Yahoo 2008 Annual Report Download - page 39

Revenues. Revenues by groups of similar services were as follows (dollars in thousands):
Years Ended December 31, 2006-2007
% Change
2007-2008
% Change2006 (*) 2007 (*) 2008 (*)
Marketing services:
Owned and Operated sites . . $3,074,803 48% $3,669,816 52% $4,045,996 56% 19% 10%
Affiliate sites ............. 2,552,404 40% 2,418,423 35% 2,270,210 32% (5)% (6)%
Marketing services ........ 5,627,207 88% 6,088,239 87% 6,316,206 88% 8% 4%
Fees .................... 798,472 12% 881,035 13% 892,296 12% 10% 1%
Total revenues ........ $6,425,679 100% $6,969,274 100% $7,208,502 100% 8% 3%
(*) Percent of total revenues.
We currently generate marketing services revenues principally from display advertising on Owned and Operated
sites and from search advertising. “Searches” is defined as online search queries that may yield Internet search
results ranked and sorted based on relevance to the user’s search query. “Sponsored search results” are a subset
of the overall search results, and provide links to paying advertisers’ Web pages.
We also receive revenues for Content Match links (advertising on Yahoo! Properties and Affiliate sites which
includes contextually relevant advertiser links to their respective Websites) on Owned and Operated and
Affiliate sites and display advertising on Affiliate sites. The net revenues and related volume metrics from
these additional sources are not currently material and are excluded from the discussion and calculation of
average revenue per Page View on Owned and Operated sites and average revenue per search on Affiliate sites
that follows.
Marketing Services Revenues from Owned and Operated Sites. Marketing services revenues from Owned and
Operated sites for the year ended December 31, 2008 increased by approximately $376 million, or 10 percent, as
compared to 2007. Factors leading to growth in overall marketing services revenues included an increase in user
activity levels on Yahoo! Properties, which contributed to a higher volume of search queries, Page Views, and ad
impression displays. The transition of and changes in certain of our broadband access partnerships from being
fee-paying user based to an advertising revenue sharing model have also contributed to the increase in marketing
services revenues from Owned and Operated sites. Marketing services revenues from Owned and Operated sites
for the year ended December 31, 2007 increased by approximately $595 million, or 19 percent, as compared to
2006. The year-over-year growth in marketing services revenues in 2007 can be attributed to a combination of
factors that have driven increased marketing services revenues across Yahoo! Properties both domestically and
internationally. These included an increase in our user base and activity levels on Yahoo! Properties, which
resulted in a higher volume of search queries, ad impression displays, and click-throughs.
The primary components of growth in our marketing services revenues from Owned and Operated sites are
search and display advertising. For the year ended December 31, 2008, revenues from search advertising on
Owned and Operated sites grew 17 percent, compared to 2007. For the year ended December 31, 2008, revenues
from display advertising on Owned and Operated sites grew 7 percent, compared to 2007.
We periodically review and refine our methodology for monitoring, gathering, and counting Page Views to more
accurately reflect the total number of Web pages viewed by users on Yahoo! Properties. Based on this process,
from time to time we update our methodology to exclude from the count of Page Views interactions with our
servers that we determine or believe are not the result of user visits to our Owned and Operated sites.
Using our updated methodology, for the year ended December 31, 2008 as compared to 2007, Page Views
increased 19 percent and revenue per Page View decreased 7 percent, and for the year ended December 31, 2007
as compared to 2006, Page Views increased 12 percent and revenue per Page View increased 6 percent. The
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