Yahoo 2014 Annual Report Download - page 18

Several of our competitors offer an integrated variety of Internet products, advertising services,
technologies, online services and content in a manner similar to Yahoo. We compete against these
and other companies to attract and retain users, advertisers, developers, and third-party Website
publishers as participants in our Affiliate network, and to obtain agreements with third parties to
promote or distribute our services. We also compete with social media and networking sites which
are increasingly used to communicate and share information, and which are attracting a substantial
and increasing share of users, users’ online time, and online advertising dollars.
A key element of our strategy is focusing on mobile products and mobile advertising formats, as well
as increasing our revenue from mobile. A number of our competitors have devoted significant
resources to the development of products, services and apps for mobile devices. Several of our
competitors have mobile revenue significantly greater than ours. If we are unable to develop
products for mobile devices that users find engaging and that help us grow our mobile revenue, our
competitive position, our financial condition and operating results could be harmed.
In addition, a number of competitors offer products, services and apps that directly compete for
users with our offerings, including e-mail, search, video, social, sports, news, finance, micro-blogging,
and messaging. Similarly, our competitors or other participants in the online advertising marketplace
offer advertising exchanges, ad networks, demand side platforms, ad serving technologies,
sponsored search offerings, and other services that directly compete for advertisers with our
offerings. Additionally, as the use of programmatic advertising continues to increase, we compete
with companies that have also invested in programmatic platform offerings. We also compete with
traditional print and broadcast media companies to attract domestic and international advertising
spending. Some of our existing competitors and possible entrants have greater brand recognition for
certain products, services and apps, more expertise in particular market segments, and greater
operational, strategic, technological, financial, personnel, or other resources than we do. Many of our
competitors have access to considerable financial and technical resources with which to compete
aggressively, including by funding future growth and expansion and investing in acquisitions,
technologies, and research and development. Further, emerging start-ups may be able to innovate
and provide new products, services and apps faster than we can. In addition, competitors may
consolidate or collaborate with each other, and new competitors may enter the market. Some of our
competitors in international markets have a substantial competitive advantage over us because they
have dominant market share in their territories, have greater local brand recognition, are focused on
a single market, are more familiar with local tastes and preferences, or have greater regulatory and
operational flexibility due to the fact that we may be subject to both U.S. and foreign regulatory
requirements.
If our competitors are more successful than we are in developing and deploying compelling products
or in attracting and retaining users, advertisers, publishers, developers, or distributors, our revenue
and growth rates could decline.
We generate the majority of our revenue from search and display advertising, and the reduction in
spending by or loss of current or potential advertisers would cause our revenue and operating
results to decline.
For the twelve months ended December 31, 2014, 79 percent of our total revenue came from search
and display advertising. Our ability to retain and grow search and display revenue depends upon:
• maintaining and growing our user base and popularity as an Internet destination site;
• maintaining the popularity of our existing products, introducing engaging new products and
making our new and existing products popular and distributable on mobile and other alternative
devices and platforms;
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