Yahoo! Reports Third Quarter 1999 Financial Results; Company Audience Surpasses 100 Million Unique Users Worldwide in September - Company Financial Information

Edge: Work-Group Computing Report, Oct 11, 1999

Yahoo! Inc. (Nasdaq:YHOO) Wednesday reported net revenues totaling $155,078,000 for the third quarter ended Sept. 30, 1999, a 134 percent increase over net revenues of $66,290,000 in the third quarter of 1998. Pro forma net income for the quarter was $40,407,000 or $0.14 per share diluted, excluding merger-related charges incurred in the acquisition of broadcast.com and the effects of amortization of intangible assets. This compares to pro forma net income of $6,916,000 or $0.02 per share diluted for the same period in 1998, and pro forma net income of $27,060,000 or $0.09 per share diluted in the second quarter ended June 30, 1999. Net income, including the merger-related charges and effects of amortization of intangible assets for the quarter ended Sept. 30, 1999, was $14,862,000 or $0.05 per share diluted, compared to a net income of $4,249,000 or $0.01 per share diluted for the comparable period in the previous year. The financial results for all periods presented have been restated to reflect the acquisition of broadcast.com, which was completed in July 1999.

"During the quarter, we achieved record levels in terms of revenues, consumer audience, and advertising and merchant clients," said Tim Koogle, chairman and CEO, Yahoo!. "This performance is the result of the broad, global base of users, clients, and partners we have built and the leverage associated with developing a highly integrated media, commerce, and communications platform. The strong brand and expansive worldwide presence we have established positions us to continue our leadership role into the 21st century."

Audience Growth and Usage Yahoo!'s audience, reach, and traffic continued to increase in the third quarter. More than 105 million unique users worldwide visited the Yahoo! global network of properties during the month of September 1999. The company's registration base grew to more than 80 million cumulative database registrations for Yahoo!'s member services. Yahoo!'s combined reach among home and work users increased to a record 63.7 percent in the United States during August 1999, up from 61.9 percent in July 1999 (Media Metrix). Recent third-party research also ranks Yahoo! the No. 1 Web network in the U.K., Germany, France, Italy, Spain, Japan and Korea. Yahoo! recently launched Yahoo! China (http://www.yahoo.com.cn) and Yahoo! Mexico (http://www.mx.yahoo.com). The company now has 21 geographic World properties.

During the month of September 1999, Yahoo!'s traffic increased to an average of 385 million page views per day, compared to an average of 310 million page views per day in June 1999. Yahoo! Japan's traffic, which is included in the above page view totals, increased to more than 33 million page views per day on average, compared to more than 22 million page views per day in June 1999.

Yahoo! continued to extend its strategy to build the only place anyone in the world needs to go to find and get connected to anything or anyone and to buy anything. As part of this strategy, Yahoo! extended its commerce, communications, and media services during the quarter.

Commerce In anticipation of the upcoming holiday season, Yahoo! expanded its commerce services platform worldwide. Yahoo! Shopping, launched less than a year ago, has grown to more than 7,000 merchants and more than 4 million products today. Newly-designed product categories in Yahoo! Shopping now highlight merchant brands, offering increased merchandising opportunities and easier access for consumers. In addition, Yahoo! recently launched Yahoo! Wallet and Express Checkout to enable consumers to store their credit card information with Yahoo! and quickly and conveniently purchase products across thousands of merchants. Yahoo! Shopping welcomed numerous brand name merchants during the quarter, including Art.com, Eddie Bauer, KB Kids, REI, and Patagonia. Yahoo! also launched shopping services in Canada and Japan.

In addition, the company launched local Yahoo! Auctions services in France, Germany, Italy, Spain, Sweden, Japan and Singapore. Yahoo! now offers localized auction services in 10 countries outside the United States, in seven languages around the world. Yahoo! Auctions (http://auctions.yahoo.com) now features 930,000 products across 3,600 categories. Yahoo! Classifieds (http://classifieds.yahoo.com) has also grown significantly, featuring more than 2.6 million listings.

In support of the company's efforts to provide the leading personal financial services on the Web, Yahoo! teamed with CheckFree and introduced online bill payment services through Yahoo! Finance (http://finance.yahoo.com) for its users in the United States. In addition, Yahoo! joined with Bank of America and Telebank in the United States, National Westminster Bank in the United Kingdom, and Openbank in Spain to give Yahoo! Finance and My Yahoo! users secure electronic access to their bank account information.

Communications During the quarter, Yahoo! continued to build a broad set of global communications tools in universally-popular areas such as email, instant messaging, and chat. The company launched Yahoo! Mobile (http://mobile.yahoo.com) to enable users to manage their wireless and mobile communications from one convenient location. The new service also lets Yahoo! users send customized content from their My Yahoo! preferences to wireless devices, including pagers, data phones, and personal digital assistants. Yahoo! Mobile features a library of approximately 4,700 downloadable Palm software applications. Yahoo! launched Yahoo! Briefcase (http://briefcase.yahoo.com), a file-storage and photo-album product allowing individuals to store and share files in one central location on the Internet. In addition, the company enhanced its Yahoo! Mail service with the launch of Yahoo! Greetings (http://greetings.yahoo.com), a free electronic greeting card service.