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YAHOO! REPORTS FIRST QUARTER 2009 RESULTS

April 21, 2009

Company Exceeds Midpoint of Operating Cash Flow Outlook Range

Maintains Strong Balance Sheet with $3.7 Billion in Cash and Marketable Debt
Securities

SUNNYVALE, Calif., (RPRN) April 21, 2009 – Yahoo! Inc. (NASDAQ: YHOO) today reported revenues of $1,580 million for the quarter ended March 31, 2009, a decrease of 13
percent from the first quarter of 2008. Excluding the impact of currency rate fluctuations,
revenues for the first quarter of 2009 would have declined 8 percent from the first quarter
of 2008. The Company’s non-GAAP operating cash flow for the first quarter of 2009 of
$409 million exceeded the midpoint of the outlook range provided by the Company last
quarter.
Marketing services revenues declined 12 percent and fees revenues declined 20
percent. As expected, revenues were reduced by the effects of currency rate
fluctuations, the sale of Kelkoo and lower fees revenues from broadband partnerships,
voice-over IP services and subscription music offerings. Excluding the effects of these
items, revenues would have declined 3 percent. Net income per diluted share in the first
quarter of 2009 was $0.08, compared to $0.37 in the first quarter of 2008. Net income
for the first quarter of 2008 included a non-cash gain of $401 million, or $0.29 per diluted
share, related to Alibaba Group’s initial public offering of Alibaba.com, net of tax. Non-
GAAP net income per diluted share in the first quarter of 2009 was $0.15, compared to
non-GAAP net income of $0.18 per diluted share in the first quarter of 2008. Non-GAAP
net income per diluted share excludes stock-based compensation expense, costs for
advisors, restructuring charges, net, and the non-cash gain related to Alibaba.com.
“Yahoo! is not immune to the ongoing economic downturn, but careful cost management
in the first quarter allowed our operating cash flow to come in near the high end of our
outlook range,” said Yahoo! chief executive officer Carol Bartz. “While we experienced
pressure in both display and search advertising in the first quarter, we believe Yahoo!
remains one of the most compelling advertising buys on the Internet. With our leading
audience properties, substantial reach and innovative advertising solutions, we are
confident Yahoo!




Financial Highlights
GAAP Results (in millions, except per share amounts)
Q1 2008 Q1 2009 Change
Revenues $1,818 $1,580 (13%)
Income from operations $121 $101 (17%)
Net income $537 $118 (78%)
Net income per diluted
share $0.37 $0.08 (78%)
Non-GAAP Results (in millions, except per share amounts)
Q1 2008 Q1 2009 Change
Operating cash flow $433 $409 (6%)
Non-GAAP net income $246 $206 (16%)
Non-GAAP net income
per diluted share $0.18 $0.15 (17%)
“Yahoo!’s balance sheet remains strong, and we are continuing to generate free cash
flow which provides us with the flexibility to make strategic investments in key talent,
platforms, products and infrastructure, even during this economic downturn,” said
Yahoo! chief financial officer Blake Jorgensen. “We also are making selective
adjustments to our spending to accelerate those strategic investments.”
Revenues
􀂃 Marketing services revenues from Owned and Operated sites were $872 million
for the first quarter of 2009, a 10 percent decrease compared to $966 million for
the same period of 2008. The decrease was driven by a 3 percent decline in
search advertising revenue and a 13 percent decline in display advertising
revenue.
􀂃 Marketing services revenues from Affiliate sites were $511 million for the first
quarter of 2009, a 16 percent decrease compared to $606 million for the same
period of 2008. The decrease was driven primarily by Yahoo!’s efforts to improve
traffic quality and lower revenue per search.
Cash Flow and Cash Balance
􀂃 Cash flow from operating activities for the first quarter of 2009 was $262 million,
a 67 percent decrease compared to $786 million in the same period of 2008.
Cash flow from operating activities for the first quarter of 2008 included a $350
million one-time payment from AT&T Inc.
􀂃 Free cash flow for the first quarter of 2009 was $214 million, a 67 percent
decrease compared to $647 million in the same period of 2008. Free cash flow
for the first quarter of 2008 included a $350 million one-time payment from AT&T
Inc.
􀂃 Cash, cash equivalents and investments in marketable debt securities were
$3,691 million at March 31, 2009 compared to $3,522 million at December 31,
2008, an increase of $169 million.

Cost Initiatives
To allow flexibility for accelerated strategic investments and targeted hiring in its core
operations, Yahoo! expects to reduce its number of current employees worldwide by
approximately five percent. The majority of impacted employees are expected to be
notified within the next two weeks. The Company is also continuing to implement nonheadcount
cost reductions.
Business Outlook
GAAP revenue for the second quarter of 2009 is expected to be in the range of $1,425
million to $1,625 million. Non-GAAP operating income before depreciation, amortization,
and stock-based compensation expense for the second quarter of 2009 is expected to
be in the range of $375 million to $425 million. Income from operations for the second
quarter of 2009 is expected to be in the range of $80 million to $90 million.
Conference Call
Yahoo! will host a conference call to discuss first quarter 2009 results at 5:00 p.m.
Eastern Time today. A live webcast of the conference call, together with supplemental
financial information, can be accessed through the Company's Investor Relations
website at http://yhoo.client.shareholder.com/results.cfm. In addition, an archive of the
webcast can be accessed through the same link. An audio replay of the call will be
available for one week following the conference call by calling (888) 286-8010 or (617)
801-6888, reservation number: 29476596.
Note Regarding Non-GAAP Financial Measures
This press release and its attachments include the following financial measures defined
as non-GAAP financial measures by the Securities and Exchange Commission (“SEC”):
revenues excluding traffic acquisition costs or TAC; operating income before
depreciation, amortization, and stock-based compensation expense (also referred to as
operating cash flow); free cash flow; and non-GAAP net income and non-GAAP net
income per share. These measures may be different from non-GAAP financial
measures used by other companies. The presentation of this financial information is not
intended to be considered in isolation or as a substitute for the financial information
prepared and presented in accordance with generally accepted accounting principles
(“GAAP”). Explanations of the Company’s non-GAAP financial measures and
reconciliations of these financial measures to the GAAP financial measures the
Company considers most comparable are included in the accompanying “Note to
Unaudited Condensed Consolidated Statements of Income,” “Reconciliations to
Unaudited Condensed Consolidated Statements of Income,” “Reconciliation of GAAP
Net Income and GAAP Net Income Per Share to Non-GAAP Net Income and Non-GAAP
Net Income Per Share” and “Business Outlook

About Yahoo!
Yahoo! Inc. (“Yahoo!” or the “Company”) is a leading global Internet brand and one of
the most trafficked Internet destinations worldwide. Yahoo! is focused on powering its
communities of users, advertisers, publishers, and developers by creating indispensable
experiences built on trust. Yahoo! is headquartered in Sunnyvale, California. For more
information, visit pressroom.yahoo.com or the Company’s blog, Yodel Anecdotal.
“Owned and Operated sites” refers to Yahoo!’s owned and operated online properties
and services.
“Affiliate sites” refers to Yahoo!'s distribution network of third-party entities who have
integrated Yahoo!'s advertising offerings into their websites or their other offerings.
This press release and its attachments contain forward-looking statements that involve
risks and uncertainties concerning Yahoo!'s expected financial performance (including
without limitation the statements and information in the Business Outlook section and the
quotations from management in this press release), as well as Yahoo!'s strategic and
operational plans. 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 impact of management and
organizational changes; the implementation and results of Yahoo!'s ongoing strategic
and cost reduction initiatives; Yahoo!'s ability to compete with new or existing
competitors; reduction in spending by, or loss of, marketing services customers; the
demand by customers for Yahoo!'s premium services; acceptance by users of new
products and services; risks related to joint ventures and the integration of acquisitions;
risks related to Yahoo!'s international operations; failure to manage growth and
diversification; adverse results in litigation, including intellectual property infringement
claims; Yahoo!'s ability to protect its intellectual property and the value of its brands;
dependence on key personnel; dependence on third parties for technology, services,
content, and distribution; general economic conditions and changes in economic
conditions; the possibility that third parties may in the future make proposals to acquire
all or a part of Yahoo! or take other actions which may create uncertainty for our
employees, publishers, advertisers, and other business partners; and the possibility of
significant costs of defense, indemnification, and liability resulting from stockholder
litigation. All information set forth in this press release and its attachments is as of April
21, 2009. Yahoo! does not intend, and undertakes no duty, to update this information to
reflect future events or circumstances. More information about potential factors that
could affect the Company's business and financial results is included under the captions
"Risk Factors" and "Management's Discussion and Analysis of Financial Condition and
Results of Operations" in the Company's Annual Report on Form 10-K for the year
ended December 31, 2008, which is on file with the SEC and available on the SEC's
website at www.sec.gov. Additional information will also be set forth in those sections in
Yahoo!’s Quarterly Report on Form 10-Q for the quarter ended March 31, 2009, which
will be filed with the SEC in the second quarter of 2009.
Yahoo! and the Yahoo! logos are trademarks and/or registered trademarks of Yahoo!
Inc. All other names are trademarks and/or registered trademarks of their respective
owners.




Media Relations Contacts:
Brad Williams, Yahoo! Inc., (408) 349-7069, bhw@yahoo-inc.com
Kim Rubey, Yahoo! Inc., (408) 349-8910, krubey@yahoo-inc.com


Investor Relations Contact:
Cathy La Rocca, Yahoo! Inc., (408) 349-5188, cathy@yahoo-inc.com

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