Yahoo! Reports Second Quarter 1999 Financial Results; Company Posts $115 Million in Revenues and $0.11 Pro Forma EPS
SANTA CLARA, Calif.--(BUSINESS WIRE)--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(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 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. |
