Yahoo 2008 Annual Report Download - page 23

• the impact of known potential liabilities or unknown liabilities associated with the companies we acquired or
in which we invested.
We are likely to experience similar risks in connection with our future acquisitions and strategic investments.
Our failure to be successful in addressing these risks or other problems encountered in connection with our past
or future acquisitions and strategic investments could cause us to fail to realize the anticipated benefits of such
acquisitions or investments, incur unanticipated liabilities and harm our business generally.
Any failure to manage expansion, diversification, and changes to our business could adversely affect our
operating results.
We continue to diversify and evolve our business both in the U.S. and internationally. As a result of
diversification, acquisitions, and international expansion in recent years, more than one-half of our employees are
now based outside of our Sunnyvale, California headquarters. If we are unable to effectively manage a large and
geographically dispersed group of employees or to anticipate our future growth and personnel needs our business
may be adversely affected.
As we expand and diversify our business, we must also expand and adapt our operational infrastructure. Our
business relies on data systems, billing systems, and financial reporting and control systems, among others. All of
these systems have become increasingly complex in the recent past due to the growing diversification and
complexity of our business, to acquisitions of new businesses with different systems and to increased regulation
over controls and procedures. To manage our business in a cost effective manner, we will need to continue to
upgrade and improve our data systems, billing systems, and other operational and financial systems, procedures
and controls. In some cases, we are outsourcing administrative functions to lower-cost providers. These
upgrades, improvements and outsourcing changes will require a dedication of resources and in some cases are
likely to be complex. If we are unable to adapt our systems and put adequate controls in place in a timely
manner, our business may be adversely affected. In particular, sustained failures of our billing systems to
accommodate increasing numbers of transactions, to accurately bill users and advertisers, or to accurately
compensate Affiliates could adversely affect the viability of our business model.
Any failure to scale and adapt our existing technology architecture to manage expansion and respond to rapid
technological change could adversely affect our business.
As some of the most visited sites on the Internet, Yahoo! Properties deliver a significant number of products,
services, and page views to users around the world. The products and services offered by Yahoo! have expanded
and changed significantly over time and are expected to continue to expand and change rapidly in the future to
accommodate new technologies and Internet advertising solutions and new means of content delivery, such as
rich media, audio, video, and mobile.
In addition, the Internet and online services industry is characterized by rapid technological change. Widespread
adoption of new Internet, networking or telecommunications technologies, or other technological changes could
require substantial expenditures to modify or adapt our services or infrastructure. The technology architectures
utilized for our services are highly complex and may not provide satisfactory support in the future, as usage
increases and products and services expand, change and become more complex. In the future, we may make
additional changes to our architectures and systems, including moving to completely new architectures and systems.
Such changes may be technologically challenging to develop and implement, may take time to test and deploy, may
cause us to incur substantial costs or data loss, and may cause delays or interruptions in service. These changes,
delays, or interruptions in our service may cause our users, Affiliates and other advertising exchange participants to
become dissatisfied with our service and move to competing providers or seek remedial actions or compensation.
Further, to the extent that demands for our services increase, we will need to expand our infrastructure, including the
capacity of our hardware servers and the sophistication of our software. This expansion is likely to be expensive and
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