Yahoo 2013 Annual Report Download - page 27

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, new
devices, new 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, such as the changes we have made in response to the
increased use of tablets and smartphones. 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 adapting our architectures, platforms and infrastructure to
accommodate increased traffic, to store user data, and track user preferences, together with the associated costs
and potential loss of traffic, could harm our operating results, cash flows from operations, and financial
condition.
We rely on third parties to provide the technologies necessary to deliver content, advertising, and services to
our users, and any change in the licensing terms, costs, availability, or acceptance of these formats and
technologies could adversely affect our business.
We rely on third parties to provide the technologies that we use to deliver content, advertising, and services to
our users. There can be no assurance that these providers will continue to license their technologies or intellectual
property to us on reasonable terms, or at all. Providers may change the fees they charge users or otherwise
change their business model in a manner that slows the widespread acceptance of their technologies. In order for
our services to be successful, there must be a large base of users of the technologies necessary to deliver our
content, advertising, and services. We have limited or no control over the availability or acceptance of those
technologies, and any change in the licensing terms, costs, availability, or user acceptance of these technologies
could adversely affect our business.
Our business depends on continued and unimpeded access to the Internet by us and our users. Internet access
providers may be able to block, degrade, or charge for access to certain of our products and services, which
could lead to additional expenses and the loss of users and advertisers.
Our products and services depend on the ability of our users to access the Internet, and certain of our products
require significant bandwidth to work effectively. Currently, this access is provided by companies that have
significant market power in the broadband and internet access marketplace, including incumbent telephone
companies, cable companies, mobile communications companies, and government-owned service providers.
Some of these providers have taken, or have stated that they may take, measures that could degrade, disrupt, or
increase the cost of user access to certain of our products by restricting or prohibiting the use of their
infrastructure to support or facilitate our offerings, or by charging increased fees to us or our users to provide our
offerings. Such interference could result in a loss of existing users and advertisers, and increased costs, and could
impair our ability to attract new users and advertisers, thereby harming our revenues and growth.
25