Yahoo 2004 Annual Report Download - page 9

Download and view the complete annual report

Please find page 9 of the 2004 Yahoo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 114

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114

Item 1. Business
OVERVIEW
Yahoo! Inc., together with its consolidated subsidiaries, (‘‘Yahoo!’’, the ‘‘Company’’, ‘‘our’’, ‘‘we’’ or ‘‘us’’) is a leading
global Internet brand and one of the most trafficked Internet destinations worldwide. We seek to provide Internet
services that are essential and relevant to users and businesses through the provision of online properties (the ‘‘Yahoo!
Network’’) to Internet users and a range of tools and marketing solutions for businesses to market to that community of
users. Yahoo! was developed and first made available in 1994 by our founders, David Filo and Jerry Yang, while they
were graduate students at Stanford University. We were incorporated in 1995 and are a Delaware corporation. We are
headquartered in Sunnyvale, California, and have offices in North America, Europe, Asia, Latin America and Australia.
We seek to leverage the power of the Yahoo! Network to create the most innovative and highest quality Internet services
for users, and to provide the most efficient and effective marketing services for businesses to reach these users. Our focus
is to increase our user base and to achieve deeper engagement of our users on the Yahoo! Network thereby enhancing the
value of that user base and increasing the spending by our advertisers.
We are also focused on extending our marketing platform and access to Internet users beyond the Yahoo! Network
through our distribution network of third party entities (which we refer to as ‘‘affiliates’’) who have integrated our
sponsored search offerings into their websites.
Many of our services are free to our users. We generate revenue by providing marketing services to businesses across the
majority of our properties and by establishing paying relationships with our users for premium services. We classify these
revenues as either Marketing Services or Fees. Our offerings to users and businesses currently fall into three categories –
Search and Marketplace; Information and Content; and Communications and Consumer Services. The majority of our
offerings are available globally.
MARKETING SERVICES FOR BUSINESSES
As part of our strategy to provide the most efficient and effective marketing services for businesses, we are committed to
providing end-to-end internet marketing solutions for advertisers. There is ongoing growth in the advertising market and
an increasing shift in advertisers’ use of media towards the Internet and away from traditional media. We are committed
to capitalizing on this shift and helping our advertisers create Internet marketing solutions that are cost effective,
compelling and engaging to the user. We leverage our research of the marketplace and our understanding of our users
and their interests to offer a suite of marketing services for our advertisers to meet the full range of their needs from
brand building, to consumer awareness, direct marketing, lead generation and commerce services. Our offerings enable
marketers to display their advertisements in different forms and in different locations on the Yahoo! Network and our
affiliates’ websites.
Advertisers can display textual, rich media and graphical advertisements across the Yahoo! Network on each page that is
viewed by our users. We work with our advertisers to maximize the effectiveness of their campaigns by optimizing
advertisement formats and placement on the network. We also help advertisers reach their desired audiences by placing
contextually relevant advertisements on our pages. For these advertising services, we earn revenue as ‘‘impressions’’ are
delivered where ‘‘impressions’’ are the number of times that an advertisement appears in pages viewed by users.
In addition, we offer a series of sponsored search offerings that enable advertisers to display text based links to their
websites on the Yahoo! Network as well as on our affiliates’ websites. These advertisements are displayed in response to
different user actions – a keyword in a search query initiated by a user or when specific content is being viewed on the
Yahoo! Network or the networks of our affiliates by a user. For example, if a user searches on the keyword ‘‘television’’ in
the Yahoo! Search box or the search box on the website of one of our affiliates, links to websites for advertisers selling
televisions will appear alongside the algorithmic search results. Alternatively, if the user is reading an article about interest
rates, he or she may be presented with advertising links to websites for mortgage-related advertisers. For these advertising
3