Yahoo 2011 Annual Report Download - page 43

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7 percent, compared to 2009. Search revenue decreased primarily due to the required change in revenue
presentation in the fourth quarter of 2010 to reflect the revenue share with Microsoft for transitioned markets and
the impact of discontinuing our paid inclusion search product in the fourth quarter of 2009 as part of our
advertising quality initiatives. The decreases for the year ended December 31, 2010 were offset, in part, by the
impact of foreign exchange fluctuations in the Asia Pacific segment and a new Affiliate in the Asia Pacific
segment added in the fourth quarter of 2009.
For the year ended December 31, 2011, Search Page Views decreased 1 percent and revenue per Search Page
View decreased 41 percent, compared to 2010. The decline in revenue per Search Page View in 2011 compared
to 2010 was due to the decline in search revenue as discussed above. For the year ended December 31, 2010,
Search Page Views decreased 1 percent and revenue per Search Page View decreased 6 percent, compared to
2009. The decline in revenue per Search Page View in 2010 compared to 2009 was due to the decline in search
revenue as discussed above.
We expect search revenue for the first quarter of 2012 to remain flat compared to the first quarter of 2011 due to
increases in Americas search revenue offset by decreases in EMEA search revenue primarily from decreased
Affiliate revenue.
Other Revenue. Other revenue includes listings-based services revenue, transaction revenue and fees revenue.
Other revenue for the year ended December 31, 2011 decreased by 4 percent, compared to 2010. The decrease
can be attributable to changes in certain of our broadband access partnerships, our shift from a fee-paying user
structure to other fee structures, and to the divestiture of certain business lines during the year ended
December 31, 2010. In addition, revenue from other premium services declined year-over-year as we continue to
outsource various offerings to commercial partners.
Other revenue for the year ended December 31, 2010 decreased by 16 percent, compared to 2009. The decrease
can be attributable to changes in certain of our broadband access partnerships, our shift from a fee-paying user
structure to other fee structures, and to the divestiture of certain business lines during the year ended
December 31, 2010. In addition, revenue from other premium services declined year-over-year as we continue to
outsource various offerings to commercial partners.
We expect other revenue to remain flat for the first quarter of 2012, compared to the first quarter of 2011 due to
decreases in certain of our broadband access partnerships offset by increases in certain of our royalty revenues.
Costs and Expenses. Operating costs and expenses consist of cost of revenue, sales and marketing, product
development, general and administrative, amortization of intangible assets, and restructuring charges, net. Cost of
revenue consists of TAC, Internet connection charges, and other expenses associated with the production and
usage of Yahoo! Properties, including amortization of acquired intellectual property rights and developed
technology.
Operating costs and expenses were as follows (dollars in thousands):
Years Ended December 31,
2009-2010 2010-2011
Dollar
Change
Percent
Change
Dollar
Change
Percent
Change2009 (1) 2010 (1) 2011 (1)
Cost of revenue(2) ..... $2,871,746 44% $2,627,545 42% $1,502,650 30% $(244,201) (9)% $(1,124,895) (43)%
Sales and marketing . . . $1,245,350 19% $1,264,491 20% $1,122,302 23% $ 19,141 2% $ (142,189) (11)%
Product development . . $1,210,168 19% $1,082,176 17% $1,005,090 20% $(127,992) (11)% $ (77,086) (7)%
General and
administrative ...... $ 580,352 9% $ 488,332 8% $ 495,804 10% $ (92,020) (16)% $ 7,472 2%
Amortization of
intangibles(2) ....... $ 39,106 1% $ 31,626 1% $ 33,592 1% $ (7,480) (19)% $ 1,966 6%
Restructuring charges,
net............... $ 126,901 2% $ 57,957 1% $ 24,420 0% $ (68,944) (54)% $ (33,537) (58)%
(1) Percent of total revenue.
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