Yahoo! Reports First Quarter 2001 Financial Results

Company Posts $180.2 Million in Revenue and $7.6 Million in Pro-Forma Net Income

    SANTA CLARA, Calif.April 11, 2001Yahoo! Inc. (Nasdaq: YHOO) today reported net revenues totaling $180,215,000 for the first quarter ended March 31, 2001, compared to net revenues of $230,807,000 for the first quarter of 2000. Pro-forma net income for the quarter ended March 31, 2001 was $7,643,000 or $0.01 per share diluted(1). This compares to pro-forma net income of $60,506,000 or $0.10 per share diluted for the comparable period in the previous year(1). Including pro-forma items, net loss for the first quarter ended March 31, 2001 was $11,486,000 or $0.02 per share diluted, compared to net income of $67,599,000 or $0.11 per share diluted reported in the comparable period of the previous year.

(1)

Pro-forma net income and net income per share calculations for all 2001 and 2000 periods exclude acquisition-related charges, amortization of intangibles and stock compensation, employer payroll taxes on gains realized by employees from non-qualified stock option exercises, derivative and impairment losses from certain assets, income related to a contract termination fee, and/or gains or losses from the exchanges or sales of certain equity investments.

    To balance Yahoo!'s investment in its growth areas with the desire to modify its near-term business plan to reflect the current economic and capital market slowdown, the company conducted a comprehensive operational review during the quarter. "The principle that guided our decisions was the determination of where we needed to invest to take advantage of future opportunities and ensure that we deliver long-term value to consumers, customers, employees and stockholders without compromising the quality of our service," said Tim Koogle, Yahoo!'s chairman and CEO. "While we streamline our business over the second quarter to become more efficient and align our costs with the current market environment, we remain steadily focused on developing and delivering the essential services that will result in Yahoo! becoming the Internet's leading global consumer and business services company."

    As part of the adjustments to manage expenses, the company plans to take several measures to ensure that the company has the operating and financial flexibility to deliver long-term value. These measures include a reduction of its 3,510 employees by approximately 12 percent; the discontinuation or reallocation of some secondary services on Yahoo!'s network of properties; a decrease in discretionary marketing, distribution and promotional expenses; outsourcing of some operations; and centralization of some businesses across the global organization. "We made some decisions that were difficult, but which ultimately balance the investment in our growth areas with the adjustments to our near-term business plan to better position Yahoo! for long-term growth," Koogle said.

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