Yahoo 2007 Annual Report Download - page 24

consumer protection-related laws, regulations or industry self-regulatory principles could result in proceedings or
actions against us by governmental entities or others, which could potentially have an adverse effect on our
business.
Further, failure or perceived failure by us to comply with our policies, applicable requirements, or industry self-
regulatory principles related to the collection, use, sharing or security of personal information or other privacy-
related matters could result in a loss of user confidence in us, damage to the Yahoo! brands, and ultimately in a loss
of users, advertisers, or Affiliates which could adversely affect our business.
A large number of legislative proposals pending before the U.S. Congress, various state legislative bodies and
foreign governments concern data privacy and retention issues related to our business. It is not possible to predict
whether or when such legislation may be adopted. Certain proposals, if adopted, could impose requirements that
may result in a decrease in our user registrations and revenues. In addition, the interpretation and application of user
data protection laws are currently unsettled. These laws may be interpreted and applied inconsistently from country
to country and inconsistently with our current data protection policies and practices. Complying with these varying
international requirements could cause us to incur substantial costs or require us to change our business practices in
a manner adverse to our business.
Acquisitions and strategic investments could result in adverse impacts on our operations and in unantici-
pated liabilities.
We have acquired, and have made strategic investments in, a number of companies (including through joint
ventures) in the past, and we expect to make additional acquisitions and strategic investments in the future. Such
transactions may result in dilutive issuances of our equity securities, use of our cash resources, and incurrence of
debt and amortization expenses related to intangible assets. Our acquisitions and strategic investments to date were
accompanied by a number of risks, including:
• the difficulty of assimilating the operations and personnel of our acquired companies into our operations;
• the potential disruption of our on-going business and distraction of management;
• the incurrence of additional operating losses and expenses of the businesses we acquired or in which we invested;
• the difficulty of integrating acquired technology and rights into our services and unanticipated expenses related to
such integration;
• the failure to successfully further develop acquired technology resulting in the impairment of amounts currently
capitalized as intangible assets;
• the failure of strategic investments to perform as expected;
• the potential for patent and trademark infringement claims against the acquired company;
• the impairment of relationships with customers and partners of the companies we acquired or in which we
invested or with our customers and partners as a result of the integration of acquired operations;
• the impairment of relationships with employees of the acquired companies or our existing employees as a result of
integration of new management personnel;
• the difficulty of integrating the acquired company’s accounting, management information, human resources and
other administrative systems;
• our lack of, or limitations on, our control over the operations of our joint venture companies;
• in the case of foreign acquisitions, uncertainty regarding foreign laws and regulations and difficulty integrating
operations and systems as a result of cultural, systems and operational differences; and
• the impact of known potential liabilities or unknown liabilities associated with the companies we acquired or in
which we invested.
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