Yahoo 2005 Annual Report Download - page 37

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to the anti-takeover provisions of Section 203 of the Delaware General Corporation Law, which will
prohibit us from engaging in a “business combination” with an “interested stockholder” for a period of
three years after the date of the transaction in which the person became an interested stockholder, even if
such combination is favored by a majority of stockholders, unless the business combination is approved in a
prescribed manner. The application of Section 203 also could have the effect of delaying or preventing a
change of control or management.
Item 1B. Unresolved Staff Comments
None.
Item 2. Properties
Our headquarters is located in Sunnyvale, California and consists of owned and leased space aggregating
approximately 1 million square feet. Office space is also leased in Amsterdam, Bangalore, Buenos Aires,
Calgary, Copenhagen, Dublin, Dusseldorf, Echirolles, Hamburg, Hong Kong, London, Oslo, Madrid,
Melbourne, Mexico City, Milan, Montreal, Mumbai, Munich, New Delhi, Osaka, Paris, São Paulo, Seoul,
Singapore, Stockholm, Sydney, Taipei, Tokyo, Toronto and Trondheim. We also lease offices in various
locations in the United States, including Atlanta, Berkeley, Boston, Chicago, Columbus, Dallas, Detroit,
Hillsboro, the Los Angeles Area, Miami, New York, Orlando, Reston, the San Diego Area, the San
Francisco Bay Area, the Seattle Area, and Washington, D.C. Our datacenters are operated in locations in
the United States, Europe and Asia.
We believe that our existing facilities are adequate to meet current requirements, and that suitable
additional or substitute space will be available as needed to accommodate any further physical expansion
of operations and for any additional sales offices.
Item 3. Legal Proceedings
From time to time, third parties assert patent infringement claims against Yahoo!. Currently, we are
engaged in several lawsuits regarding patent issues and have been notified of a number of other potential
patent disputes. In addition, from time to time we are subject to other legal proceedings and claims in the
ordinary course of business, including claims of alleged infringement of trademarks, copyrights, trade
secrets and other intellectual property rights, claims related to employment matters, and a variety of
claims, including claims alleging defamation or invasion of privacy, arising in connection with our e-mail,
message boards, auction sites, shopping services and other communications and community features.
On May 24, 2001, Arista Records, Inc., Bad Boy Records, BMG Music d/b/a The RCA Records Label,
Capitol Records, Inc., Virgin Records America, Inc., Sony Music Entertainment, Inc., UMG
Recordings, Inc., Interscope Records, Motown Record Company, L.P., and Zomba Recording
Corporation filed a lawsuit alleging copyright infringement against LAUNCH in the United States District
Court for the Southern District of New York. The plaintiffs allege, among other things, that the
consumer-influenced portion of LAUNCH’s LAUNCHcast service is “interactive” within the meaning of
Section 114 of the Copyright Act and therefore does not qualify for the compulsory license provided for by
the Copyright Act. The Complaint seeks declaratory and injunctive relief and damages for the alleged
infringement. After the lawsuit was commenced, Yahoo! entered into an agreement to acquire LAUNCH.
In June 2001, LAUNCH settled the LAUNCH litigation as to UMG Recordings, Inc. Our acquisition of
LAUNCH closed in August 2001, and since that time LAUNCH has been a wholly owned subsidiary of
Yahoo!. Yahoo! and LAUNCH do not believe that LAUNCH has infringed any rights of plaintiffs and
intend to vigorously contest the lawsuit. In January 2003, LAUNCH settled the LAUNCH litigation as to
Sony Music Entertainment, Inc. In October 2003, LAUNCH settled the litigation as to Capitol
Records, Inc. and Virgin Records America, Inc. Accordingly, BMG Music d/b/a/ The RCA Records Label