Yahoo 2008 Annual Report Download - page 29

We may be required to record a significant charge to earnings if our goodwill, amortizable intangible assets,
or investments in equity interests become impaired.
We are required under generally accepted accounting principles to test goodwill for impairment at least annually
and to review our amortizable intangible assets and investments in equity interests for impairment when events or
changes in circumstance indicate the carrying value may not be recoverable. Factors that could lead to
impairment of goodwill and amortizable intangible assets include significant adverse changes in the business
climate and declines in the financial condition of our business. Factors that could lead to impairment of
investments in equity interests include a prolonged period of decline in the stock price or operating performance
of, or an announcement of adverse changes or events by, the company in which we invested. We have recorded
and may be required in the future to record additional charges to earnings if a portion of our goodwill,
amortizable intangible assets, or investments in equity interests becomes impaired. Any such charge would
adversely impact our results of operations.
We may have exposure to additional tax liabilities which could negatively impact our income tax provision, net
income, and cash flow.
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. 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. We are
subject to regular review and audit by both domestic and foreign tax authorities as well as subject to the
prospective and retrospective effects of changing tax regulations and legislation. 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.
Uncertainty resulting from potential proposals to acquire all or part of Yahoo! may adversely affect our
business.
In 2008, we received proposals to acquire all or a part of our Company. Third parties may in the future make
proposals to acquire all or part of the Company or take other actions that might create uncertainty for our
employees, publishers, advertisers, and other business partners. This continuing uncertainty could negatively
impact our business.
Our stock price has been volatile historically and may continue to be volatile regardless of our operating
performance.
The trading price of our common stock has been and may continue to be subject to wide fluctuations. During the
quarter ended December 31, 2008, the closing sale price of our common stock on the NASDAQ Global Select
Market ranged from $8.95 to $16.96 per share and the closing sale price on February 13, 2009 was $12.84 per share.
Our stock price may fluctuate in response to a number of events and factors, such as quarterly variations in operating
results, announcements and implementations of technological innovations or new services, upgrades and media
properties by us or our competitors; changes in financial estimates and recommendations by securities analysts; the
operating and stock price performance of other companies that investors may deem comparable to us; the operating
performance of companies in which we have an equity investment, including Yahoo! Japan and Alibaba Group
Holding Limited; and news reports relating to us, trends in our markets, or general economic conditions.
In addition, the stock market in general, and the market prices for Internet-related companies in particular, have
experienced volatility that often has been unrelated to the operating performance of such companies. These broad
market and industry fluctuations may adversely affect the price of our stock, regardless of our operating
performance. Volatility or a lack of positive performance in our stock price may adversely affect our ability to
retain key employees, all of whom have been granted stock options or other stock-based awards. A sustained
decline in our stock price and market capitalization could lead to an impairment charge of our long-lived assets.
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