Yahoo 2010 Annual Report Download - page 49

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by increased advertising spending and a shift towards higher-yielding display inventory by our customers. For
the year ended December 31, 2010, direct costs attributable to the Americas segment decreased $53 million, or 8
percent, compared to 2009. The decrease is primarily due to lower costs for other costs of revenue including
credit card costs and content costs.
Americas revenue ex-TAC for the year ended December 31, 2009 decreased $522 million, or 12 percent,
compared to 2008. Our year-over-year decrease in revenue ex-TAC was a result of a decline in advertising
revenue ex-TAC across the majority of Yahoo! Properties, particularly search advertising due to the economic
environment through the majority of 2009. For the year ended December 31, 2009, direct costs attributable to the
Americas segment decreased $298 million, or 32 percent, compared to 2008. The decline is primarily due to
decreases in compensation costs due to a lower average headcount as a result of our cost reduction initiatives as
well as decreases in marketing expenses.
Revenue ex-TAC in the Americas accounted for approximately 76 percent of total revenue ex-TAC for the year
ended December 31, 2010, compared to 78 percent and 77 percent in 2009 and 2008, respectively.
EMEA. EMEA revenue ex-TAC for the year ended December 31, 2010 decreased $22 million, or 6 percent,
compared to 2009. Our year-over-year decrease in revenue ex-TAC was a result of a decline in our search
advertising business and our fee-based services, partially offset by an increase in our display advertising
business. Search advertising revenue ex-TAC decreased primarily due to traffic quality initiatives. The decrease
in fees revenue is primarily attributed to changes in certain broadband access partnerships. For the year ended
December 31, 2010, direct costs attributable to the EMEA segment increased $3 million, or 3 percent, compared
to 2009. The increase is primarily driven by an increase in content costs, offset by decreases in marketing
expenses.
EMEA revenue ex-TAC for the year ended December 31, 2009 decreased $195 million, or 33 percent, compared
to 2008. Our year-over-year decrease in revenue ex-TAC was a result of a decline in advertising revenue ex-TAC
across the majority of Yahoo! Properties, particularly search advertising due to the economic environment
through the majority of 2009 and the effects of foreign exchange rate fluctuations. For the year ended
December 31, 2009, direct costs attributable to the EMEA segment decreased $96 million, or 45 percent,
compared to 2008. The decline is primarily due to decreases in compensation costs due to a lower average
headcount as a result of our cost reduction initiatives as well as decreases in marketing expenses.
Revenue ex-TAC in EMEA accounted for approximately 8 percent of total revenue ex-TAC for the year ended
December 31, 2010, compared to 8 percent and 11 percent in 2009 and 2008, respectively.
Asia Pacific. Asia Pacific revenue ex-TAC for the year ended December 31, 2010 increased $116 million, or
18 percent, compared to 2009. The increase in Asia Pacific revenue ex-TAC were primarily driven by a new
Affiliate in the Asia Pacific segment added in the fourth quarter of 2009 and the favorable effects of foreign
currency exchange rate fluctuations. For the year ended December 31, 2010, direct costs attributable to the Asia
Pacific segment increased $8 million, or 6 percent, compared to 2009. The increase is primarily due to
compensation costs driven by higher average headcount as well as increased content costs.
Asia Pacific revenue ex-TAC for the year ended December 31, 2009 remained flat compared to 2008. Fees
revenue increased year-over-year, but was offset by a decline in our search and display advertising businesses.
The increase in fees revenue was due to increased business as a result of our acquisitions in the Asia Pacific
region during the third quarter of 2008. For the year ended December 31, 2009, direct costs attributable to the
Asia Pacific segment decreased $28 million, or 17 percent, compared to 2008. The decline is primarily due to
decreases in our data center operation expenses and marketing expenses, offset by increases in compensation
expenses driven by higher average headcount.
Revenue ex-TAC in Asia Pacific accounted for approximately 16 percent of total revenue ex-TAC for the year
ended December 31, 2010, compared to 14 percent and 12 percent in 2009 and 2008, respectively.
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