Yahoo 2011 Annual Report Download - page 52

Summarized information by segment was as follows (dollars in thousands):
Years Ended December 31, 2009-2010
% Change
2010-2011
% Change2009 2010 2011
Revenue by segment:
Americas ............................ $4,852,331 $4,425,457 $3,302,989 (9)% (25)%
EMEA .............................. 598,300 579,145 629,383 (3)% 9%
Asia Pacific ......................... 1,009,684 1,320,049 1,051,827 31% (20)%
Total revenue .................... $6,460,315 $6,324,651 $4,984,199 (2)% (21)%
TAC by segment:
Americas ............................ $1,195,579 $ 957,607 $ 160,110 (20)% (83)%
EMEA .............................. 207,844 210,261 221,916 1% 6%
Asia Pacific ......................... 374,403 568,554 221,345 52% (61)%
Total TAC ...................... $1,777,826 $1,736,422 $ 603,371 (2)% (65)%
Revenue ex-TAC by segment:
Americas ............................ $3,656,752 $3,467,850 $3,142,879 (5)% (9)%
EMEA .............................. 390,456 368,884 407,467 (6)% 10%
Asia Pacific ......................... 635,281 751,495 830,482 18% 11%
Total revenue ex-TAC ............. $4,682,489 $4,588,229 $4,380,828 (2)% (5)%
Direct costs by segment(1):
Americas ............................ 620,690 568,017 560,016 (8)% (1)%
EMEA .............................. 115,778 118,954 135,266 3% 14%
Asia Pacific ......................... 138,739 146,657 194,394 6% 33%
Global operating costs(2)(3) .................. 2,116,747 2,044,246 1,836,569 (3)% (10)%
Restructuring charges, net .................. 126,901 57,957 24,420 (54)% (58)%
Depreciation and amortization ............... 738,855 656,396 625,864 (11)% (5)%
Stock-based compensation expense ........... 438,087 223,478 203,958 (49)% (9)%
Income from operations ............ $ 386,692 $ 772,524 $ 800,341 100% 4%
(1) Direct costs for each segment include cost of revenue (excluding TAC) and other operating expenses that are
directly attributable to the segment such as employee compensation expense (excluding stock-based
compensation expense), local sales and marketing expenses, and facilities expenses. Beginning in the fourth
quarter of 2010, we no longer include TAC in segment direct costs. For comparison purposes, prior period
amounts have been revised to conform to the current presentation.
(2) Global operating costs include product development, service engineering and operations, marketing,
customer advocacy, general and administrative, and other corporate expenses that are managed on a global
basis and that are not directly attributable to any particular segment.
(3) The net cost reimbursements from Microsoft are primarily included in global operating costs for the years
ended December 31, 2010 and 2011.
Americas. Americas revenue ex-TAC for the year ended December 31, 2011 decreased $325 million, or
9 percent, compared to 2010. Our year-over-year decrease in revenue ex-TAC was primarily due to a decline in
search, display, and other revenue. Search revenue ex-TAC decreased due to the revenue share with Microsoft
associated with the Search Agreement as well as declines in our Affiliate search revenue as a result of the
Microsoft transition. Display revenue ex-TAC decreased due to declines in guaranteed advertising. Other revenue
decreased due to changes in certain of our broadband access partnerships, a shift from a fee-paying user structure
to other fee structures, and the divestiture of certain business lines during the year ended December 31, 2010. For
the year ended December 31, 2011, direct costs attributable to the Americas segment decreased $8 million, or 1
percent, compared to 2010. The decrease is primarily due to lower compensation costs offset slightly by higher
content costs.
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