Yahoo 2015 Annual Report Download - page 54

delivering advertisements according to advertisers’ specified criteria, such as number of impressions
during a fixed period on a specific placement. Also, we earn revenue from non-guaranteed display
advertising, which includes native advertising, by delivering advertisements on a preemptible basis.
We recognize revenue from display advertising on Yahoo Properties and Affiliate sites as impressions
of or clicks on display advertisements are delivered. Impressions are delivered when a sold
advertisement appears in pages viewed by users. Clicks are delivered when a user clicks on a native
advertisement. Arrangements for these services generally have terms of up to one year and in some
cases the terms may be up to three years. For display advertising on Affiliate sites, we pay TAC to
Affiliates for the revenue generated from the display of these advertisements on the Affiliate sites.
The display revenue derived from these arrangements that involve traffic supplied by Affiliates is
reported on a gross basis (before deducting the TAC paid to Affiliates as cost of revenue—TAC) as
we are the primary obligor to the advertisers who are the customers of the display advertising
service.
The following table presents display revenue and that revenue as a percentage of total revenue for
the periods presented (dollars in thousands):
Years Ended December 31,
2013 2014 2015
Display
Yahoo Properties $1,776,938 $1,706,675 $1,693,411
Affiliate sites 172,892 161,360 380,750
Total display revenue $1,949,830 $1,868,035 $2,074,161
Display as a percentage of total revenue
Yahoo Properties 38% 37% 34%
Affiliate sites 4% 3% 8%
Total display revenue 42% 40% 42%
Display revenue for the year ended December 31, 2015 increased $206 million, or 11 percent, compared
to 2014. For the year ended December 31, 2015, the increase in display revenue was driven by
increased Affiliate revenue in the Americas, EMEA and Asia Pacific segments of $145 million, $41
million and $33 million, respectively, as well as an increase in display revenue on Yahoo Properties in
the Americas segment of $94 million. This was partially offset by declines in display revenue on Yahoo
Properties in the EMEA and Asia Pacific segments of $49 million and $58 million, respectively. The
increase in Affiliate display revenue for the year ended December 31, 2015 resulted primarily from an
increase in video and native advertising, including incremental revenue from the BrightRoll acquisition
and an increase in revenue from native advertising on mobile devices. The increase in display revenue
on Yahoo Properties in the Americas segment was due to growth in native advertising. The decrease
in display revenue on Yahoo Properties in the EMEA and Asia Pacific segments for the year ended
December 31, 2015 was primarily driven by declines in volume and pricing of premium and audience
advertising, partially offset by an increase in volume of native advertising.
The total increase in display revenue for the year ended December 31, 2015 described above included
the impact of unfavorable foreign exchange fluctuations of $68 million using the foreign currency
exchange rates from the year ended December 31, 2014.
Display revenue for the year ended December 31, 2014 decreased $82 million, or 4 percent, compared
to 2013, primarily due to a mix shift from premium ad units to lower monetizing native ad units. The
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