Yahoo 2007 Annual Report Download - page 21

Financial results for any particular period do not predict results for future periods.
There can be no assurance that the purchasing pattern of advertisers on Yahoo! Properties will not fluctuate, that
advertisers will not make smaller and shorter-term purchases, or that market prices for online advertising will not
decrease due to competitive or other factors. In addition, there can be no assurance that the volume of searches
conducted, the amounts bid by advertisers for search marketing listings or the number of advertisers that bid in our
search marketing marketplace will not vary widely from period to period. As revenues from new sources increase, it
may become more difficult to predict our financial results based on historical performance. You should not rely on
the results for any period as an indication of future performance.
We estimate tax liabilities, the final determination of which is subject to review by domestic and interna-
tional taxation authorities.
We are subject to income taxes and other taxes in both the U.S. and the foreign jurisdictions in which we currently
operate or have historically operated. We are also subject to review and audit by both domestic and foreign taxation
authorities. The determination of our worldwide provision for income taxes and current and deferred tax assets and
liabilities requires judgment and estimation. In the ordinary course of our business, there are many transactions and
calculations where the ultimate tax determination is uncertain. Although we believe our tax estimates are
reasonable, the ultimate tax outcome may materially differ from the tax amounts recorded in our consolidated
financial statements and may materially affect our income tax provision, net income or cash flows in the period or
periods for which such determination is made.
We rely on the value of our brands, and a failure to maintain or enhance the Yahoo! brands in a cost-
effective manner could harm our operating results.
We believe that maintaining and enhancing our brands, including those that contain the Yahoo! name as well as
those that do not, is an important aspect of our efforts to attract and expand our user, advertiser, and Affiliate base.
We also believe that the importance of brand recognition will increase due to the relatively low barriers to entry in
the Internet market. We have spent considerable money and resources to date on the establishment and maintenance
of our brands, and we anticipate spending increasing amounts of money on, and devoting greater resources to,
advertising, marketing and other brand-building efforts to preserve and enhance consumer awareness of our brands.
We may not be able to successfully maintain or enhance consumer awareness of our brands and, even if we are
successful in our branding efforts, these efforts may not be cost-effective. If we are unable to maintain or enhance
customer awareness of our brands in a cost-effective manner, our business, operating results and financial condition
could be harmed.
If we are unable to license or acquire compelling content at reasonable cost or if we do not develop or com-
mission compelling content of our own, the number of users of our services may not grow as anticipated, or
may decline, or users’ level of engagement with our services may decline, all or any of which could harm
our operating results.
Our future success depends in part upon our ability to aggregate compelling content and deliver that content through
our online properties. We license much of the content on our online properties, such as news items, stock quotes,
weather reports, maps and audio and video content from third parties. We have been providing increasing amounts
of audio and video content to our users, and we believe that users will increasingly demand high-quality audio and
video content, such as music, film, speeches, news footage, concerts and other special events. Such content may
require us to make substantial payments to third parties from whom we license or acquire such content. For
example, our music and entertainment properties rely on major sports organizations, radio and television stations,
record labels, music publishers, cable networks, businesses, colleges and universities, film producers and distrib-
utors, and other organizations for a large portion of the content available on our properties. Our ability to maintain
and build relationships with third-party content providers will be critical to our success. In addition, as new methods
for accessing the Internet become available, including through alternative devices, we may need to enter into
amended content agreements with existing third-party content providers to cover the new devices. Also, to the
extent that Yahoo! develops content of its own, Yahoo!’s current and potential third-party content providers may
view our services as competitive with their own, and this may adversely affect their willingness to contract with us.
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