Yahoo 2013 Annual Report Download - page 51

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volume metrics for display are based on display revenue which we report on a gross basis (before TAC). Our
price and volume metrics for display exclude both the number of Ads Sold and the related revenue for certain
regions where we did not retain historical information in a manner that would support period-to-period
comparison on these metrics. The countries and regions included in our display metrics are: the United States, the
United Kingdom, France, Germany, Spain, Italy, Taiwan, Hong Kong, Southeast Asia, and India.
“Paid Clicks” are defined as clicks by end-users on sponsored search listings on Yahoo Properties and Affiliate
sites for which an advertiser pays on a per click basis. “Price-per-Click” is defined as search revenue divided by
our total number of Paid Clicks. Our price and volume metrics for search are based on gross search revenue
(before TAC) in all markets in which we operate.
We periodically review, refine and update our methodologies for monitoring, gathering, and counting numbers of
Ads Sold and Paid Clicks and for calculating Price-per-Click and Price-per-Ad.
Commencing in the third quarter of 2013, we made three updates to our methodologies. First, we now include the
impressions and revenue associated with our new stream ad units, which are display ads that appear in the
content streams viewed by users, in our display price and volume metrics (Ads Sold and Price-per-Ad). Second,
to provide metrics that are more consistent with our historical revenue trends, the revenue and volume associated
with other display advertisements sold on a price-per-click basis have been excluded from our search price and
volume metrics (Paid Clicks and Price-per-Click) and they will continue to be excluded from our display price
and volume metrics. Finally, the Microsoft RPS Guarantee has been excluded from the calculation of Price-per-
Click. Due to the closure of the Korea business in the fourth quarter of 2012, “Ads Sold,” “Paid Clicks,” “Price-
per-Ad,” and “Price-per-Click,” as presented below, exclude the Korea market for all periods presented. Prior
period amounts have been updated to conform to the current presentation.
Display Metrics
For the year ended December 31, 2013, number of Ads Sold decreased 1 percent and Price-per-Ad decreased 7
percent, compared to 2012. The decrease in number of Ads Sold year-over-year was attributable to a decline in
premium Ads Sold, which was partially offset by growth in non-premium advertising as a result of stream ad
units. The decrease in Price-per-Ad year-over-year was due to a shift in the mix of ads sold towards lower
monetizing stream ad units.
For the year ended December 31, 2012, number of Ads Sold decreased 10 percent and Price-per-Ad increased 8
percent, compared to 2011. The decrease in number of Ads Sold year-over-year was attributable to a decline in
number of Ads Sold on Yahoo Properties in the Americas and Asia Pacific regions. The increase in Price-per-Ad
was due to a change in the mix of our ads sold.
Search Metrics
For the year ended December 31, 2013, Paid Clicks increased 19 percent and Price-per-Click decreased 4
percent, compared to 2012. The increase in Paid Clicks was attributable to improved ad formats on Yahoo
Search, increased mobile traffic, and increased Affiliate traffic in the Americas region. The increase in Affiliate
traffic was driven by incremental traffic in Latin America. The decrease in Price-per-Click was primarily due to a
higher mix of traffic in lower monetizing geographic regions and traffic quality improvement initiatives
conducted by Yahoo, which lowered Price-per-Click.
For the year ended December 31, 2012, Paid Clicks and Price-per-Click increased 8 percent and 2 percent,
respectively, compared to 2011. The increase in Paid Clicks was primarily attributable to the optimization of the
user interface. The increase in Price-per-Click was due to a change in the mix of Paid Clicks on our sponsored
listings.
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