Yahoo 2012 Annual Report Download - page 39

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Technologies, tools, software, and applications could block our advertisements, impair our ability to deliver
interest-based advertising, or shift the location in which advertising appears, which could harm our operating
results.
Technologies, tools, software, and applications (including new and enhanced Web browsers) have been
developed and are likely to continue to be developed that can block display, search, and interest-based
advertising and content, delete or block the cookies used to deliver such advertising, or shift the location in which
advertising appears on pages so that our advertisements do not show up in the most monetizable places on our
pages or are obscured. Most of our revenue is derived from fees paid by advertisers in connection with the
display of graphical advertisements or clicks on search advertisements on Web pages. As a result, the adoption of
such technologies, tools, software, and applications could reduce the number of display and search
advertisements that we are able to deliver and/or our ability to deliver interest-based advertising and this, in turn,
could reduce our advertising revenue and operating results.
Proprietary document formats may limit the effectiveness of our search technology by preventing our
technology from accessing the content of documents in such formats, which could limit the effectiveness of
our products and services.
A large amount of information on the Internet is provided in proprietary document formats. These proprietary
document formats may limit the effectiveness of search technology by preventing the technology from accessing
the content of such documents. The providers of the software applications used to create these documents could
engineer the document format to prevent or interfere with the process of indexing the document contents with
search technology. This would mean that the document contents would not be included in search results even if
the contents were directly relevant to a search. The software providers may also seek to require us to pay them
royalties in exchange for giving us the ability to search documents in their format. If the search platform
technology we employ is unable to index proprietary format Web documents as effectively as our competitors’
technology, usage of our search services might decline, which could cause our revenue to fall.
We have dedicated considerable resources to provide a variety of premium products and services, which might
not prove to be successful in generating significant revenue for us.
We offer fee-based enhancements for many of our free services. The development cycles for these technologies
are long and generally require significant investment by us. We have invested and will continue to invest in
premium products and services. Some of these premium products and services might not generate anticipated
revenue or might not meet anticipated user adoption rates. We have previously discontinued some non-profitable
premium services and may discontinue others. General economic conditions as well as the rapidly evolving
competitive landscape may affect users’ willingness to pay for such premium services. If we cannot generate
revenue from our premium services that are greater than the cost of providing such services, our operating results
could be harmed.
Fluctuations in foreign currency exchange rates may adversely affect our operating results and financial
condition.
Revenue generated and expenses incurred by our international subsidiaries and equity method investees are often
denominated in the currencies of the local countries. As a result, our consolidated U.S. dollar financial statements
are subject to fluctuations due to changes in exchange rates as the financial results of our international
subsidiaries and equity method investees are translated from local currencies into U.S. dollars. Our financial
results are also subject to changes in exchange rates that impact the settlement of transactions in non-local
currencies. The carrying values of our equity investments in our equity investees are also subject to fluctuations
in the exchange rates of foreign currencies.
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