FOR IMMEDIATE RELEASE
YAHOO! REPORTS SECOND QUARTER FINANCIAL RESULTS
SECOND QUARTER PRO FORMA NET INCOME OF $0.15 PER SHARE
SANTA CLARA, CALIF. - JULY 8, 1998 - Yahoo! Inc. (NASDAQ: YHOO) today
reported revenues totaling $41.2 million for the second quarter ended June
30, 1998, a 192 percent increase over the same period in 1997. Pro forma net
income for the second quarter of 1998 was $8.1 million, or $0.15 per share
diluted, before the effect of a $44.1 million non-recurring charge for
in-process R&D purchased in the acquisition of Viaweb Inc. The pro forma net
income for the current quarter compares with a pro forma net loss of $0.3
million or $0.01 per share diluted, excluding the effect of a $21.2 million
non-recurring, non-cash charge incurred during the second quarter of 1997.
In separate announcements today, Yahoo!-Registered Trademark- said its
Board of Directors has approved a 2-for-1 common stock split and that it has
entered into an agreement for a $250 million private placement of common
stock to SOFTBANK Holdings, Inc.
Yahoo! today also announced that its traffic grew to an average of 115
million page views per day during the month of June 1998, compared to the 95
million page views per day average during March 1998. Yahoo! Japan, which is
included in the above page view totals, increased to an average of
approximately 8 million page views per day during the month of June 1998 from
an average of approximately 6 million per day in March 1998. A page view is
defined as one electronic page of information displayed in response to a user
request.
Yahoo! also announced that its registered user base grew to more than 18
million members, compared to more than 12 million as of March 1998,
reflecting the number of people who have submitted personal data for Yahoo!'s
universal registration process. In addition, Yahoo! was recently ranked No.
1 in reach among all Web sites with 54.1 percent of work users accessing
Yahoo!. The company's reach among home users has grown to 44.4 percent, and
is second only to AOL's reach by 1 percent (Media Metrix, May 1998).
"While we maintained our leadership position in audience reach among
work users and continued to experience popularity among home users, we had
significant growth in the number of registered Yahoo! members during the
quarter," said Tim Koogle, president and CEO, Yahoo!. "We continued to build
on the strong distribution platform we deliver to advertisers, merchants, and
content providers. As a result, we were able to sign several key agreements
during the quarter and experienced strong revenue growth. As always, we are
continuing to focus on building our strong brand, delivering quality content
and services, and aggressively growing our global audience as well as our
advertising and commerce revenue."
MERCHANT AND SHOPPING SERVICES
During the second quarter, Yahoo! expanded its online merchant services.
The company acquired Viaweb Inc. and launched Yahoo! Store to provide small
and medium-sized online merchants with a complete, easy-to-use service to
create, design, host, manage and promote online stores. In addition, Yahoo!
launched Impulse Deals, a new merchandising platform where merchants can
offer targeted shopping bargains on the Web. Also during the quarter,
AutoConnect joined Yahoo!
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Autos' (autos.yahoo.com) featured merchant button program, providing users
with easy access to shop for and purchase cars. AT&T and JFAX joined
Yahoo!'s premier merchant program to provide traditional communication
services and unified messaging services, respectively. The Fragrance Counter
is now enabling Yahoo! users to purchase designer fragrances and cosmetics in
relevant areas throughout the Yahoo! network of properties.
PROGRAMMING
Yahoo! further expanded its programming during the quarter. The company
announced that Inktomi will become Yahoo!'s integrated default search results
provider beginning in the third quarter. Yahoo! introduced Yahoo! Computers
(computers.yahoo.com), offering users news, product reviews, shareware
downloads, shopping services and chats. The company launched Yahoo! Movies
(movies.yahoo.com) providing a directory of movie and entertainment
information, showtimes, new releases, news and reviews and more. Yahoo! also
launched Yahoo! Real Estate (realestate.yahoo.com), a comprehensive, free
resource for listings, tools and information on buying, selling and renting
property. In addition, Yahoo! Sports (sports.yahoo.com) is providing full
coverage of the World Cup '98 in 11 different languages for users around the
world.
COMMUNICATION SERVICES
During the quarter, Yahoo! enhanced the communications services it
offers users. Yahoo! users now have convenient access to order and be billed
for AT&T's traditional communication services online. In addition, JFAX
enables users to turn their Yahoo! Mail (mail.yahoo.com) account into a
universal in-box for incoming and outgoing electronic, fax or voice messages.
Yahoo! Chat (chat.yahoo.com), the leading Web-based chat service, partnered
with PRIMEDIA during the quarter, and now features more than 100 celebrity
and expert chats each month.
EXPANDING AUDIENCE
Yahoo! extended its distribution during the quarter through an agreement
with Compaq. My Yahoo! is now the default Internet start page on Compaq's new
Internet PC product family, enabling customers to fully personalize their Web
experience.
INTERNATIONAL GROWTH
As in the U.S., the company's World Yahoo!s are very popular among Web
users, with several of its international sites being ranked No. 1 in various
categories. Yahoo! significantly expanded its network of international
properties during the quarter. In addition to Yahoo! Italy (yahoo.it), a
geographically-based Web guide, Yahoo! launched two language-based Web guides
for the significant number of Chinese (chinese.yahoo.com and
gbchinese.yahoo.com) and Spanish (espanol.yahoo.com) speaking Web users
around the world. The comprehensive, global, branded network of Yahoo!
properties has grown to now include 14 World Yahoo!s featuring content and
services for geographic areas and language-based global communities.
ABOUT YAHOO!
Yahoo! Inc. is a global Internet media company that offers a network of
branded Web programming serving millions of users daily. As the first
navigational guide to the Web, www.yahoo.com is the single largest guide in
terms of traffic, advertising, household and business user reach, and is one
of the most recognized brands associated with the Internet. Yahoo! provides
targeted Internet resources and communications services for a broad range of
audiences, based on demographic, key-subject and geographic interests. Yahoo!
is headquartered in Santa Clara, Calif.
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YAHOO! REPORTS SECOND QUARTER FINANCIAL RESULTS/PAGE 3
This announcement contains forward looking statements that involve risks
and uncertainties, including those relating to the company's ability to grow
its user and advertiser base, and advertising and commerce revenues. Actual
results may differ materially from the results predicted and reported results
should not be considered an indication of future performance. The potential
risks and uncertainties include, among others, the company's limited
operating history, the increasingly competitive environment for Web services
and advertising sales, the early stage of the Web as an advertising medium,
the company's dependence on advertising revenues and third parties for
technology, content and distribution. More information about potential
factors which could affect the company's business and financial results is
included in the company's annual report on Form 10-K for the year ended Dec.
31, 1997, including (without limitation) under the captions, "Management's
Discussion and Analysis of Financial Condition and Results of Operations,"
"Risk Factors," "Competition," and "Proprietary Rights," the company's
quarterly report on Form 10-Q for the period ended March 31, 1998, and the
company's current report filed on Form 8-K dated June 18, 1998, which are on
file with the Securities and Exchange Commission (www.sec.gov). The
accompanying condensed consolidated statements of operations and balance
sheets are an integral part of this announcement.
# # #
Yahoo! and the Yahoo! logo are trademarks and/or
registered trademarks of Yahoo! Inc.
All other names are trademarks and/or registered
trademarks of their respective owners.
CONTACTS:
Gary Valenzuela Diane Hunt
Senior Vice President and Director, Corporate Communications
Chief Financial Officer Yahoo! Inc.
Yahoo! Inc. (408) 731-3441
(408) 731-3350 diane@yahoo-inc.com
investor_relations@yahoo-inc.com
YAHOO! INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
---------------------------- -----------------------------
1998 1997 1998 1997
---------- ---------- ---------- ----------
NET REVENUES $ 41,210 $ 14,107 $ 71,416 $ 24,172
COST OF REVENUES 4,720 2,318 8,637 3,755
-------- -------- -------- --------
GROSS PROFIT 36,490 11,789 62,779 20,417
-------- -------- -------- --------
OPERATING EXPENSES:
SALES AND MARKETING 20,044 9,448 36,140 16,863
PRODUCT DEVELOPMENT 5,010 2,444 9,544 4,693
GENERAL AND ADMINISTRATIVE 2,227 1,613 4,219 2,910
OTHER - NON-RECURRING COSTS 44,100 21,245 44,100 21,245
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 71,381 34,750 94,003 45,711
-------- -------- -------- --------
LOSS FROM OPERATIONS (34,891) (22,961) (31,224) (25,294)
INVESTMENT INCOME, NET 1,848 1,227 3,294 2,618
MINORITY INTERESTS IN OPERATIONS
OF CONSOLIDATED SUBSIDIARIES 112 182 355 384
-------- -------- -------- --------
LOSS BEFORE INCOME TAXES (32,931) (21,552) (27,575) (22,292)
PROVISION FOR INCOME TAXES 3,060 - 4,131 -
-------- -------- -------- --------
NET LOSS $(35,991) $(21,552) $(31,706) $(22,292)
-------- -------- -------- --------
-------- -------- -------- --------
NET LOSS PER SHARE - DILUTED $ (0.81) $ (0.50) $ (0.72) $ (0.52)
-------- -------- -------- --------
-------- -------- -------- --------
WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS
USED IN PER SHARE CALCULATION - DILUTED 44,504 43,146 43,778 42,689
-------- -------- -------- --------
-------- -------- -------- --------
PRO FORMA NET INCOME (LOSS) PER SHARE - DILUTED (1) $ 0.15 $ (0.01) $ 0.23 $ (0.02)
-------- -------- -------- --------
-------- -------- -------- --------
WEIGHTED AVERAGE COMMON SHARES AND EQUIVALENTS
USED IN PRO FORMA NET INCOME (LOSS) PER SHARE
CALCULATION - DILUTED 54,597 43,146 53,986 42,689
-------- -------- -------- --------
-------- -------- -------- --------
(1) PRO FORMA NET INCOME (LOSS) PER SHARE DILUTED EXCLUDES THE EFFECT OF
IN-PROCESS PURCHASED TECHNOLOGY OF $44,100,000 INCURRED IN CONNECTION WITH
THE ACQUISITION OF VIAWEB INC. DURING THE QUARTER ENDED JUNE 30, 1998 AND
EXCLUDES THE EFFECT OF A ONE-TIME NON-CASH CHARGE OF $21,245,000 RELATED TO
THE VISA MARKETPLACE RESTRUCTURING INCURRED DURING THE QUARTER ENDED JUNE 30,
1997.
NOTE: THE ABOVE SHARE AND PER SHARE CALCULATIONS DO NOT REFLECT THE EFFECT
OF THE JULY 1998 2-FOR-1 STOCK SPLIT.
YAHOO! INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
JUNE 30, DECEMBER 31,
1998 1997
----------- ------------
(UNAUDITED) (AUDITED)
ASSETS
CASH, CASH EQUIVALENTS, AND INVESTMENTS
IN MARKETABLE SECURITIES $ 147,236 $ 107,012
ACCOUNTS RECEIVABLE, NET 16,795 10,986
PREPAID EXPENSES 4,211 5,893
PROPERTY AND EQUIPMENT, NET 8,987 7,035
OTHER ASSETS 14,389 10,958
--------- ---------
TOTAL ASSETS $ 191,618 $ 141,884
--------- ---------
--------- ---------
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
ACCOUNTS PAYABLE $ 5,633 $ 5,477
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 19,857 13,127
DEFERRED REVENUE 18,533 4,852
--------- ---------
TOTAL LIABILITIES 44,023 23,456
MINORITY INTERESTS IN CONSOLIDATED SUBSIDIARIES 961 716
SHAREHOLDERS' EQUITY:
COMMON STOCK 206,657 146,126
ACCUMULATED DEFICIT (59,677) (27,971)
CUMULATIVE TRANSLATION ADJUSTMENT (346) (443)
--------- ---------
TOTAL SHAREHOLDERS' EQUITY 146,634 117,712
--------- ---------
$ 191,618 $ 141,884
--------- ---------
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