Yahoo 2009 Annual Report Download - page 27

effective method for generating revenues for such services. General economic conditions as well as the rapidly
evolving competitive landscape may affect users’ willingness to pay for such services. If we cannot generate
revenues from these services that are greater than the cost of providing such services, our operating results could
be harmed.
If we are unable to recruit and retain key personnel, we may not be able to execute our business plan.
Our business is dependent on our ability to recruit, hire, motivate, and retain talented, highly skilled personnel.
Achieving this objective may be difficult due to many factors, including the intense competition for such highly
skilled personnel in the San Francisco Bay Area and other metropolitan areas where our offices and the offices of
several of our vertical and horizontal competitors are located, as well as fluctuations in global economic and
industry conditions, changes in Yahoo!’s management or leadership, competitors’ hiring practices, and the
effectiveness of our compensation programs. If we do not succeed in recruiting, retaining, and motivating our
key employees and in attracting new key personnel, we may be unable to meet our business plan and as a result,
our revenue and profitability may decline.
If we are unable to license or acquire compelling content and services at reasonable cost or if we do not
develop or commission compelling content of our own, the number of users of our services may not grow as
anticipated, or may decline, or users’ level of engagement with our services may decline, all or any of which
could harm our operating results.
Our future success depends in part on our ability to aggregate compelling content and deliver that content
through our online properties. We license from third parties much of the content and services on our online
properties, such as news items, stock quotes, weather reports, music video, music radio, and maps. We believe
that users will increasingly demand high-quality content and services, including music videos, film clips, news
footage, and special productions. Such content and services may require us to make substantial payments to third
parties from whom we license or acquire such content or services. Our ability to maintain and build relationships
with such third-party providers is critical to our success. In addition, as new methods for accessing the Internet
become available, including through alternative devices, we may need to enter into amended agreements with
existing third-party providers to cover the new devices. We may be unable to enter into new, or preserve existing,
relationships with the third-parties whose content or services we seek to obtain. In addition, as competition for
compelling content increases both domestically and internationally, our third-party providers may increase the
prices at which they offer their content and services to us, and potential providers may not offer their content or
services to us at all, or may offer them on terms that are not agreeable to us. An increase in the prices charged to
us by third-party providers could harm our operating results and financial condition. Further, many of our content
and services licenses with third parties are non-exclusive. Accordingly, other media providers may be able to
offer similar or identical content. This increases the importance of our ability to deliver compelling editorial
content and personalization of this content for users in order to differentiate Yahoo! from other businesses. If we
are unable to license or acquire compelling content at reasonable prices, if other companies distribute content or
services that are similar to or the same as that provided by Yahoo!, or if we do not develop compelling editorial
content or personalization services, the number of users of our services may not grow as anticipated, or may
decline, which could harm our operating results.
We rely on third-party providers of rich media products to provide the technologies required to deliver rich
media content to our users, and any change in the licensing terms, costs, availability, or user acceptance of
these products could adversely affect our business.
We rely on leading providers of streaming media products to license the software necessary to deliver rich media
content to our users. There can be no assurance that these providers will continue to license these products to us
on reasonable terms, or at all. Our users are currently able to electronically download copies of the software to
play rich media free of charge, but providers of rich media products may begin charging users for copies of their
player software or otherwise change their business model in a manner that slows the widespread acceptance of
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