Yahoo 2009 Annual Report Download - page 25

harmful code or applications. Investigating and defending these types of claims is expensive, even if the claims
are without merit or do not ultimately result in liability, and could subject us to significant monetary liability or
cause a change in business practices that could impact our ability to compete.
Acquisitions and strategic investments could result in adverse impacts on our operations and in unanticipated
liabilities.
We have acquired, and have made strategic investments in, a number of companies (including through joint
ventures) in the past, and we expect to make additional acquisitions and strategic investments in the future. Such
transactions may result in dilutive issuances of our equity securities, use of our cash resources, and incurrence of
debt and amortization expenses related to intangible assets. Our acquisitions and strategic investments to date
were accompanied by a number of risks, including:
• the difficulty of assimilating the operations and personnel of our acquired companies into our operations;
• the potential disruption of our on-going business and distraction of management;
• the incurrence of additional operating losses and expenses of the businesses we acquired or in which we
invested;
• the difficulty of integrating acquired technology and rights into our services and unanticipated expenses related
to such integration;
• the failure to successfully further develop acquired technology resulting in the impairment of amounts
currently capitalized as intangible assets;
• the failure of strategic investments to perform as expected;
• the potential for patent and trademark infringement claims against the acquired company;
• litigation or other claims in connection with the acquired company;
• the impairment of relationships with customers and partners of the companies we acquired or in which we
invested or with our customers and partners as a result of the integration of acquired operations;
• the impairment of relationships with employees of the acquired companies or our existing employees as a
result of integration of new management personnel;
• our lack of, or limitations on, our control over the operations of our joint venture companies;
• in the case of foreign acquisitions and investments, the difficulty of integrating operations and systems as a
result of cultural, systems, and operational differences and the impact of particular economic, currency,
political, legal and regulatory risks associated with specific countries; and
• the impact of known potential liabilities or liabilities that may be unknown, including as a result of inadequate
internal controls, associated with the companies we acquired or in which we invested.
We are likely to experience similar risks in connection with our future acquisitions and strategic investments.
Our failure to be successful in addressing these risks or other problems encountered in connection with our past
or future acquisitions and strategic investments could cause us to fail to realize the anticipated benefits of such
acquisitions or investments, incur unanticipated liabilities and harm our business generally.
Any failure to manage expansion and changes to our business could adversely affect our operating results.
We continue to evolve our business both in the U.S. and internationally. As a result of acquisitions, and
international expansion in recent years, more than one-half of our employees are now based outside of our
Sunnyvale, California headquarters. If we are unable to effectively manage a large and geographically dispersed
group of employees or to anticipate our future growth and personnel needs our business may be adversely
affected.
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