Yahoo 2008 Annual Report Download - page 37

2008 Highlights
Years Ended December 31, 2007-2008
ChangeOperating Highlights 2007 2008
(In thousands)
Revenues ................................................. $6,969,274 $ 7,208,502 $ 239,228
Income from operations ..................................... $ 695,413 $ 12,963 $ (682,450)
Years Ended December 31, 2007-2008
ChangeCash Flow Highlights 2007 2008
(In thousands)
Net cash provided by operating activities ....................... $1,918,899 $ 1,880,241 $ (38,658)
Net cash used in investing activities ............................ $ (572,502) $(1,311,783) $ (739,281)
Net cash (used in) provided by financing activities ................ $(1,442,008) $ 332,406 $1,774,414
Our revenues for the year ended December 31, 2008 increased 3 percent year-over-year to approximately $7.2
billion, with Page Views, which is defined as our internal estimate of the total number of Web pages viewed by
users on Owned and Operated sites, up 19 percent year-over-year. The growth can be attributed to an increasing
number and activity level of users across our offerings on Yahoo! Properties. Marketing services and fees
revenues experienced 4 percent and 1 percent year-over-year growth, respectively. We began to feel the impact
of the global economic recession in the third quarter of 2008. The current general economic conditions have
caused some advertisers to spend less on online advertising which could negatively affect the growth rate of our
revenues.
Cash generated from our operations is a measure of the cash productivity of our business model. Our operating
activities in 2008 generated adequate cash to meet our operating needs. Cash used in investing activities in 2008
included capital expenditures of $675 million, cash consideration for acquisitions of $209 million, and net
purchases of marketable debt securities of $368 million. Cash used in financing activities in 2008 reflected our
net cash used for direct stock repurchases of $79 million as well as $77 million used for tax withholdings related
to net share settlements of restricted stock awards and restricted stock units, which were offset by cash proceeds
from the issuance of common stock of $363 million as a result of the exercise of employee stock options.
Summary
We believe the searches, Page Views, click-throughs, and the related marketing services and fees revenues that
we generate correlate to the number and activity level of users across our offerings on Yahoo! Properties and the
activity level on our Affiliate sites. By providing a platform for our users that brings together our search
technology, content, and community while allowing for personalization and integration across devices, we seek
to become more essential to, increase our share of, and deepen the engagement of, our users with our products
and services. We believe this deeper engagement of new and existing users coupled with the growth of the
Internet as an advertising medium may enable us to increase our revenues in the future.
In 2008, we recorded a $350 million one-time payment from AT&T Inc. in long-term deferred revenues, a
portion of which was recognized as revenues during the year, and a non-cash gain of $401 million, net of tax,
within earnings in equity interests representing our share of Alibaba Group’s gain on the IPO of Alibaba.com.
We also recorded a goodwill impairment charge of $488 million related to our European reporting unit.
During 2008, we implemented a strategic workforce realignment in the first quarter and initiated a number of
cost reduction initiatives in the fourth quarter, including a workforce reduction and consolidation of our real
estate facilities. In connection with these initiatives we incurred severance, facility and other restructuring costs
of $137 million, offset by $30 million in related stock-based compensation expense reversals for unvested awards
which were forfeited, resulting in a net restructuring charge of $107 million in 2008.
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