Yahoo 2007 Annual Report Download - page 18

1-800-SEC-0330. The SEC maintains an Internet site that contains reports, proxy and information statements, and
other information regarding our filings at http://www.sec.gov.
Item 1A. Risk Factors
We face significant competition from large-scale Internet content, product and service aggregators, princi-
pally Google, Microsoft and AOL.
We face significant competition from companies, principally Google, Microsoft, and AOL, that have aggregated a
variety of Internet products, services and content in a manner similar to Yahoo!. Google’s Internet search service
directly competes with us for Affiliate and advertiser arrangements, both of which are key to our business and
operating results. Microsoft’s Internet search service also directly competes with us for Affiliate and advertiser
arrangements with paid search, and may release features that may make Internet searching capabilities a more
integrated part of its Windows operating system. Additionally, Google and Microsoft both offer many other
services that directly compete with our services, including consumer e-mail services, desktop search, local search,
instant messaging, photos, maps, video sharing, content channels, mobile applications, and shopping services. AOL
has access to content from Time Warner’s movie, television, music, book, periodical, news, sports, and other media
holdings; access to a network of cable and other broadband users and delivery technologies; advertising offerings;
and considerable resources for future growth and expansion. Some of the existing competitors and possible
additional entrants may have greater operational, strategic, financial, personnel or other resources than we do, as
well as greater brand recognition either overall or for certain products and services. We expect these competitors
increasingly to use their financial and engineering resources to compete with us, individually and potentially in
combination with each other. In certain of these cases, most notably AOL, our competition has a direct billing
relationship with a greater number of their users through Internet access and other services than we have with our
users through our premium services. This relationship may permit such competitors to be more effective than us in
targeting services and advertisements to the specific preferences of their users thereby giving them a competitive
advantage. If our competitors are more successful than we are in developing compelling products or attracting and
retaining users, advertisers, or publishers, then our revenues and growth rates could decline.
We also face competition from other Internet service companies, including Internet access providers, device
manufacturers offering online services, Internet advertising companies, and destination Websites.
Our users must access our services through Internet access providers, including wireless providers and providers of
cable and broadband Internet access. To the extent that an access provider or device manufacturer offers online
services competitive with those of Yahoo!, the user may elect to use the services or properties of that access provider
or manufacturer. In addition, the access provider or manufacturer may make it difficult to access our services by not
listing them in the access provider’s or manufacturer’s own directory or by providing Yahoo! with less prominent
listings than the access provider, manufacturer, or a competitor’s offerings. Such access providers and manufac-
turers may prove better able to target services and advertisements to the preferences of their users. If such access
providers and device manufacturers are more successful than we are in developing compelling products or
attracting and retaining users or advertisers, then our revenues could decline. Further, to the extent that Internet
access providers, mobile service providers or network providers increase the costs of service to users or restrict
Yahoo!’s ability to deliver products, services and content to advertisers or end users or increase our costs of doing
so, our revenues could decline.
We also compete for users and advertisers with many other providers of online services, including Internet
advertising companies, destination Websites and social media and networking sites. Some of these competitors
may have more expertise in a particular segment of the market, and within such segment, have longer operating
histories, larger advertiser or user bases, and more brand recognition or technological features than we offer.
In the future, competitors may acquire additional competitive offerings, and if we are unable to complete strategic
acquisitions or investments, our business could become less competitive. Further, competitors may consolidate
with each other to become more competitive, and new competitors may enter the market. If our competitors are
more successful than we are in developing compelling products or attracting and retaining users, advertisers or
publishers, then our revenues and growth rates could decline.
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