Yahoo 2008 Annual Report Download - page 48

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Business Segment Results
We manage our business geographically. Our primary areas of measurement and decision-making are the U.S.
and International. Management relies on an internal management reporting process that provides revenues and
segment operating income before depreciation, amortization, and stock-based compensation expense for making
financial decisions and allocating resources. Segment operating income before depreciation, amortization, and
stock-based compensation expense includes income from operations before depreciation, amortization and stock-
based compensation expense. Management believes that segment operating income before depreciation,
amortization, and stock-based compensation expense is an appropriate measure for evaluating the operational
performance of our segments. However, this measure should be considered in addition to and not as a substitute
for, or superior to, income from operations or other measures of financial performance prepared in accordance
with generally accepted accounting principles in the U.S. (“U.S. GAAP”).
Summarized information by segment was as follows (dollars in thousands):
Years Ended December 31, 2006-2007
% Change
2007-2008
% Change2006 (*) 2007 (*) 2008 (*)
Revenues by segment:
United States ........ $4,365,922 68% $4,727,123 68% $5,189,868 72% 8% 10%
International ........ 2,059,757 32% 2,242,151 32% 2,018,634 28% 9% (10)%
Total revenues . . . $6,425,679 100% $6,969,274 100% $7,208,502 100% 8% 3%
(*) Percent of total revenues.
Years Ended December 31, 2006-2007
% Change
2007-2008
% Change2006 2007 2008
Segment operating income before depreciation,
amortization, and stock-based compensation
expense:
United States ........................ $1,451,656 $1,433,617 $1,212,821 (1)% (15)%
International ......................... 454,261 493,418 (2,218) 9% (100)%
Total segment operating income before
depreciation, amortization, and
stock-based compensation
expense ....................... 1,905,917 1,927,035 1,210,603 1% (37)%
Depreciation and amortization ........... (540,021) (659,195) (790,033) 22% 20%
Stock-based compensation expense ....... (424,930) (572,427) (407,607) 35% (29)%
Income from operations ............ $ 940,966 $ 695,413 $ 12,963 (26)% (98)%
Revenues are attributed to individual countries according to the international online property that generated the
revenues. No single foreign country accounted for more than 10 percent of revenues in 2008, 2007, or 2006,
respectively.
United States. U.S. revenues for the year ended December 31, 2008 increased approximately $463 million, or 10
percent, as compared to 2007. U.S. revenues for the year ended December 31, 2007 increased approximately
$361 million, or 8 percent, as compared to 2006. The year-over-year increases in 2008 and 2007 were a result of
growth in advertising across Yahoo! Properties. More than 95 percent of the 2008 increase, or $458 million,
came from marketing services revenues. Approximately 79 percent of the 2007 increase, or $286 million, came
from marketing services revenues. Over the past year, our expanding user base has contributed to the growth in
our advertising revenues. U.S. operating income before depreciation, amortization, and stock-based
compensation expense for the year ended December 31, 2008 decreased $221 million, or 15 percent, as compared
to 2007. U.S. operating income before depreciation, amortization, and stock-based compensation expense for the
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