Yahoo 2006 Annual Report Download - page 38

Our stock price has been volatile historically and may continue to be volatile regardless of our operating
performance.
The trading price of our common stock has been and may continue to be subject to wide fluctuations. During the
year ended December 31, 2006, the closing sale prices of our common stock on the Nasdaq ranged from $22.99 to
$43.42 per share and the closing sale price on February 15, 2007 was $31.25 per share. Our stock price may
fluctuate in response to a number of events and factors, such as quarterly variations in operating results;
announcements and implementations of technological innovations or new services, upgrades and media properties
by us or our competitors; changes in financial estimates and recommendations by securities analysts; the operating
and stock price performance of other companies that investors may deem comparable to us; the operating
performance of companies in which we have an equity investment, including Yahoo! Japan and Alibaba; and
news reports relating to trends in our markets or general economic conditions.
In addition, the stock market in general, and the market prices for Internet-related companies in particular, have
experienced volatility that often has been unrelated to the operating performance of such companies. These broad
market and industry fluctuations may adversely affect the price of our stock, regardless of our operating
performance. Additionally, volatility or a lack of positive performance in our stock price may adversely affect
our ability to retain key employees, all of whom have been granted stock options or other stock-based awards.
Anti-takeover provisions could make it more difficult for a third party to acquire us.
We have adopted a stockholder rights plan and initially declared a dividend distribution of one right for each
outstanding share of common stock to stockholders of record as of March 20, 2001. As a result of our two-for-one
stock split effective May 11, 2004, each share of common stock is now associated with one-half of one right. Each
right entitles the holder to purchase one unit consisting of one one-thousandth of a share of our Series A Junior
Participating Preferred Stock for $250 per unit. Under certain circumstances, if a person or group acquires
15 percent or more of our outstanding common stock, holders of the rights (other than the person or group triggering
their exercise) will be able to purchase, in exchange for the $250 exercise price, shares of our common stock or of
any company into which we are merged having a value of $500. The rights expire on March 1, 2011, unless extended
by our Board of Directors. Because the rights may substantially dilute the stock ownership of a person or group
attempting to take us over without the approval of our Board of Directors, our rights plan could make it more
difficult for a third party to acquire us (or a significant percentage of our outstanding capital stock) without first
negotiating with our Board of Directors regarding that acquisition.
In addition, our Board of Directors has the authority to issue up to 10 million shares of Preferred Stock (of which
2 million shares have been designated as Series A Junior Participating Preferred Stock) and to determine the price,
rights, preferences, privileges and restrictions, including voting rights, of those shares without any further vote or
action by the stockholders.
The rights of the holders of our common stock may be subject to, and may be adversely affected by, the rights of the
holders of any Preferred Stock that may be issued in the future. The issuance of Preferred Stock may have the effect
of delaying, deterring or preventing a change of control of Yahoo! without further action by the stockholders and
may adversely affect the voting and other rights of the holders of our common stock. Further, certain provisions of
our charter documents, including provisions eliminating the ability of stockholders to take action by written consent
and limiting the ability of stockholders to raise matters at a meeting of stockholders without giving advance notice,
may have the effect of delaying or preventing changes in control or management of Yahoo!, which could have an
adverse effect on the market price of our stock. In addition, our charter documents do not permit cumulative voting,
which may make it more difficult for a third party to gain control of our Board of Directors. Further, we are subject
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.
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