Yahoo 2013 Annual Report Download - page 24

access have resulted in and may in the future result in a combination of significant legal and financial exposure,
increased remediation and other costs, damage to our reputation and a loss of confidence in the security of our
products, services and networks that could have an adverse effect on our business. We take steps to prevent
unauthorized access to our corporate systems, however, because the techniques used to obtain unauthorized
access, disable or degrade service, or sabotage systems change frequently or may be designed to remain dormant
until a triggering event, we may be unable to anticipate these techniques or implement adequate preventative
measures. If an actual or perceived breach of our security occurs, the market perception of the effectiveness of
our security measures could be harmed and we could lose users and customers.
Interruptions, delays, or failures in the provision of our services could damage our reputation and harm our
operating results.
Delays or disruptions to our service, or the loss or compromise of data, could result from a variety of causes,
including the following:
• Our operations are susceptible to outages and interruptions due to fire, flood, earthquake, tsunami, other
natural disasters, power loss, equipment or telecommunications failures, cyber attacks, terrorist attacks,
political or social unrest, and other events over which we have little or no control. We do not have multiple site
capacity for all of our services and some of our systems are not fully redundant in the event of delays or
disruptions to service, so some data or systems may not be fully recoverable after such events.
• The systems through which we provide our products and services are highly technical, complex, and
interdependent. Design errors might exist in these systems, or might be introduced when we make
modifications, which might cause service malfunctions or require services to be taken offline while corrective
responses are developed.
• Despite our implementation of network security measures, our servers are vulnerable to computer viruses,
malware, worms, hacking, physical and electronic break-ins, router disruption, sabotage or espionage, and
other disruptions from unauthorized access and tampering, as well as coordinated denial-of-service attacks.
We may not be in a position to promptly address attacks or to implement adequate preventative measures if we
are unable to immediately detect such attacks. Such events could result in large expenditures to investigate or
remediate, to recover data, to repair or replace networks or information systems, including changes to security
measures, to deploy additional personnel, to defend litigation or to protect against similar future events, and
may cause damage to our reputation or loss of revenue.
• We rely on third-party providers over which we have little or no control for our principal Internet connections
and co-location of a significant portion of our data servers, as well as for our payment processing capabilities
and key components or features of certain of our products and services. Any disruption of the services they
provide us or any failure of these third-party providers to handle higher volumes of use could, in turn, cause
delays or disruptions in our services and loss of revenue. In addition, if our agreements with these third-party
providers are terminated for any reason, we might not have a readily available alternative.
Prolonged delays or disruptions to our service could result in a loss of users, damage to our brands, legal costs or
liability, and harm to our operating results.
Our international operations expose us to additional risks that could harm our business, operating results, and
financial condition.
In addition to uncertainty about our ability to continue to generate revenue from our foreign operations and
expand our international market position, there are additional risks inherent in doing business internationally
(including through our international joint ventures), including:
• tariffs, trade barriers, customs classifications and changes in trade regulations;
• difficulties in developing, staffing, and simultaneously managing a large number of varying foreign operations
as a result of distance, language, and cultural differences;
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