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: October 6, 1999



YAHOO! INC.
(Exact name of registrant as specified in its charter)
0-26822
(Commission File Number)



Delaware
 
77-0398689


(State or other jurisdiction of

incorporation or organization)
 
(I.R.S. Employer

Identification No.)



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)








Item 5.  Other Events
    On October 6, 1999, Yahoo! Inc., a Delaware corporation ("Yahoo!") announced its financial results for the three and nine month periods ended
September 30, 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 more thorough discussions of factors affecting
the Company's operating results are included in the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 1998, the Company's Current Report on
Form 8-K/A filed on June 8, 1999, the Company's Registration Statement on Form S-4 filed on June 8, 1999, and the Company's Quarterly Report on
Form 10-Q for the period ended June 30, 1999, and are all filed with the Securities and Exchange Commission.
Item 7.  Financial Statements, Pro Forma Financial Information and Exhibits.


(c)
Exhibits.






 
 
99.1
 
Press Release dated October 6, 1999.









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: October 6, 1999
 
 
 

By:
 

/s/ GARY VALENZUELA   
 Gary Valenzuela

Senior Vice President, Finance and Administration, and Chief Financial Officer









YAHOO! INC.
INDEX TO EXHIBITS



Exhibit Number

 
Description

 
 



99.1
 
Press Release dated October 6, 1999.
 
 

FOR IMMEDIATE RELEASE
Yahoo! Reports Third Quarter 1999 Financial Results
Company Audience Surpasses 100 Million Unique Users Worldwide in September
    SANTA CLARA, Calif.—Oct. 6, 1999—Yahoo! Inc. (Nasdaq: YHOO) today
reported net revenues totaling $155,078,000 for the third quarter ended Sept. 30, 1999, a 134 percent increase over net revenues of $66,290,000 in the third quarter of 1998. Pro forma
net income for the quarter was $40,407,000 or $0.14 per share diluted, excluding merger-related charges incurred in the acquisition of broadcast.com and the effects of amortization of intangible
assets. This compares to pro forma net income of $6,916,000 or $0.02 per share diluted for the same period in 1998, and pro forma net income of $27,060,000 or $0.09 per share diluted in the second
quarter ended June 30, 1999. Net income, including the merger-related charges and effects of amortization of intangible assets for the quarter ended Sept. 30, 1999, was $14,862,000 or
$0.05 per share diluted, compared to a net income of $4,249,000 or $0.01 per share diluted for the comparable period in the previous year. The financial results for all periods presented have been
restated to reflect the acquisition of broadcast.com, which was completed in July 1999.

    "During the quarter, we achieved record levels in terms of revenues, consumer audience, and advertising and merchant clients," said Tim Koogle, chairman and CEO, Yahoo!. "This
performance is the result of the broad, global base of users, clients, and partners we have built and the leverage associated with developing a highly integrated media, commerce, and communications
platform. The strong brand and expansive worldwide presence we have established positions us to continue our leadership role into the 21st century."
Audience Growth and Usage
    Yahoo!'s audience, reach, and traffic continued to increase in the third quarter. More than 105 million unique users worldwide visited the Yahoo! global
network of properties during the month of September 1999. The company's registration base grew to more than 80 million cumulative database registrations for Yahoo!'s member services.
Yahoo!'s combined reach among home and work users increased to a record 63.7 percent in the United States during August 1999, up from 61.9 percent in July 1999 (Media
Metrix). Recent third-party research also ranks Yahoo! the No. 1 Web network in the U.K., Germany, France, Italy, Spain, Japan and Korea. Yahoo! recently launched Yahoo! China
(http://www.yahoo.com.cn) and Yahoo! Mexico (http://www.yahoo.com.mx). The company now has 21 geographic World properties.

    During the month of September 1999, Yahoo!'s traffic increased to an average of 385 million page views per day, compared to an average of 310 million page views
per day in June 1999. Yahoo! Japan's traffic, which is included in the above page view totals, increased to more than 33 million page views per day on average, compared to more than
22 million page views per day in June 1999.

    Yahoo! continued to extend its strategy to build the only place anyone in the world needs to go to find and get connected to anything or anyone and to buy anything. As part of this
strategy, Yahoo! extended its commerce, communications, and media services during the quarter.
Commerce
    In anticipation of the upcoming holiday season, Yahoo! expanded its commerce services platform worldwide. Yahoo! Shopping, launched less than a year ago, has
grown to more than 7,000 merchants and more than 4 million products today. Newly-designed product categories in Yahoo! Shopping now highlight merchant brands, offering increased merchandising
opportunities and easier access for consumers. In addition, Yahoo! recently launched Yahoo! Wallet and Express Checkout to enable consumers to store their credit card information with Yahoo! and
quickly and conveniently purchase products across thousands of merchants. Yahoo! Shopping welcomed numerous brand name merchants during the quarter,

including Art.com, Eddie Bauer, KB Kids, REI, and Patagonia. Yahoo! also launched shopping services in Canada and Japan.

    In addition, the company launched local Yahoo! Auctions services in France, Germany, Italy, Spain, Sweden, Japan and Singapore. Yahoo! now offers localized auction services in 10
countries outside the United States, in seven languages around the world. Yahoo! Auctions (http://auctions.yahoo.com) now features 930,000 products
across 3,600 categories. Yahoo! Classifieds (http://classifieds.yahoo.com) has also grown significantly, featuring more than 2.6 million
listings.

    In support of the company's efforts to provide the leading personal financial services on the Web, Yahoo! teamed with CheckFree and introduced online bill payment services through
Yahoo! Finance (http://finance.yahoo.com) for its users in the United States. In addition, Yahoo! joined with Bank of America and Telebank in the United
States, National Westminster Bank in the United Kingdom, and Openbank in Spain to give Yahoo! Finance and My Yahoo! users secure electronic access to their bank account information.
Communications
    During the quarter, Yahoo! continued to build a broad set of global communications tools in universally-popular areas such as email, instant messaging, and
chat. The company launched Yahoo! Mobile (http://mobile.yahoo.com) to enable users to manage their wireless and mobile communications from one
convenient location. The new service also lets Yahoo! users send customized content from their My Yahoo! preferences to wireless devices, including pagers, data phones, and personal digital
assistants. Yahoo! Mobile features a library of approximately 4,700 downloadable Palm software applications. Yahoo! launched Yahoo! Briefcase
(http://briefcase.yahoo.com), a file-storage and photo-album product allowing individuals to store and share files in one central location
on the Internet. In addition, the company enhanced its Yahoo! Mail service with the launch of Yahoo! Greetings (http://greetings.yahoo.com), a free
electronic greeting card service.
Media
    During the quarter, Yahoo! expanded its media business and further integrated programming throughout its global network. The company completed its acquisition
of broadcast.com and introduced
a new service named Yahoo! Broadcast (http://www.broadcast.com), the comprehensive source for audio and video programming on the Web. In addition, Yahoo! began integrating rich audio and video
programming across its media properties, including Yahoo! News (http://news.yahoo.com), Yahoo! Sports
(http://sports.yahoo.com), Yahoo! Shopping (http://shopping.yahoo.com), Yahoo! Finance
(http://finance.yahoo.com), Yahoo! Digital (http://digital.yahoo.com), and Yahoo! TV Guide
(http://tv.yahoo.com). Yahoo! launched Yahoo! Digital (http://digital.yahoo.com), enabling users to
watch and listen to music broadcasts, and also allowing users to self-publish and sell their own music online. Yahoo! Broadcast also provides Yahoo! the ability to package and distribute
media for corporate clients.

    Yahoo! GeoCities (http://geocities.yahoo.com), one of the world's largest online communities, began offering Yahoo! Pagebuilder, a
point-and-click, drag-and-drop tool, enabling novice users to easily create professional-looking home pages. Yahooligans!
(http://www.yahooligans.com), one of the leading guides on the Web for kids, launched Parents' Guide, delivering safety tips for families, roadmaps to
educational content, and a guide to products that block, filter, or monitor access to Internet content.
Distribution
    Yahoo! continued to expand upon its Yahoo! Everywhere™ strategy to make Yahoo!'s services available to the largest audience of Web users of any
device, from any access point, at any time. In

September, users accessed Yahoo! through 25 million unique IP addresses, representing more than 5,000 different Internet Service Providers of dialup, high speed cable, DSL, and satellite
Internet access in the United States. Sprint PCS Internet-enabled wireless digital phones became available nationwide during the third quarter, offering a range of Yahoo! services to consumers. In
addition, Yahoo! joined forces with Hewlett-Packard to serve as Yahoo!'s strategic channel partner for Corporate My Yahoo!, with HP providing sales, marketing, system integration, and customer support
for Fortune 1000 clients.
Merchant and Advertiser Services
    Yahoo!'s advertiser and merchant base increased to 3,150 clients, including major new accounts and brands such as American Greetings, Conseco Insurance, Fila,
Hard Rock Café, Kellogg's, Nordstrom, Office Max, Sega, Viagra, and Webvan. Yahoo! welcomed several premier merchants, including Ashford.com, eve.com, living.com, Miadora, OnHealth.com,
US SEARCH.com, and WeddingNetwork.com. During the quarter, Yahoo! expanded the marketing services available through its Fusion Marketing Online™ platform with several new highly targeted
programs for advertisers and merchants, including the ability to target with multiple demographics within vertical properties and direct mail campaigns.
About Yahoo!
    Yahoo! Inc. is a global Internet media company that offers a branded network of media, commerce, and communication services to 105 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 also provides online business services designed to enhance Yahoo!'s clients' Web services, including audio and video streaming, store hosting and management,
and Web site tools and services. The company's global Web network includes 21 World properties. Yahoo! has offices in Europe, the Asia Pacific, Latin America, Canada and the United States, and is
headquartered in Santa Clara, Calif.

    This announcement contains forward-looking statements that involve risks and uncertainties, including those relating to the company's ability to grow its user and advertiser bases,
its advertising and commerce revenues, and to continue to generate profits and positive cash flow from operations. Actual results may differ materially from the results predicted and reported results
should not be considered as an indication of future performance. The potential risks and uncertainties include, among others, the company's limited operating history, the increasingly competitive and
constantly changing environment for advertising sales and for Yahoo! branded services, the early stage of the Web as an advertising and commerce medium, the company's dependence on advertising
revenues and on third parties for technology, content, and distribution, and the company's ability to successfully integrate its acquired companies, especially GeoCities and 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, and the Quarterly Report on Form 10-Q for the period ended June 30, 1999, including (without limitation) under the captions, "Management's Discussion
and Analysis of Financial Condition and Results of Operations," and "Risk Factors," which are on file with the Securities and Exchange Commission (http://www.sec.gov). The accompanying condensed
consolidated statements of operations and balance sheets are an integral part of this announcement.

# # #
Yahoo!, the Yahoo! logo, Yahooligans!, Yahoo! Everywhere, 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 Vice President and Chief Financial Officer
 
Director, Corporate Communications


Yahoo! Inc.
 
Yahoo! Inc.


(408) 731-3350
 
(408) 731-3441


investor_relations@yahoo-inc.com
 
diane@yahoo-inc.com






Yahoo! Inc.
Condensed Consolidated Balance Sheets

(in thousands)



 

 
September 30, 1999

 
December 31, 1998

 


 

 
(unaudited)

 
(unaudited)

 


ASSETS
 


Cash, cash equivalents, and investments in marketable debt securities
 
$
790,534
 
$
626,804
 


Accounts receivable, net
 
 
43,886
 
 
34,089
 


Property and equipment, net
 
 
44,529
 
 
31,007
 


Investments in marketable equity securities
 
 
56,004
 
 
1,910
 


Other assets
 
 
120,143
 
 
87,209
 


 
 

 

 


Total assets
 
$
1,055,096
 
$
781,019
 


 
 

 

 


 

 LIABILITIES AND STOCKHOLDERS' EQUITY
 
 


 

Liabilities:
 
 
 
 
 

 
 
 
 
 
 

 
 
 


Accounts payable
 
$
11,225
 
$
9,986
 


Accrued expenses and other liabilities
 
 
82,519
 
 
52,977
 


Deferred revenue
 
 
72,365
 
 
39,796
 


 
 

 

 


Total liabilities
 
 
166,109
 
 
102,759
 


 
 

 

 


Minority interests in consolidated subsidiaries
 
 
2,981
 
 
1,248
 


 
 

 

 


 

Stockholders' equity:
 
 
 
 
 

 
 
 
 
 
 

 
 
 


Common Stock
 
 
919,824
 
 
748,015
 


Accumulated deficit
 
 
(56,291
)
 
(71,861
)


Accumulated other comprehensive income
 
 
22,473
 
 
858
 


 
 

 

 


Total stockholders' equity
 
 
886,006
 
 
677,012
 


 
 

 

 


 
 
$
1,055,096
 
$
781,019
 


 
 

 

 





Note: The results for all periods presented have been restated to reflect the acquisition of broadcast.com which was completed during the quarter ended September 30, 1999 and
accounted for as a pooling of interests.



Yahoo! Inc.
Unaudited Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)



 

 
Three Months Ended

September 30,

 
Nine Months Ended

September 30,

 


 

 
1999

 
1998

 
1999

 
1998

 


Net revenues
 
$
155,078
 
$
66,290
 
$
387,525
 
$
153,823
 


 

Cost of revenues
 
 
 
 
 

23,696
 
 
 
 
 

12,653
 
 
 
 
 

65,130
 
 
 
 
 

32,785
 
 


Amortization of purchased technology
 
 
2,500
 
 
1,462
 
 
7,174
 
 
1,879
 


 
 

 

 

 

 


Total cost of revenues
 
 
26,196
 
 
14,115
 
 
72,304
 
 
34,664
 


 
 

 

 

 

 


Gross profit
 
 
128,882
 
 
52,175
 
 
315,221
 
 
119,159
 


 
 

 

 

 

 


Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 
 


Sales and marketing
 
 
53,274
 
 
32,908
 
 
144,247
 
 
82,079
 


Product development
 
 
16,224
 
 
8,628
 
 
44,806
 
 
23,090
 


General and administrative
 
 
8,197
 
 
6,309
 
 
25,173
 
 
15,659
 


Amortization of intangibles
 
 
3,477
 
 
869
 
 
10,139
 
 
1,159
 


Other—non-recurring costs(1)
 
 
22,125
 
 
336
 
 
88,487
 
 
15,336
 


 
 

 

 

 

 


Total operating expenses
 
 
103,297
 
 
49,050
 
 
312,852
 
 
137,323
 


 
 

 

 

 

 


Income (loss) from operations
 
 
25,585
 
 
3,125
 
 
2,369
 
 
(18,164
)


 

Investment income, net
 
 
 
 
 

10,018
 
 
 
 
 

6,665
 
 
 
 
 

26,691
 
 
 
 
 

10,967
 
 


Minority interests in operations of consolidated subsidiaries
 
 
(569
)
 
10
 
 
(1,733
)
 
365
 


 
 

 

 

 

 


Income (loss) before income taxes
 
 
35,034
 
 
9,800
 
 
27,327
 
 
(6,832
)


 

Provision for income taxes(2)
 
 
 
 
 

20,172
 
 
 
 
 

5,551
 
 
 
 
 

10,932
 
 
 
 
 

9,682
 
 


 
 

 

 

 

 


Net income (loss)
 
$
14,862
 
$
4,249
 
$
16,395
 
$
(16,514
)


 
 

 

 

 

 


Net income (loss) per share—diluted(3)
 
$
0.05
 
$
0.01
 
$
0.06
 
$
(0.08
)


 
 

 

 

 

 


Shares used in per share calculation—diluted
 
 
296,336
 
 
279,842
 
 
296,860
 
 
211,669
 


 
 

 

 

 

 





(1)

Non-recurring costs consist of the following:

  •  During the quarter ended September 30, 1999, $22,125,000 was incurred in connection with the acquisition of broadcast.com.
  •  During the quarter ended June 30, 1999, $53,500,000 was incurred in connection with the acquisition of GeoCities, $1,525,000 was
incurred in connection (with) the relocation of GeoCities employees, and an aggregate of $1,100,000 was incurred in connection with the acquisitions of Encompass and Online Anywhere.
  •  During the quarter ended March 31, 1999, $9,775,000 of in-process research and development was incurred in connection with the
acquisition of a (development) stage Internet software company and $462,000 was incurred in connection with the acquisition of Net Roadshow.
  •  During the quarter ended September 30, 1998, $336,000 was incurred in connection with the acquisition of SimpleNet.
  •  During the quarter ended June 30, 1998, $15,000,000 of in-process research and development was incurred in connection with the
acquisition of Viaweb Inc.


(2)

During the quarter ended June 30, 1999, the Company released its valuation allowance on certain acquired net operating losses as a result of a change in tax regulations
resulting in a tax benefit. The tax provision also includes the effect of nondeductible acquisition-related costs.


(3)

The calculation for the 1998 periods includes the accretion of mandatory redeemable convertible preferred stock.


Note: The results for all periods presented have been restated to reflect the acquisition of broadcast.com which was completed during the quarter ended
September 30, 1999 and accounted for as a pooling of interests.



Yahoo! Inc.
Unaudited Pro Forma Condensed Consolidated Statements of Operations

(in thousands, except per share amounts)



 

 
Three Months Ended

September 30,

 
Nine Months Ended

September 30,



 

 
1999

 
1998

 
1999

 
1998



Net revenues
 
$
155,078
 
$
66,290
 
$
387,525
 
$
153,823


Cost of revenues
 
 
23,696
 
 
12,653
 
 
65,130
 
 
32,785


 
 

 

 

 



Gross profit
 
 
131,382
 
 
53,637
 
 
322,395
 
 
121,038


 
 

 

 

 



Operating expenses:
 
 
 
 
 
 
 
 
 
 
 
 


Sales and marketing
 
 
53,274
 
 
32,908
 
 
144,247
 
 
82,079


Product development
 
 
16,224
 
 
8,628
 
 
44,806
 
 
23,090


General and administrative
 
 
8,197
 
 
6,309
 
 
25,173
 
 
15,659


 
 

 

 

 



Total operating expenses
 
 
77,695
 
 
47,845
 
 
214,226
 
 
120,828


 
 

 

 

 



Income from operations
 
 
53,687
 
 
5,792
 
 
108,169
 
 
210


 

Investment income, net
 
 
 
 
 

10,018
 
 
 
 
 

6,665
 
 
 
 
 

26,691
 
 
 
 
 

10,967


Minority interests in operations of consolidated subsidiaries
 
 
(569
)
 
10
 
 
(1,733
)
 
365


 
 

 

 

 



Income before income taxes
 
 
63,136
 
 
12,467
 
 
133,127
 
 
11,542


 

Provision for income taxes
 
 
 
 
 

22,729
 
 
 
 
 

5,551
 
 
 
 
 

47,926
 
 
 
 
 

9,682


 
 

 

 

 



Pro forma net income
 
$
40,407
 
$
6,916
 
$
85,201
 
$
1,860


 
 

 

 

 



Pro forma net income per share—diluted
 
$
0.14
 
$
0.02
 
$
0.29
 
$
0.01


 
 

 

 

 



Shares used in per share pro forma calculation—diluted
 
 
296,336
 
 
279,842
 
 
296,860
 
 
269,521


 
 

 

 

 





Note: The above unaudited pro forma condensed consolidated statements of operations exclude the effects of the following:

  •  During the quarter ended September 30, 1999, $22,125,000 was incurred in connection with the acquisition of broadcast.com.
  •  During the quarter ended June 30, 1999, $53,500,000 was incurred in connection with the acquisition of GeoCities, $1,525,000 was
incurred (in) connection with the relocation of GeoCities employees, and an aggregate of $1,100,000 was incurred in connection with the acquisitions of Encompass and Online Anywhere.
  •  During the quarter ended March 31, 1999, $9,775,000 of in-process research and development was incurred in connection with the
acquisition of a development stage Internet software company and $462,000 was incurred in connection with the acquisition of Net Roadshow.
  •  During the quarter ended September 30, 1998, $336,000 was incurred in connection with the acquisition of SimpleNet.
  •  During the quarter ended June 30, 1998, $15,000,000 of in-process research and development was incurred in connection with the
acquisition of Viaweb Inc.
  •  Amortization of purchased technology and goodwill and the accretion of mandatory redeemable convertible preferred stock.
The above also assumes a 36% effective tax rate for the pro forma presentation of the three and nine month periods ended September 30, 1999.

Note: The results for all periods presented have been restated to reflect the acquisition of broadcast.com which was completed during the quarter ended
September 30, 1999 and accounted for as a pooling of interests.