Yahoo 2011 Annual Report Download - page 23

and data retention laws and regulations are currently unsettled in the U.S. and internationally. These laws may be
interpreted and applied inconsistently from country to country and inconsistently with our current policies and
practices, making it difficult to make long-range business planning decisions regarding data use, notice, storage,
access, or retention. Complying with these varying international requirements could cause us to incur substantial
costs or require us to change our business practices in a manner adverse to our business.
If our security measures are breached, our products and services may be perceived as not being secure, users
and customers may curtail or stop using our products and services, and we may incur significant legal and
financial exposure.
Our products and services involve the storage and transmission of Yahoo!’s users’ and customers’ personal and
proprietary information in our facilities and on our equipment, networks and corporate systems. Security
breaches could expose us to a risk of loss of this information, litigation, remediation costs, increased costs for
security measures, loss of revenue, damage to our reputation, and potential liability. Our user data and corporate
systems and security measures may be breached due to the actions of outside parties, employee error,
malfeasance, or otherwise, and, as a result, an unauthorized party may obtain access to our data or our users’ or
customers’ data. Additionally, outside parties may attempt to fraudulently induce employees, users, or customers
to disclose sensitive information in order to gain access to our data or our users’ or customers’ data. We must
continuously examine and modify our security controls and business policies to adapt to the rise of social
networking, the adoption of new devices and technologies enabling users to share data and communicate in new
ways, and the increasing focus by our users and regulators on controlling and protecting user data.
Any breach or unauthorized access could result in significant legal and financial exposure, increased costs for
security measures or to defend litigation or damage to our reputation, and a loss of confidence in the security of
our products and services and networks that could potentially have an adverse effect on our business. Because the
techniques used to obtain unauthorized access, disable or degrade service, or sabotage systems change frequently
or may be designed to remain dormant until a predetermined event and often are not recognized until launched
against a target, we may be unable to anticipate these techniques or implement adequate preventative measures.
If an actual or perceived breach of our security occurs, the market perception of the effectiveness of our security
measures could be harmed, we could lose users and customers, and we could suffer financial exposure due to
such events or in connection with remediation efforts, investigation costs, changed security, and system
protection measures.
We may be subject to legal liability associated with providing online services or content.
We host and provide a wide variety of services and technology products that enable and encourage individuals
and businesses to exchange information, upload or otherwise generate photos, videos, text, and other content;
advertise products and services; conduct business; and engage in various online activities both domestically and
internationally. As a publisher of original content, we may be subject to claims such as libel, defamation or
improper use of publicity rights, as well as infringement claims such as plagiarism. The law relating to the
liability of providers of online services and products for activities of their users is currently unsettled both within
the U.S. and internationally. Claims have been threatened and brought against us for defamation, negligence,
breaches of contract, plagiarism, copyright or trademark infringement, unfair competition, unlawful activity, tort,
including personal injury, fraud, or other theories based on the nature and content of information which we
publish or to which we provide links or that may be posted online or generated by us or by third parties,
including our users. In addition, we have been and may again in the future be subject to domestic or international
actions alleging that certain content we have generated or third-party content that we have made available within
our services violates laws in domestic and international jurisdictions. Defense of any such actions could be costly
and involve significant time and attention of our management and other resources, may result in monetary
liabilities or penalties, and may require us to change our business in an adverse manner.
We arrange for the distribution of third-party advertisements to third-party publishers and advertising networks,
and we offer third-party products, services, or content, such as stock quotes and trading information, under the
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