Yahoo 2014 Annual Report Download - page 61

For the year ended December 31, 2013, Paid Clicks increased 19 percent and Price-per-Click
decreased 4 percent, compared to 2012. The increase in Paid Clicks was attributable to improved ad
formats on Yahoo Search, increased mobile traffic, and increased Affiliate traffic in the Americas
region. The increase in Affiliate traffic was driven by incremental traffic in Latin America. The
decrease in Price-per-Click was primarily due to a higher mix of traffic in lower monetizing
geographic regions and traffic quality improvement initiatives conducted by Yahoo, which lowered
Price-per-Click.
Display Metrics
For the year ended December 31, 2014, number of Ads Sold increased 17 percent and Price-per-Ad
decreased 18 percent, compared to 2013. The increase in number of Ads Sold for the year ended
December 31, 2014 was attributable to an increase in native ad units sold, partially offset by a decline
in premium Ads Sold. Native ad units were launched late in the second quarter of 2013. Native ad
units represented approximately 37 percent of total Ads Sold for the year ended December 31, 2014,
as compared to 7 percent of total Ads Sold for the year ended December 31, 2013. The decrease in
Price-per-Ad for the year ended December 31, 2014 was due to a shift in the mix of Ads Sold toward
lower monetizing native ad units.
For the year ended December 31, 2013, number of Ads Sold decreased 1 percent and Price-per-Ad
decreased 5 percent, compared to 2012. The decrease in number of Ads Sold year-over-year was
attributable to a decline in premium Ads Sold, which was partially offset by growth in non-premium
advertising as a result of native ad units. The decrease in Price-per-Ad year-over-year was due to a
shift in the mix of Ads Sold towards lower monetizing native ad units.
Revenue ex-TAC by Segment
Americas
Americas revenue ex-TAC for the year ended December 31, 2014 increased $29 million, or 1 percent,
compared to 2013. The increase in Americas revenue ex-TAC for the year ended December 31, 2014
was attributable to an increase in search revenue ex-TAC of $78 million, partially offset by declines in
display revenue ex-TAC and other revenue ex-TAC of $35 million and $14 million, respectively. Search
revenue ex-TAC in the Americas region increased 6 percent for the year ended December 31, 2014, as
compared to the same period of 2013, as Paid Clicks increased 14 percent and Price-per-Click
increased 3 percent in the region. The increase in search revenue ex-TAC for the year ended
December 31, 2014 was attributable to an increase in search revenue on Yahoo Properties driven by
higher revenue-per-search from a change in the design of the search results page and an increase in
search advertising from mobile devices. Search revenue ex-TAC increased despite the expiration of
the RPS Guarantee in the U.S in March 2014. The increase in search revenue ex-TAC on Yahoo
Properties was partially offset by a decline in Affiliate search revenue in the region. The decline in
display revenue ex-TAC for the year ended December 31, 2014 was due to a decline in premium ads
sold on Yahoo Properties, partially offset by an increase in native advertising and advertising on
Affiliate sites. The decline in other revenue ex-TAC for the year ended December 31, 2014 was
primarily attributable to a decline in listings-based revenue, partially offset by an increase in fees
revenue, as a result of the patent license revenue.
Americas revenue ex-TAC for the year ended December 31, 2013 increased $43 million, or 1 percent,
compared to 2012. The increase in Americas revenue ex-TAC was primarily attributable to an increase
in search revenue ex-TAC of $148 million and fees revenue of $87 million. The increase in search
revenue ex-TAC was attributable to an increase in sponsored searches on Yahoo Properties and
higher revenue per search due to improved ad formats. The increase in fees revenue was primarily
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