Yahoo 2013 Annual Report Download - page 12

Yahoo’s product teams include a broad array of engineering and product talent and support a large portion of the
Yahoo product portfolio and technology infrastructure. Our product teams have expertise in consumer
applications (Web/Mobile), scalable software platforms, information retrieval, machine learning and science,
editorial, networking/communications technologies, and presentation layer frameworks.
Our engineering and production teams are primarily located in our Sunnyvale, California, headquarters,
Bangalore, India, and Beijing, China. Product development expenses for 2011, 2012, and 2013 totaled
approximately $919 million, $886 million, and $1 billion, respectively, which included stock-based
compensation expense of $81 million, $74 million, and $83 million, respectively.
M&A ACTIVITY
As part of our overall strategy, we focused on acquisitions in 2013 that help us achieve three different goals. The
first is to grow our technical talent base. Our acquisition of Stamped is a good example of this, where the team
came to Yahoo and focused on building the Yahoo Screen mobile experience which launched in Q3 2013.
Second, is to enhance our technology and core products offerings. Our 2013 acquisition of Summly is an
example where we acquired the summarization technology that was initially incorporated in our Yahoo App last
Spring and continued with the launch of Yahoo News Digest in Q1 2014. Third, is to expand audience and
engagement. Our acquisition of Tumblr in Q2 2013 is an example where we gained access to an engaged
community of younger users that complemented our core audience.
We expect to make additional acquisitions and strategic investments in the future.
GLOBAL OPERATIONS
We manage our business geographically. The primary areas of measurement and decision-making are Americas,
EMEA (Europe, Middle East, and Africa), and Asia Pacific. Additional information required by this item is
incorporated herein by reference to Note 18—“Segments” of the Notes to our consolidated financial statements,
which appears in Part II, Item 8 of this Annual Report on Form 10-K.
We own a majority or 100 percent of all of these international operations (except in Australia and New Zealand,
China, and Japan where we have joint ventures and/or noncontrolling interests). We support these businesses
through a network of offices worldwide.
Revenue is primarily attributed to individual countries according to the international online property that
generated the revenue.
Information regarding risks involving our international operations is included in Part I, Item 1A “Risk Factors”
of this Annual Report on Form 10-K and is incorporated herein by reference.
SALES
We maintain three primary channels for selling our advertising services: field, mid-market, and reseller/small
business. Our field advertising sales team sells display advertising in all markets and search advertising to
premium advertisers under the Search Agreement with Microsoft. Our mid-market channel sells our services to
medium-sized businesses, while our reseller/small business channel enables us to sell advertising services to
additional regional and small business advertisers. In 2013, we reorganized our U.S. sales force from a regional
structure to a vertical structure providing one, customer-centric solution to our customers. We believe that this
will allow us to provide the best solutions across all of our products based on a deeper understanding of our
customers’ businesses.
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