Yahoo 2008 Annual Report Download - page 38
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The objective of the cost reduction initiatives implemented in the fourth quarter of 2008 was to reduce our
current annualized cost run rate by more than $400 million to enhance profitability in the current economic
environment. We will continue to emphasize productivity improvement initiatives that may result in additional
restructurings. For further details regarding these restructuring initiatives and related costs and charges, refer to
our discussion under Costs and Expenses and Note 16—“Restructuring Charges, Net” in the Notes to the
consolidated financial statements.
In the following Management’s Discussion and Analysis, we discuss the following areas of our financial results:
• Results of Operations;
• Business Segment Results;
• Transactions;
• Liquidity and Capital Resources;
• Critical Accounting Policies and Estimates; and
• Recent Accounting Pronouncements.
Results of Operations
The following table sets forth selected information on our results of operations as a percentage of revenues for
the periods indicated:
Years Ended December 31,
2006 2007 2008
Revenues .......................................................... 100% 100% 100%
Cost of revenues .................................................... 42 41 42
Gross profit .................................................... 58 59 58
Operating expenses:
Sales and marketing ............................................. 20 23 22
Product development ............................................ 13 15 17
General and administrative ........................................ 8 9 10
Amortization of intangibles ....................................... 2 2 1
Restructuring charges, net ......................................... 0 0 1
Goodwill impairment charge ...................................... 0 0 7
Total operating expenses ..................................... 43 49 58
Income from operations .............................................. 15 10 0
Other income, net ............................................... 2 2 1
Income before income taxes, earnings in equity interests, and minority
interests ......................................................... 17 12 1
Provision for income taxes ............................................ (7) (5) (3)
Earnings in equity interests ............................................ 2 2 8
Minority interests in operations of consolidated subsidiaries .................. 0 0 0
Net income .................................................... 12% 9% 6%
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