SUNNYVALE, Calif. - April 9, 2003 - Yahoo! Inc. (Nasdaq: YHOO) today reported results for the first quarter ended March 31, 2003. Net revenues for the first quarter totaled $282.9 million, a 47 percent increase over the $192.7 million reported in the same period in 2002. Net income for the first quarter of 2003 was $0.08 per diluted share, compared to a net loss of $0.09 per diluted share for same period of 2002.

"The path of steady execution and growth we established last year continues into 2003 with particular emphasis on product quality, innovation and client service," said Terry Semel, chairman and CEO, Yahoo! Inc. "Our results this quarter reflect the strong performance of our marketing services businesses, as well as continued success in providing fee-based services to both individual consumers and businesses. We intend to maintain our focus on providing the best experience on the Web, which we believe will lead to increased user engagement and ultimately greater success for our company."


Business Outlook

"Steadfast focus on our financial mission to maximize long-term free cash flow has resulted in great progress on our key financial benchmarks of revenue per user and revenue per employee, as demonstrated by our first quarter results. We will continue to focus on these objectives in an effort to achieve strong and growing profitability and to drive sustainable long-term growth," said Susan Decker, chief financial officer, Yahoo! Inc. "Given the positive results we saw in the quarter and our current outlook for the remaining nine months, and including the expected contribution from the acquisition of Inktomi, we are upwardly revising our revenue and EBITDA outlook for the full year 2003. We are also introducing a full year free cash flow outlook." Please refer to the "Notes to Unaudited Condensed Consolidated Statements of Operations" attached to this press release for our business outlook.


First Quarter 2003 Financial Highlights

Revenues: In the first quarter of 2003, Yahoo! reported net revenues of $282.9 million, a 47 percent increase from the same period in 2002.

Marketing services revenues totaled $190.0 million, a 38 percent increase from the same period in 2002. This increase resulted from a combination of a strong increase in revenues from Yahoo!'s sponsored search services, as well as growth in the balance of Yahoo!'s global marketing services revenues.

Fees revenues totaled $63.7 million, a 61 percent increase compared to the same period in 2002. This increase was primarily driven by the growth in paying customers for Yahoo!'s premium services, including the new SBC Yahoo! DSL and Dial products, Yahoo! Personals, and our communications suite of premium services.

Listings revenues totaled $29.3 million, an 89 percent increase compared to the same period in 2002. This increase was driven primarily by the incremental contribution of revenue from HotJobs, which was acquired in February 2002.

Operating Income (Loss): Operating income for the first quarter of 2003 totaled $55.0 million, compared to an operating loss of $4.2 million in the same period of 2002. The substantial increase from operating loss to operating profit reflects strong growth in revenue and only a 16% increase in costs on a year over year basis. Operating income was 19% of total revenues in the first quarter of 2003 compared to an operating loss of 2% of revenues for the same period of 2002.

Depreciation and Amortization: Depreciation expense for the first quarter of 2003 was $23.3 million, a $3.8 million increase compared to the same period in 2002. The increase primarily resulted from the exercise of the purchase option of the synthetic lease for our headquarters and additional depreciation expense related to HotJobs, which was acquired in February 2002. Amortization expense for the first quarter of 2003 was $5.7 million, a $2.3 million increase from the same period in 2002, primarily as a result of the HotJobs acquisition.

EBITDA: Earnings before interest, taxes, depreciation and amortization ("EBITDA") for the first quarter of 2003 was $84.1 million, a 348% increase compared to the $18.8 million reported in the same period of 2002. EBITDA margins were 30% of total revenues in the first quarter of 2003 compared to 10% in the same period of 2002. The increase in EBITDA reflects our strong revenue growth and the results of our ongoing cost discipline.
Net Income: Net income for the first quarter of 2003 was $46.7 million or $0.08 per diluted share, compared with income before the cumulative effect of accounting change of $10.5 million or $0.02 per diluted share for the same period of 2002. Net loss was $53.6 million or $0.09 per diluted share for the first quarter of 2002, including the charge of $64.1 million for the cumulative effect of the accounting change for the implementation of Statement of Financial Accounting Standard No. 142 ("SFAS 142"). SFAS 142, which the Company adopted January 1, 2002, requires companies to assess the goodwill recorded from previous acquisitions, and as necessary, record an impairment charge that does not affect cash or the Company's operations.

Quarterly Conference Call

Yahoo! will host a conference call to discuss first quarter 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 Web site at http://yhoo.client.shareholder.com/earnings.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 48 hours following the conference call by calling 877-213-9653 or 630-652-3041, reservation number: 7011885.


About Yahoo!

Yahoo! Inc. is a leading provider of comprehensive online products and services to consumers and businesses worldwide. Yahoo! is the No. 1 Internet brand globally and the most trafficked Internet destination worldwide. Headquartered in Sunnyvale, Calif., Yahoo!'s global network includes 25 World properties and is available in 13 languages.



This press release and its attachments contain forward-looking statements that involve risks and uncertainties concerning Yahoo!'s expected financial performance (as described without limitation in the Business Outlook section and 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, decreases or delays in advertising spending; the actual increases in demand by customers for Yahoo!'s premium and enterprise services; acceptance of new products and services; general economic conditions; risks related to the integration of recent acquisitions; the ability to adjust to changes in personnel, including management changes; and the dependence on third parties for technology, services, content and distribution. All information set forth in this release and its attachments is as of April 9, 2003, and Yahoo! undertakes no duty to update this information. 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 fiscal year ended December 31, 2002, including (without limitation) under the captions, "Risk Factors" and "Management's Discussion and Analysis of Financial Condition and Results of Operations," which is on file with the Securities and Exchange Commission (the "SEC") and available at 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 three month period ended March 31, 2003, which will be filed with the SEC in the second quarter of 2003.
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Media Relations Contacts:
Nissa Anklesaria, Yahoo! Inc., (408) 349-7738, nissa@yahoo-inc.com
Michael Lynam, Fleishman-Hillard, (415) 318-4109, lynamm@fleishman.com

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