Yahoo 2014 Annual Report Download - page 22

license or acquire such content or services. Our ability to maintain and build relationships with such
third-party providers is critical to our success. In addition, as users increasingly access the Internet
via mobile and other alternative devices, we may need to enter into amended agreements with
existing third-party providers to cover the new devices. We may be unable to enter into new, or
preserve existing, relationships with the third-parties whose content or services we seek to obtain. In
addition, as competition for compelling content increases both domestically and internationally, our
third-party providers may increase the prices at which they offer their content and services to us,
stop offering their content or services to us, or offer their content and services on terms that are not
agreeable to us. An increase in the prices charged to us by third-party providers could harm our
operating results and financial condition. Further, because many of our content and services licenses
with third parties are non-exclusive, other media providers may be able to offer similar or identical
content. This increases the importance of our ability to deliver compelling editorial content and
personalization of this content for users in order to differentiate Yahoo from other businesses. If we
are unable to license or acquire compelling content at reasonable cost, if other companies distribute
content or services that are similar to or the same as that provided by us, if we do not develop or
commission compelling editorial content (including personalized content), or if we do not receive
compelling content from our users, the number of users of our services may not grow as anticipated,
or may decline, or users’ level of engagement with our services may decline, all or any of which could
harm our operating results.
Acquisitions and strategic investments could result in adverse impacts on our operations and in
unanticipated liabilities.
We have acquired, and have made strategic investments in, a number of companies (including
through joint ventures) in the past, and we expect to make additional acquisitions and strategic
investments in the future. Such transactions may result in use of our cash resources, dilutive
issuances of our equity securities, or incurrence of debt. Such transactions may also result in
amortization expenses related to intangible assets. Our acquisitions and strategic investments to
date were accompanied by a number of risks, including:
• the difficulty of integrating the operations, personnel, systems, and controls of acquired
companies as a result of cultural, regulatory, systems, and operational differences;
• the potential disruption of our ongoing business and distraction of management;
• the incurrence of additional operating losses and operating expenses of the businesses we
acquired or in which we invested;
• the difficulty of integrating acquired technology and rights into our services and unanticipated
expenses related to such integration;
• the failure to successfully further develop an acquired business or technology and any resulting
impairment of amounts currently capitalized as intangible assets;
• the failure of strategic investments to perform as expected or to meet financial projections;
• the potential for patent and trademark infringement and data privacy and security claims against
the acquired companies, or companies in which we have invested;
• litigation or other claims in connection with acquisitions, acquired companies, or companies in
which we have invested;
• the impairment or loss of relationships with customers and partners of the companies we
acquired or in which we invested or with our customers and partners as a result of the integration
of acquired operations;
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