Yahoo 2014 Annual Report Download - page 23

• the impairment of relationships with, or failure to retain, employees of acquired companies or our
existing employees as a result of integration of new personnel;
• our lack of, or limitations on our, control over the operations of our joint venture companies;
• in the case of foreign acquisitions and investments, the impact of particular economic, tax,
currency, political, legal and regulatory risks associated with specific countries; and
• the impact of known potential liabilities or liabilities that may be unknown, including as a result of
inadequate internal controls, associated with the companies we acquired or in which we invested.
We are likely to experience similar risks in connection with our future acquisitions and strategic
investments. Our failure to be successful in addressing these risks or other problems encountered in
connection with our past or future acquisitions and strategic investments could cause us to fail to
realize the anticipated benefits of such acquisitions or investments, incur unanticipated liabilities, and
harm our business generally.
We may be required to record a significant charge to earnings if our goodwill, amortizable
intangible assets, investments in equity interests, or other investments become impaired.
We are required under generally accepted accounting principles to test goodwill for impairment at
least annually and to review our amortizable intangible assets, investments in equity interests
(including investments held by any equity method investee), and our other investments, for
impairment when events or changes in circumstance indicate the carrying value may not be
recoverable. Factors that could lead to impairment of goodwill, amortizable intangible assets
(including goodwill or assets acquired via acquisitions) and other investments include significant
adverse changes in the business climate and actual or projected operating results (affecting our
company as a whole or affecting any particular reporting unit) and declines in the financial condition
of our business. Factors that could lead to impairment of investments in equity interests include a
prolonged period of decline in the stock price or operating performance of, or an announcement of
adverse changes or events by, the companies in which we invested or the investments held by those
companies. Factors that could lead to an impairment of U.S. government securities, which constitute
a significant portion of our current assets, include any downgrade of U.S. government debt or
concern about the creditworthiness of the U.S. government. We have recorded and may be required
in the future to record additional charges to earnings if our goodwill, amortizable intangible assets,
investments in equity interests, including investments held by any equity method investee, or other
investments become impaired. Any such charge would adversely impact our financial results.
Our business depends on a strong brand, and failing to maintain or enhance the Yahoo brands in a
cost-effective manner could harm our operating results.
Maintaining and enhancing our brands is an important aspect of our efforts to attract and expand our
user, advertiser, and Affiliate base. We believe that the importance of brand recognition will increase
due to the relatively low barriers to entry in certain portions of the Internet market. Maintaining and
enhancing our brands will depend largely on our ability to provide high-quality, innovative products,
and services, which we might not do successfully. We have spent and expect to spend considerable
money and resources on the establishment and maintenance of our brands, as well as advertising,
marketing, and other brand-building efforts to preserve and enhance consumer awareness of our
brands. Our brands may be negatively impacted by a number of factors such as service outages,
product malfunctions, data protection and security issues, exploitation of our trademarks by others
without permission, and poor presentation or integration of our search marketing offerings by
Affiliates on their sites or in their software and services.
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