Yahoo 2014 Annual Report Download - page 35

investment in Yahoo Japan. While we do not currently anticipate repatriating these earnings, any
repatriation of funds in foreign jurisdictions to the U.S. could result in higher effective tax rates for us
and subject us to significant additional U.S. income tax liabilities.
We are subject to regular review and audit by both domestic and foreign tax authorities as well as
subject to the prospective and retrospective effects of changing tax regulations and legislation.
Although we believe our tax estimates are reasonable, the ultimate tax outcome may materially differ
from the tax amounts recorded in our consolidated financial statements and may materially affect our
income tax provision, net income, or cash flows in the period or periods for which such determination
and settlement is made.
Proprietary document formats may limit the effectiveness of our search technology by preventing
our technology from accessing the content of documents in such formats, which could limit the
effectiveness of our products and services.
A large amount of information on the Internet is provided in proprietary document formats. These
proprietary document formats may limit the effectiveness of search technology by preventing the
technology from accessing the content of such documents. The providers of the software applications
used to create these documents could engineer the document format to prevent or interfere with the
process of indexing the document contents with search technology. This would mean that the
document contents would not be included in search results even if the contents were directly relevant
to a search. The software providers may also seek to require us to pay them royalties in exchange for
giving us the ability to search documents in their format. If the search platform technology we employ
is unable to index proprietary format Web documents as effectively as our competitors’ technology,
usage of our search services might decline, which could cause our revenue to fall.
Adverse macroeconomic conditions could cause decreases or delays in spending by our advertisers
and could harm our ability to generate revenue and our results of operations.
Advertising expenditures tend to be cyclical, reflecting overall economic conditions and budgeting
and buying patterns. Since we derive most of our revenue from advertising, adverse macroeconomic
conditions have caused, and future adverse macroeconomic conditions could cause, decreases or
delays in advertising spending and negatively impact our advertising revenue and short-term ability
to grow our revenue. Further, any decreased collectability of accounts receivable or early termination
of agreements, whether resulting from customer bankruptcies or otherwise due to adverse
macroeconomic conditions, could negatively impact our results of operations.
Our stock price has been volatile historically and may continue to be volatile regardless of our
operating performance.
The trading price of our common stock has been and may continue to be subject to broad
fluctuations. During the twelve months ended December 31 2014, the closing sale price of our
common stock on the NASDAQ Global Select Market ranged from $32.87 to $52.37 per share and the
closing sale price on February 13, 2015 was $44.42 per share. Our stock price may fluctuate in
response to a number of events and factors, such as variations in quarterly operating results or
announcements of technological innovations, significant transactions, or new features, products or
services by us or our competitors; changes in financial estimates and recommendations by securities
analysts; the operating and stock price performance of, or other developments involving, other
companies that investors may deem comparable to us; trends in our industry; general economic
conditions; and the operating performance and market valuation of Alibaba Group and Yahoo Japan
Corporation in which we have investments. The equity valuation of our investment in Yahoo Japan
Corporation may be impacted due to fluctuations in foreign currency exchange rates. We present our
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