Yahoo 2014 Annual Report Download - page 2

Yahoo’s Board of Directors and executive team are
committed to delivering shareholder value through
sustained growth. In 2012, our leadership team
began a multiyear transformation to return an iconic
company to greatness, shifting from a declining
desktop strategy to a mobile-first strategy that has
already yielded significant results. Our strategy to
reinvent our business has made Yahoo one of the top
three players in mobile, and we’re just getting started.
In 2014, our global user base across search,
communications, and digital content grew to more
than 1 billion monthly active users—more than
575 million of whom visited us on a mobile device.
As an advertising-driven business, we’ve continued
to build and modernize our ad offerings with Yahoo
Gemini, Yahoo Ad Manager Plus, BrightRoll and Flurry.
These strategic investments, a mixture of organic
growth and acquisitions, have created a strong
foundation for growth. They not only bring us to
parity with the competition, but propel us to industry-
leading positions in areas including mobile analytics
and video advertising.
An Update on Our Progress
Yahoo is driving toward a dramatic business
transformation. Online advertising technology moves
incredibly quickly. Our strategy has focused on mobile,
video, native and social (aka Mavens), the fastest-
growing areas of digital advertising. Before 2012,
Mavens offerings did not contribute meaningfully
to Yahoo. In 2014, however, our Mavens offerings
generated more than $1.1 billion of GAAP revenue. In
just two years, we created more than a billion dollars
of new annual revenue, with robust further growth
expected in 2015. We are keenly focused on revenue
growth, both new and mature. Our approach has been
to stabilize our legacy businesses while offsetting their
natural maturation and declines with growth from
these areas of new investment.
• Mobile: In 2014, mobile monthly active users
continued to show strong growth and reached
575 million users, one of the largest mobile
audiences globally. In terms of mobile monetization,
we reported $768 million in mobile GAAP revenue
in 2014.
• Video: Through partnerships with Good Morning
America and Live Nation, as well as Yahoo original
shows, we continue to offer top-tier video content
that deeply engages our users. Additionally, we
are reinventing our large legacy display business
to better connect marketers with users. Our Q4
acquisition of BrightRoll instantly lets us serve more
video ads and reach more users than any other
platform. BrightRoll revenue exceeded $100 million
in 2014, with solid growth expected this year.
• Native: Yahoo Gemini’s native ads have become
essential to Yahoo’s transformation in digital
advertising. We saw nearly $300 million of GAAP
revenue in 2014 on Yahoo Gemini native ads, with
solid growth of more than 32% quarter-over-quarter
in Q4.
• Social: Tumblr continues to grow faster than almost
any other social network, with an audience of more
than 460 million people each month. And mobile app
usage continues to drive growth, with mobile app
users up 32% year-over-year. As a result, 75 of the
Ad Age top 100 already have a presence on Tumblr.
Our search business has shown strong growth.
We signed a five-year strategic partnership with
Mozilla in November 2014 that made Yahoo the
default search provider for Firefox in the U.S. In Q4
2014, we saw an 18% search-click-driven revenue
growth, 10% year-over-year increase in paid clicks,
and a 7% year-over-year price-per-click growth.
Overall in 2014, we delivered $3.382 billion of gross
search revenue, which maps to $1.793 billion in GAAP
revenue and $1.784 billion in ex-TAC revenue.
YHOO shares have outperformed peers and the
S&P 500. Yahoo’s shareholder return since July 2012
has been 182%, exceeding the shareholder returns of
Dear Yahoo
Shareholder
Yahoo is driving toward a
dramatic business transformation.