Yahoo 2005 Annual Report Download - page 25

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• we may be required to “make good” on our obligations by providing additional advertising or
alternative services;
• the partners or co-brand services may not renew the arrangements or may renew at lower rates; and
• the arrangements may not generate anticipated levels of shared transactions revenue, or partners
may default on the payment commitments in such agreements as has occurred in the past.
Accordingly, any leveling off or decrease of our user base (or usage by our existing base) or the failure to
generate anticipated levels of shared transactions revenue could result in a significant decrease in our
revenues.
Decreases or delays in advertising spending by our advertisers due to general economic conditions could harm our
ability to generate advertising revenue.
Expenditures by advertisers tend to be cyclical, reflecting overall economic conditions and budgeting and
buying patterns. Since we derive the majority of our revenues from advertising, any decreases in or delays
in advertising spending due to general economic conditions could reduce our revenues or negatively
impact our ability to grow our revenues.
Financial results for any particular period do not predict results for future periods.
There can be no assurance that the purchasing pattern of advertisers on the Yahoo! Properties will not
fluctuate, that advertisers will not make smaller and shorter-term purchases, or that market prices for
online advertising will not decrease due to competitive or other factors. In addition, there can be no
assurance that the volume of searches conducted, the amounts bid by advertisers for search marketing
listings or the number of advertisers that bid in our search marketing marketplace will not vary widely from
period to period. As revenues from new sources increase, it may become more difficult to predict our
financial results based on historical performance. You should not rely on the results for any period as an
indication of future performance.
We rely on the value of the Yahoo! brands, and a failure to maintain or enhance the Yahoo! brands in a cost-
effective manner could harm our operating results.
We believe that maintaining and enhancing the Yahoo! brands is an important aspect of our efforts to
attract and expand our user and advertiser base. We also believe that the importance of brand recognition
will increase due to the relatively low barriers to entry in the Internet market. We have spent considerable
money and resources to date on the establishment and maintenance of the Yahoo! brands, and we
anticipate spending increasing amounts of money on, and devoting greater resources to, advertising,
marketing and other brand-building efforts to preserve and enhance consumer awareness of the Yahoo!
brands. We may not be able to successfully maintain or enhance consumer awareness of the Yahoo!
brands and, even if we are successful in our branding efforts, these efforts may not be cost-effective. If we
are unable to maintain or enhance customer awareness of the Yahoo! brands in a cost-effective manner,
our business, operating results and financial condition could be harmed.
If we are unable to license or acquire compelling content at reasonable costs or if we do not develop compelling
content, the number of users of our services may not grow as anticipated, or may decline, which could harm our
operating results.
Our future success depends in part upon our ability to aggregate compelling content and deliver that
content through our online properties. We license much of the content on our online properties, such as
news items, stock quotes, weather reports, maps and audio and video content from third parties. We have
been providing increasing amounts of audio and video content to our users, and we believe that users will