Yahoo 2015 Annual Report Download - page 17

offer advertising exchanges, ad networks, demand side platforms, ad serving technologies,
sponsored search offerings, and other services that directly compete for advertisers with our
offerings. Additionally, as the use of programmatic advertising continues to increase, we compete
with companies that have also invested in programmatic platform offerings. We also compete with
traditional print and broadcast media companies to attract domestic and international advertising
spending. Some of our existing competitors and possible entrants have greater brand recognition for
certain products, services and apps, more expertise in particular market segments, and greater
operational, strategic, technological, financial, personnel, or other resources than we do. Many of our
competitors have access to considerable financial and technical resources with which to compete
aggressively, including by funding future growth and expansion and investing in acquisitions,
technologies, and research and development. Further, emerging start-ups may be able to innovate
and provide new products, services and apps faster than we can. In addition, competitors may
consolidate or collaborate with each other, and new competitors may enter the market. Some of our
competitors in international markets have a substantial competitive advantage over us because they
have dominant market share in their territories, have greater local brand recognition, are focused on
a single market, are more familiar with local tastes and preferences, or have greater regulatory and
operational flexibility due to the fact that we may be subject to both U.S. and foreign regulatory
requirements.
If our competitors are more successful than we are in developing and deploying compelling products
or in attracting and retaining users, advertisers, publishers, developers, or distributors, our revenue
and growth rates could decline.
We generate the majority of our revenue from search and display advertising, and the reduction in
spending by or loss of current or potential advertisers would cause our revenue and operating
results to decline.
For the twelve months ended December 31, 2015, 84 percent of our total revenue came from search
and display advertising. Our ability to retain and grow search and display revenue depends upon:
• increasing our daily active users, logged in users, page views and engagement;
• introducing engaging new products that are popular with users and distributable on mobile and
other alternative devices and platforms;
• maintaining and expanding our advertiser base on PCs and mobile devices;
• achieving a better traffic mix from our Yahoo Properties and Affiliates and improving our
monetization rates on such traffic;
• broadening our relationships with advertisers to small- and medium-sized businesses;
• successfully implementing changes and improvements to our advertising management platforms
and formats and obtaining the acceptance of our advertising management platforms by
advertisers, website publishers, and online advertising networks;
• successfully acquiring, investing in, and implementing new technologies;
• successfully implementing changes in our sales force, sales development teams, and sales
strategy;
• continuing to innovate and improve the monetization capabilities of our display and native
advertising and our mobile products;
• effectively monetizing mobile and other search queries;
• improving the quality of our user and advertiser products;
• continuing to innovate and improve users’ search experiences;
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