Yahoo 2012 Annual Report Download - page 36

Investigating and defending these types of claims are expensive, even if the claims are without merit or do not
ultimately result in liability, and could subject us to significant monetary liability or cause a change in business
practices that could negatively impact our ability to compete.
Acquisitions and strategic investments could result in adverse impacts on our operations and in unanticipated
liabilities.
We have acquired, and have made strategic investments in, a number of companies (including through joint
ventures) in the past, and we expect to make additional acquisitions and strategic investments in the future. Such
transactions may result in dilutive issuances of our equity securities, use of our cash resources, and incurrence of
debt and amortization expenses related to intangible assets. Our acquisitions and strategic investments to date
were accompanied by a number of risks, including:
• the difficulty of assimilating the operations and personnel of acquired companies into our operations;
• the potential disruption of our ongoing business and distraction of management;
• the incurrence of additional operating losses and expenses of the businesses we acquired or in which we
invested;
• the difficulty of integrating acquired technology and rights into our services and unanticipated expenses related
to such integration;
• the failure to successfully further develop an acquired business or technology and any resulting impairment of
amounts currently capitalized as intangible assets;
• the failure of strategic investments to perform as expected;
• the potential for patent and trademark infringement and data privacy and security claims against the acquired
companies, or companies in which we have invested;
• litigation or other claims in connection with acquisitions, acquired companies, or companies in which we have
invested;
• the impairment or loss of relationships with customers and partners of the companies we acquired or in which
we invested or with our customers and partners as a result of the integration of acquired operations;
• the impairment of relationships with, or failure to retain, employees of acquired companies or our existing
employees as a result of integration of new personnel;
• our lack of, or limitations on our, control over the operations of our joint venture companies;
• the difficulty of integrating operations, systems, and controls as a result of cultural, regulatory, systems, and
operational differences;
• in the case of foreign acquisitions and investments, the impact of particular economic, tax, currency, political,
legal and regulatory risks associated with specific countries; and
• the impact of known potential liabilities or liabilities that may be unknown, including as a result of inadequate
internal controls, associated with the companies we acquired or in which we invested.
We are likely to experience similar risks in connection with our future acquisitions and strategic investments.
Our failure to be successful in addressing these risks or other problems encountered in connection with our past
or future acquisitions and strategic investments could cause us to fail to realize the anticipated benefits of such
acquisitions or investments, incur unanticipated liabilities, and harm our business generally.
22