FOR IMMEDIATE RELEASE
Yahoo! Reports Second Quarter 1999 Financial
Results
Company Posts $115 Million in Revenues and $0.11 Pro Forma EPS
SANTA CLARA, Calif. July 7, 1999 - Yahoo! Inc. (Nasdaq: YHOO) today
reported net revenues totaling $115,239,000 for the second quarter ended June
30, 1999, a 156 percent increase over net revenues of $44,948,000 reported in
the same period in 1998. Pro forma net income for the quarter was $28,298,000
or $0.11 per share diluted, excluding merger-related charges incurred in the
acquisitions of GeoCities, Online Anywhere, and Encompass, Inc., and the
effects of amortization of intangible assets. This compares to pro forma net
income of $1,459,000 or $0.01 per share diluted for the same period in 1998,
and pro forma net income of $19,900,000 or $0.08 per share diluted in the first
quarter ended March 31, 1999. These financial results include the recent
acquisitions of GeoCities, Online Anywhere, and Encompass, and do not
include the proposed acquisition of broadcast.com, which is anticipated to close
in the third quarter of 1999. Net loss, including the merger-related charges and
effects of amortization of intangible assets for the quarter ended June 30, 1999,
was $15,062,000 or $0.07 per share compared to a net loss of $14,248,000 or
$0.08 per share for the quarter ended June 30, 1998.
"During the second quarter, we expanded our audience, our extensive global
presence, the content and services we offer, the platforms and devices on which
they are delivered, and the marketing programs we offer our customers," said
Tim Koogle, chairman and CEO, Yahoo!. "The GeoCities, broadcast.com,
Online Anywhere, and Encompass acquisitions support our strategy to further
strengthen our leadership in these areas, delivering the Web's best consumer
experience from any device, any time, while providing merchants and advertisers
with innovative, integrated, and measurable solutions."
Audience Growth and Usage
Yahoo!’s global audience, reach, and consumption continued to increase during
the second quarter. In the month of June 1999, more than 80 million unique
users worldwide visited the Yahoo! network, and the company’s registration
base grew to more than 65 million unique registrations. In addition, the Yahoo!
and GeoCities combined reach among work and home users increased to 59.7
percent in the United States during May (Media Metrix, May 1999). During the
month of June 1999, traffic on the Yahoo! global network of properties
increased to an average of 310 million page views per day, compared to an
average of 235 million page views per day in March 1999. Yahoo! Japan’s
traffic, which is included in the above page view totals, increased to more than
22 million page views per day during the month of June 1999 from more than 17
million per day in March 1999. These June 1999 page views reflect the recent
acquisition of GeoCities.
Distribution and Marketing
Yahoo! continued to expand its extensive global distribution during the quarter.
The company acquired Online Anywhere to enable Yahoo! to easily deliver
content and services to a wide array of non- PC and wireless devices. Yahoo!
also acquired Encompass, enabling Yahoo! to offer PC and device
manufacturers a comprehensive solution that results in easier consumer access
to content and services on the Web. In the United States, Yahoo! entered or
extended distribution alliances with Caere Corporation, Hewlett-Packard,
Phoenix Technologies, Sprint PCS, and Symantec. Yahoo! also extended its
relationship with TIBCO Software, to offer Corporate My Yahoo! to the
corporate marketplace. Internationally, Yahoo! teamed with SmarTone in Hong
Kong, D2 in Germany, and SK Telecom and Hansol PCS in Korea to deliver
Yahoo!’s Web content and services to wireless phone users.
During the quarter, Yahoo! and Canal Fox, the No. 1 general entertainment
channel in Latin America, entered a marketing and promotional agreement. In
addition, Yahoo! UK & Ireland and BskyB, U.K.’s largest television network,
entered a marketing and promotional agreement to promote Yahoo! UK &
Ireland throughout BskyB’s network.
Network Programming and Services
During the second quarter, Yahoo! continued to build out its media properties.
Yahoo! completed its first phase of integrating the GeoCities online community
(http://geocities.yahoo.com) and home page building services into Yahoo!’s
global network, including its unique universal registration system. In personal
finance, Yahoo! and Bank of America began giving individuals access to their
bank account information through Yahoo! Finance (http://finance.yahoo.com)
and My Yahoo! (http://my.yahoo.com). Yahoo! Finance also launched auto loan
services through a relationship with debis Financial Services. During the quarter,
Yahoo! unveiled Yahoo! Radio (http://radio.yahoo.com), providing Web users
with direct access to broadcast audio programming. The company also
launched Yahoo! Health (http://health.yahoo.com), enabling users to conduct
research, obtain the latest health news, gain advice from medical experts, and
find a physician. Yahoo! also expanded its programming and services
throughout its geographic properties around the world. With the newly launched
Yahoo! Brazil (http://br.yahoo.com), Yahoo! now owns and operates 19
geographic services around the world in 12 different languages.
In commerce, the company opened Yahoo! Auctions internationally in Australia
& NZ (http://auctions.yahoo.com.au), the UK & Ireland
(http://auctions.yahoo.com/uk), and Canada (http://auctions.yahoo.com/ca).
Yahoo! also unveiled Yahoo! Auctions Express (http://auctions.yahoo.com) to
enable sellers with large inventories to easily upload hundreds of items and run
multiple auctions. In addition, Yahoo! Classifieds was rolled out in Yahoo! UK
& Ireland and Yahoo! France.
During the quarter, Yahoo! expanded its communications services. In the United
States, Yahoo! gave users the ability to talk with others anywhere in the world
over the Internet using Yahoo! Messenger’s voice chat feature
(http://messenger.yahoo.com). Yahoo! also added a new conference calling
feature to Yahoo! Address Book (http://address.yahoo.com), enabling users to
create and manage U.S.-based conference calls from any Internet-connected
computer. In addition, the company launched Yahoo! Messenger in Canada, the
UK & Ireland, Australia & NZ, France, and Germany. Yahoo! Mail and Yahoo!
Address Book were launched in Canada.
Merchant and Advertiser Services
During the quarter, Yahoo! expanded and executed upon its Fusion Marketing
Online™ (FMO) strategy, which is designed to leverage the company’s
significant worldwide audience, traffic, and database to provide customized and
measurable marketing solutions to its clients. Yahoo! and Procter & Gamble
expanded their relationship through extensive, highly-integrated FMO marketing
programs designed to connect Yahoo!’s global audience with P’s brands in
innovative ways. In addition to P, Yahoo!’s advertiser base increased to
2,700 clients during the quarter, including major new accounts and brands such
as Autoweb.com, Bell Atlantic Mobile, Claritin, Milky Way, Musicland,
Nabisco, 7-Eleven, Sprint, and Target Stores.
About Yahoo!
Yahoo! Inc. is a global Internet media company that offers a branded network of
comprehensive information, communication, and shopping services to 80 million
users worldwide. As the first online navigational guide to the Web,
www.yahoo.com is the leading guide in terms of traffic, advertising, household
and business user reach, and is one of the most recognized brands associated
with the Internet. The company’s global Web network includes 19 World
properties. Yahoo! has offices in Europe, the Asia Pacific, South America,
Canada, and the United States, and is headquartered in Santa Clara, Calif.
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 bases, its advertising and commerce revenues, and to continue to
generate profits and positive cash flow from operations. Actual results may
differ materially from the results predicted and reported results should not be
considered as an indication of future performance. The potential risks and
uncertainties include, among others, the company’s limited operating history, the
increasingly competitive and constantly changing environment for advertising
sales and for Yahoo! branded services, the early stage of the Web as an
advertising and commerce medium, the company’s dependence on advertising
revenues and on third parties for technology, content, and distribution, and the
company’s ability to successfully integrate its acquired companies, especially
GeoCities and the proposed acquisition of broadcast.com. More information
about potential factors that 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, 1998, the company’s Quarterly Report on Form 10-Q for the
period ended March 31, 1999, and the company’s Current Report on Form
8-K/A and the company’s Registration Statement on Form S-4 filed June 8,
1999, including (without limitation) under the captions, “Management’s
Discussion and Analysis of Financial Condition and Results of Operations,”
“Risk Factors,” “Competition,” and “Proprietary Rights,” which are on file with
the Securities and Exchange Commission (http://www.sec.gov). The
accompanying condensed consolidated statements of operations and balance
sheets are an integral part of this announcement.