Yahoo! Reports Second Quarter 1999 Financial Results; Company Posts $115 Million in Revenues and $0.11 Pro Forma EPS - Company Financial Information

Edge: Work-Group Computing Report, July 12, 1999

Yahoo! Inc. (Nasdaq:YHOO) Wednesday 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.