Yahoo 2013 Annual Report Download - page 55

Download and view the complete annual report

Please find page 55 of the 2013 Yahoo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 150

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149
  • 150

Sales and marketing expenses for the year ended December 31, 2013 increased $29 million, or 3 percent, as
compared to 2012. The year-over-year increase was primarily due to an increase in marketing expenses of $31
million and stock-based compensation expenses of $20 million. This was offset by a decline in other
compensation costs of $25 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, for which there were
no similar campaigns in 2012. The increase in stock based compensation in the sales and marketing function was
due to an increase in the number of awards granted at a higher fair value, including performance-based awards.
The decline in other compensation costs in the sales and marketing function was primarily due to a decline in
average headcount year-over-year.
Sales and marketing expenses for the year ended December 31, 2012 decreased $21 million, or 2 percent, as
compared to 2011. The year-over-year decrease was primarily due to a decline in marketing and public relations
expenses as well as a decline in third-party service provider expenses. This was offset by higher salaries of $29
million and higher stock-based compensation expense of $17 million in the sales and marketing function. The
increase in salaries was due to higher sales commissions. The increase in stock-based compensation expense was
due primarily to increased award grants and vesting accelerations upon executive terminations.
Sales and marketing expenses represented approximately 24 percent of GAAP revenue for the year ended
December 31, 2013, compared to 22 percent and 23 percent in 2012 and 2011, respectively.
Product Development
Product development expenses consist primarily of compensation-related expenses (including stock-based
compensation expense) incurred for the development of, enhancements to and maintenance of Yahoo Properties,
classification and organization of listings within Yahoo Properties, research and development, and Yahoo’s
technology platforms and infrastructure. Depreciation expense and other operating costs are also included in
product development.
Product development expenses for the year ended December 31, 2013 increased $123 million, or 14 percent, as
compared to 2012. For the year ended December 31, 2013, the increase was primarily attributable to a decline in
capitalizable projects of $65 million, as well as an increase in facilities and equipment expense of $24 million,
stock based compensation expense of $9 million, salaries of $11 million due to an increase in headcount in the
function, and travel and entertainment expense of $6 million. The increase in stock based compensation in the
product development function was due to an increase in the number of awards granted at a higher fair value.
Product development expenses for the year ended December 31, 2012 decreased $34 million, or 4 percent, as
compared to 2011. For the year ended December 31, 2012, the decline was primarily attributable to a decline in
salaries of $22 million and a decline in stock based compensation expense of $6 million in the product
development function as a result of reduced headcount related to the Q2’12 Restructuring Plan described below.
Product development expenses represented approximately 22 percent of GAAP revenue for the year ended
December 31, 2013, compared to 18 percent for both 2012 and 2011.
General and Administrative
General and administrative expenses consist primarily of compensation-related expenses (including stock-based
compensation expense) related to other corporate departments and fees for professional services.
General and administrative expenses for the year ended December 31, 2013 increased $29 million, or 5 percent,
as compared to 2012. The increase in expenses in the general and administrative function was due to increases in
facilities and equipment expense of $20 million due to investments in office space and our global employee
53