Yahoo 2012 Annual Report Download - page 37

If we are unable to recruit, hire, motivate, and retain key personnel, we may not be able to execute our
business plan.
Our business is dependent on our ability to recruit, hire, motivate, and retain talented, highly skilled personnel.
Achieving this objective may be difficult due to many factors, including the intense competition for such highly
skilled personnel in the San Francisco Bay Area and other metropolitan areas where our offices are located;
fluctuations in global economic and industry conditions; competitors’ hiring practices; and the effectiveness of
our compensation programs. If we do not succeed in retaining and motivating our existing key employees and in
attracting new key personnel, we may be unable to meet our business plan and as a result, our revenue and
profitability may decline.
Any failure to manage expansion and changes to our business could adversely affect our operating results.
If we are unable to effectively manage a large and geographically dispersed group of employees or to anticipate
our future growth and personnel needs, our business may be adversely affected.
As we expand our business, we must also expand and adapt our operational infrastructure. Our business relies on
data systems, billing systems, and financial reporting and control systems, among others. All of these systems
have become increasingly complex in the recent past due to the growing complexity of our business, acquisitions
of new businesses with different systems, and increased regulation over controls and procedures. To manage our
business in a cost-effective manner, we will need to continue to upgrade and improve our data systems, billing
systems, and other operational and financial systems, procedures, and controls. In some cases, we are outsourcing
administrative functions to lower-cost providers. These upgrades, improvements and outsourcing changes will
require a dedication of resources and in some cases are likely to be complex. If we are unable to adapt our
systems and put adequate controls in place in a timely manner, our business may be adversely affected. In
particular, sustained failures of our billing systems to accommodate increasing numbers of transactions, to
accurately bill users and advertisers, or to accurately compensate Affiliates could adversely affect the viability of
our business model.
Any failure to scale and adapt our existing technology architecture to manage expansion of user-facing
services and to respond to rapid technological change could adversely affect our business.
As some of the most visited sites on the Internet, Yahoo! Properties deliver a significant number of products,
services, page views, and advertising impressions to users around the world. We expect our products and services
to continue to expand and change significantly and rapidly in the future to accommodate new technologies and
Internet advertising solutions, and new means of content delivery.
In addition, widespread adoption of new Internet, networking or telecommunications technologies, or other
technological changes, could require substantial expenditures to modify or adapt our services or infrastructure.
The technology architectures and platforms utilized for our services are highly complex and may not provide
satisfactory security features or support in the future, as usage increases and products and services expand,
change, and become more complex. In the future, we may make additional changes to our existing, or move to
completely new, architectures, platforms and systems, or our users may increasingly access our sites through
devices that compel us to invest in new architectures, platforms and systems. Such changes may be
technologically challenging to develop and implement, may take time to test and deploy, may cause us to incur
substantial costs or data loss, and may cause changes, delays or interruptions in service. These changes, delays,
or interruptions in our service may cause our users, Affiliates and other advertising platform participants to
become dissatisfied with our service or to move to competing providers or seek remedial actions or
compensation. Further, to the extent that demands for our services increase, we will need to expand our
infrastructure, including the capacity of our hardware servers and the sophistication of our software. This
expansion is likely to be expensive and complex and require additional technical expertise. As we acquire users
who rely upon us for a wide variety of services, it becomes more technologically complex and costly to retrieve,
store, and integrate data that will enable us to track each user’s preferences. Any difficulties experienced in
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