
derive from Yahoo! Shopping and related services is typically in the form of lead-based fees, where retailers pay a fee
based on the number of times a user clicks on a link to their site, transaction fees, and advertising fees. Users who had a
favorable buying experience with a particular retailer may contact that retailer directly for future purchases rather than
through our services. Competing providers of e-commerce offerings, including retailers with whom we have relationships,
may provide a more convenient and comprehensive online customer experience due to their singular focus on
e-commerce. Retailers may also establish exclusive relationships with our competitors. If our users bypass our e-commerce
offerings and related services and contact competing providers or retailers directly, our revenue could decline.
New technologies could block our ads, which would harm our operating results.
Technologies have been developed and are likely to continue to be developed that can block the display of our ads. Most
of our revenues are derived from fees paid to us by advertisers in connection with the display of ads on web pages. As a
result, ad-blocking technology could, in the future, adversely affect our operating results.
We rely on third party providers for our principal Internet connections and technologies, databases and services critical to our
properties and services and any errors, failures or disruption in the services provided by these third parties could significantly
harm our business and operating results.
We rely on private third-party providers for our principal Internet connections, co-location of a significant portion of our
data servers and network access. Any disruption, from natural disasters, technology malfunctions, sabotage or other
factors, in the Internet or network access or co-location services provided by these third-party providers or any failure of
these third-party providers to handle current or higher volumes of use could significantly harm our business, operating
results and financial condition. We have little control over these third-party providers which increases our vulnerability to
disruptions or problems with their services. Any financial difficulties experienced by our providers may have negative
effects on our business, the nature and extent of which we cannot predict. We license technology and related databases
from third parties for certain elements of our properties, including, among others, technology underlying the delivery of
news, stock quotes and current financial information, chat services, street mapping and telephone listings, streaming
capabilities and similar services. We have experienced and expect to continue to experience interruptions and delays in
service and availability for such elements. We also rely on a third-party provider for key components of our email service.
Furthermore, we depend on hardware and software suppliers for prompt delivery, installation and service of servers and
other equipment to deliver our services. Any errors, failures, interruptions, or delays experienced in connection with these
third-party technologies and information services could negatively impact our relationship with users and adversely affect
our brand, our business and operating results.
We rely on distribution agreements and relationships with various third parties and any failure to obtain or maintain such
distribution relationships on reasonable terms could impair our ability to fully execute our business plan.
In addition to our relationships with Internet access providers, to increase traffic for our offerings and make them more
available and attractive to advertisers and users, we have certain distribution agreements and informal relationships with,
operators of online networks and leading Websites, software companies, electronics companies, and computer manufactur-
ers. Depending on the distributor and the agreement, these distribution arrangements may not be exclusive and may only
have a short term. Some of our distributors, particularly distributors who are also competitors or potential competitors,
may not renew their distribution agreements with us. In addition, as new methods for accessing the Web become
available, including through alternative devices, we may need to enter into amended distributions agreements with
existing distributors to cover the new devices and agreements with additional distributors. In the future, existing and
potential distributors may not offer distribution of our properties and services to us on reasonable terms, or at all. If we
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