Yahoo! Reports Second Quarter 1999 Financials
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&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 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.