Yahoo 2010 Annual Report Download - page 22

• 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 acquisitions or the acquired company;
• the impairment or loss 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, or failure to retain, employees of acquired companies or our existing
employees as a result of integration of new 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, tax, 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. As a result of acquisitions, and international expansion in recent years, more
than 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.
As we expand our business, we must also expand and adapt our operational infrastructure. Our business relies on
data systems, billing systems, and financial reporting and control systems, among others. All of these systems
have become increasingly complex in the recent past due to the growing complexity of our business, due to
acquisitions of new businesses with different systems, and due to increased regulation over controls and
procedures. To manage our business in a cost-effective manner, we will need to continue to upgrade and improve
our data systems, billing systems, and other operational and financial systems, procedures and controls. In some
cases, we are outsourcing administrative functions to lower-cost providers. These upgrades, improvements and
outsourcing changes will require a dedication of resources and in some cases are likely to be complex. If we are
unable to adapt our systems and put adequate controls in place in a timely manner, our business may be adversely
affected. In particular, sustained failures of our billing systems to accommodate increasing numbers of
transactions, to accurately bill users and advertisers, or to accurately compensate Affiliates could adversely affect
the viability of our business model.
Any failure to scale and adapt our existing technology architecture to manage expansion of user-facing
services and to respond to rapid technological change could adversely affect our business.
As some of the most visited sites on the Internet, Yahoo! Properties deliver a significant number of products,
services, page views, and advertising impressions to users around the world. The products and services offered
by us are expected to continue to expand and change significantly and rapidly in the future to accommodate new
technologies and Internet advertising solutions, and new means of content delivery.
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