<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
DATE OF REPORT: April 7, 1999
----------------------
YAHOO! INC.
(Exact name of registrant as specified in its charter)
0-26822
(Commission File Number)
CALIFORNIA 77-0398689
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3420 CENTRAL EXPRESSWAY
SANTA CLARA, CALIFORNIA 95051
(Address of principal executive offices, with zip code)
(408) 731-3300
(Registrant's telephone number, including area code)
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ITEM 5. OTHER EVENTS
On April 7, 1999, Yahoo! Inc., a California corporation ("Yahoo!") announced
its financial results for the quarter ended March 31, 1999. A copy of
Yahoo!'s press release announcing these financial results is attached as
Exhibit 99.1 hereto and incorporated by reference herein.
The press release filed as an exhibit to this report includes "safe harbor"
language, pursuant to the Private Securities Litigation Reform Act of 1995,
indicating that certain statements about the Company's business contained in the
press release are "forward-looking" rather than "historic." The press release
also states that a more thorough discussion of factors affecting the Company's
operating results is included in the Company's Annual Report on Form 10-K for
the fiscal year ended December 31, 1998, filed with the Securities and Exchange
Commission.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
99.1 Press Release dated April 7, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
YAHOO! INC.
Date: April 8, 1999 By: /s/ Gary Valenzuela
--------------------------------------
Gary Valenzuela
Senior Vice President, Finance and
Administration, and Chief Financial Officer
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YAHOO! INC.
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit Number Description
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<S> <C>
99.1 Press Release dated April 7, 1999.
</TABLE>
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FOR IMMEDIATE RELEASE
YAHOO! REPORTS PROFITABLE FIRST QUARTER
COMPANY POSTS $86 MILLION IN REVENUES AND $0.11 PRO FORMA EPS
SANTA CLARA, CALIF. - APRIL 7, 1999 - Yahoo! Inc. (NASDAQ: YHOO) today
reported net revenues totaling $86,064,000 for the first quarter ended March 31,
1999, nearly triple the revenues of $30,596,000 reported in the comparable
period of the previous year. Revenues for the first quarter ended March 31,
1999 represent a 13 percent increase over revenues of $76,410,000 reported in
the fourth quarter ended Dec. 31, 1998. Pro forma net income for the quarter
was $25,142,000 or $0.11 per share diluted, excluding the effects of
amortization of intangible assets and a one-time charge for in-process research
and development. This compares to net income of $3,270,000 or $0.02 per share
diluted for the comparable period in the previous year, and pro forma net income
of $25,043,000 or $0.11 per share diluted in the fourth quarter ended Dec. 31,
1998, excluding the effects of amortization of intangible assets and $4,400,000
of one-time charges.
Including the amortization of intangibles and the one-time charge, net
income for the first quarter ended March 31, 1999 was $16,435,000 or $0.07 per
share diluted, compared to net income of $3,270,000 or $0.02 per share diluted
reported in the comparable period of the previous year. Net income for the
fourth quarter ended Dec. 31, 1998, was $18,524,000 or $0.08 per share diluted,
including the amortization of intangible assets and one-time charges.
During the first quarter, Yahoo! announced definitive agreements to acquire
GeoCities and broadcast.com. Through its acquisition of GeoCities, Yahoo! will
gain access to one of the world's largest online communities. Yahoo!'s
acquisition of broadcast.com is expected to expand Yahoo!'s multimedia content
offerings for users, and provide additional distribution for content and
services partners and enhanced services for advertisers and businesses. The
GeoCities and broadcast.com acquisitions are expected to close in the second and
third quarters, respectively, and are not included in Yahoo!'s financial results
reported today.
"We continue to see strong organic growth across our global network of
media properties," said Tim Koogle, chairman and CEO of Yahoo!. "During the
quarter, we were proactive in further establishing Yahoo!'s leadership position
for the future, including our announced acquisitions of GeoCities and
broadcast.com. We expect both of these acquisitions, which are not reflected in
our first quarter results, to add substantially to the breadth of services we
offer our global users, and advertising, merchant and business partners."
AUDIENCE GROWTH AND USAGE
Yahoo!'s audience growth rate in February (+5.4 percent) was the fastest
among the top ten Web sites, and twice the growth rate of the Web overall.
Yahoo!'s reach continues to grow across its network. The Yahoo! network of
properties is ranked No. 1 in reach among work
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YAHOO! REPORTS FIRST QUARTER PROFIT/PAGE 2
users (53.4 percent), No. 2 in home reach (44.1 percent) and No. 2 in combined
work/home reach (51.8 percent). These findings, which are from Media Metrix's
February 1999 research, do not include GeoCities and broadcast.com.
During the month of March 1999, traffic on the Yahoo! global network of
properties grew to an average of 235 million page views per day, compared to an
average of 167 million page views per day in December 1998. Yahoo! Japan's
traffic, which is included in the above page view totals, increased to more than
17 million page views per day during the month of March 1999 from more than 13
million per day in December 1998. A page view is defined as one electronic page
of information displayed in response to a user request.
Yahoo! today also announced that its registration base increased to 47
million unique registrations for Yahoo!'s registered member services, including
shopping, auctions, classifieds, email, clubs, calendar, My Yahoo!
(http://my.yahoo.com), and more.
In the first quarter, Yahoo! continued to deliver on its 'Yahoo!
Everywhere' strategy and significantly expanded its distribution through an
array of domestic and global agreements. Yahoo! announced plans to further
extend its services beyond the desktop through relationships with PageNet and
Online Anywhere. Yahoo! and PageNet, a leader in wireless messaging and
information, intend to make Yahoo! (www.yahoo.com), My Yahoo!, Yahoo! Mail
(http://mail.yahoo.com) and Yahoo! Calendar (http://calendar.yahoo.com) services
available nationwide on PageNet pagers and other wireless devices. Through a
relationship with Online Anywhere, Yahoo! intends to employ Online Anywhere's
Author Once, View Anywhere-TM- service to optimize and deliver content and
services to personal digital assistants and TV-based Internet appliances
nationwide. Yahoo! continued to expand its presence on most popular PC desktops.
Building on its prior quarter announcements, the company added distribution
alliances with Compaq Europe, Gateway, Hewlett-Packard, IBM, Micron Electronics,
and Toshiba. In addition, Yahoo! Germany (www.yahoo.de) and Mannesmann Arcor
unveiled a pay-as-you-go Internet access service, called Yahoo! Online, which is
expected to launch in the second quarter.
Yahoo! entered a marketing agreement with News Corporation in the first
quarter and kicked off a national network and cable TV advertising program,
including tie-ins between Yahoo! and multiple Fox media divisions.
NETWORK PROGRAMMING AND SERVICES
During the quarter, Yahoo! expanded its Web programming for users. The
company launched three new properties in Asia, including Yahoo! Singapore
(www.yahoo.com.sg), Yahoo! Taiwan (www.yahoo.com.tw), and Yahoo! Hong Kong
(www.yahoo.com.hk and www.english.yahoo.com.hk).
Yahoo! also expanded its suite of services for small businesses during the
first quarter. Yahoo! Site (http://site.yahoo.com) is a new service offering
businesses a fast and easy way to create professional-quality Web sites and
immediately begin marketing their business online.
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YAHOO! REPORTS FIRST QUARTER PROFIT/PAGE 3
For $29.95 per month, individuals have up to 25 Mb of storage space to create a
Web presence hosted by Yahoo! using a simple site-builder tool. Yahoo! Site
also provides a suite of tracking and reporting tools providing comprehensive
information on how the business' site is doing and offers an easy upgrade path
to Yahoo! Store. Yahoo! also launched Business Express
(http://www.yahoo.com/info/suggest/busexpress.html), offering all
commerce-enabled, online stores expedited consideration for Web site inclusion
in the main Yahoo! directory for a one-time, non-refundable fee of $199. With
Yahoo!'s new Connected Office service (http://connected.clubs.yahoo.com/office),
small companies can create their own internal communication hub and Intranet,
including private communications tools, a shared company calendar and
customizable business news and information.
Merchants continue to join Yahoo! Shopping (http://shopping.yahoo.com),
which added more than 1,100 new online stores during the quarter. Through
relationships with Banc One Payment Services and First Data Merchant Services
Corporation, Yahoo! now provides Yahoo! Store participants with a convenient and
cost-effective way to set up a merchant account, begin accepting credit card
payments, and process credit-card transactions in a secure, fast and reliable
environment over the Internet.
During the quarter, Yahoo! Auctions (http://auctions.yahoo.com) gave
individuals the opportunity to listen, watch and/or bid real-time online
simultaneously with bidders in physical galleries by co-hosting a large
Entertainment Memorabilia auction. Yahoo! introduced photo albums for Yahoo!
Clubs (http://clubs.yahoo.com), Yahoo!'s online community building service. The
company launched Yahoo! Finance Tax Center (http://biz.yahoo.com/taxes/), a
comprehensive resource to help users solve tax dilemmas year-round, and Yahoo!
Entertainment (http://entertainment.yahoo.com), an expanded centralized source
for television, movie, and music news and information. Yahoo! also launched
Yahoo! Sports Fantasy Baseball (http://fantasy.yahoo.com/baseball), enabling
fans to manage their own fantasy team using real-life stats and results of
today's big league stars.
MERCHANT AND ADVERTISER SERVICES
During the quarter, Yahoo! launched Fusion Marketing Online-TM- (FMO), an
expanded, integrated marketing program for clients worldwide. FMO builds on the
strengths of Yahoo!'s advertising and merchant programs and leverages Yahoo!'s
worldwide audience, traffic and user preferences database to provide customized
and measurable marketing solutions. Major new advertisers during the quarter
included ABC.com, Claritin, Daimler-Benz, Gillette, Hasbro Interactive, Nestle,
and Quest Communications.
ABOUT YAHOO!
Yahoo! Inc. is a global Internet media company that offers a branded
network of comprehensive information, communication and shopping services to 60
million users worldwide. As the first online navigational guide to the Web,
www.yahoo.com is the leading guide in terms of traffic, advertising, household
and business user reach, and is one of the most recognized brands associated
with the Internet. The company's global Web network includes 18 world
properties. Yahoo! has offices in Europe, the Asia Pacific, South America,
Canada and the United States, and is headquartered in Santa Clara, Calif.
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YAHOO! REPORTS FIRST QUARTER PROFIT/PAGE 4
This announcement contains forward-looking statements that involve risks
and uncertainties, including those relating to the company's ability to grow its
user and advertiser bases, its advertising and commerce revenues, and to
continue to generate profits and positive cash flow from operations. Actual
results may differ materially from the results predicted and reported results
should not be considered as an indication of future performance. The potential
risks and uncertainties include, among others, the company's limited operating
history, the increasingly competitive and constantly changing environment for
advertising sales and for Yahoo! branded services, the early stage of the Web as
an advertising and commerce medium, the company's dependence on advertising
revenues and on third parties for technology, content and distribution, and the
company's ability to successfully integrate its acquired companies, especially
GeoCities and broadcast.com. More information about potential factors that
could affect the company's business and financial results is included in the
company's Annual Report on Form 10-K for the year ended Dec. 31, 1998 including
(without limitation) under the captions, "Management's Discussion and Analysis
of Financial Condition and Results of Operations," "Risk Factors,"
"Competition," and "Proprietary Rights," which is on file with the Securities
and Exchange Commission (http://www.sec.gov). The accompanying condensed
consolidated statements of operations and balance sheets are an integral part of
this announcement.
# # #
Yahoo!, the Yahoo! logo and Fusion Marketing Online are trademarks and/or
registered trademarks of Yahoo! Inc.
All other names are trademarks and/or registered trademarks of their respective
owners.
CONTACTS:
GARY VALENZUELA DIANE HUNT
Senior VP and Chief Financial Officer Director, Corporate Communications
Yahoo! Inc. Yahoo! Inc.
(408) 731-3350 (408) 731-3441
[email protected] [email protected]
<PAGE>
YAHOO! INC.
Unaudited Pro Forma Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
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1999 1998
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<S> <C> <C>
Net revenues $ 86,064 $ 30,596
Cost of revenues 8,347 4,294
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Gross profit 77,717 26,302
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Operating expenses:
Sales and marketing 32,299 16,653
Product development 8,964 4,764
General and administrative 3,456 2,227
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Total operating expenses 44,719 23,644
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Income from operations 32,998 2,658
Investment income, net 6,615 1,440
Minority interests in operations
of consolidated subsidiaries (325) 243
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Income before income taxes 39,288 4,341
Provision for income taxes 14,146 1,071
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Pro forma net income $ 25,142 $ 3,270
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Pro forma net income per share - diluted $ 0.11 $ 0.02
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Weighted average common shares and
equivalents used in per share calculation - diluted 237,111 213,866
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</TABLE>
Note: The above pro forma condensed consolidated statement of operations for
the three months ended March 31, 1999 excludes the effects of $9,775,000
of in-process research and development incurred in connection with the
acquisition of a development stage Internet software company during
January 1999, $2,570,000 for the amortization of intangible assets, and
the related tax effects of such items.
<PAGE>
YAHOO! INC.
Unaudited Condensed Consolidated Statements of Operations
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------------
1999 1998
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<S> <C> <C>
Net revenues $ 86,064 $ 30,596
Cost of revenues 8,347 4,294
Amortization of purchased technology 1,350 -
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Total cost of revenues 9,697 4,294
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Gross profit 76,367 26,302
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Operating expenses:
Sales and marketing 32,299 16,653
Product development 8,964 4,764
General and administrative 3,456 2,227
Amortization of intangibles 1,220 -
Other - non-recurring costs (1) 9,775 -
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Total operating expenses 55,714 23,644
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Income from operations 20,653 2,658
Investment income, net 6,615 1,440
Minority interests in operations
of consolidated subsidiaries (325) 243
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Income before income taxes 26,943 4,341
Provision for income taxes 10,508 1,071
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Net income $ 16,435 $ 3,270
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Net income per share - diluted $ 0.07 $ 0.02
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Weighted average common shares and equivalents
used in per share calculation - diluted 237,111 213,866
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</TABLE>
(1) Non-recurring costs consist of $9,775,000 of in-process research and
development incurred in connection with the acquisition of a development stage
Internet software company during January 1999.
<PAGE>
YAHOO! INC.
Condensed Consolidated Balance Sheets
(in thousands)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1999 1998
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(UNAUDITED) (AUDITED)
<S> <C> <C>
ASSETS
Cash, cash equivalents, and investments
in marketable debt securities $ 524,351 $ 482,426
Accounts receivable, net 26,876 24,831
Property and equipment, net 19,925 15,189
Investments in marketable equity securities 130,493 41,339
Other assets 90,034 58,099
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Total assets $ 791,679 $ 621,884
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LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable $ 8,467 $ 6,504
Note payable 9,000 -
Accrued expenses and other liabilities 43,572 39,621
Deferred revenue 45,498 38,301
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Total liabilities 106,537 84,426
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Minority interests in consolidated subsidiaries 1,573 1,248
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Shareholders' equity:
Common Stock 598,257 523,020
Retained earnings (accumulated deficit) 7,993 (8,442)
Accumulated other comprehensive income 77,319 21,632
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Total shareholders' equity 683,569 536,210
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$ 791,679 $ 621,884
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</TABLE>
