YAHOO INC
S-3, 1998-01-08
COMPUTER INTEGRATED SYSTEMS DESIGN
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<PAGE>
    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JANUARY 8, 1998
 
                                               REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549
                            ------------------------
 
                                    FORM S-3
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933
                            ------------------------
 
                                  YAHOO! INC.
             (Exact Name of Registrant as specified in its charter)
 
<TABLE>
<S>                                               <C>
                   CALIFORNIA                                        77-0398689
            (State of incorporation)                    (I.R.S. Employer Identification No.)
</TABLE>
 
                       3400 CENTRAL EXPRESSWAY, SUITE 201
                         SANTA CLARA, CALIFORNIA 95051
                                 (408) 731-3300
  (Address, including zip code, and telephone number, including area code, of
                   Registrant's principal executive offices)
 
                                 TIMOTHY KOOGLE
                     PRESIDENT AND CHIEF EXECUTIVE OFFICER
                       3400 CENTRAL EXPRESSWAY, SUITE 201
                         SANTA CLARA, CALIFORNIA 95051
                                 (408) 731-3300
 (Name, address, including zip code, and telephone number, including area code,
                             of agent for service)
 
                                   COPIES TO:
                                 JAMES L. BROCK
                                  HEAYOON WOO
                               VENTURE LAW GROUP
                           A PROFESSIONAL CORPORATION
                              2800 SAND HILL ROAD
                          MENLO PARK, CALIFORNIA 94025
                                 (415) 854-4488
                            ------------------------
 
        APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT UNTIL
                                JULY 27, 1998 OR
 UNTIL SUCH EARLIER TIME THAT ALL OF THE SHARES REGISTERED HEREUNDER HAVE BEEN
                                     SOLD.
                            ------------------------
 
    If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
 
    If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
 
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
                           --------------------------
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
                                                                   PROPOSED MAXIMUM    PROPOSED MAXIMUM
           TITLE OF EACH CLASS OF                 AMOUNT TO         OFFERING PRICE        AGGREGATE           AMOUNT OF
        SECURITIES TO BE REGISTERED             BE REGISTERED        PER SHARE(1)     OFFERING PRICE(1)    REGISTRATION FEE
<S>                                           <C>                 <C>                 <C>                 <C>
Common Stock, par value
  $0.00067 per share........................    850,510 shares          $64.00           $54,432,640           $16,058
</TABLE>
 
(1) Estimated solely for the purpose of computing the amount of the registration
    fee, based on the average of the high and low prices for the Company's
    Common Stock as reported on the Nasdaq National Market on January 5, 1998 in
    accordance with Rule 457 under the Securities Act of 1933.
                         ------------------------------
 
    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SECTION 8(A), MAY
DETERMINE.
 
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
PROSPECTUS        SUBJECT TO COMPLETION, DATED JANUARY 8, 1998
 
                                 850,510 SHARES
 
                                  YAHOO! INC.
 
                        COMMON STOCK, $0.00067 PAR VALUE
                               ------------------
 
    THE COMMON STOCK OFFERED HEREBY INVOLVES A HIGH DEGREE OF RISK. SEE "RISK
FACTORS" COMMENCING ON PAGE 5 OF THIS PROSPECTUS FOR INFORMATION THAT SHOULD BE
CONSIDERED BY PROSPECTIVE INVESTORS.
                             ---------------------
 
    All references herein to "Yahoo!" or the "Company" mean Yahoo! Inc., a
California corporation, unless otherwise indicated by the context.
 
    The 850,510 shares of Yahoo! Inc. Common Stock, $0.00067 par value, covered
by this Prospectus (the "Shares") are offered for the account of certain
shareholders of the Company (the "Selling Shareholders"). The Shares were
acquired by or may be acquired by certain of the Selling Shareholders in
connection with the purchase by the Company and SOFTBANK Holdings Inc., a
Delaware corporation ("Softbank"), of shares of capital stock of GeoCities, a
California corporation, in December 1997 and January 1998 (the "GeoCities
Transaction") or may be sold directly by Softbank as Selling Shareholder in lieu
of sale by the other Selling Shareholders. For additional information regarding
the GeoCities Transaction, see "Acquisition of Common Stock by Selling
Shareholders." The Shares may be offered by the Selling Shareholders from time
to time in one or more transactions in the over-the-counter market at prices
prevailing therein, in negotiated transactions at such prices as may be agreed
upon, or in a combination of such methods of sale. See "Plan of Distribution."
The price at which any of the Shares may be sold, and the commissions, if any,
paid in connection with any such sale, are unknown and may vary from transaction
to transaction. Each Selling Shareholder has advised the Company that no sale or
distribution other than as disclosed herein will be effected until after this
Prospectus shall have been appropriately amended or supplemented, if required,
to set forth the terms thereof. The Company will not receive any proceeds from
the sale of the Shares by the Selling Shareholders.
 
    The Securities and Exchange Commission (the "Commission") may take the view
that, under certain circumstances, the Selling Shareholders and any
broker-dealers or agents that participate with the Selling Shareholders in the
distribution of the Shares may be deemed to be "underwriters" within the meaning
of the Securities Act. Commissions, discounts or concessions received by any
such broker-dealer or agent may be deemed to be underwriting commissions under
the Securities Act. The Company and the Selling Shareholders have agreed to
certain indemnification arrangements. See "Plan of Distribution."
 
    The Company's Common Stock is quoted on the Nasdaq National Market under the
symbol "YHOO." On January 7, 1998, the last sale price of the Company's Common
Stock on the Nasdaq National Market was $63 13/16 per share.
                            ------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
     EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
        SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
             COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF
                THIS PROSPECTUS. ANY REPRESENTATION TO THE
                      CONTRARY IS A CRIMINAL OFFENSE.
                            ------------------------
 
<TABLE>
<CAPTION>
                                                              UNDERWRITING DISCOUNTS         PROCEEDS TO
                                       PRICE TO PUBLIC            AND COMMISSION         SELLING SHAREHOLDERS
<S>                                <C>                       <C>                       <C>
Per Share........................
Total............................       See Text Above            See Text Above            See Text Above
</TABLE>
 
                THE DATE OF THIS PROSPECTUS IS JANUARY   , 1998
<PAGE>
    No person is authorized in connection with any offering made hereby to give
any information or to make any representation not contained in this Prospectus,
and, if given or made, such information or representation must not be relied
upon as having been authorized by the Company or the Selling Shareholders. This
Prospectus does not constitute an offer to sell or a solicitation of an offer to
buy any security other than the shares of Common Stock offered hereby, nor does
it constitute an offer to sell or a solicitation of an offer to buy any of the
shares offered hereby to any person in any jurisdiction in which it is unlawful
to make such an offer or solicitation. Neither the delivery of this Prospectus
nor any sale made hereunder shall under any circumstances create any implication
that the information contained herein is correct as of any time subsequent to
the date hereof.
 
                             ADDITIONAL INFORMATION
 
    This Prospectus constitutes a part of a Registration Statement on Form S-3
(herein, together with all amendments and exhibits, referred to as the
"Registration Statement") filed by the Company with the Commission under the
Securities Act. This Prospectus does not contain all of the information set
forth in the Registration Statement, certain parts of which are omitted in
accordance with the rules and regulations of the Commission. For further
information with respect to the Company and the shares of Common Stock offered
hereby, reference is hereby made to the Registration Statement. Statements
contained herein concerning the provisions of any document are not necessarily
complete, and each such statement is qualified in its entirety by reference to
the copy of such document filed with the Commission.
 
                             AVAILABLE INFORMATION
 
    The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files reports, proxy and information statements and other information
with the Commission. Such reports, proxy and information statements and other
information may be inspected and copied at the public reference facilities
maintained by the Commission at 450 Fifth Street, NW, Washington, D.C. 20549,
and at the following Regional Offices of the Commission: New York Regional
Office, Seven World Trade Center, New York, New York 10048, and Chicago Regional
Office, Northwest Atrium Center, 500 West Madison Street, Chicago, Illinois
60661. Copies of such material can be obtained from the Public Reference Section
of the Commission, 450 Fifth Street, NW, Washington, D.C. 20549 upon payment of
the prescribed fees. The Company is also required to file electronic versions of
these documents with the Commission through the Commission's Electronic Data
Gathering, Analysis and Retrieval System ("EDGAR"). The Common Stock of the
Company is quoted on The Nasdaq National Market. Reports, proxy and information
statements and other information concerning the Company may be inspected at The
Nasdaq Stock Market at 1735 K Street, NW, Washington, D.C. 20006. In addition,
the Commission maintains a World Wide Web site (http:// www.sec.gov) that
contains reports, proxy and information statements and other information
regarding registrants that file electronically with the Commission.
 
                                       2
<PAGE>
                     INFORMATION INCORPORATED BY REFERENCE
 
    The following documents filed by the Company with the Commission are
incorporated by reference in this Prospectus:
 
        1.  The Company's Annual Report on Form 10-K for the year ended December
    31, 1996 (File No. 0-26822).
 
        2.  The Company's definitive Proxy Statement dated March 25, 1997, filed
    in connection with the Company's April 30, 1997 Annual Meeting of
    Shareholders.
 
        3.  The Company's Quarterly Reports on Form 10-Q for the quarters ended
    March 31, 1997, June 30, 1997, and September 30, 1997 (File No. 0-26822).
 
        4.  The Company's Current Reports on Form 8-K, filed with the Commission
    on August 4, 1997, October 14, 1997 (as amended October 30, 1997) and
    January 5, 1998 (File No. 0-26822).
 
        5.  The description of the Company's Common Stock set forth in the
    Company's Registration Statement on Form 8-A, filed with the Commission on
    March 12, 1996 (File No. 0-26822).
 
    All documents filed by the Company pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Common Stock offered hereby shall be deemed
to be incorporated by reference in this Prospectus. Any statement contained in a
document incorporated by reference herein shall be deemed to be modified or
superseded for purposes hereof to the extent that a statement contained herein
(or in any other subsequently filed document which also is incorporated by
reference herein) modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed to constitute a part hereof, except
as so modified or superseded.
 
    The Company will furnish without charge to each person, including any
beneficial owner, to whom this Prospectus is delivered, on the written or oral
request of such person, a copy of any or all of the documents incorporated by
reference, other than exhibits to such documents. Requests should be directed to
Andrea Klipfel, Investor Relations, 3400 Central Expressway, Suite 201, Santa
Clara, California 95051, telephone: (408) 731-3300.
 
                                       3
<PAGE>
                                  THE COMPANY
 
    Yahoo! is an Internet media company that offers a network of
globally-branded properties, specialty programming, and aggregated content
distributed primarily on the World Wide Web (the "Web") serving business
professionals and consumers, and is among the most widely used guides for
information and discovery on the Web.
 
    Under the "Yahoo!" brand, the Company provides intuitive, context-based
guides to online content, Web search capabilities, aggregated third-party
content and community and personalization features. In September 1997, Internet
users viewed an average of 50 million Web pages per day in "Yahoo!" branded
properties.
 
    The Company makes its properties available without charge to users and
generates revenue primarily through the sale of banner advertising. Advertising
on Yahoo! properties is sold through the Company's internal advertising sales
force and third party agents. During the third quarter of 1997, more than 1200
advertisers purchased advertising on Yahoo! properties.
 
    Yahoo! was incorporated on March 5, 1995 under the laws of California. The
Company's principal executive offices are located at 3400 Central Expressway,
Suite 201, Santa Clara, California 95051 and its telephone number is (408)
731-3300. As used in this prospectus, the "Company" and "Yahoo!" refer to Yahoo!
Inc., a California corporation, and its wholly owned subsidiaries.
 
                                       4
<PAGE>
                                  RISK FACTORS
 
    THIS PROSPECTUS (INCLUDING THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN)
CONTAINS FORWARD-LOOKING STATEMENTS WITHIN THE MEANING OF SECTION 27A OF THE
SECURITIES ACT OF 1933 AND SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934,
INCLUDING, WITHOUT LIMITATION, STATEMENTS REGARDING THE COMPANY'S EXPECTATIONS,
BELIEFS, INTENTIONS OR FUTURE STRATEGIES. ALL FORWARD-LOOKING STATEMENTS
INCLUDED IN THIS DOCUMENT ARE BASED ON INFORMATION AVAILABLE TO THE COMPANY ON
THE DATE HEREOF, AND THE COMPANY ASSUMES NO OBLIGATION TO UPDATE ANY SUCH
FORWARD-LOOKING STATEMENTS. ACTUAL RESULTS COULD DIFFER MATERIALLY FROM THOSE
PROJECTED IN THE FORWARD-LOOKING STATEMENTS AS A RESULT OF THE RISK FACTORS SET
FORTH BELOW AND IN THE DOCUMENTS INCORPORATED BY REFERENCE HEREIN. IN EVALUATING
THE COMPANY'S BUSINESS, PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER THE
FOLLOWING RISK FACTORS IN ADDITION TO THE OTHER INFORMATION SET FORTH HEREIN OR
INCORPORATED HEREIN BY REFERENCE.
 
LIMITED OPERATING HISTORY; ANTICIPATED LOSSES
 
    The Company was incorporated in March 1995 and did not commence generating
advertising revenues until August 1995. Accordingly, the Company has a limited
operating history upon which an evaluation of the Company can be based, and its
prospects are subject to the risks, expenses and uncertainties frequently
encountered by companies in the new and rapidly evolving markets for Internet
products and services, including the Web-based advertising market. Specifically,
such risks include, without limitation, the failure to continue to develop and
extend the "Yahoo!" brand, the failure to develop new media properties, the
inability of the Company to maintain and increase the levels of traffic on
Yahoo! properties, the development of equal or superior services or products by
competitors, the failure of the market to adopt the Web as an advertising
medium, the failure to successfully sell Web-based advertising through the
Company's recently developed internal sales force, potential reductions in
market prices for Web-based advertising as a result of competition or other
factors, the failure of the Company to effectively generate commerce-related
revenues through sponsored services and placements in Yahoo! properties, the
inability of the Company to effectively integrate the technology and operations
or any other acquired businesses or technologies with its operations such as the
recent acquisition of Four11 Corporation, the failure of the Company to
successfully offer personalized Web-based services, such as e-mail services, to
consumers without errors or interruptions in service, and the inability to
continue to identify, attract, retain and motivate qualified personnel. There
can be no assurance that the Company will be successful in addressing such
risks. As of September 30, 1997, the Company had an accumulated deficit of
$26,695,000. The limited operating history of the Company and the uncertain
nature of the markets addressed by the Company make the prediction of future
results of operations difficult or impossible and, therefore, the recent revenue
growth experienced by the Company should not be taken as indicative of the rate
of revenue growth, if any, that can be expected in the future. The Company
believes that period-to-period comparisons of its operating results are not
meaningful and that the results for any period should not be relied upon as an
indication of future performance. The Company currently expects to significantly
increase its operating expenses to expand its sales and marketing operations, to
fund greater levels of product development and to develop and commercialize
additional media properties. As a result of these factors, there can be no
assurance that the Company will not incur significant losses on a quarterly and
annual basis.
 
FLUCTUATIONS IN QUARTERLY OPERATING RESULTS
 
    As a result of the Company's limited operating history, the Company does not
have historical financial data for a significant number of periods on which to
base planned operating expenses. The Company
 
                                       5
<PAGE>
derives the majority of its revenues from the sale of advertisements under
short-term contracts, which are difficult to forecast accurately. The Company's
expense levels are based in part on its expectations concerning future revenue
and to a large extent are fixed. The Company also has fixed expenses in the form
of advertising revenue guarantees of up to $18.5 million over the next 18 months
relating to the NETSCAPE GUIDE BY YAHOO!, which subject the Company to
additional risk in the event that revenues from this property are not sufficient
to offset guaranteed payments and related operating expenses. Quarterly revenues
and operating results depend substantially upon the advertising revenues
received within the quarter, which are difficult to forecast accurately.
Accordingly, the cancellation or deferral of a small number of advertising
contracts could have a material adverse effect on the Company's business,
results of operations and financial condition. The Company may be unable to
adjust spending in a timely manner to compensate for any unexpected revenue
shortfall, and any significant shortfall in revenue in relation to the Company's
expectations would have an immediate adverse effect on the Company's business,
operating results and financial condition. In addition, the Company plans to
continue to significantly increase its operating expenses to expand its sales
and marketing operations, to continue to develop and extend the "Yahoo!" brand,
to fund greater levels of product development and to develop and commercialize
additional media properties. To the extent that such expenses precede or are not
subsequently followed by increased revenues, the Company's business, operating
results and financial condition will be materially and adversely affected.
 
    The Company's operating results may fluctuate significantly in the future as
a result of a variety of factors, many of which are outside the Company's
control. These factors include the level of usage of the Internet, demand for
Internet advertising, the addition or loss of advertisers, the level of user
traffic on Yahoo! properties and the Company's other online media properties,
the advertising budgeting cycles of individual advertisers, the amount and
timing of capital expenditures and other costs relating to the expansion of the
Company's operations, the introduction of new products or services by the
Company or its competitors, pricing changes for Web-based advertising, the
timing of initial set-up, engineering or development fees that may be paid in
connection with larger advertising and distribution arrangements, technical
difficulties with respect to the use of YAHOO! or other media properties
developed by the Company, incurrence of costs relating to acquisitions such as
the recent acquisition of Four11 Corporation, general economic conditions and
economic conditions specific to the Internet and online media. As a strategic
response to changes in the competitive environment, the Company may from time to
time make certain pricing, service or marketing decisions or business
combinations that could have a material adverse effect on the Company's
business, results of operations and financial condition. The Company also has
experienced, and expects to continue to experience, seasonality in its business,
with user traffic on YAHOO! and the Company's other online media properties
being lower during the summer and year-end vacation and holiday periods, when
usage of the Web and the Company's services typically experience slower growth
or decline. Additionally, seasonality may also affect the amount of customer
advertising dollars placed with the Company in the first and third calendar
quarters as advertisers historically spend less during these quarters.
 
    A key element of the Company's strategy is to generate additional
advertising revenues through sponsored services and placements by third parties
in Yahoo! online properties in addition to banner advertising. In connection
with these arrangements, the Company may receive sponsorship fees as well as a
portion of transaction revenues received by the third party sponsor from users
originated through the Yahoo! placement, in return for minimum levels of user
impressions to be provided by the Company. To the extent implemented, these
arrangements expose the Company to potentially significant financial risks,
including the risk that the Company fails to deliver required minimum levels of
user impressions and that third party sponsors do not renew the agreements at
the end of their term. In addition, because the Company has limited experience
with these arrangements, the Company is unable to determine what effect such
arrangements will have on gross margins and results of operations. Although
transaction-based fees have not to date represented a material portion of the
Company's net revenues, if and to the extent such revenues become significant,
the foregoing factors could result in greater variations in the Company's
 
                                       6
<PAGE>
quarterly operating results and could have a material adverse effect on the
Company's business, results of operations and financial condition.
 
    Due to all of the foregoing factors, in some future quarter the Company's
operating results may fall below the expectations of securities analysts and
investors. In such event, the trading price of the Company's Common Stock would
likely be materially and adversely affected.
 
RISKS ASSOCIATED WITH NETSCAPE GUIDE BY YAHOO!
 
    During March 1997, the Company entered into certain agreements with Netscape
Communications Corporation ("Netscape") under which the Company has developed
and operates an Internet information navigation service called "NETSCAPE GUIDE
BY YAHOO!" (the "GUIDE"). The Co-Marketing Agreement provides that revenue from
advertising on the GUIDE, which is managed by the Company, is to be shared
between the Company and Netscape. Under the terms of the Trademark License
Agreement, the Company made a one-time non-refundable trademark license fee
payment of $5,000,000 in March 1997 which is being amortized over the initial
two-year term, which commenced in May 1997. Under the terms of the Co-Marketing
agreement as amended in June 1997, the Company also provided Netscape with a
minimum of $4,660,000 in guarantees against shared advertising revenues in the
first year of the agreement and up to $15,000,000 in the second year of the
agreement, subject in the second year to certain minimum levels of advertising
impressions being reached on the GUIDE. Actual payments may be higher and will
relate directly to the overall revenue recognized from the GUIDE.
 
    The Netscape Guide agreement exposes the Company to a number of significant
risks and uncertainties, including, without limitation: the risk that the
Company will fail to generate sufficient advertising revenue to offset the
initial and future guaranteed payments to Netscape, including any failure that
results from negative trends in the Web-based advertising business (such as
price erosion) or the inability of the Company to rapidly expand their
advertising sales and management efforts to match the additional inventory
currently anticipated from the Guide; the risk that projected user traffic
levels for the Guide will not be achieved, which may be affected by several
factors, such as declines or slower growth in the number of users of Netscape's
browser product, particularly as a result of continued increases in the market
share of other browser products, such as Microsoft Corporation's ("Microsoft")
Internet Explorer browser product; the effect of competitive personalized
information services from other parties; and the risk that Netscape does not
elect to renew the agreement at the end of the two year term, after which the
agreement permits Netscape to use certain elements of the user interface
developed by the Company without payment of any consideration to the Company. As
a result of the foregoing factors, there can be no assurance that the Guide
activities will not have a material adverse effect on the Company's business,
operating results or financial condition.
 
COMPETITION
 
    The market for Internet products and services is highly competitive and
competition is expected to continue to increase significantly. There are no
substantial barriers to entry in these markets, and the Company expects that
competition will continue to intensify. Although the Company currently believes
that the diverse segments of the Internet market will provide opportunities for
more than one supplier of products and services similar to those of the Company,
it is possible that a single supplier may dominate one or more market segments.
 
                                       7
<PAGE>
    The Company competes with many other providers of online navigation,
information and community services. Many companies offer competitive products or
services addressing Web navigation services, including, among others, Digital
Equipment Corporation (AltaVista), Excite, Inc. ("Excite"), including WebCrawler
and NetFind, the version of Excite's service for America Online ("AOL") users,
Infoseek Corporation, Inktomi, Lycos, Inc. (Lycos and A2Z), Open Text
Corporation (Open Text Index), C--NET (Snap! Online) and Wired (hotbot). In
addition, the Company competes with metasearch services and software
applications, such as C--NET's search.com service, that allow a user to search
the databases of several directories and catalogs simultaneously. The Company
also competes indirectly with database vendors that offer information search and
retrieval capabilities with their core database products. The Company also faces
competition from providers of software and other Internet products and services
that incorporate search and retrieval features into their offerings. For
example, Web browsers offered by Netscape and Microsoft, which are the most
widely used browsers, incorporate prominent search buttons and similar features,
such as features based on "push" technologies, that direct search traffic to
competing services, including those that may be developed or licensed by such
parties. In addition, entities that sponsor or maintain high-traffic Web sites
or that provide an initial point of entry for Internet users, such as the
Regional Bell Operating Companies or Internet Service Providers ("ISPs") such as
Microsoft and AOL, currently offer and could further develop, acquire or license
Internet search and navigation functions that compete with those offered by the
Company and could take actions that make it more difficult for consumers to find
and use Yahoo! services. For example, Microsoft recently announced that it will
offer Internet search engine services provided by Inktomi in the Microsoft
Network and other Microsoft online properties. The Company expects that such
search services may be tightly integrated into the Microsoft operating system,
the Internet Explorer browser and other software applications, and that
Microsoft may promote such services within the Microsoft Network or through
other end-user services such as WebTV. Insofar as Microsoft's Internet
navigational offerings may be more conveniently accessed by users than those of
the Company, this may provide Microsoft with significant competitive advantages
that could have a material adverse effect on the Company's business. A large
number of Web sites and online services (including, among others, the Microsoft
Network, AOL, and other Web navigation companies such as Excite, Lycos and
Infoseek) offer informational and community features, such as news, stock
quotes, sports coverage, Yellow Pages and e-mail listings, weather news, chat
services and bulletin board listings that are competitive with the services
offered by the Company. A number of companies, including HotMail (which was
recently acquired by Microsoft) and WhoWhere?, offer Web-based e-mail service
similar to those offered by the Company, and such companies have and are
expected to continue to provide such services in tandem with larger navigational
sites and online services. Several companies, including large companies such as
Microsoft and AOL and their affiliates, also are developing or currently offer
online information services for local markets, which compete with the Company's
regional Yahoo! online properties. The Company also faces intense competition in
international markets, including competition from U.S.-based competitors as well
as media and online companies that are already well established in those foreign
markets. Many of the Company's existing competitors, as well as a number of
potential new competitors, have significantly greater financial, technical,
marketing and distribution resources than the Company. In addition, providers of
Internet tools and services may be acquired by, receive investments from or
enter into other commercial relationships with larger, well-established and
well-financed companies, such as Microsoft or Netscape. For example, AOL is a
significant shareholder of Excite, and a version of the Excite service (AOL
NetFind) has been designated as the exclusive Internet search service for use by
AOL's subscribers. Greater competition resulting from such relationships could
have a material adverse effect on the Company's business, operating results and
financial condition.
 
    The Company also competes with online services, other Web site operators and
advertising networks, as well as traditional offline media such as television,
radio and print for a share of advertisers' total advertising budgets. The
Company believes that the number of companies selling Web-based advertising and
the available inventory of advertising space have increased substantially during
recent periods.
 
                                       8
<PAGE>
Accordingly, the Company may face increased pricing pressure for the sale of
advertisements and reductions in the Company's advertising revenues.
 
    The Company believes that the principal competitive factors in its markets
are brand recognition, ease of use, comprehensiveness, independence, quality and
responsiveness of search results, the availability of targeted content and
focused value added products and services, quality and brand appeal, access to
end users, and, with respect to advertisers and sponsors, the number of users,
duration and frequency of visits and user demographics. Competition among
current and future suppliers of Internet navigational and informational
services, high-traffic Web sites and ISPs, as well as competition with other
media for advertising placements, could result in significant price competition
and reductions in advertising revenues. There can be no assurance that the
Company will be able to compete successfully or that the competitive pressures
faced by the Company will not have a material adverse effect on the Company's
business, operating results and financial condition.
 
DEPENDENCE ON CONTINUED GROWTH IN USE OF THE INTERNET; TECHNOLOGICAL CHANGE
 
    The Company's future success is substantially dependent upon continued
growth in the use of the Internet and the Web in order to support the sale of
advertising on the Company's online media properties. There can be no assurance
that communication or commerce over the Internet will become more widespread or
that extensive content will continue to be provided over the Internet. The
Internet may not prove to be a viable commercial marketplace for a number of
reasons, including lack of acceptable security technologies, potentially
inadequate development of the necessary infrastructure, such as a reliable
network backbone, or timely development and commercialization of performance
improvements, including high speed modems. In addition, to the extent that the
Internet continues to experience significant growth in the number of users and
level of use, there can be no assurance that the Internet infrastructure will
continue to be able to support the demands placed upon it by such potential
growth or that the performance or reliability of the Web will not be adversely
affected by this continued growth. If use of the Internet does not continue to
grow, or if the Internet infrastructure does not effectively support growth that
may occur, the Company's business, operating results and financial condition
would be materially and adversely affected. The market for Internet products and
services is characterized by rapid technological developments, evolving industry
standards and customer demands, and frequent new product introductions and
enhancements. These market characteristics are exacerbated by the emerging
nature of this market and the fact that many companies are expected to introduce
new Internet products and services in the near future. Failure of the Company to
effectively adapt to technological developments could adversely affect the
Company's business, operating results and financial condition.
 
DEVELOPING MARKET; UNPROVEN ACCEPTANCE OF THE COMPANY'S PRODUCTS AND MEDIA
  PROPERTIES
 
    The markets for the Company's products and media properties have only
recently begun to develop, are rapidly evolving and are characterized by an
increasing number of market entrants who have introduced or developed
information navigation products and services for use on the Internet and the
Web. As is typical in the case of a new and rapidly evolving industry, demand
and market acceptance for recently introduced products and services are subject
to a high level of uncertainty and risk. Because the market for the Company's
products and media properties is new and evolving, it is difficult to predict
the future growth rate, if any, and size of this market. There can be no
assurance either that the market for the Company's products and media properties
will develop or that demand for the Company's products or media properties will
emerge or become sustainable. If the market fails to develop, develops more
slowly than expected or becomes saturated with competitors, or if the Company's
products and media properties do not achieve or sustain market acceptance, the
Company's business, operating results and financial condition will be materially
and adversely affected.
 
                                       9
<PAGE>
RISKS ASSOCIATED WITH BRAND DEVELOPMENT
 
    The Company believes that establishing and maintaining the "Yahoo!" brand is
a critical aspect of its efforts to attract and expand its audience and that the
importance of brand recognition will increase due to the growing number of
Internet sites and the relatively low barriers to entry. Promotion and
enhancement of the "Yahoo!" brand will depend largely on the Company's success
in providing high-quality products and services, which success cannot be
assured. In order to attract and retain Internet users and to promote and
maintain the "Yahoo!" brand in response to competitive pressures, the Company
may find it necessary to increase substantially its financial commitment to
creating and maintaining a distinct brand loyalty among consumers. If the
Company is unable to provide high-quality products and services or otherwise
fails to promote and maintain its brand, or if the Company incurs excessive
expenses in an attempt to improve its products and services or promote and
maintain its brand, the Company's business, operating results and financial
condition will be materially and adversely affected.
 
RELIANCE ON ADVERTISING REVENUES AND UNCERTAIN ADOPTION OF THE WEB AS AN
  ADVERTISING MEDIUM
 
    The Company derives substantially all of its revenues from the sale of
advertisements on its Web pages under short-term contracts. Most of the
Company's advertising customers have only limited experience with the Web as an
advertising medium, have not devoted a significant portion of their advertising
expenditures to Web-based advertising and may not find such advertising to be
effective for promoting their products and services relative to traditional
print and broadcast media. The Company's ability to generate significant
advertising revenues will depend upon, among other things, advertisers'
acceptance of the Web as an effective and sustainable advertising medium, the
development of a large base of users of the Company's services possessing
demographic characteristics attractive to advertisers, and the ability of the
Company to continue to develop and update effective advertising delivery and
measurement systems. No standards have yet been widely accepted for the
measurement of the effectiveness of Web-based advertising, and there can be no
assurance that such standards will develop sufficiently to support Web-based
advertising as a significant advertising medium. In addition, there can be no
assurance that the advertisers will determine that banner advertising, which
comprises substantially all of the Company's revenues, is an effective
advertising medium, and there can be no assurance that the Company will
effectively transition to any other forms of Web-based advertising, should they
develop. Certain advertising filter software programs are available that limit
or remove advertising from an Internet user's desktop. Such software, if
generally adopted by users, may have a materially adverse effect upon the
viability of advertising on the Internet. There also can be no assurance that
the Company's advertising customers will accept the internal and third-party
measurements of impressions received by advertisements on Yahoo! and the
Company's online media properties, or that such measurements will not contain
errors. The Company relies primarily on its internal advertising sales force for
domestic advertising sales, which involves additional risks and uncertainties,
including (among others) risks associated with the recruitment, retention,
management, training and motivation of sales personnel. As a result of these
factors, there can be no assurance that the Company will sustain or increase
current advertising sales levels. Failure to do so will have a material adverse
effect on the Company's business, operating results and financial position.
 
SUBSTANTIAL DEPENDENCE UPON THIRD PARTIES
 
    The Company depends substantially upon third parties for several critical
elements of its business including, among others, technology and infrastructure,
content development and distribution activities.
 
                                       10
<PAGE>
    TECHNOLOGY AND INFRASTRUCTURE.  The Company supplements its Internet
directory listings with full-text Web search results provided by AltaVista, a
division of Digital Equipment Corporation ("Digital"), under a non-exclusive
agreement. The Company believes that these search results provide a key
competitive element for its Internet navigation services. The Company therefore
depends substantially upon ongoing maintenance and technical support from
Digital to ensure accurate and rapid presentation of such search results to the
Company's customers. In addition, any termination of the agreement with Digital
or Digital's failure to renew such agreement upon expiration could result in
substantial additional costs to the Company in developing or licensing
replacement technology, and could result in a loss of levels of use of the
Company's navigational services. The Company also relies principally on a
private third-party provider, GlobalCenter, Inc. ("GlobalCenter"), for the
Company's Internet connections. Additionally, e-mail service Internet
connections are provided by GTE. Any disruption in the Internet access provided
by these third-party providers or any failure of these third-party providers to
handle current or higher volumes of use could have a material adverse effect on
the Company's business, operating results and financial condition. The Company
also licenses technology and related databases from third parties for certain
elements of Yahoo! properties, including, among others, technology underlying
news, stock quotes and current financial information, chat services, street
mapping, telephone listings and similar services. The Company has experienced
and expects to continue to experience interruptions and delays in service and
availability for such elements, such as recent interruptions in the Company's
stock quote services. Any errors, failures or delays experienced in connection
with these third party technologies and information services could negatively
impact the Company's relationship with users and adversely affect the Company's
brand and its business, and could expose the Company to liabilities to
third-parties.
 
    CONTENT DEVELOPMENT.  A key element of the Company's strategy involves the
implementation of Yahoo!-branded media properties targeted for interest areas,
demographic groups and geographic areas. In these efforts, the Company has
relied and will continue to rely substantially on content development and
localization efforts of third parties. For example, the Company has entered into
an agreement with Ziff-Davis pursuant to which Ziff-Davis publishes an online
publication and a print magazine under the "Yahoo!" brand. The Company also
expects to rely substantially on third party affiliates, including Softbank in
Japan and Korea, Rogers Communications ("Rogers") in Canada, and Ziff-Davis in
certain European countries, to localize, maintain and promote these services and
to sell advertising in local markets. There can be no assurance that the
Company's current or future third-party affiliates will effectively implement
these properties, or that their efforts will result in significant revenue to
the Company. Any failure of these parties to develop and maintain high-quality
and successful media properties also could result in unfavorable dilution to the
"Yahoo!" brand.
 
    DISTRIBUTION RELATIONSHIPS.  In order to create traffic for the Company's
online properties and make them more attractive to advertisers and consumers,
the Company has entered into certain distribution agreements and informal
relationships with leading Web browser providers (Microsoft and Netscape),
operators of online networks and leading Web sites, and computer manufacturers,
such as Compaq Computer and Gateway 2000. The Company believes these
arrangements are important to the promotion of the Company's online media
properties particularly among new Web users who may first access the Web through
these browsers, services, Web sites or computers. The Company's business
relationships with these companies consist of arrangements for the positioning
of access to Yahoo! properties on Web browsers and cooperative marketing
programs and licenses to include YAHOO! in online networks or services offered
by these parties, which are intended to increase the use and visibility of
YAHOO!. These distribution arrangements typically are not exclusive, and may be
terminable upon little or no notice. Third parties that provide distribution
channels for the Company may also assess fees or otherwise impose additional
conditions on the listing of YAHOO! or other online properties of the Company,
such as Netscape's requirement of substantial payments for placement of YAHOO!
on the "Net Search" Web page accessible from a button on the Netscape Web
browser. In addition, these companies may terminate or reduce their joint
marketing activities with the Company. Any such events could have a material
adverse effect on the Company's business, results of operations and financial
condition.
 
                                       11
<PAGE>
ENHANCEMENT OF YAHOO! PROPERTIES AND DEVELOPMENT OF NEW PROPERTIES
 
    To remain competitive, the Company must continue to enhance and improve the
functionality, features and content of the YAHOO! main site, as well as the
Company's other branded media properties. There can be no assurance that the
Company will be able to successfully maintain competitive user response times or
implement new features and functions, such as new search capabilities, greater
levels of user personalization, localized content filter and information
delivery through "push" or other methods, which will involve the development of
increasingly complex technologies. The Company also expects that personalized
information services, such as the Company's recently launched Web-based e-mail
service, will require significantly greater expenses associated with, among
other things, increased server capacity and equipment and requirements for
additional customer support personnel and systems. To the extent such additional
expenses are not offset by additional revenues from such personalized services,
the Company's financial results will be adversely affected.
 
    The Company's future success also depends in part upon the timely processing
of Web site listings submitted by users and Web content providers, which have
increased substantially in recent periods. The Company has from time to time
experienced significant delays in the processing of submissions, and further
delays could have a material adverse effect on the Company's goodwill among Web
users and content providers, and on the Company's business.
 
    A key element of the Company's business strategy is the development and
introduction of new "Yahoo!" branded online properties targeted for specific
interest areas, user groups with particular demographic characteristics and
geographic areas. There can be no assurance that the Company will be successful
in developing, introducing and marketing such products or media properties or
that such products and media properties will achieve market acceptance, enhance
the Company's brand name recognition or increase traffic on Yahoo!'s online
properties. Furthermore, enhancements of or improvements to YAHOO! or new media
properties may contain undetected errors that require significant design
modifications, resulting in a loss of customer confidence and user support and a
decrease in the value of the Company's brand name recognition. The Company's
ability to successfully develop additional targeted media properties depends
substantially on use of YAHOO! to promote such properties. If use of YAHOO!
fails to continue to grow, the Company's ability to establish other targeted
properties would be adversely affected. Any failure of the Company to
effectively develop and introduce these properties, or failure of such
properties to achieve market acceptance, could adversely affect the Company's
business, results of operations and financial condition.
 
INVESTMENTS IN AFFILIATES
 
    The Company has made equity investments in affiliated companies that are
involved in the commercialization of "Yahoo!" branded online properties, such as
versions of YAHOO! localized for foreign markets. The Company currently intends
to continue to make significant additional investments in such companies from
time to time in the future, as well as other companies involved in the
development of technologies or services that are complementary or related to the
Company's business. These affiliated companies typically are in an early stage
of development and may be expected to incur substantial losses. As a result, the
Company has recorded and expects to continue to record a share of the losses in
such affiliates attributable to the Company's ownership, which losses have had
and will continue to have an adverse effect on the Company's results of
operations. Furthermore, there can be no assurance that any investments in such
companies will result in any return nor can there be any assurance as to the
timing of any such return, or that the Company will not lose its entire
investment.
 
MANAGEMENT OF POTENTIAL GROWTH
 
    The Company's recent growth has placed, and is expected to continue to
place, a significant strain on its managerial, operational and financial
resources. To manage its potential growth, the Company must
 
                                       12
<PAGE>
continue to implement and improve its operational and financial systems and to
expand, train and manage its employee base. The Company also expects that its
operational and management systems will face additional strain as a result of
the Company's recent acquisition of Four11 Corporation. The process of managing
advertising within large, high traffic Web sites such as those in the Yahoo!
network is an increasingly important and complex task. The Company relies on
both internal and licensed third party advertising inventory management and
analysis systems. To the extent that any extended failure of the Company's
advertising management system results in incorrect advertising insertions, the
Company may be exposed to "make good" obligations with its advertising
customers, which, by displacing advertising inventory, could defer advertising
revenues and thereby have a material adverse effect on the Company's business,
operating results and financial condition. Failure of the Company's advertising
management systems to effectively track and provide accurate and timely reports
on advertising results also could negatively effect the Company's relationships
with advertisers and thereby have an adverse effect on the Company's business.
There can be no assurance that the Company's systems, procedures or controls
will be adequate to support the Company's operations or that Company management
will be able to achieve the rapid execution necessary to fully exploit the
Company's market opportunity. Any inability to effectively manage growth, if
any, could have a material adverse effect on the Company's business, operating
results and financial condition.
 
RISK OF CAPACITY CONSTRAINTS AND SYSTEMS FAILURES
 
    The Company is dependent on its ability to effectively serve a high volume
of use of its online media properties. Accordingly, the performance of the
Company's online media properties is critical to the Company's reputation, its
ability to attract advertisers to the Company's Web sites and to achieve market
acceptance of these products and media properties. Any system failure that
causes interruption or an increase in response time of the Company's products
and media properties could result in less traffic to the Company's Web sites
and, if sustained or repeated, could reduce the attractiveness of the Company's
products and media properties to advertisers and licensees. An increase in the
volume of queries conducted through the Company's products and media properties
could strain the capacity of the software or hardware deployed by the Company,
which could lead to slower response time or system failures, and adversely
affect the number of impressions received by advertisers and thus the Company's
advertising revenues. In addition, as the number of Web pages and users
increase, there can be no assurance that the Company's products and media
properties and infrastructure will be able to scale accordingly. The Company
also faces technical challenges associated with higher levels of personalization
and localization of content delivered to users of its services, which adds
strain to the Company's development and operational resources. For example,
personalized information services, such as Web-based email services, involve
increasingly complex technical and operational challenges, and there can be no
assurance that the Company will successfully implement and scale such services
to the extent required by any growth in the number of users of such services, or
that the failure to do so will not materially and adversely affect the goodwill
of users of these services, or negatively affect the Company's brand and
reputation. The Company is also dependent upon Web browsers and Internet and
online service providers for access to its products and media properties. In
particular, a private third party provider, GlobalCenter, provides the Company's
principal Internet connections. In the past, users have occasionally experienced
difficulties due to system failures, including failures unrelated to the
Company's systems. Additionally, email service Internet connections are provided
by GTE. Any disruption in the Internet access provided by these third-party
providers or any failure of these third-party providers to handle higher volumes
of user traffic could have a material adverse effect on the Company's business,
operating results and financial condition. Furthermore, the Company is dependent
on hardware suppliers for prompt delivery, installation and service of servers
and other equipment used to deliver the Company's products and services.
 
    The Company's operations are susceptible to outages due to fire, floods,
power loss, telecommunications failures, break-ins and similar events. In
addition, substantially all of the Company's network infrastructure is located
in Northern California, an area susceptible to earthquakes, which also could
cause
 
                                       13
<PAGE>
system outages or failures. The Company does not presently have a disaster
recovery plan or redundant, multiple site capacity in the event of any such
occurrence. Despite the implementation of network security measures by the
Company, its servers are vulnerable to computer viruses, break-ins and similar
disruptions from unauthorized tampering with the Company's computer systems. For
example, the Company recently experienced an unauthorized access by a
third-party to the Company's website. The occurrence of any of these events
could result in interruptions, delays or cessations in service to Yahoo! users,
which could have a material adverse effect on the Company's business, operating
results and financial condition.
 
INTEGRATION OF ACQUISITIONS
 
    As part of its business strategy, the Company expects to enter into business
combinations. For example, the Company recently acquired Four11 Corporation, a
privately held online communications and directory company. Acquisition
transactions are accompanied by a number of risks, including, among other
things, the difficulty of assimilating the operations and personnel of the
acquired companies, the potential disruption of the Company's ongoing business,
the inability of management to maximize the financial and strategic position of
the Company through the successful incorporation of acquired technology or
content and rights into the Company's products and media properties, expenses
associated with the transactions (such as expenses of approximately $4 million
that the Company expects to incur in the fourth quarter of 1997 in connection
with the acquisition of Four11 Corporation) additional expenses associated with
amortization of acquired intangible assets, the maintenance of uniform
standards, controls, procedures and policies, the impairment of relationships
with employees and customers as a result of any integration of new management
personnel, and the potential unknown liabilities associated with acquired
businesses. There can be no assurance that the Company would be successful in
overcoming these risks or any other problems encountered in connection with such
acquisitions.
 
TRADEMARKS AND PROPRIETARY RIGHTS
 
    The Company regards its copyrights, trademarks, trade dress, trade secrets
and similar intellectual property as critical to its success, and the Company
relies upon trademark and copyright law, trade secret protection and
confidentiality and/or license agreements with its employees, customers,
partners and others to protect its proprietary rights. The Company pursues the
registration of its trademarks in the United States and (based upon anticipated
use) internationally, and has applied for the registration of certain of its
trademarks, including "Yahoo!" and "Yahooligans!". Effective trademark,
copyright and trade secret protection may not be available in every country in
which the Company's products and media properties are distributed or made
available through the Internet. The Company has licensed in the past, and it
expects that it may license in the future, elements of its distinctive
trademarks, trade dress and similar proprietary rights to third parties,
including in connection with branded mirror sites of YAHOO!, and other media
properties and merchandise that may be controlled operationally by third
parties. While the Company attempts to ensure that the quality of its brand is
maintained by such licensees, no assurances can be given that such licensees
will not take actions that could materially and adversely affect the value of
the Company's proprietary rights or the reputation of its products and media
properties, either of which could have a material adverse effect on the
Company's business. Also, the Company is aware that third parties have from time
to time copied significant portions of YAHOO! directory listings for use in
competitive Internet navigational tools and services, and there can be no
assurance that the distinctive elements of YAHOO! will be protectible under
copyright law. There can be no assurance that the steps taken by the Company to
protect its proprietary rights will be adequate or that third parties will not
infringe or misappropriate the Company's copyrights, trademarks, trade dress and
similar proprietary rights. In addition, there can be no assurance that other
parties will not assert infringement claims against the Company.
 
                                       14
<PAGE>
    Many parties are actively developing search, indexing and related Web
technologies at the present time. The Company believes that such parties have
taken and will continue to take steps to protect these technologies, including
seeking patent protection. As a result, the Company believes that disputes
regarding the ownership of such technologies are likely to arise in the future.
 
DEPENDENCE ON KEY PERSONNEL
 
    The Company's performance is substantially dependent on the performance of
its senior management and key technical personnel. In particular, the Company's
success depends substantially on the continued efforts of its senior management
team. The Company does not carry key person life insurance on any of its senior
management personnel. The loss of the services of any of its executive officers
or other key employees could have a material adverse effect on the business,
operating results and financial condition of the Company.
 
    The Company's future success also depends on its continuing ability to
attract and retain highly qualified technical and managerial personnel.
Competition for such personnel is intense and there can be no assurance that the
Company will be able to retain its key managerial and technical employees or
that it will be able to attract and retain additional highly qualified technical
and managerial personnel in the future. The inability to attract and retain the
necessary technical and managerial personnel could have a material and adverse
effect upon the Company's business, operating results and financial condition.
 
GOVERNMENT REGULATION AND LEGAL UNCERTAINTIES
 
    There are currently few laws or regulations directly applicable to access to
or commerce on the Internet. Due to the increasing popularity and use of the
Internet, it is possible that a number of laws and regulations may be adopted
with respect to the Internet, covering issues such as user privacy, pricing and
characteristics and quality of products and services. For example, although the
Communications Decency Act was held to be unconstitutional, there can be no
assurance that similar legislation will not be enacted in the future, and it is
possible that such legislation could expose the Company to substantial
liability. Such legislation could also dampen the growth in use of the Web
generally and decrease the acceptance of the Web as a communications and
commercial medium, and could, thereby, have a material adverse effect on the
Company's business, results of operations and financial condition. Other
nations, including Germany, have taken actions to restrict the free flow of
material deemed to be objectionable on the Web. In addition, several
telecommunications carriers are seeking to have telecommunications over the Web
regulated by the Federal Communications Commission (the "FCC") in the same
manner as other telecommunications services. For example, America's Carriers
Telecommunications Association ("ACTA") has filed a petition with the FCC for
this purpose. In addition, because the growing popularity and use of the Web has
burdened the existing telecommunications infrastructure and many areas with high
Web use have begun to experience interruptions in phone service, local telephone
carriers, such as Pacific Bell, have petitioned the FCC to regulate ISPs and
OSPs in a manner similar to long distance telephone carriers and to impose
access fees on the ISPs and OSPs. If either of these petitions is granted, or
the relief sought therein is otherwise granted, the costs of communicating on
the Web could increase substantially, potentially slowing the growth in use of
the Web, which could in turn decrease the demand for the Company's products and
media properties. Also, it is possible that laws will be adopted or current laws
interpreted in a manner to impose liability on online service providers such as
the Company for listing or linking to third-party Web sites that include
materials that infringe copyrights or other rights of others. Such laws and
regulations if enacted could have an adverse effect on the Company's business,
operating results and financial condition. Moreover, the applicability to the
Internet of the existing laws governing issues such as property ownership,
copyright defamation, obscenity and personal privacy is uncertain, and the
Company may be subject to claims that its services violate such laws. Any such
new legislation or regulation or the application of existing laws and
regulations to the Internet could have a material adverse effect on the
Company's business, operating results and financial condition.
 
                                       15
<PAGE>
    Due to the global nature of the Web, it is possible that, although
transmissions by the Company over the Internet originate primarily in the State
of California, the governments of other states and foreign countries might
attempt to regulate the Company's transmissions or prosecute the Company for
violations of their laws. There can be no assurance that violations of local
laws will not be alleged or charged by state or foreign governments, that the
Company might not unintentionally violate such law or that such laws will not be
modified, or new laws enacted, in the future. Any of the foregoing developments
could have a material adverse effect on the Company's business, results of
operations and financial condition.
 
LIABILITY FOR INFORMATION SERVICES AND COMMERCE-RELATED ACTIVITIES
 
    Because materials may be downloaded by the online or Internet services
operated or facilitated by the Company and may be subsequently distributed to
others, there is a potential that claims will be made against the Company for
defamation, negligence, copyright or trademark infringement, personal injury or
other theories based on the nature and content of such materials. Such claims
have been brought, and sometimes successfully pressed, against online service
providers in the past. In addition, the Company could be exposed to liability
with respect to the selection of listings that may be accessible through the
Company's Yahoo!-branded products and media properties, or through content and
materials that may be posted by users in classifieds, bulletin board and chat
room services offered by the Company. Such claims might include, among others,
that by providing hypertext links to Web sites operated by third parties, the
Company is liable for copyright or trademark infringement or other wrongful
actions by such third parties through such Web sites. It is also possible that
if any information provided through the Company's services, such as stock
quotes, analyst estimates or other trading information, contains errors, third
parties could make claims against the Company for losses incurred in reliance on
such information. In connection with the acquisition of Four11 Corporation, the
Company recently began offering Web-based email services, which expose the
Company to potential risks, such as liabilities or claims resulting from
unsolicited email (spamming), lost or misdirected messages, illegal or
fraudulent use of e-mail or interruptions or delays in e-mail service.
 
    The Company also from time to time enters into arrangements to offer third
party products and services under the "Yahoo!" brand or via distribution on
Yahoo! properties. For example, the Company recently announced an agreement with
GeoCities under which GeoCities will offer free home page services and certain
related products to Yahoo! users. The Company also recently announced an
arrangement with AudioNet, an Internet-based broadcast network, whereby links to
AudioNet's site and content will be distributed via Yahoo! properties. These
business arrangements involve additional legal risks, such as potential
liabilities for content posted by free home page users or made available by
other third party providers. The Company may be subject to claims concerning
such services or content by virtue of the Company's involvement in marketing,
branding or providing access to such services, even if the Company does not
itself host, operate, or provide such services. While the Company's agreements
with these parties often provide that the Company will be indemnified against
such liabilities, there can be no assurance that such indemnification, if
available, will be adequate.
 
    From time to time, the Company enters into agreements with sponsors, content
providers, service providers and merchants under which the Company is entitled
to receive a share of revenue from the purchase of goods and services by users
of the Company's online properties. Such arrangements may expose the Company to
additional legal risks and uncertainties, including (without limitation)
potential liabilities to consumers of such products and services. Although the
Company carries general liability insurance, the Company's insurance may not
cover potential claims of this type or may not be adequate to indemnify the
Company for all liability that may be imposed.
 
RISKS ASSOCIATED WITH INTERNATIONAL OPERATIONS AND EXPANSION
 
    A key part of the Company's strategy is to develop "Yahoo!" branded online
properties in international markets. The Company has developed and operates,
through joint ventures with Softbank and related entities, versions of YAHOO!
localized for Japan, Germany, France, the U.K and Korea. The
 
                                       16
<PAGE>
Company offers a version of YAHOO! localized for Canada under an agreement with
Rogers Communications, and the Company operates localized or mirror versions of
YAHOO! through wholly owned subsidiaries in Australia and Singapore.
 
    To date, the Company has only limited experience in developing localized
versions of its products and marketing and operating its products and services
internationally, and the Company relies substantially on the efforts and
abilities of its foreign business partners in such activities. The Company has
experienced and expects to continue to experience higher costs as a percentage
of revenues in connection with international online properties than domestic
online properties. If the international revenues are not adequate to offset
investments in such activities, the Company's business, operating results and
financial condition could be materially adversely affected. The Company may
experience difficulty in managing international operations as a result of
distance as well as language and cultural differences, and there can be no
assurance that the Company or its partners will be able to successfully market
and operate its products and services in foreign markets. The Company also
believes that in light of substantial anticipated competition, it will be
necessary to move quickly into international markets in order to effectively
obtain market share, and there can be no assurance that the Company will be able
to do so. In addition to the uncertainty as to the Company's ability to continue
to generate revenues from its foreign operations and expand its international
presence, there are certain risks inherent in doing business on an international
level, such as unexpected changes in regulatory requirements, trade barriers,
difficulties in staffing and managing foreign operations, longer payment cycles,
problems in collecting accounts receivable, political instability, fluctuations
in currency exchange rates, seasonal reductions in business activity in certain
other parts of the world and potentially adverse tax consequences. There can be
no assurance that one or more of such factors will not have a material adverse
effect on the Company's future international operations and, consequently, on
the Company's business, operating results and financial condition.
 
CONCENTRATION OF STOCK OWNERSHIP
 
    As of December 31, 1997, the present directors, executive officers, greater
than 5% shareholders and their respective affiliates beneficially owned
approximately 68% of the outstanding Common Stock of the Company. As of December
31, 1997, Softbank beneficially owned approximately 31% of the outstanding
Common Stock of the Company. As a result of their ownership, the directors,
executive officers, greater than 5% shareholders (including Softbank) and their
respective affiliates collectively are able to control all matters requiring
shareholder approval, including the election of directors and approval of
significant corporate transactions. Such concentration of ownership may also
have the effect of delaying or preventing a change in control of the Company.
 
VOLATILITY OF STOCK PRICE
 
    The trading price of the Company's Common Stock has been and may continue to
be subject to wide fluctuations in response to a number of events and factors,
such as quarterly variations in operating results, announcements of
technological innovations or new products and media properties by the Company or
its competitors, changes in financial estimates and recommendations by
securities analysts, the operating and stock price performance of other
companies that investors may deem comparable to the Company, and news reports
relating to trends in the Company's markets. In addition, the stock market in
general, and the market prices for Internet-related companies in particular,
have experienced extreme volatility that often has been unrelated to the
operating performance of such companies. These broad market and industry
fluctuations may adversely affect the trading price of the Company's Common
Stock, regardless of the Company's operating performance.
 
LEGAL PROCEEDINGS
 
    In July 1997, GTE New Media Services Incorporated ("GTE New Media"), an
affiliate of GTE, filed suit in Dallas, Texas, against Netscape Communications
Corporation ("Netscape") and the Company, in which GTE New Media made a number
of claims relating to the inclusion of certain Yellow Pages hypertext links in
the "Netscape Guide by Yahoo!", an online navigational property operated by the
 
                                       17
<PAGE>
Company under an agreement with Netscape. In this lawsuit, GTE New Media has
alleged, among other things, that by including links to the Yellow Pages service
operated by several Regional Bell Operating Companies (the "RBOCs") within the
Netscape Guide, the Company has tortiously interfered with an alleged
contractual relationship between GTE New Media and Netscape relating to
placement of links by Netscape for a Yellow Pages service operated by GTE New
Media. GTE New Media seeks injunctive relief as well as actual and punitive
damages. In October 1997, GTE New Media brought suit in the U.S. District Court
for the District of Columbia, against the RBOCs, Netscape and the Company, in
which GTE alleges, among other things, that the alleged exclusion of the GTE New
Media Yellow Pages from the Netscape Guide Yellow Pages service violates federal
antitrust laws, and GTE New Media seeks injunctive relief and damages (trebled
under federal antitrust laws) from such alleged actions. The Company believes
that the claims against the Company in these lawsuits are without merit and
intends to contest them vigorously. Although the Company cannot predict with
certainty the outcome of these lawsuits or the expenses that may be incurred in
defending the lawsuits, the Company does not believe that the result in the
lawsuits will have a material adverse effect on the Company's financial position
or results of operations.
 
    From time to time the Company has been, and expects to continue to be,
subject to other legal proceedings and claims in the ordinary course of its
business, including, among others, contractual disputes with advertisers and
content distribution providers, and claims of alleged infringement of the
trademarks and other intellectual property rights of third parties by the
Company and its licensees. Such claims, even if not meritorious, could result in
the expenditure of significant financial and managerial resources. Although the
Company cannot predict the outcome of any proceeding, the Company is not
currently aware of any such legal proceedings or claims that the Company
believes will have, individually or in the aggregate, a material adverse effect
on the Company's financial position or results of operations.
 
ANTITAKEOVER EFFECT OF CERTAIN CHARTER PROVISIONS
 
    The Board of Directors has the authority to issue up to 10,000,000 shares of
Preferred Stock and to determine the price, rights, preferences, privileges and
restrictions, including voting rights, of those shares without any further vote
or action by the shareholders. The rights of the holders of Common Stock may be
subject to, and may be adversely affected by, the rights of the holders of any
Preferred Stock that may be issued in the future. The issuance of Preferred
Stock may have the effect of delaying, deferring or preventing a change of
control of the Company without further action by the shareholders and may
adversely affect the voting and other rights of the holders of Common Stock. The
Company has no present plans to issue shares of Preferred Stock. Further,
certain provisions of the Company's charter documents, including provisions
eliminating the ability of shareholders to take action by written consent and
limiting the ability of shareholders to raise matters at a meeting of
shareholders without giving advance notice, may have the effect of delaying or
preventing changes in control or management of the Company, which could have an
adverse effect on the market price of the Company's Common Stock. In addition,
effective upon qualification of the Company as a "listed corporation," as
defined in Section 301.5(d) of the California Corporations Code, the Company's
charter documents eliminated cumulative voting and provide that, at such time as
the Company has at least six directors, the Company's Board of Directors will be
divided into two classes, each of which serves for a staggered two-year term,
which may make it more difficult for a third party to gain control of the
Company's Board of Directors.
 
SHARES ELIGIBLE FOR FUTURE SALE
 
    As of December 31, 1997, the Company had outstanding 44,950,083 shares of
Common Stock, and options to purchase a total of approximately 11,576,213 shares
of the Company's Common Stock under the Company's stock option plans. Of these
shares, an estimated number of 2,322,897 shares recently issued or that may be
issued or sold in connection with acquisition and investment transactions
(including the recent acquisition of Four11 Corporation and the GeoCities
Transaction) will be tradeable pursuant to registra-
tion statements (including the registration statement of which this prospectus
is part). Sales of substantial amounts of such shares in the public market or
the prospect of such sales could adversely affect the market price of the
Company's Common Stock. See "Selling Shareholders."
 
                                       18
<PAGE>
                                USE OF PROCEEDS
 
    The proceeds from the sale of the shares are solely for the account of the
Selling Shareholders. Accordingly, the Company will not receive any proceeds
from the sale of the shares from the Selling Shareholders.
 
              ACQUISITION OF COMMON STOCK BY SELLING SHAREHOLDERS
 
    On December 31, 1997, the Company, Softbank, GeoCities and certain GeoCities
shareholders (the "GeoCities Shareholders") entered into a Stock Purchase
Agreement (the "Agreement") pursuant to which each of the Company and Softbank
agreed to acquire from GeoCities and the GeoCities Shareholders certain shares
of GeoCities capital stock. In connection with the acquisition of such
securities, the Company has issued to GeoCities and the GeoCities Shareholders
an aggregate of 78,079 shares of the Company's Common Stock and Softbank has
initially transferred to GeoCities and the GeoCities Shareholders a total of
278,000 shares of the Company's Common Stock; and Softbank has agreed in
addition to pay a total of approximately $28.0 million to GeoCities and the
GeoCities Shareholders in cash or by delivery of shares of the Company's Common
Stock upon completion of the GeoCities Transaction. The actual number of Shares
that may be transferred by Softbank in lieu of cash would be determined upon
completion of the GeoCities Transaction (expected in late January 1998) based
upon the trading price of the Company's Common Stock during certain periods
preceding the date of the final closing of the GeoCities Transaction. Based upon
a price per Share of $64.00, which is the average of the high and low sale
prices of the Company's Common Stock reported on the Nasdaq National Market on
January 5, 1998, an aggregate of up to 722,984 Shares, including the initial
transfer, may be transferred by Softbank to GeoCities and the GeoCities
Shareholders upon the completion of the GeoCities Transaction. The Company
cannot predict the actual trading price of the Common Stock in any future
period, and therefore the actual number of Shares that may be transferred by
Softbank to GeoCities and the GeoCities Shareholders may be higher or lower than
the number stated herein. In connection with the Agreement, the Company agreed
to register the resale of all shares of the Company's Common Stock acquired by
GeoCities and the GeoCities Shareholders in the transaction.
 
                                       19
<PAGE>
                              SELLING SHAREHOLDERS
 
    The following table sets forth certain information known to the Company with
respect to beneficial ownership of the Company's Common Stock as of January 7,
1998 by each Selling Shareholder, assuming for this purpose that Softbank pays
the entire remaining consideration for the GeoCities Transaction through shares
of the Company's Common Stock. Except as indicated, none of the Selling
Shareholders has held any position or office or had any other material
relationship with the Company or any of its affiliates within the past three
years other than as a result of the ownership of the Company's Common Stock. The
Company may amend or supplement this Prospectus from time to time to update the
disclosure set forth herein.
<TABLE>
<CAPTION>
                                           SHARES BENEFICIALLY                               SHARES BENEFICIALLY
                                             OWNED(1) PRIOR                                    OWNED(1) AFTER
                                             TO THE OFFERING                SHARES OFFERED     THE OFFERING(2)
                                          ---------------------                BY THIS       -------------------
     SELLING SHAREHOLDERS             SHARES                PERCENT           PROSPECTUS           SHARES
- ------------------------------      ----------              -------         --------------   -------------------
<S>                             <C>                   <C>                   <C>              <C>
Bohnett, David C..............              139,144         *                  139,144                         0
Chase Venture Capital
  Associates, L.P.(3).........               83,908         *                   83,908                         0
The fl@tiron Fund LLC(4)......               10,534         *                   10,534                         0
GeoCities(5)..................              316,392         *                  316,392                         0
InnoCal, L.P.(6)..............              118,848         *                  118,848                         0
Intel Corporation.............              125,600         *                  125,600                         0
Venture Lending, a division of
  Cupertino National Bank &
  Trust.......................                6,636         *                    6,636                         0
 
<CAPTION>
 
     SELLING SHAREHOLDERS             PERCENT
- ------------------------------        -------
<S>                             <C>
Bohnett, David C..............        *
Chase Venture Capital
  Associates, L.P.(3).........        *
The fl@tiron Fund LLC(4)......        *
GeoCities(5)..................        *
InnoCal, L.P.(6)..............        *
Intel Corporation.............        *
Venture Lending, a division of
  Cupertino National Bank &
  Trust.......................        *
</TABLE>
 
- ------------------------
 
 *  Less than one percent of the Company's outstanding Common Stock.
 
(1) The number and percentage of shares beneficially owned is determined in
    accordance with Rule 13d-3 of the Exchange Act, and the information is not
    necessarily indicative of beneficial ownership for any other purpose. Under
    such rule, beneficial ownership includes any shares as to which the
    individual has sole or shared voting power or investment power and also any
    shares which the individual has the right to acquire within 60 days of
    January 7, 1998 through the exercise of any stock option or other right. In
    the event that Softbank elects to deliver shares of Common Stock to
    GeoCities and the GeoCities Shareholders, the actual total number of Shares
    that may be transferred by Softbank would be determined upon completion of
    the GeoCities Transaction (expected in late January 1998) based upon the
    trading price of the Company's Common Stock during certain periods preceding
    the date of the final closing of the GeoCities Transaction. Solely for the
    purposes of presentation in the table above, the number of Shares to be
    transferred to certain of the Selling Shareholders has been computed based
    upon a price per Share of $64.00, which is the average of the high and low
    sale prices of the Company's Common Stock reported on the Nasdaq National
    Market on January 5, 1998. The Company cannot predict the actual trading
    price of the Common Stock in any future period, and therefore the actual
    number of Shares that may be transferred by Softbank to certain of the
    Selling Shareholders may be higher or lower than the number presented above.
    Unless otherwise indicated in the footnotes, each person has sole voting and
    investment power (or shares such powers with his or her spouse) with respect
    to the shares shown as beneficially owned.
 
(2) Assumes that each Selling Shareholder will sell all of the Shares set forth
    above under "Shares Offered By This Prospectus." There can be no assurance
    that the Selling Shareholders will sell all or any of the Shares offered
    hereunder.
 
(3) Assumes the sale of 34,507 of these Shares by Chase Venture Capital
    Associates, L.P. in lieu of Softbank. See footnote 1.
 
(4) Assumes the sale of 3,760 of these Shares by The fl@tiron Fund LLC in lieu
    of Softbank. See footnote 1.
 
                                       20
<PAGE>
(5) Assumes the sale of 296,151 of these Shares by GeoCities in lieu of
    Softbank. See footnote 1. GeoCities and the Company are parties to a
    Codistribution Agreement dated as of December 31, 1997. The Company,
    Softbank, an affiliate of the Company, and certain affiliates of Softbank
    are shareholders of GeoCities. In addition, Softbank Corporation, an
    affiliate of Softbank, has created a joint venture with GeoCities named
    GeoCities Japan Corporation.
 
(6) Assumes the sale of 110,566 of these Shares by Innocal, L.P. in lieu of
    Softbank. See footnote 1.
 
    In lieu of the sale of up to 444,984 shares of the Company's Common Stock by
certain of the Selling Shareholders listed in the above table, Softbank may sell
directly up to an equal number of shares of the Company's Common Stock pursuant
to this Prospectus in order to fund Softbank's obligation to make cash payments
in the GeoCities Trnsaction. See "Acquisition of Common Stock by Selling
Shareholders." As of January 7, 1998, Softbank beneficially owned 13,914,842
shares of the Company's Common Stock, representing approximately 31.0% of the
Company's outstanding Common Stock. In the event that Softbank sells all of the
444,984 shares in lieu of certain Selling Shareholders, Softbank will
beneficially own 13,469,858 shares of the Company Common Stock after such sale,
representing approximately 30.0% of the Company's outstanding Common Stock. The
number of shares that may be sold by Softbank hereunder to fund cash payments in
the GeoCities Transaction may vary depending upon the trading price of the
Company's Common Stock. Softbank is a significant shareholder of the Company,
and Softbank and certain of its affiliates have entered into a number of
business agreements with the Company. See "Certain Transactions" in the
Company's definitive Proxy Statement dated March 25, 1997 and "Management's
Discussion and Analysis of Financial Condition and Results of
Operations--Overview" in the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1997, which information is incorporated herein by
reference.
 
                              PLAN OF DISTRIBUTION
 
    Shares of Common Stock covered hereby may be offered and sold from time to
time by the Selling Shareholders. The Selling Shareholders will act
independently of the Company in making decisions with respect to the timing,
manner and size of each sale. The Shares may be sold by one or more of the
following means of distribution: (a) a block trade in which the broker-dealer so
engaged will attempt to sell Shares as agent, but may position and resell a
portion of the block as principal to facilitate the transaction; (b) purchases
by a broker-dealer as principal and resale by such broker-dealer for its own
account pursuant to this Prospectus; (c) an over-the-counter distribution in
accordance with the rules of the Nasdaq National Market; (d) ordinary brokerage
transactions and transactions in which the broker solicits purchasers; and (e)
in privately negotiated transactions. To the extent required, this Prospectus
may be amended and supplemented from time to time to describe a specific plan of
distribution. In connection with distributions of the Shares or otherwise, the
Selling Shareholders may enter into hedging transactions with broker-dealers or
other financial institutions. In connection with such transactions,
broker-dealers or other financial institutions may engage in short sales of the
Company's Common Stock in the course of hedging the positions they assume with
Selling Shareholders. The Selling Shareholders may also sell the Company's
Common Stock short and redeliver the shares to close out such short positions.
The Selling Shareholders may also enter into option or other transactions with
broker-dealers or other financial institutions which require the delivery to
such broker-dealer or other financial institution of Shares offered hereby,
which Shares such broker-dealer or other financial institution may resell
pursuant to this Prospectus (as supplemented or amended to reflect such
transaction). The Selling Shareholders may also pledge Shares to a broker-dealer
or other financial institution, and, upon a default, such broker-dealer or other
financial institution may effect sales of the pledged Shares pursuant to this
Prospectus (as supplemented or amended to reflect such transaction). In
addition, any Shares that qualify for sale pursuant to Rule 144 may be sold
under Rule 144 rather than pursuant to this Prospectus. In effecting sales,
brokers, dealers or agents engaged by the Selling Shareholders may arrange for
other brokers or dealers to participate. The Selling Shareholders and any
underwriter, dealer or agent who participate in the distribution of such
 
                                       21
<PAGE>
shares may be deemed to be "underwriters" under the Securities Act, and any
discount, commission or concession received by such persons might be deemed to
be an underwriting discount or commission under the Securities Act. The Company
has agreed to indemnify the Selling Shareholders against certain liabilities
arising under the Securities Act.
 
    Broker-dealers and agents may receive commissions from the Selling
Shareholders (and, if acting as agent for the purchaser of such shares, from
such purchaser) in amounts to be negotiated prior to the sale. Usual and
customary brokerage fees will be paid by the Selling Shareholders.
Broker-dealers may agree with the Selling Shareholders to sell a specified
number of shares at a stipulated price per share, and, to the extent such a
broker-dealer is unable to do so acting as agent for the Selling Shareholders,
to purchase as principal any unsold shares at the price required to fulfill the
broker-dealer commitment to the Selling Shareholders. Broker-dealers who acquire
shares as principal may thereafter resell such shares from time to time in
transactions (which may involve crosses and block transactions and which may
involve sales to and through other broker-dealers, including transactions of the
nature described above) in the over-the-counter market, in negotiated
transactions or by a combination of such methods of sale or otherwise at market
prices prevailing at the time of sale or at negotiated prices, and in connection
with such resales may pay to or receive from the purchasers of such shares
commissions computed as described above.
 
    The Company has advised the Selling Shareholders that the anti-manipulation
rules under the Exchange Act may apply to sales of Shares in the market and to
the activities of the Selling Shareholders and their affiliates. The Selling
Shareholders have advised the Company that during such time as the Selling
Shareholders may be engaged in the attempt to sell shares registered hereunder,
they will: (i) not engage in any stabilization activity in connection with any
of the Company's securities; (ii) not bid for or purchase any of the Company's
securities or any rights to acquire the Company's securities, or attempt to
induce any person to purchase any of the Company's securities or rights to
acquire the Company's securities other than as permitted under the Exchange Act;
(iii) not effect any sale or distribution of the Shares until after the
Prospectus shall have been appropriately amended or supplemented, if required,
to set forth the terms thereof; and (iv) effect all sales of Shares in broker's
transactions through broker-dealers acting as agents, in transactions directly
with market makers or in privately negotiated transactions where no broker or
other third party (other than the purchaser) is involved.
 
    The Selling Shareholders may indemnify any broker-dealer that participates
in transactions involving the sale of the shares against certain liabilities,
including liabilities arising under the Securities Act. Any commissions paid or
any discounts or concessions allowed to any such broker-dealers, and any profits
received on the resale of such shares, may be deemed to be underwriting
discounts and commissions under the Securities Act if any such broker-dealers
purchase shares as principal.
 
    In order to comply with the securities laws of certain states, if
applicable, the Common Stock will be sold in such jurisdictions only through
registered or licensed brokers or dealers. In addition, in certain states, the
Common Stock may not be sold unless such shares have been registered or
qualified for sale in the applicable state or an exemption from the registration
or qualification requirement is available and is complied with.
 
    The Company has agreed to maintain the effectiveness of this Registration
Statement with respect to the shares of Common Stock offered hereunder by the
Selling Shareholders until six months following the completion of the GeoCities
Transaction, which is expected to occur in mid-January 1998. No sales may be
made pursuant to this Prospectus after such date unless the Company amends or
supplements this Prospectus to indicate that it has agreed to extend such period
of effectiveness. There can be no assurance that the Selling Shareholders will
sell all or any of the shares of Common Stock offered hereunder.
 
                                 LEGAL MATTERS
 
    The validity of the shares of Common Stock offered hereby will be passed
upon by Venture Law Group, A Professional Corporation, Menlo Park, California,
counsel to the Company. As of January 7,
 
                                       22
<PAGE>
1998, certain attorneys of Venture Law Group owned in the aggregate
approximately 2,988 shares of Common Stock of the Company.
 
                                    EXPERTS
 
    The consolidated financial statements of Yahoo! Inc. incorporated in this
Prospectus by reference to the Company's Annual Report on Form 10-K for the year
ended December 31, 1996 and the supplementary consolidated financial statements
of Yahoo! Inc. and the financial statements of Four11 Corporation, incorporated
in this Prospectus by reference to the Company's Current Report on Form 8-K/A
dated October 14, 1997 (as amended October 30, 1997) have been so incorporated
in reliance on the reports of Price Waterhouse LLP, independent accountants,
given on the authority of said firm as experts in auditing and accountancy.
 
                                       23
<PAGE>
                                    PART II
                   INFORMATION NOT REQUIRED IN THE PROSPECTUS
 
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
 
    The Registrant will bear no expenses in connection with any sale or other
distribution by the Selling Shareholders of the shares being registered other
than the expenses of preparation and distribution of this Registration Statement
and the Prospectus included in this Registration Statement. Such expenses are
set forth in the following table. All of the amounts shown are estimates except
the Securities and Exchange Commission ("SEC") registration fee and the NASD
listing fee.
 
<TABLE>
<CAPTION>
<S>                                                                                  <C>
SEC registration fee...............................................................  $  16,058
Legal fees and expenses............................................................     10,000
Accounting fees and expenses.......................................................     10,000
NASD listing fee...................................................................      2,000
Miscellaneous expenses.............................................................      1,942
                                                                                     ---------
Total..............................................................................  $  40,000
                                                                                     ---------
                                                                                     ---------
</TABLE>
 
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
 
    Section 317 of the California Corporations Code allows for the
indemnification of officers, directors, and other corporate agents in terms
sufficiently broad to indemnify such persons under certain circumstances for
liabilities (including reimbursement for expenses incurred) arising under the
Securities Act of 1933, as amended (the "Securities Act"). Article VII of the
Registrant's Articles of Incorporation and Article VI of the Registrant's Bylaws
provide for indemnification of the Registrant's directors, officers, employees
and other agents to the extent and under the circumstances permitted by the
California Corporations Code. The Registrant has also entered into agreements
with its directors and officers that will require the Registrant, among other
things, to indemnify them against certain liabilities that may arise by reason
of their status or service as directors to the fullest extent not prohibited by
law.
 
    In connection with this offering, the Selling Shareholders have agreed to
indemnify the Registrant, its directors and officers and each such person who
controls the Registrant, against any and all liability arising from inaccurate
information provided to the Registrant by the Selling Shareholders and contained
herein up to a maximum of the proceeds received by the Selling Shareholders from
the sale of their Shares hereunder.
 
ITEM 16. EXHIBITS.
 
<TABLE>
<CAPTION>
 EXHIBITS.
<S>          <C>
       5.1   Opinion of Venture Law Group, A Professional Corporation
 
      23.1   Consent of Price Waterhouse LLP, Independent Accountants
 
      23.2   Consent of Price Waterhouse LLP, Independent Accountants
 
      23.3   Consent of Venture Law Group, A Professional Corporation (included in Exhibit 5.1)
 
      24.1   Power of Attorney (see page II-3)
</TABLE>
 
ITEM 17. UNDERTAKINGS.
 
    The undersigned Registrant hereby undertakes:
 
    (1) To file, during any period in which offers or sales are being made, a
       post-effective amendment to this Registration Statement to include any
       material information with respect to the plan of
 
                                      II-1
<PAGE>
       distribution not previously disclosed in the Registration Statement or
       any material change to such information in the Registration Statement.
 
    (2) That, for the purpose of determining any liability under the Securities
       Act, each post-effective amendment shall be deemed to be a new
       registration statement relating to the securities offered therein, and
       the offering of such securities at that time shall be deemed to be the
       initial bona fide offering thereof.
 
    (3) To remove from registration by means of a post-effective amendment any
       of the securities being registered which remain unsold at the termination
       of this offering.
 
    (4) That, for purposes of determining any liability under the Securities
       Act, each filing of the Registrant's annual report pursuant to Section
       13(a) or Section 15(d) of the Exchange Act that is incorporated by
       reference in the Registration Statement shall be deemed to be a new
       registration statement relating to the securities offered therein, and
       the offering of such securities at that time shall be deemed to be the
       initial bona fide offering thereof.
 
    Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions, or otherwise, the Registrant
has been advised that in the opinion of the SEC such indemnification is against
public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the Registrant of expenses incurred or
paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Securities Act and will be governed by the final
adjudication of such issue.
 
                                      II-2
<PAGE>
                                   SIGNATURES
 
    Pursuant to the requirements of the Securities Act of 1933, Yahoo! Inc.
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the City of Santa Clara, State of California, on January 8, 1998.
 
<TABLE>
<S>                             <C>  <C>
                                YAHOO! INC.
 
                                By:              /s/ TIMOTHY KOOGLE
                                     -----------------------------------------
                                                   Timothy Koogle
                                       PRESIDENT AND CHIEF EXECUTIVE OFFICER
</TABLE>
 
                               POWER OF ATTORNEY
 
    KNOW ALL PERSONS BY THESE PRESENTS, that each person whose signature appears
below hereby constitutes and appoints Timothy Koogle and Gary Valenzuela,
jointly and severally, his or her true and lawful attorneys-in-fact, each with
full power of substitution, for him or her in any and all capacities, to sign
any and all amendments (including post-effective amendments) to this
Registration Statement, and to file the same, with all exhibits thereto and all
documents in connection therewith, with the Securities and Exchange Commission,
hereby ratifying and confirming all that each of said attorneys-in-fact or any
of them, or his or their substitute or substitutes, may lawfully do or cause to
be done or by virtue hereof. Pursuant to the requirements of the Securities Act
of 1933, this registration statement has been signed by the following persons in
the capacities and on the dates indicated.
 
<TABLE>
<CAPTION>
          SIGNATURE                       TITLE                    DATE
- ------------------------------  --------------------------  -------------------
 
<C>                             <S>                         <C>
                                President, Chief Executive
      /s/ TIMOTHY KOOGLE          Officer and Director
- ------------------------------    (Principal Executive        January 8, 1998
        Timothy Koogle            Officer)
 
                                Senior Vice President,
                                  Finance and
     /s/ GARY VALENZUELA          Administration, and
- ------------------------------    Chief Financial Officer     January 8, 1998
       Gary Valenzuela            (Principal Financial
                                  Officer)
 
     /s/ JAMES J. NELSON        Vice President, Finance
- ------------------------------    (Principal Accounting       January 8, 1998
       James J. Nelson            Officer)
 
       /s/ ERIC HIPPEAU
- ------------------------------  Director                      January 8, 1998
         Eric Hippeau
 
      /s/ ARTHUR H. KERN
- ------------------------------  Director                      January 8, 1998
        Arthur H. Kern
</TABLE>
 
                                      II-3
<PAGE>
<TABLE>
<CAPTION>
          SIGNATURE                       TITLE                    DATE
- ------------------------------  --------------------------  -------------------
 
<C>                             <S>                         <C>
      /s/ MICHAEL MORITZ
- ------------------------------  Director                      January 8, 1998
        Michael Moritz
 
        /s/ JERRY YANG
- ------------------------------  Director                      January 8, 1998
          Jerry Yang
</TABLE>
 
                                      II-4
<PAGE>
                               INDEX TO EXHIBITS
 
<TABLE>
<CAPTION>
 EXHIBIT NUMBER    DESCRIPTION
- -----------------  -------------------------------------------------------------------------------------------------
<S>                <C>
          5.1      Opinion of Venture Law Group, A Professional Corporation
 
         23.1      Consent of Price Waterhouse LLP, Independent Accountants
 
         23.2      Consent of Price Waterhouse LLP, Independent Accountants
 
         23.3      Consent of Venture Law Group, a Professional Corporation (included in Exhibit 5.1)
 
         24.1      Power of Attorney (see page II-3)
</TABLE>

<PAGE>
                                                                     EXHIBIT 5.1
 
                                          January 8, 1998
 
Yahoo! Inc.
3400 Central Expressway, Suite 201
Santa Clara, CA 95051
 
    REGISTRATION STATEMENT ON FORM S-3
 
Ladies and Gentlemen:
 
    We have examined the Registration Statement on Form S-3 to be filed by you
with the Securities and Exchange Commission on or about January 7, 1998 (the
"Registration Statement") in connection with the registration under the
Securities Act of 1933, as amended, of a total of 850,510 shares of your Common
Stock (the "Shares"), to be sold by certain shareholders listed in the
Registration Statement (the "Selling Shareholders"). As your legal counsel, we
have examined the proceedings taken and are familiar with the proceedings
proposed to be taken by you in connection with the sale of the Shares by the
Selling Shareholders in the manner set forth in the Registration Statement in
the section entitled "Plan of Distribution."
 
    It is our opinion that the Shares, when sold by the Selling Shareholders in
the manner referred to in the Registration Statement, will be legally and
validly issued, fully paid and nonassessable.
 
    We consent to the use of this opinion as an exhibit to the Registration
Statement and further consent to the use of our name wherever it appears in the
Registration Statement and any amendments to it.
 
                                          Sincerely,
                                          VENTURE LAW GROUP
                                          A Professional Corporation
 
                                          /s/ VENTURE LAW GROUP

<PAGE>
                                                                    EXHIBIT 23.1
 
                       CONSENT OF INDEPENDENT ACCOUNTANTS
 
    We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
January 14, 1997, except as to the pooling of interests with Four11 Corporation
which is as of October 20, 1997, which appears as Exhibit 99.1 to the Current
Report on Form 8K/A dated October 14, 1997 (as amended October 30, 1997). We
also consent to the incorporation by reference of our report on the Financial
Statement Schedule, which appears on page 26 of Yahoo! Inc.'s Annual Report on
Form 10-K for the year ended December 31, 1996. We also consent to the reference
to us under the heading "Experts" in such Prospectus.
 
/s/ PRICE WATERHOUSE LLP
 
San Jose, California
January 7, 1998

<PAGE>
                                                                    EXHIBIT 23.2
 
                       CONSENT OF INDEPENDENT ACCOUNTANTS
 
    We hereby consent to the incorporation by reference in the Prospectus
constituting part of this Registration Statement on Form S-3 of our report dated
October 6, 1997, except as to Note 9, which is as of October 20, 1997, on the
financial statements of Four11 Corporation which appears in Item 7(a) of the
Current Report on Form 8-K/A of Yahoo! Inc. dated October 14, 1997 (as amended
October 30, 1997). We also consent to the reference to us under the heading
"Experts" in such Prospectus.
 
/s/ PRICE WATERHOUSE LLP
 
San Jose, California
January 7, 1998


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