Yahoo 2005 Annual Report Download - page 32

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26
Our international operations are subject to increased risks which could harm our business, operating results and
financial condition.
In addition to uncertainty about our ability to continue to generate revenues from our foreign operations
and expand our international market position, there are certain risks inherent in doing business
internationally, including:
• trade barriers and changes in trade regulations;
• difficulties in developing, staffing and simultaneously managing a large number of varying foreign
operations as a result of distance, language and cultural differences;
• stringent local labor laws and regulations;
• longer payment cycles;
• currency exchange rate fluctuations;
• political or social unrest or economic instability;
• import or export restrictions;
• seasonal volatility in business activity;
• risks related to government regulation or required compliance with local laws in certain
jurisdictions, including those more fully described above; and
• potentially adverse tax consequences.
One or more of these factors could harm our future international operations and consequently, could harm
our brand, business, operating results and financial condition.
We may be subject to legal liability for online services.
We host a wide variety of services that enable individuals and businesses to exchange information, generate
content, advertise products and services, conduct business and engage in various online activities on an
international basis. The law relating to the liability of providers of these online services for activities of
their users is currently unsettled both within the United States and internationally. Claims have been
threatened and have been brought against us for defamation, negligence, copyright or trademark
infringement, unlawful activity, tort, including personal injury, fraud, or other theories based on the nature
and content of information that we provide links to or that may be posted online or generated by our users
or with respect to auctioned materials. In addition, Yahoo! was the subject of a claim brought by certain
entities in a French court regarding, among other things, the availability of certain content within our
services which was alleged to violate French law. We may be subject to similar actions in domestic or other
international jurisdictions in the future. Our defense of any such actions could be costly and involve
significant time and attention of our management and other resources.
We also periodically enter into arrangements to offer third-party products, services or content under the
Yahoo! brand or via distribution on the Yahoo! Properties, including stock quotes and trading
information. We may be subject to claims concerning these products, services or content by virtue of our
involvement in marketing, branding, broadcasting or providing access to them, even if we do not ourselves
host, operate, provide, or provide access to these products, services or content. While our agreements with
respect to these products, services and content, often provide that we will be indemnified against such
liabilities, the ability to receive such indemnification depends on the financial resources of the other party
to the agreement and any amounts received may not be adequate to cover our liabilities.
It is also possible that, if any information provided directly by us contains errors or is otherwise negligently
provided to users, third parties could make claims against us. For example, we offer web-based e-mail