Yahoo 2007 Annual Report Download - page 27

established branding in that country, greater knowledge with respect to the tastes and preferences of users residing
in that country and/or their focus on a single market. Further, the local providers may have greater regulatory and
operational flexibility than Yahoo! due to the fact that we are subject to both U.S. and foreign regulatory
requirements. We must continue to improve our local offerings, become more knowledgeable about our local users
and their preferences, deepen our relationships with our local users as well as increase our branding and other
marketing activities in order to remain competitive and strengthen our international market position.
Our international operations are subject to increased risks which could harm our business, operating results
and financial condition.
In addition to uncertainty about our ability to continue to generate revenues from our foreign operations and expand
our international market position, there are certain risks inherent in doing business internationally, including:
• trade barriers and changes in trade regulations;
• difficulties in developing, staffing and simultaneously managing a large number of varying foreign operations as a
result of distance, language, and cultural differences;
• stringent local labor laws and regulations;
• longer payment cycles;
• credit risk and higher levels of payment fraud;
• currency exchange rate fluctuations;
• political or social unrest or economic instability;
• import or export restrictions;
• seasonal volatility in business activity;
• risks related to government regulation or required compliance with local laws in certain jurisdictions, including
those more fully described above; and
• potentially adverse tax consequences.
One or more of these factors could harm our future international operations and consequently, could harm our
brand, business, operating results, and financial condition.
We may be subject to legal liability for online services.
We host a wide variety of services that enable individuals and businesses to exchange information, generate content,
advertise products and services, conduct business, and engage in various online activities on a domestic and an
international basis. The law relating to the liability of providers of these online services for activities of their users is
currently unsettled both within the U.S. and internationally. Claims have been threatened and have been brought
against us for defamation, negligence, copyright or trademark infringement, unlawful activity, tort, including
personal injury, fraud, or other theories based on the nature and content of information to which we provide links or
that may be posted online or generated by our users. In addition, Yahoo! has been and may again in the future be
subject to domestic or international actions alleging that the availability of certain content within our services
violates laws in domestic and international jurisdictions. Defense of any such actions could be costly and involve
significant time and attention of our management and other resources.
We also periodically enter into arrangements to offer third-party products, services or content under the Yahoo!
brand or via distribution on Yahoo! Properties, including stock quotes and trading information. We may be subject
to claims concerning these products, services or content by virtue of our involvement in marketing, branding,
broadcasting or providing access to them, even if we do not ourselves host, operate, provide, or provide access to
these products, services or content. While our agreements with respect to these products, services and content, often
provide that we will be indemnified against such liabilities, the ability to receive such indemnification depends on
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