Yahoo 2015 Annual Report Download - page 53

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complement the search services provided by Microsoft and Yahoo Gemini (Yahoo’s marketplace for
search and native advertising). We also generate search revenue from a revenue sharing
arrangement with Yahoo Japan Corporation (“Yahoo Japan”) for search technology and services as
reported.
The following table presents search revenue and that revenue as a percentage of total revenue for
the periods presented (dollars in thousands):
Years Ended December 31,
2013 2014 2015
Search
Yahoo Properties
$1,371,134 $1,518,035 $1,809,711
Affiliate sites
370,657 274,826 274,428
Total search revenue
$1,741,791 $1,792,861 $2,084,139
Search as a percentage of total revenue
Yahoo Properties
29% 33% 36%
Affiliate sites
8% 6% 6%
Total search revenue
37% 39% 42%
Search revenue for the year ended December 31, 2015 increased $291 million, or 16 percent, compared
to 2014. This increase in search revenue was attributable to growth in revenue generated on Yahoo
Properties of $292 million, primarily in the Americas segment. This increase resulted from higher
search volume on desktop due primarily to the Mozilla Agreement, which contributed $394 million, as
well as an increase in revenue from search advertising on mobile devices. The increase was partially
offset by a decline in click volume on other visits to Yahoo Properties. Affiliate search revenue overall
remained flat but consisted of declines in the Asia Pacific and EMEA segments of $30 million and $13
million, respectively, partially offset by an increase in the Americas segment of $42 million.
The total increase in search revenue for the year ended December 31, 2015 described above included
the impact of unfavorable foreign exchange fluctuations of $41 million using the foreign currency
exchange rates from the year ended December 31, 2014.
Search revenue for the year ended December 31, 2014 increased $51 million, or 3 percent, compared
to 2013, driven by higher revenue-per-search in the Americas segment on Yahoo Properties and
growth in advertising revenue from mobile, partially offset by the impact of the Microsoft transition in
the Asia Pacific segment. Search revenue grew despite the expiration in March 2014 of Microsoft’s
guarantee of Yahoo revenue-per-search under the Search Agreement (the “RPS Guarantee”) in the
U.S. The increase in search revenue for the year ended December 31, 2014 was primarily attributable
to an increase in advertising revenue on Yahoo Properties in the Americas, EMEA, and Asia Pacific
segments of $94 million, $38 million, and $15 million, respectively, partially offset by a decline in
advertising revenue on Affiliate sites in the Americas, EMEA, and Asia Pacific segments of $12 million,
$8 million and $76 million, respectively. The decline in Affiliate search revenue in the Asia Pacific
segment was due to the required change in revenue presentation for transitioned markets from a
gross (before TAC) to a net (after TAC) basis.
Display Revenue
Display revenue is generated from the display of graphical, non-graphical, and video advertisements
(“display advertising”). We earn revenue from guaranteed or “premium” display advertising by
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