Yahoo 1998 Annual Report Download

Download and view the complete annual report

Please find the complete 1998 Yahoo annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 66

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66

any
1998 Annual Report

Table of contents

  • Page 1
    any 19 9 8 Annual Repor t

  • Page 2

  • Page 3
    anyone The only place has to go to get connected to anything or anybody. 17 15 16 14 11 9 7 5 3 1 12 10 8 6 4 2

  • Page 4
    ...r e t h eir in t er es t s . Ya h oo! is on e of t h e m os t p op u la r a n d com p r eh en s ive com m u n it ies on lin e, op en in g u p a w or ld of t h in gs t o d o a n d p eop le t o m eet . A p er s on b id d in g in a n on lin e a u ct ion of old b a s eb a ll ca r d s d is cover s h e is...

  • Page 5
    Dur i ng an onl i ne auc t i on f or ol d basebal l c ar ds, t wo c hi l dhood f r i ends ar e r eac quai nt ed.

  • Page 6
    ...ca l t a s k is fin d in g t h e r igh t in for m a t ion a t t h e r igh t t im e. Min u t es b efor e a wed d in g, a fat h er s t r u ggles t o t ie h is s on 's b ow t ie. Fin d in g t h a t in for m a t ion , a t t h a t m om en t , is im p or t a n t . A la s t -m in u t e s ea r ch on Ya h oo...

  • Page 7
    Hi s br ot her 's weddi ng i s i n an hour, and not a c l ue how t o f i ni sh t he l oop.

  • Page 8
    17 15 16 14 11 9 7 5 3 1 12 10 8 6 4 2

  • Page 9
    ... ir ect p r op or t ion t o t h e In t er n et , b eca u s e it is a r eflect ion of t h e Web it s elf. As n ew u s a ge p a t t er n s a n d s it es a p p ea r, Ya h oo! is t h e on e p la ce t o s ee it a ll h a p p en . Ya h oo!'s en t r ep r en eu r ia l s t a ff p ion eer s n ew ways of t h in...

  • Page 10
    ...r od u ct r eview s , in for m a t ion , a n d com p a r is on s , h elp in g t h em m a ke t h e b es t d ecis ion . Wit h Ya h oo! a s t h eir s h op p in g ca r t , a fa m ily s ea r ch es for t h e p er fect gift for Gr a n d m ot h er, a n d fin d s a b a r ga in in t h e p r oces s . Th e w or...

  • Page 11
    Consum er s enj oy shoppi ng when t hey c an c hoose f r om t he best st or es and t he best sel ec t i on.

  • Page 12
    ...d er com es in fr om a n ot h er con t in en t . "A fr ien d em a iled m e a b ou t you r w on d er fu l coffee b ea n s ..." t h e n ew cu s t om er s ays . A s u cces s fu l b u s in es s kn ow s h ow t o fin d cu s t om er s , a n d t a r get p r od u ct s t o t h eir n eed s . Th r ou gh Ya h oo...

  • Page 13
    A suc c essf ul busi ness sat i sf i es t he needs of i t s c ust om er s, wher ever t hey ar e.

  • Page 14

  • Page 15
    ...d of bu s in es s we a r e in . Th e con cep t b eh in d Ya h oo! is s im p le - it is t h e on ly p la ce a nyon e h a s t o go t o get con n ect ed t o a nyt h in g or a nyb ody. Th is con cep t is a p p ea lin g t o p eop le, a n d I b elieve t h a t is a key r ea s on w hy Ya h oo! is p a r t of...

  • Page 16
    ... ep or t t h a t 1998 w a s a n ot h er s u cces s fu l yea r for Ya h oo!. In 1998, w e con t in u ed t o ca r efu lly m a n a ge t h e b u s in es s a n d in ves t in a ggr es s ively gr ow in g ou r lea d er s h ip p os it ion w h ile d eliver in g con s is t en t ly in cr ea s in g p r ofit s on...

  • Page 17
    ... gin s , p os it ive ca s h flow, a n d a h ea lt h y b a la n ce s h eet , w e h ave p os it ion ed Ya h oo! t o a ggr es s ively a n d p r oa ct ively gr ow ou r w or ld w id e b u s in es s . Du r in g t h e yea r, Ya h oo! s ign ifica n t ly en h a n ced a n d exp a n d ed t h e con t en t , com...

  • Page 18
    ... r ofes s ion a ls a n d en t r ep r en eu r s com p et e, in clu d in g dyn a m ic n ew s , con t en t , a n d com m u n it ies . Ya h oo! n ow en a b les s m a ll b u s in es s es t o cr ea t e, h os t , m a n a ge, a n d p r om ot e t h eir on lin e b u s in es s es . Ya h oo! Con n ect ed Office...

  • Page 19
    ...s er s , Ya h oo! is p os it ion ed t o lever a ge t h e p ow er of t h e In t er n et a n d b e on e of t h e m os t im p or t a n t glob a l, com p r eh en s ive, b r a n d ed Web n et w or ks in t h e yea r s a h ea d . We w ill con t in u e t o m a n a ge t h e b u s in es s ca r efu lly w h ile...

  • Page 20
    ... e fu s ion of t h es e com p lem en t a r y a n d r ela t ed a ct ivit ies r es u lt s in a t igh t ly in t egr a t ed exp er ien ce for u s er s . Peop le u s e Ya h oo! for m a n y t h in gs a n d va lu e t h e a b ilit y t o go t o on e p la ce for t h eir n eed s . f usi ng t he f ut ur e br...

  • Page 21
    ....4 $18.7 $26.6 $30.6 $41.7 $54.6 $76.4 0 97 Q1 97 Q2 97 Q3 97 Q4 98 Q1 98 Q2 98 Q3 98 Q4 r evenue 250 200 annual (m illion s ) 150 100 0 95 96 97 98 cash flow posi t i ve (m illion s ) 50 40 30 20 +$17.3 +$22.6 +$34.5 +$50.0 +$2.7 +$4.6 10 $203.3 $21.5 $70.5 50...

  • Page 22
    Yahoo! today • Au die n ce : Over 50 m illion Un iq u e Us er s Wor ld w id e • Us age : Over 15 b illion Pa ge View s d u r in g Q4 1998 • Prope rt ie s : 57, in clu d in g 15 In t er n a t ion a l • Adve rt is in g/ Me rch an t s : 2,225 d u r in g Q4 1998 • Con t e n t Part n e rs : ...

  • Page 23
    ... r ch 1998 pr oj ec t ed wor l dwi de advert ising m ar k et 8 web (billion s ) Th e Web h a s b ecom e a m a in s t r ea m p a r t of t h e w or ld 's cu lt u r es a n d econ om ies . Ya h oo! is s u cces s fu lly s ca lin g it s op er a t ion s t o m eet t h e 6 4 2 $3.0 $1.8 $4.4 gr ow...

  • Page 24
    ...even u es Gr os s p r ofit Tot a l op er a t in g exp en s es Net in com e (los s ) Net in com e (los s ) p er s h a r e - b a s ic * Net in com e (los s ) p er s h a r e - d ilu t ed * Sh a r es u s ed in p er s h a r e ca lcu la t ion - b a s ic * Sh a r es u s ed in p er s h a r e ca lcu la t ion...

  • Page 25
    ..."Web "), w w w .yah oo.com is a lea d in g gu id e in t er m s of t r a ffic, a d ver t is in g, h ou s eh old a n d b u s in es s u s er r ea ch , a n d is on e of t h e m os t r ecogn ized b r a n d s a s s ocia t ed w it h t h e In t er n et . Th e Com p a n y w a s in cor p or a t ed in Ca lifor...

  • Page 26
    ...g of in t er es t s , t h e Com p a n y exch a n ged 541,908 s h a r es of Ya h oo! Com m on St ock for a ll of Web Ca l's ou t s t a n d in g s h a r es . Th e h is t or ica l op er a t ion s of Web Ca l a r e n ot m a t er ia l t o t h e Com p a n y's fin a n cia l p os it ion or r es u lt s of op...

  • Page 27
    ...ject t o cer t a in con d it ion s , r egu la t or y a p p r ova l, a n d a p p r ova l b y GeoCit ies s t ockh old er s . Th e Com p a n y exp ect s t o r ecor d a on e-t im e ch a r ge in t h e s econ d q u a r t er of 1999 r ela t in g t o exp en s es in cu r r ed w it h t h is t r a n s a ct ion...

  • Page 28
    ... Com p a n y fr om cer t a in ob liga t ion s a n d cla im s . In con n ect ion w it h t h is a gr eem en t , Ya h oo! is s u ed 2,797,924 s h a r es of Ya h oo! Com m on St ock t o t h e Vis a Gr ou p , for w h ich t h e Com p a n y r ecor d ed a on e-t im e, n on -ca s h , p r e-t a x ch a r ge of...

  • Page 29
    ...a lit y of con t en t a va ila b le on Ya h oo! on lin e m ed ia p r op er t ies , a n d in cr ea s ed u s a ge of t h es e p r op er t ies . As m ea s u r ed in p a ge view s (d efin ed a s elect r on ic p a ge d is p la ys ), t h e Com p a n y d eliver ed a n a ver a ge of a p p r oxim a t ely 167...

  • Page 30
    ..., Sw ed en , Au s t r a lia , Sin ga p or e, Kor ea , Den m a r k, a n d Nor w a y d u r in g 1997, a n d It a ly, Hon g Kon g, a n d Sp a in a s w ell a s Ya h oo! gu id es in Sp a n is h a n d Ma n d a r in Ch in es e la n gu a ges d u r in g 1998, a n d a n in cr ea s e in s a les com m is s ion...

  • Page 31
    ... Com p a n y fr om cer t a in ob liga t ion s a n d cla im s . In con n ect ion w it h t h is a gr eem en t , Ya h oo! is s u ed 2,797,924 s h a r es of Ya h oo! Com m on St ock t o t h e Vis a Gr ou p , for w h ich t h e Com p a n y r ecor d ed a on e-t im e, n on -ca s h , p r e-t a x ch a r ge of...

  • Page 32
    ...s ' s h a r e of t h e s u b s id ia r ies ' n et in com e. In com e Taxe s . Ya h oo! r ecor d ed a n in com e t a x p r ovis ion of $17.8 m illion in 1998. At Decem b er 31, 1998, t h e Com p a n y h a d n et op er a t in g los s ca r r yfor w a r d s a n d r es ea r ch t a x cr ed it ca r r yfor...

  • Page 33
    ... liq u id , of h igh -q u a lit y in ves t m en t gr a d e, a n d p r ed om in a n t ly h a ve m a t u r it ies of les s t h a n on e yea r w it h t h e in t en t t o m a ke s u ch fu n d s r ea d ily a va ila b le for op er a t in g p u r p os es . At Decem b er 31, 1998, t h e Com p a n y h a d ca...

  • Page 34
    ... in ce it s in cep t ion , w h ich is con s is t en t w it h in cr ea s ed s t a ffin g, a n d a n t icip a t es t h a t t h is w ill con t in u e in t h e fu t u r e. Ad d it ion a lly, t h e Com p a n y w ill con t in u e t o eva lu a t e p os s ib le a cq u is it ion s of, or in ves t m en t s in...

  • Page 35
    ... in es s , r es u lt s of op er a t ion s , a n d fin a n cia l con d it ion . Ya h oo! is in t h e p r oces s of fu lly d evelop in g a com p r eh en s ive con t in gen cy p la n t o a d d r es s s it u a t ion s t h a t m a y r es u lt if it is u n a b le t o a ch ieve Yea r 2000 r ea d in es s of...

  • Page 36
    ...900,000 s h a r es a u t h or ized ; 199,019 is s u ed a n d ou t s t a n d in g in 1998 a n d 180,408 is s u ed a n d ou t s t a n d in g in 1997 Ad d it ion a l p a id -in ca p it a l Accu m u la t ed d eficit Accu m u la t ed ot h er com p r eh en s ive in com e (los s ) Tot a l s h a r eh old er...

  • Page 37
    ... con s olid a t ed s u b s id ia r ies In com e (los s ) b efor e in com e t a xes Pr ovis ion for in com e t a xes Net in com e (los s ) Net in com e (los s ) p er s h a r e - b a s ic Net in com e (los s ) p er s h a r e - d ilu t ed Sh a r es u s ed in p er s h a r e ca lcu la t ion - b a s ic Sh...

  • Page 38
    ... en t in Ya h oo! J a p a n Com p en s a t ion a n d ot h er exp en s e on op t ion gr a n t s a n d w a r r a n t is s u a n ces Ba la n ce a t Decem b er 31, 1997 Com p r eh en s ive in com e (los s ): Net in com e Ot h er com p r eh en s ive in com e (los s ), n et of t a x: Net u n r ea lized ga...

  • Page 39
    Ad d it ion a l Pa id -in Ca p it a l Accu m u la t ed Deficit Accu m u la t ed Ot h er Com p r eh en s ive In com e (Los s ) Tot a l Com p r eh en s ive In com e (Los s ) $ 6,982 - $ (1,016) (6,427) $ - - $ 5,975 (6,427) $ (6,427) (63) (63) (6,490) - 63,745 35,103 - 7,368 9 197 113,404...

  • Page 40
    ... Net in com e (los s ) Ad ju s t m en t s t o r econ cile n et in com e (los s ) t o n et ca s h p r ovid ed b y (u s ed in ) op er a t in g a ct ivit ies : Dep r ecia t ion a n d a m or t iza t ion Ta x b en efit s fr om s t ock op t ion s Non -ca s h ch a r ges r ela t ed t o s t ock op t ion gr...

  • Page 41
    ...e Com p a n y's fin a n cia l p os it ion a n d t h e r es u lt s of op er a t ion s a s if Yoyod yn e a n d Fou r 11 w er e w h olly-ow n ed s u b s id ia r ies of t h e Com p a n y s in ce in cep t ion . Com p on en t s of t h e con s olid a t ed r es u lt s of op er a t ion s of Ya h oo! a n d of...

  • Page 42
    ... in g gu a r a n t eed im p r es s ion levels a r e a ch ieved . Th e Com p a n y a ls o ea r n s r even u e on s p on s or s h ip con t r a ct s fr om fees r ela t in g t o t h e d es ign , coor d in a t ion , a n d in t egr a t ion of cu s t om er s ' con t en t a n d lin ks in t o Ya h oo! on lin...

  • Page 43
    ... m in ves t m en t s , a n d t h os e w it h m a t u r it ies gr ea t er t h a n t w elve m on t h s fr om t h e b a la n ce s h eet d a t e a r e con s id er ed lon g-t er m in ves t m en t s . 62 Th e Com p a n y's m a r ket a b le s ecu r it ies a r e cla s s ified a s a va ila b le-for -s a le...

  • Page 44
    ...y's p olicy is t o r egu la r ly r eview t h e a s s u m p t ion s u n d er lyin g t h e op er a t in g p er for m a n ce a n d ca s h flow for eca s t s in a s s es s in g t h e ca r r yin g va lu es . Th e Com p a n y id en t ifies a n d r ecor d s im p a ir m en t los s es on lon g-lived a s s et...

  • Page 45
    ... e fu n ct ion a l cu r r en cy of t h e Com p a n y's in t er n a t ion a l s u b s id ia r ies is t h e loca l cu r r en cy. Th e fin a n cia l s t a t em en t s of t h es e s u b s id ia r ies a r e t r a n s la t ed t o Un it ed St a t es d olla r s u s in g yea r -en d r a t es of exch a n ge...

  • Page 46
    ...p er iod fr om n on -ow n er s ou r ces . Exa m p les of it em s t o b e in clu d ed in com p r eh en s ive in com e, w h ich a r e exclu d ed fr om n et in com e, in clu d e for eign cu r r en cy t r a n s la t ion a d ju s t m en t s a n d u n r ea lized ga in s a n d los s es on a va ila b le-for...

  • Page 47
    ...ecu r it ies w er e cla s s ified a s a va ila b le-for -s a le a s follow s (in t h ou s a n d s ): Gr os s Am or t ized Cos t s Gr os s Un r ea lized Ga in s Gr os s Un r ea lized Los s es Es t im a t ed Fa ir Va lu e U.S. Gover n m en t a n d a gen cies Mu n icip a l b on d s Cor p or a t e d eb...

  • Page 48
    ... c. On J u n e 10, 1998, t h e Com p a n y com p let ed t h e a cq u is it ion of a ll ou t s t a n d in g s h a r es of Via w eb , a p r ovid er of s oft w a r e a n d s er vices for h os t in g on lin e s t or es , t h r ou gh t h e is s u a n ce of 1,574,364 s h a r es of Ya h oo! Com m on St ock...

  • Page 49
    ...g of in t er es t s , t h e Com p a n y exch a n ged 541,908 s h a r es of Ya h oo! Com m on St ock for a ll of Web Ca l's ou t s t a n d in g s h a r es . Th e h is t or ica l op er a t ion s of Web Ca l a r e n ot m a t er ia l t o t h e Com p a n y's fin a n cia l p os it ion or r es u lt s of op...

  • Page 50
    ...VENTURES Yah oo! Japan . Du r in g Ap r il 1996, t h e Com p a n y s ign ed a join t ven t u r e a gr eem en t 62 60 58 56 54 52 50 48 46 44 42 40 61 59 57 55 53 51 49 47 45 43 41 w it h SOFTBANK w h er eb y Ya h oo! J a p a n Cor p or a t ion w a s for m ed t o es t a b lis h a n d m a n a ge in...

  • Page 51
    ... t er es t on t h e b a la n ce s h eet , w a s $883,000 a n d $405,000, r es p ect ively. Yah oo! Kore a. Du r in g Au gu s t 1997, t h e Com p a n y s ign ed a join t ven t u r e a gr eem en t w it h SOFTBANK a n d ot h er SOFTBANK a ffilia t e com p a n ies w h er eb y Ya h oo! Kor ea w a s for...

  • Page 52
    ...14, 1998, t h e Com p a n y r eceived p r oceed s of $250 m illion in exch a n ge for 5,453,760 n ew ly is s u ed s h a r es of Ya h oo! Com m on St ock t h r ou gh a p r iva t e p la cem en t w it h SOFTBANK. Th e s h a r es p u r ch a s ed b y SOFTBANK a r e s u b ject t o a p r e-exis t in g a gr...

  • Page 53
    ...31, 1996 Ad d it ion a l s h a r es r es er ved Op t ion s gr a n t ed Op t ion s ca n celed Op t ion s exer cis ed Ba la n ce a t Decem b er 31, 1997 Ad d it ion a l s h a r es r es er ved Op t ion s gr a n t ed Op t ion s ca n celed Op t ion s exer cis ed Ba la n ce a t Decem b er 31, 1998 10,279...

  • Page 54
    ...Th e w eigh t ed a ver a ge exer cis e p r ices p er s h a r e for op t ion s ves t ed a t Decem b er 31, 1997 a n d 1996 w er e $0.99 a n d les s t h a n $0.01, r es p ect ively. Th r ou gh Decem b er 31, 1998, Ya h oo! a n d cer t a in a cq u ir ed en t it ies r ecor d ed com p en s a t ion exp en...

  • Page 55
    ...b e gr a n t ed ea ch yea r , t h e a b ove p r o for m a d is clos u r es a r e n ot r ep r es en t a t ive of p r o for m a effect s on r ep or t ed fin a n cia l r es u lt s for fu t u r e yea r s . note 8 INCOME TAXES Th e com p on en t s of in com e (los s ) b efor e t a xes a r e a s follow...

  • Page 56
    ...e a s follow s (in t h ou s a n d s ): Yea r En d ed Decem b er 31, 1998 1997 1996 Defer r ed in com e t a x a s s et s : Net op er a t in g los s a n d cr ed it ca r r yfor w a r d s Non d ed u ct ib le r es er ves a n d exp en s es Gr os s d efer r ed t a x a s s et s Va lu a t ion a llow a n ce...

  • Page 57
    ...ia loca t ion . Ad d it ion a lly d u r in g 1998, t h e Com p a n y en t er ed in t o va r iou s ot h er n on -ca n cela b le op er a t in g lea s e a gr eem en t s for it s s a les offices t h r ou gh ou t t h e U.S. a n d it s in t er n a t ion a l s u b s id ia r ies . Fu t u r e m in im u m lea...

  • Page 58
    ...ject t o cer t a in con d it ion s , r egu la t or y a p p r ova l, a n d a p p r ova l b y GeoCit ies s t ockh old er s . Th e Com p a n y exp ect s t o r ecor d a on e-t im e ch a r ge in t h e s econ d q u a r t er of 1999 r ela t in g t o exp en s es in cu r r ed w it h t h is t r a n s a ct ion...

  • Page 59
    ...op er a t ion s , of s h a r eh old er s ' eq u it y a n d of ca s h flow s p r es en t fa ir ly, in a ll m a t er ia l r es p ect s , t h e fin a n cia l p os it ion of Ya h oo! In c. a n d it s s u b s id ia r ies a t Decem b er 31, 1998 a n d 1997, a n d t h e r es u lt s of t h eir op er a t ion...

  • Page 60
    ...m ou n t s ) (u n a u d it ed ) Qu a r t er En d ed Ma r ch 31 J u n e 30 Sep t em b er 30 Decem b er 31 1998 Net r even u es Gr os s p r ofit In com e (los s ) fr om op er a t ion s In com e (los s ) b efor e in com e t a xes Net in com e (los s ) Net in com e (los s ) p er s h a r e - b a s ic...

  • Page 61
    ... ief Ya h oo Je ff Malle t t Pr es id en t , Ch ief Op er a t in g Officer a n d Dir ect or Gary Vale n zu e la Sen ior Vice Pr es id en t , Fin a n ce a n d Ad m in is t r a t ion , Ch ief Fin a n cia l Officer Farzad Naze m Sen ior Vice Pr es id en t , Ch ief Tech n ology Officer An il Sin gh Sen...

  • Page 62
    ... ki Ch o Ch u o-ku , Tokyo 103 J apan Yah oo! Kore a #502 Kyu n ggi Bld g. 184-4 Ch u n gjeon gr o 2ga Seod a em u n -ku Seou l, Kor ea 62 60 58 56 54 52 50 48 46 44 42 40 61 59 57 55 53 51 49 47 45 43 41 Price w at e rh ou s e Coope rs LLP Sa n J os e, Ca lifor n ia L EGA...

  • Page 63
    ... n d gr ow t h of it s b u s in es s a n d , t h er efor e, d oes n ot a n t icip a t e p a yin g a n y ca s h d ivid en d s in t h e for es eea b le fu t u r e. ©1999 Ya h oo! In c. All r igh t s r es er ved . Ya h oo! a n d t h e Ya h oo! logo a r e r egis t er ed t r a d em a r ks of Ya h oo! In...

  • Page 64
    â„¢ 62 60 58 56 54 52 50 48 46 44 42 40 61 59 57 55 53 51 49 47 45 43 41

  • Page 65
    strategic design communications: stephen turner & associates, san francisco

  • Page 66
    Yahoo! Inc. 3 4 2 0 Cent r al Expr essway Sant a Clar a, CA 9 5 0 5 1 4 0 8 .7 3 1 .3 3 0 0 www.yahoo.com a Yahoo! 19 9 8 Annual Repor t