Yahoo 2013 Annual Report Download - page 53

of $25 million and content costs of $5 million. The increase in marketing expenses was primarily due to
advertising campaigns to generate additional traffic on Yahoo Shopping, Mail, Autos and Screen, as well as our
On the Road with Yahoo marketing campaign and our Fantasy Football television advertising campaign. There
were no similar campaigns in 2012. The increase in marketing expenses and content costs was partially offset by
declines in compensation costs of $9 million and bandwidth and other cost of revenue of $6 million.
For the year ended December 31, 2012, direct costs attributable to the Americas segment increased $37 million,
or 5 percent, compared to 2011. The increase in direct costs was primarily due to higher compensation of $44
million and content costs of $35 million partially offset by lower marketing costs of $33 million and bandwidth
and other cost of revenue of $7 million.
Direct costs attributable to the Americas segment represented approximately 23 percent of Americas revenue ex-
TAC for the year ended December 31, 2013 compared to 22 percent for both 2012 and 2011.
EMEA
For the year ended December 31, 2013, direct costs attributable to the EMEA segment increased $4 million, or 2
percent, compared to 2012. The increase in direct costs was primarily attributable to an increase in content costs
and marketing expenses of $6 million partially offset by a $3 million decrease in compensation costs and
bandwidth and other cost of revenue.
For the year ended December 31, 2012, direct costs attributable to the EMEA segment decreased $4 million, or 2
percent, compared to 2011. The decline was primarily due to decreased compensation costs of $3 million and
marketing expenses of $2 million in the region. This was partially offset by increased content costs of $2 million
in the region.
Direct costs attributable to the EMEA segment represented approximately 48 percent of EMEA revenue ex-TAC
for the year ended December 31, 2013, compared to 45 percent and 41 percent in 2012 and 2011, respectively.
Asia Pacific
For year ended December 31, 2013, direct costs attributable to the Asia Pacific segment decreased $26 million,
or 12 percent, compared to 2012. The decrease was primarily attributable to a $15 million decline in
compensation costs which resulted from reduced headcount primarily related to the closure of our Korea
business, a $6 million decline in content costs, and a $10 million decline in outsourced service provider expenses
and other expenses. This overall decrease was partially offset by an increase of $9 million in bandwidth and other
cost of revenue in the region.
For year ended December 31, 2012, direct costs attributable to the Asia Pacific segment decreased $1 million, or
1 percent, compared to 2011. The decrease was primarily due to decreased marketing expenses offset by higher
bandwidth and other cost of revenue.
Direct costs attributable to the Asia Pacific segment represented approximately 26 percent of Asia Pacific
revenue ex-TAC for the year ended December 31, 2013, compared to 27 percent for both 2012 and 2011.
Operating Costs and Expenses
Traffic Acquisition Costs for Non-transitioned Search Markets and All Display Markets
TAC consists of payments made to third-party entities that have integrated our advertising offerings into their
Websites or other offerings and payments made to companies that direct consumer and business traffic to Yahoo
Properties. We enter into agreements of varying duration that involve TAC. There are generally two economic
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