Yahoo 2011 Annual Report Download - page 42

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Results of Operations
Revenue. Revenue by groups of similar services was as follows (dollars in thousands):
Years Ended December 31, 2009-2010
% Change
2010-2011
% Change2009 (*) 2010 (*) 2011 (*)
Display ................. $1,866,984 29% $2,154,886 34% $2,160,309 43% 15% 0%
Search .................. 3,396,396 53% 3,161,589 50% 1,853,110 37% (7)% (41)%
Other ................... 1,196,935 18% 1,008,176 16% 970,780 20% (16)% (4)%
Total revenue ........ $6,460,315 100% $6,324,651 100% $4,984,199 100% (2)% (21)%
(*) Percent of total revenue.
We currently generate revenue principally from display advertising on Yahoo! Properties and from search
advertising on Yahoo! Properties and Affiliate sites.
We earn revenue from guaranteed or “premium” display advertising by delivering advertisements according to
advertisers’ specified criteria, such as number of impressions during a fixed period on a specific placement. Also,
we earn revenue from non-guaranteed or “non-premium” display advertising by delivering advertisements for
advertisers purchasing inventory on a preemptible basis, which means that the advertisement may or may not
appear, inventory is not reserved and position placement is not assured. Generally, we make our non-guaranteed
display inventory available through our Right Media Exchange.
To assist us in evaluating display advertising and search advertising, beginning in the fourth quarter of 2010 we
began reporting the number of Web pages viewed by users (“Page Views”) separately for display and search.
“Search Page Views” is defined as the number of Web pages viewed by users on Yahoo! Properties and Affiliate
sites resulting from search queries and “revenue per Search Page View” is defined as search revenue divided by
our Search Page Views. “Display Page Views” is defined as the total number of Page Views on Yahoo!
Properties less the number of Search Page Views on Yahoo! Properties, and “revenue per Display Page View” is
defined as display revenue divided by our Display Page Views.
We periodically review and refine our methodology for monitoring, gathering, and counting Page Views on
Yahoo! Properties. Based on this process, from time to time, we update our methodology to exclude from the
count of Page Views interactions with our servers that we determine or believe are not the result of user visits to
Yahoo! Properties.
Display Revenue. Display revenue for the year ended December 31, 2011 remained flat compared to 2010, due to
growth in guaranteed and non-guaranteed advertising in the EMEA and Asia Pacific segments and increases in
non-guaranteed advertising in the Americas offset by declines in Americas for guaranteed advertising. Display
revenue for the year ended December 31, 2010 increased by 15 percent, compared to 2009. Increased advertising
spending in display and a shift towards higher-yielding display inventory resulted in increased display revenue.
For the year ended December 31, 2011, Display Page Views decreased 2 percent and revenue per Display Page
View increased 6 percent, compared to 2010. For the year ended December 31, 2010, Display Page Views
decreased 2 percent and revenue per Display Page View increased 20 percent, compared to 2009 due to the
increase in revenue as discussed above.
We expect display revenue to remain flat for the first quarter of 2012, compared to the first quarter of 2011, due
to decreases in Americas display revenue primarily from reduced guaranteed display advertising offset by
increases in display revenue in the EMEA and Asia Pacific segments.
Search Revenue. Search revenue for the year ended December 31, 2011 decreased by 41 percent, compared to
2010. Search revenue decreased primarily due to the required change in revenue presentation which began in the
fourth quarter of 2010, the associated revenue share with Microsoft for the U.S. and Canada, and the loss of an
Affiliate in the Asia Pacific segment. Search revenue for the year ended December 31, 2010 decreased by
40