Yahoo 2006 Annual Report Download - page 39

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 1.7 million square feet. In 2006, we purchased additional land in Santa Clara, California. 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, Sa
˜o 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 data centers 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 other 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 Media, Inc. (“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, which closed in August 2001, and since that time LAUNCH
has been a wholly owned subsidiary of Yahoo!. Because LAUNCH settled the LAUNCH litigation as to all other
plaintiffs, BMG Music d/b/a/ The RCA Records Label is the sole remaining plaintiff in this proceeding. On
November 4, 2005, the Court issued an order denying the plaintiff’s summary judgment motions as to interactivity
and willful infringement. A trial date has been set for April 16, 2007. We do not believe it is feasible to predict or
determine the outcome or resolution of the LAUNCH litigation at this time. The range of possible resolutions of
such LAUNCH litigation could include judgments against LAUNCH or settlements that could require substantial
payments by LAUNCH.
On July 12, 2001, the first of several purported securities class action lawsuits was filed in the United States District
Court, Southern District of New York against certain underwriters involved in Overture Services Inc.’s (“Overture”)
initial public offering, Overture, and certain of Overture’s current and former officers and directors. The Court
consolidated the cases against Overture. Plaintiffs allege, among other things, violations of the Securities Act of
1933 and the Securities Exchange Act of 1934 involving undisclosed compensation to the underwriters, and
improper practices by the underwriters, and seek unspecified damages. Similar complaints were filed in the same
court against numerous public companies that conducted initial public offerings of their common stock since the
mid-1990s. All of these lawsuits were consolidated for pretrial purposes before Judge Shira Scheindlin. On
April 19, 2002, plaintiffs filed an amended complaint, alleging Rule 10b-5 claims of fraud. On July 15, 2002, the
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