Yahoo! Reports Second Quarter 1999 Financial Results

By : |July 7, 1999 0

SANTA CLARA, Calif. July 7, 1999 – Yahoo! 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,

These financial results include the recent acquisitions of GeoCities, Online Anywhere, and Encompass, and do not include the proposed acquisition of, 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,, 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
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
( 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 ( and My Yahoo! ( Yahoo!
Finance also launched auto loan services through a relationship with debis Financial
Services. During the quarter, Yahoo! unveiled Yahoo! Radio (,
providing Web users with direct access to broadcast audio programming. The company also
launched Yahoo! Health (, 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

(, 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
(, the UK & Ireland (, and
Canada ( Yahoo! also unveiled Yahoo! Auctions Express
( 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 ( Yahoo! also
added a new conference calling feature to Yahoo! Address Book (,
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(tm) (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&G’s brands in innovative ways. In addition to P&G, Yahoo!’s
advertiser base increased to 2,700 clients during the quarter, including major new
accounts and brands such as, Bell Atlantic Mobile, Claritin, Milky Way,
Musicland, Nabisco, 7-Eleven, Sprint, and Target Stores.

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