Yahoo 2006 Annual Report Download - page 23

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consults regularly with agencies and advertisers on design and placement of online advertising, and provides
customers with measurements and analyses of advertising effectiveness as well as effective consumer insights that
can be turned into marketing campaigns. In addition to our geographic sales structure, we have industry focused
sales teams for automotive, consumer packaged goods, entertainment, finance, retail, pharmaceuticals, sports,
technology, telecommunications and travel. In international markets, we have either our own internal sales
professionals or we have established sales agency relationships in more than 20 countries.
MARKETING
We believe that world-class marketing can be a competitive advantage. The Yahoo! brand is one of the most widely
recognized in the world. Maintaining and growing that brand enables us to attract, retain, and more deeply engage
users and advertisers. We believe a great brand begins with a great product. Yahoo! marketing engages in each step
of product development, deployment and management to understand our offerings and how best to market them to
our audience of potential and existing users. Our marketing communications efforts help accelerate product
momentum, awareness, adoption, and engagement. We use online, television, print, radio and outdoor advertising,
and we leverage our global online network and our distribution partnerships to market our products and services to
the right people at the right time. With continued investment in global brand and product marketing, we believe we
can continue to attract and engage users and advertisers.
COMPETITION
We operate in the Internet products, services and content market, which is highly competitive and characterized by
rapid change, converging technologies, and increasing competition from companies offering communication,
information and entertainment services integrated into other products and media properties. We primarily compete
with companies to attract users to our website and advertisers to our marketing services. We expect the market to
become increasingly competitive if online marketing continues to grow and gain acceptance on a global basis.
Globally, our most significant competition is from Google Inc. (“Google”), Microsoft Corporation (“Microsoft”)
and Time Warner’s America Online business (“AOL” or “America Online”).
The principal competitive factors relating to attracting and retaining users include the quality and relevance of our
search results, and the usefulness, accessibility, integration and personalization of the online services that we offer
as well as the overall user experience on our website. In the case of attracting advertisers, the principal competitive
factors are the reach, effectiveness and efficiency of our marketing services as well as the creativity of the marketing
solutions that we offer.
We also compete for customers, users and advertisers with many other providers of online services, including web
businesses where expertise in a particular market segment may provide a competitive advantage and with social
media and networking competitors.
Internationally, we compete with local portals that are predominantly supported by local telecommunication
providers, or local providers of specific locally designed and marketed Internet services, some of which may have a
potential competitive advantage due to an existing direct billing relationship with their users.
We believe that we are effectively competing in the Internet services market as we continue to refine our search
technology, build onto our existing online properties and services, and further improve our users’ experience.
Additional information regarding competition is included in Part I, Item 1A “Risk Factors” of this Annual Report on
Form 10-K.
PRODUCT DEVELOPMENT
Yahoo! continually enhances, expands and launches products and features to meet evolving user, advertiser and
publisher needs for technological innovation and a deeper, more integrated experience.
As a complement to our core engineering and production teams, we also have scientists working in our Yahoo!
Research Labs dedicated to developing novel algorithms and technology that empower users, businesses, and
advertisers worldwide to maximize the social and economic potential of the Internet. Yahoo! performs research to
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