Yahoo 2015 Annual Report Download - page 14

advertisers. Pursuant to the current terms of the Search Agreement, as amended on April 15, 2015 by
the Eleventh Amendment to the Search Agreement (the “Eleventh Amendment”), this sales
exclusivity terminated on July 1, 2015. The Company and Microsoft have been transitioning premium
advertisers for Microsoft’s paid search services to Microsoft on a market-by-market basis. As of
February 26, 2016, such transition was substantially complete for most markets in North America and
Europe, and the parties are cooperating on transitioning the remaining markets. Our mid-market
channel sells our advertising services to medium-sized businesses, while our reseller/small business
channel allows us to sell advertising services to additional regional and small business advertisers.
Our U.S. sales force is structured vertically allowing us to offer customers integrated customer-
centric solutions. We believe this approach allows us to provide the best solutions across all of our
products based on a deeper understanding of our customers’ businesses.
In the U.S., we employ sales professionals in multiple locations, including Atlanta, Boston, Chicago,
Dallas, Detroit, Hillsboro, the Los Angeles area, Miami, New York, Omaha, San Francisco, and
Sunnyvale as of December 31, 2015. In international markets, we either have our own internal sales
professionals or rely on our established sales agency relationships in 35 countries, regions, and
territories as of December 31, 2015.
Revenue under the Search Agreement represented approximately 31 percent, 35 percent, and 35
percent of our revenue for the years ended December 31, 2013, 2014 and, 2015, respectively, and no
other individual customer represented more than 10 percent of our revenue in 2013, 2014, or 2015.
Internet usage is subject to seasonal fluctuations, typically declining during customary summer
vacation periods and increasing during the fourth quarter holiday period due to higher online retail
activity. These seasonal patterns have affected, and we expect will continue to affect, our business
and quarterly sequential revenue growth rates.
Marketing
Yahoo is one of the most recognized brands in the world. Our products, services, and content enable
us to attract, retain, and engage users, advertisers, and publishers. Our marketing team will help
shape our offerings to better market them to our potential and existing users.
Competition
Our industry is characterized by rapid evolution and innovation through disruptive technologies. We
face significant competition from a wide range of businesses, particularly companies that seek to
connect people with digital content and with each other. We compete on a global scale for audience
share, marketers, and talent. Our competition includes:
• General purpose search engines and information services such as Alphabet’s Google and
Microsoft’s Bing.
• Companies such as Facebook and Twitter that provide mail, photo sharing, blogging,
microblogging, and other social or communication services. These areas are attracting an
increasing share of users, users’ online time (across desktop and mobile), and advertising dollars.
• Companies that offer an integrated variety of Internet products, advertising services,
technologies, online services, and/or content in a manner similar to us that compete for the
attention of our users, advertisers, developers, and third-party website publishers. We also
compete with these companies to obtain agreements with third parties to promote or distribute
our services.
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