Yahoo 2014 Annual Report Download - page 19

• maintaining and expanding our advertiser base on PCs and mobile devices;
• achieving a better traffic mix from our Yahoo Properties and Affiliates and improving our
monetization rates on such traffic;
• broadening our relationships with advertisers to small- and medium-sized businesses;
• successfully implementing changes and improvements to our advertising management platforms
and formats and obtaining the acceptance of our advertising management platforms by
advertisers, Website publishers, and online advertising networks;
• successfully acquiring, investing in, and implementing new technologies and strategic
partnerships;
• successfully implementing changes in our sales force, sales development teams, and sales
strategy;
• continuing to innovate and improve the monetization capabilities of our display and native
advertising and our mobile products;
• effectively monetizing mobile and other search queries;
• continuing to innovate and improve users’ search experiences;
• maintaining and expanding our Affiliate program for search and display advertising services; and
• deriving better demographic and other information about our users to enable us to offer better
experiences to both our users and advertisers.
In most cases, our agreements with advertisers have a term of one year or less, and may be
terminated at any time by the advertiser or by us. Search marketing agreements often have
payments dependent upon usage or click-through levels. Accordingly, it is difficult to forecast search
and display revenue accurately. In addition, our expense levels are based in part on expectations of
future revenue, including any guaranteed minimum payments to our Affiliates in connection with
search and/or display advertising, and in some cases, the expenses could exceed the revenue that we
generate. The state of the global economy, growth rate of the online advertising market, and
availability of capital impacts the advertising spending patterns of our existing and potential
advertisers. Any reduction in spending by, or loss of, existing or potential advertisers would
negatively impact our revenue and operating results. Further, we may be unable to adjust our
expenses and capital expenditures quickly enough to compensate for any unexpected revenue
shortfall.
As more people access our products via mobile devices rather than PCs and mobile advertising
continues to evolve, if we do not continue to grow our mobile users and revenue, our financial
results will be adversely impacted.
The number of people who access the Internet through mobile devices rather than a PC, including
mobile telephones, smartphones and tablets, is increasing and will likely continue to increase
dramatically. Over 575 million (including Tumblr) of our monthly users are now joining us on mobile
devices. In addition, search queries are increasingly being undertaken through mobile devices. As a
result, our ability to grow advertising revenue is increasingly dependent on our ability to generate
revenue from ads displayed on mobile devices.
A key element of our strategy is focusing on mobile devices and we expect to continue to devote
significant resources to the creation and support of developing new and innovative mobile products,
services and apps. However, if our new mobile products, services and apps, including new forms of
Internet advertising for mobile devices, do not continue to attract and retain mobile users, advertisers
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