Yahoo 2008 Annual Report Download - page 5

provide them easy-to-use solutions and aprovide them easy-to-use solutions and a
clearer understanding of campaign perfor-clearer understanding of campaign perfor-
mance. While ad spending remains undermance. While ad spending remains under
pressure, we believe our ability to deliverpressure, we believe our ability to deliver
better returns on marketing dollars helpedbetter returns on marketing dollars helped
to drive growth with several large advertis-to drive growth with several large advertis-
ers in the latter part of 2008. We will continueers in the latter part of 2008. We will continue
to develop products, features and sales plansto develop products, features and sales plans
to grow our share of the advertising pie overto grow our share of the advertising pie over
time, which should put Yahoo! in a strongertime, which should put Yahoo! in a stronger
position when ad budgets begin to grow again.position when ad budgets begin to grow again.
Rolling Out Powerful Platforms:Rolling Out Powerful Platforms: UnderlyingUnderlying
all of Yahoo!’s products must be cutting-edgeall of Yahoo!’s products must be cutting-edge
technology, which we are making moretechnology, which we are making more
efficient internally and more accessible toefficient internally and more accessible to
outside developers by fundamentally rewiringoutside developers by fundamentally rewiring
Yahoo!. Over the last year, the Company hasYahoo!. Over the last year, the Company has
begun the shift from historically decentralizedbegun the shift from historically decentralized
product silos to creating a global productproduct silos to creating a global product
infrastructure. We will continue to invest toinfrastructure. We will continue to invest to
unify platforms, processes and code to allowunify platforms, processes and code to allow
us to be more streamlined, efficient andus to be more streamlined, efficient and
effective, and to innovate more rapidly.effective, and to innovate more rapidly.
In 2008, we launched the Yahoo! OpenIn 2008, we launched the Yahoo! Open
Strategy (Y!OS), a set of complementaryStrategy (Y!OS), a set of complementary
developer platforms designed to betterdeveloper platforms designed to better
open Yahoo! to third-party developersopen Yahoo! to third-party developers
and publishers. We’ve invited developersand publishers. We’ve invited developers
to take advantage of our huge scale byto take advantage of our huge scale by
writing applications that build on ourwriting applications that build on our
popular properties, tap into millions of loyalpopular properties, tap into millions of loyal
users, and make users’ Internet experiencesusers, and make users’ Internet experiences
more relevant and useful.more relevant and useful.
We also opened up our search infrastructureWe also opened up our search infrastructure
and technology to developers with BOSSand technology to developers with BOSS
(Build your Own Search Service), which(Build your Own Search Service), which
allows developers to create custom searchallows developers to create custom search
experiences on their own sites. By improvingexperiences on their own sites. By improving
search across the Web, we’re fosteringsearch across the Web, we’re fostering
innovation and creating new monetizationinnovation and creating new monetization
opportunities. Look for more tangible resultsopportunities. Look for more tangible results
in 2009 and beyond as we make our productsin 2009 and beyond as we make our products
more open and social.more open and social.
LOOKING AHEADLOOKING AHEAD
We have a lot of strengths at Yahoo!—loyalWe have a lot of strengths at Yahoo!—loyal
users, marquee advertisers, great technology,users, marquee advertisers, great technology,
superb employees, a valuable brand, andsuperb employees, a valuable brand, and
a strong balance sheet. And now that oura strong balance sheet. And now that our
organization is poised to be faster on its feet,organization is poised to be faster on its feet,
you can look for us to better capitalize onyou can look for us to better capitalize on
those strengths. We will focus on betterthose strengths. We will focus on better
understanding our customers’ business, ex-understanding our customers’ business, ex-
ercising careful cost discipline, and executingercising careful cost discipline, and executing
against our business model. I haven’t beenagainst our business model. I haven’t been
here long enough to make you a more specifichere long enough to make you a more specific
list of promises but I can tell you that I believelist of promises but I can tell you that I believe
the foundation of our success will be builtthe foundation of our success will be built
by a relentless focus on great products andby a relentless focus on great products and
customer service—plain and simple.customer service—plain and simple.
We might have a tough year ahead of us givenWe might have a tough year ahead of us given
current economic conditions, but I didn’t takecurrent economic conditions, but I didn’t take
this job because it was easy; I’m here becausethis job because it was easy; I’m here because
I saw a great opportunity to create long-termI saw a great opportunity to create long-term
shareholder value. What I’ve seen in my firstshareholder value. What I’ve seen in my first
few months here only strengthens my belieffew months here only strengthens my belief
in that potential.in that potential.
Throughout the good times and bad, Yahoo!Throughout the good times and bad, Yahoo!
has been fortunate to work with great people:has been fortunate to work with great people:
customers, partners, developers, employees,customers, partners, developers, employees,
and, of course, you. I know it’s been a difficultand, of course, you. I know it’s been a difficult
ride for our shareholders in recent years, andride for our shareholders in recent years, and
we appreciate your continued faith and sup-we appreciate your continued faith and sup-
port. While the challenges we face can’t beport. While the challenges we face can’t be
minimized, opportunity is still knocking loudly.minimized, opportunity is still knocking loudly.
I look forward to delivering on Yahoo!’s tre-I look forward to delivering on Yahoo!’s tre-
mendous promise in the coming years.mendous promise in the coming years.
Carol Bartz
Chief Executive Officer
Free Cash Flow ( $1.3 billion) is a non-GAAP financial measure defined as cash flow from operating activities ($1.9 billion) (adjusted to include excessFree Cash Flow ( $1.3 billion) is a non-GAAP financial measure defined as cash flow from operating activities ($1.9 billion) (adjusted to include excess
tax benefits from stock-based compensation ($125.1 million)), less net capital expenditures ($674.8 million) and dividends received ($18.9 million).tax benefits from stock-based compensation ($125.1 million)), less net capital expenditures ($674.8 million) and dividends received ($18.9 million).
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