Yahoo 2009 Annual Report Download - page 32

impairment of goodwill and amortizable intangible assets include significant adverse changes in the business
climate and declines in the financial condition of our business. Factors that could lead to impairment of
investments in equity interests include a prolonged period of decline in the stock price or operating performance
of, or an announcement of adverse changes or events by, the company in which we invested. We have recorded
and may be required in the future to record additional charges to earnings if a portion of our goodwill,
amortizable intangible assets, or investments in equity interests becomes impaired. Any such charge would
adversely impact our financial results.
We may have exposure to additional tax liabilities which could negatively impact our income tax provision, net
income, and cash flow.
We are subject to income taxes and other taxes in both the U.S. and the foreign jurisdictions in which we
currently operate or have historically operated. The determination of our worldwide provision for income taxes
and current and deferred tax assets and liabilities requires judgment and estimation. In the ordinary course of our
business, there are many transactions and calculations where the ultimate tax determination is uncertain. In
addition, there are current proposals for new U.S. tax legislation which, if adopted, could adversely affect the
Company’s tax rate. We are subject to regular review and audit by both domestic and foreign tax authorities as
well as subject to the prospective and retrospective effects of changing tax regulations and legislation. Although
we believe our tax estimates are reasonable, the ultimate tax outcome may materially differ from the tax amounts
recorded in our consolidated financial statements and may materially affect our income tax provision, net
income, or cash flows in the period or periods for which such determination and settlement is made.
Our stock price has been volatile historically and may continue to be volatile regardless of our operating
performance.
The trading price of our common stock has been and may continue to be subject to broad fluctuations. During the
year ended December 31, 2009, the closing sale price of our common stock on the NASDAQ Global Select
Market ranged from $11.01 to $17.81 per share and the closing sale price on February 19, 2010 was $15.58 per
share. Our stock price may fluctuate in response to a number of events and factors, such as variations in quarterly
operating results, announcements and implementations of technological innovations or new services by us or our
competitors; changes in financial estimates and recommendations by securities analysts; the operating and stock
price performance of other companies that investors may deem comparable to us; the operating performance of
companies in which we have an equity investment, including Yahoo Japan Corporation (“Yahoo Japan”) and
Alibaba Group Holding Limited (“Alibaba Group”); and news reports relating to us, trends in our markets, or
general economic conditions.
In addition, the stock market in general, and the market prices for Internet-related companies in particular, have
experienced volatility that often has been unrelated to the operating performance of such companies. These broad
market and industry fluctuations may adversely affect the price of our stock, regardless of our operating
performance. Volatility or a lack of positive performance in our stock price may adversely affect our ability to
retain key employees, all of whom have been granted stock options or other stock-based awards. A sustained
decline in our stock price and market capitalization could lead to an impairment charge of our long-lived assets.
Anti-takeover provisions could make it more difficult for a third-party to acquire us.
We have adopted a stockholder rights plan and initially declared a dividend distribution of one right for each
outstanding share of common stock to stockholders of record as of March 20, 2001. As a result of our
two-for-one stock split effective May 11, 2004, each share of common stock is now associated with one-half of
one right. Each right entitles the holder to purchase one unit consisting of one one-thousandth of a share of our
Series A Junior Participating Preferred Stock for $250 per unit. Under certain circumstances, if a person or group
acquires 15 percent or more of our outstanding common stock, holders of the rights (other than the person or
group triggering their exercise) will be able to purchase, in exchange for the $250 exercise price, shares of our
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