Yahoo 2014 Annual Report Download - page 60

Search and Display Metrics
We present information below regarding the number of “Paid Clicks” and “Price-per-Click” for search
and the number of “Ads Sold” and “Price-per-Ad” for display. This information is derived from
internal data.
“Paid Clicks” are defined as clicks by end-users on sponsored search listings (excluding native ad
units) on Yahoo Properties and Affiliate sites. Advertisers generally pay for sponsored search listings
on a per-click basis. “Search click-driven revenue” is gross search revenue (GAAP search revenue
plus the related revenue share with third parties), excluding the Microsoft RPS Guarantee and search
revenue from Yahoo Japan. “Price-per-Click” is defined as search click-driven revenue divided by our
total number of Paid Clicks.
“Ads Sold” consist of display ad impressions for paying advertisers on Yahoo Properties.
“Price-per-Ad” is defined as display revenue from Yahoo Properties divided by our total number of
Ads Sold. Our price and volume metrics for display are based on display revenue which we report on
a gross basis (before TAC), and include data for graphical, sponsorship, and native ad units on Yahoo
Properties (including mobile). Our price and volume metrics for display exclude both the number of
Ads Sold and the related revenue for certain regions and acquired companies where historical data
was not retained in a manner that would support period-to-period comparison on these metrics. The
countries and regions included in our display metrics are: the U.S., the United Kingdom, France,
Germany, Spain, Italy, Taiwan, Hong Kong, Southeast Asia, and India.
We periodically review, refine and update our methodologies for monitoring, gathering, and counting
number of Paid Clicks and Ads Sold and for calculating search click-driven revenue, Price-per-Click,
and Price-per-Ad.
Tumblr, Inc. (“Tumblr”) data is included in our display metrics beginning in the first quarter of
2014. The Tumblr data that we included for the first and second quarter of 2014 consisted solely of
native ad units. Also, commencing in the third quarter of 2013, we made three other updates to our
methodologies. First, we have included the impressions and revenue associated with our native ad
units, which are display ads that appear in the content streams viewed by users, in our display price
and volume metrics (Ads Sold and Price-per-Ad). Second, to provide metrics that are more
consistent with our historical revenue trends, the revenue and volume associated with other display
advertisements sold on a price-per-click basis have been excluded from our search price and volume
metrics (Paid Clicks and Price-per-Click) and they will continue to be excluded from our display price
and volume metrics. Finally, the Microsoft RPS Guarantee has been excluded from the calculation of
Price-per-Click. Due to the closure of the Korea business in the fourth quarter of 2012, “Ads Sold,”
“Paid Clicks,” “Price-per-Ad,” and “Price-per-Click,” as presented below, exclude the Korea market for
all periods presented. Prior period amounts have been updated to conform to the current
presentation.
Search Metrics
For the year ended December 31, 2014, Paid Clicks increased 5 percent and Price-per-Click increased
11 percent, compared to 2013. The increase in Paid Clicks for the year ended December 31, 2014 was
attributable to an increase in Paid Clicks on Yahoo Properties from distribution partners primarily in
the Americas region, partially offset by a decline in Paid Clicks on Affiliate sites related to traffic
quality initiatives across the regions. The increase in Price-per-Click for the year ended December 31,
2014 was primarily driven by a higher mix of traffic from the Americas region, which is higher
monetizing as compared to other geographic regions, and improved Affiliate traffic quality across all
regions resulting in higher Price-per-Click. Improvements in Price-per-Click resulted in year-over-year
growth in search click-driven revenue for the year ended December 31, 2014 of 17 percent.
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