Yahoo 2011 Annual Report Download - page 19

Our comprehensive strategic review may cause uncertainty regarding the future of our business, impact
employee hiring and retention, increase the volatility in our stock price, and adversely impact our revenue,
operating results, and financial condition.
Our Board of Directors is engaged in a comprehensive strategic review, which includes evaluating the full range
of options available to return our company to increased growth and innovation. Our Board’s strategic review and
any related speculation and uncertainty regarding our future business strategy and direction, including litigation
pending in the Delaware Chancery Court relating to the strategic review process, may cause or result in:
• disruption of our business or distraction of our employees and management;
• difficulty in recruiting, hiring, motivating, and retaining talented and skilled personnel;
• increased stock price volatility;
• difficulty in negotiating, maintaining, or consummating business or strategic relationships or transactions; and
• increased advisory fees or costs to investigate or defend litigation, even if claims are without merit or do not
ultimately result in liability or changes in business practices.
If we are unable to mitigate these or other potential risks related to the uncertainty caused by the strategic review,
it may disrupt our business or adversely impact our revenue, operating results, and financial condition.
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 competitors are located; fluctuations in global economic and industry conditions; changes in our
management or leadership; uncertainty due to our comprehensive strategic review; 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 videos, 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
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