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To: Glenn D. Rudolph who wrote (6658)	4/27/2001 9:01:17 PM
From: Mark Fowler	Read Replies (1) \| Respond to of 57684

Glenn i hope things might be looking up for Yhoo: dailynews.yahoo.com

To: Glenn D. Rudolph who wrote (6658)	4/27/2001 11:03:22 PM
From: Mark Fowler	Respond to of 57684

Yahoo! Moving to New California Headquarters This Weekend Dow Jones Online News, Friday, April 27, 2001 at 20:17 SAN FRANCISCO -- Yahoo! Inc. will begin moving into its new headquarters this weekend, a move that will reduce costs and consolidate the company's work force. The Internet company, which provides content and services over the Web such as financial news and shopping, will transfer its employees and their equipment such as personal computers to its new Sunnyvale, Calif., headquarters over the next two months, a spokeswoman said. Yahoo (YHOO), which had been leasing office space in Santa Clara, Calif., will move into its three new office buildings at 701 First Avenue in Sunnyvale, Calif. Write to Mylene Mangalindan at mylene.mangalindan@wsj.com

To: Glenn D. Rudolph who wrote (6658)	4/29/2001 1:21:43 PM
From: Mark Fowler	Read Replies (1) \| Respond to of 57684

CREDIT SUISSE FIRST BOSTON CORPORATION Equity Research Americas U.S./Technology/Internet Data Services BUY LARGE CAP $9.03 Exodus Communications Inc. (EXDS) Exodus reports weaker than expected Q1 results; management lowers guidance. Summary Exodus reported weaker than expected first quarter results last night. Revenues of $349M and EBITDA of $5.5M were 6% and 23% below our estimates of $ 370M and $7M respectively, reflecting the difficult market conditions. The company provided revised guidance for 2000. The company had previously forecasted a range of revenues of $2.0 to $ 2.3billion and is now forecasting a range of $1.5 to $1.6 billion. We had previously forecasted revenues of $2. 01 billion and EBITDA of $296 mm. We are adjusting our numbers to $1.5 billion and $177 mm for revenues and EBITDA respectively. While the hosting sector is being impacted at the current time by the pull back in corporate IT spending and the ongoing shakeout in the dot-com sector, the underlying fundamentals of the sector remain intact. We continue to believe Exodus is and will continue to be the market leader in this sector and as such we maintain our Buy recommendation with our new target of $15. Price Target Mkt.Value 52-Week 4/26/011 (12mo.) Div. Yield (Mms) Price Range USD 9.03 $15 None None $17.8B $69-$6 Annual Prev. Abs. Rel. EV/ EBITDA/ EPS EPS P/E P/E EBITDA Share 12/02E -0.17 0.96 12/01E -0.70 0.33 12/00A -0.36 -0.10 March June Sept. Dec. FY End 2002E -0.08 -0.05 -0.03 -0.01 Dec 31 2001E -0.22 -0.21 -0.16 -0.11 2000A -0.07 -0.07 -0.10 -0.13 ROIC (12/00) NA Total Debt (12/00) $2.8B Book Value/Share (12/00) $1.09 WACC (12/00) NA Debt/Total Capital (12/00) 16% Common Shares 631M EP Trend2 NA Est. 5-Yr. EPS Growth NA Est. 5-Yr. Div. Growth NA 1On 4/26/01 DJIA closed at 10692 and Nasdaq at 2035. 2Economic profit trend. Exodus is a global provider of Internet systems and network management solutions for businesses with mission-critical Internet operations. Investment Summary Exodus reported weaker than expected first quarter results last night, reflecting the overall difficult market conditions. The company reported revenues of $349 mm, a 24% sequential increase on a stand-alone basis and 4% sequential increase on a pro forma basis. This was 6% below our expectations of $370 mm. EBITDA of $5.5 mm was also below our expectation of $7 mm. Churn during the quarter increased to 6%, doubling from 3% in the previous quarter. Annualized revenue per customer decreased during the quarter by 2% to $323,000. Bookings for the quarter totaled $200 mm, down 27% sequentially from $270 mm (EXDS stand-alone.) During last night's conference call the company provided revised guidance for 2001. The company had previously forecasted revenues of $2.0 to $2.3 billion and is now forecasting a range of $1.5 to $1.6 billion. The revised guidance is being attributed to sluggish growth from dot-coms, impact of high levels of churn as well as more difficult general market conditions. We had previously forecasted revenues of $2.01 billion and EBITDA of $296 mm for 2001 . We are adjusting our numbers to $1.5 billion and $177 mm for revenues and EBITDA respectively. While the hosting sector is being impacted at the current time by the pull back in corporate IT spending and the ongoing shakeout in the dot-com sector, the underlying fundamentals of the sector remain intact. We continue to believe Exodus is and will continue to be the market leader in this sector and as such we maintain our Buy recommendation with our new target of $15. First Quarter Highlights Revenues We note that historically we have been providing sequential growth rates for investors as a measure to company's current quarter performance, however, we will be unable to do so with this quarter's results given the lack of information on GlobalCenters' Q4 actual results. Comparing this quarter's results to Q4 Exodus' stand-alone results will not provide appropriate comparatives. Exodus reported revenues of $349 mm for the first quarter of 2001, a 22% sequential increase (4% sequential increase on our pro forma estimates) and 6 % below than our estimate of $370 mm. More specifically, managed services contributed 32% of total revenues in the quarter (38% in Q4 '00) with hosting services and Internet connectivity contributing 45% (42% in Q4 '00) and 23% ( 20% in Q4 '00) respectively. We recognize that the revenue mix was affected this quarter due to the addition of the GlobalCenter customer base, which has a higher percentage of space and bandwidth revenues than Exodus. According to Exodus management, GlobalCenter generated less than 8% of its revenues from managed services last quarter. Nevertheless, we believe that Exodus will be aggressively cross-selling its suite of managed services to the GlobalCenter customer base and drive the revenue mix of the combined company back to historical levels over time. Looking more closely at the top line, the average annualized recurring revenue per customer declined 2% from $329,000 in Q4 to $323,000 in Q1. The decline in revenue per customer was the result of the acquisition of GlobalCenter, which had an ARPU of approximately $250,000 in Q4 2000. The company believes that with the aggressive cross-selling of managed hosting services to the GlobalCenter customers, continued up-selling of additional services to existing customers and the signing up of larger corporate accounts, ARPU is expected to trend upwards going forward. For the first time the company provided revenues generated from managed hosting, which came in at $36 mm for the quarter a growth rate of 20% over the fourth quarter. Exodus recorded net new customers added in the quarter of 534. However, since GlobalCenter had approximately 500 customers at the time of the acquisition, we believe that organic customers growth this quarter was down substantially from the fourth quarter (245 net adds in Q4 '00) due mainly to an increase in churn and the slowdown in demand from dot-com customers. It is difficult to provide an accurate net add number given that when Global Center was consolidated, the increase to Exodus customer count was less than 500. There were some customer overlap and elimination of redundancy due to the way GlobalCenter accounted for customers. The bottom line is that net adds did decline substantially versus previous quarters given the reduced demand from dot-com customers, caution on behalf of enterprise customers and much higher churn levels. We note the company stated on the conference call last night that they have noticed an improvement in both demand and churn in March and April. We believe that most of the incremental demand for hosting and managed services over the near to intermediate term will come from the enterprise market. Exodus has been targeting the enterprise space for some time and its efforts are continuing to bear fruit as highlighted by the company's growing base of signature corporate accounts. In addition, the company's focus on the enterprise segment is also being reflected in the revenue mix. During the fourth quarter enterprises contributed 62% of total revenues and bookings , which is up solidly from 57% last quarter and 44% from the same period last year. More specifically, 2/3 of new bookings in this quarter was from enterprise accounts. The company generated $200 mm in new bookings during the quarter, down 27% from the prior quarter. This is the first quarter where new bookings growth declined sequentially. The company's ability to drive bookings is obviously being affected by the slowdown in dot-com demand. We expect new bookings to improve somewhat in the later half of the year as Exodus continues to ramp its enterprise pipeline and as market conditions improve. However we are not expecting substantial improvements in bookings until 2002. Expenses The company reported gross margins of 27% in the quarter or 43% excluding depreciation and amortization. The company reported EBITDA of $5.5 mm for the quarter, $1.5 mm less than our estimate of $7mm. While revenues were lower than expected so were operating costs at which resulted in a slight miss on a dollar basis. Given its revised growth expectations the company has undertaken a reflective cost control program. The company has placed a moratorium on hiring, eliminated all contractors, consultants and temporary workers. In addition the company expects to achieve staff reductions through attrition and actively assessing productivity of its employees. The company has instituted a company wide program to reduce all discretionary spending and has launched a mandate to review all of its operating processes to continue to improve operating efficiencies. We expect this to result in significant improvements in gross and EBITDA margins throughout the year. CREDIT SUISSE FIRST BOSTON CORPORATION CREDIT SUISSE FIRST BOSTON CORPORATION Copyright © CREDIT SUISSE FIRST BOSTON, and its subsidiaries and affiliates, 2001. All rights reserved. CREDIT SUISSE FIRST BOSTON CORPORATION CREDIT SUISSE FIRST BOSTON CORPORATION CSFB may, to the extent permitted by law, participate or invest in financing transactions with the issuer(s) of the securities referred to in this report, perform services for or solicit business from such issuers, and/or have a position or effect transactions in the securities or options thereon. In addition, it may make markets in the securities mentioned in the material presented in this report. PLEASE REFER TO TICKER CSFBDISC FOR IMPORTANT LEGAL DISCLOSURES. = = EXODUS COMMUNICATIONS = = EXDS: BUY