Yahoo 2007 Annual Report Download - page 13

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HOW WE GENERATE REVENUES
As part of our strategy to provide the most efficient and effective marketing services for advertisers and publishers,
we are committed to providing a comprehensive set of Internet marketing solutions. There is an ongoing growth in
the advertising market and an increasing shift in advertisers’ and publishers’ use of online media, as communities
shift toward the Internet from traditional media. We are committed to capitalizing on this shift and helping
advertisers and publishers create and execute Internet marketing solutions that both enable users to interact with our
advertisers’ and publishers’ brands as well as provide valuable insights to our advertisers and publishers about their
customer base. We utilize our continuing research of the marketplace and our understanding of our users and their
interests to offer a suite of targeted marketing services for our advertisers and publishers to meet the full range of
their needs from brand building to consumer awareness, direct marketing, lead generation, commerce services, and
ad inventory monetization. Our offerings enable marketers to display their advertisements in different formats and
in different locations on Yahoo! Properties and on our Affiliate sites and to optimize their performance against their
marketing objectives.
Advertisers and publishers can display advertisements on the pages that are viewed by users across Yahoo!
Properties and on our Affiliate sites. Yahoo! offers a broad range of tools available for online display advertising,
including rich media, video, and targeting. We work with our advertisers and publishers to maximize the
effectiveness of their campaigns by optimizing advertising formats and placement on Yahoo! Properties or our
Affiliate sites. We also use our targeting capabilities to help advertisers and publishers reach their desired
communities by placing contextually relevant advertising on both our Owned and Operated sites and the sites of our
Affiliate partners.
We generate revenues by providing marketing services to advertisers across a majority of Yahoo! Properties and
Affiliate sites. The majority of our marketing services revenues is from sales of online display advertising.
Revenues are generated from several offerings including: the display of rich media advertisements, display of text-
based links to an advertiser’s Website, listing-based services, and commerce-based transactions.
We recognize revenues from the display of graphical advertisements (“display advertising”) on Yahoo! Properties
and on Affiliate sites as “impressions” are delivered. An “impression” is delivered when an advertisement appears
in pages viewed by users. We also recognize revenues from the display of text based links to the Websites of our
advertisers (“search advertising”) which are placed on Yahoo! Properties and on Affiliate sites. We recognize
revenues from these arrangements as “click-throughs” occur.
Marketing services revenues also include listings and transaction revenues. Listings revenues are generated from a
variety of consumer and business listings-based services, including access to the Yahoo! HotJobs database and
classified advertising such as Yahoo! Autos, Yahoo! Real Estate, and other services. We recognize listings revenues
when the services are performed. Transaction revenues are generated from facilitating commercial transactions
through Yahoo! Properties, principally from Yahoo! Travel and Yahoo! Shopping. We recognize transaction
revenues when there is evidence that qualifying transactions have occurred, for example, when travel arrangements
are booked through Yahoo! Travel.
Fees revenues consist of revenues generated from a variety of consumer and business fee-based services, including
Internet broadband services, royalties received from joint venture partners, premium mail, music and personals
offerings, as well as services for small businesses. We recognize fees revenues when the services are performed.
In 2006, we formed a strategic partnership with the Newspaper Consortium enabling the newspapers to provide
advertisers who buy ads in any of the consortium’s newspapers the ability to also post their ads on Yahoo!’s
advertising network. In 2007, we expanded the partnership to include over 20 leading U.S. newspaper publishing
companies and more than 550 daily and weekly newspapers. We believe this arrangement will continue to expand a
powerful local and national advertising marketplace, enabling advertisers to reach a larger, broader audience, and
enabling newspapers to increase their overall monetization. In addition, Yahoo! places ads from Yahoo!’s
advertisers on these newspapers’ sites. For these advertising services, we earn revenue as “impressions” are
delivered.
We also provide advertising through a series of search offerings that enable advertisers to display text-based links to
their Websites on Yahoo! Properties, as well as on our Affiliate sites. These advertisements are displayed in
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