Yahoo 1997 Annual Report Download - page 15

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12
se le c t e d fina ncial
data
Ex cep t for hist orical in form at ion , t h e d iscu ssion in t h is Rep ort (in clu d in g, w ithou t lim it at ion , t h e d iscu ssion
under the heading “Resu lt s of Op erat ion s”) con t ain s forw ard -look in g st at em en t s t h at in v olv e risk s an d
uncertainties. T h e Com p an y 's act u al resu lt s cou ld d iffer m at erially from t h ose d iscu ssed h erein . Fact ors t h at
could cause or con t rib u t e t o su ch d ifferen ces in clu d e, b u t are n ot lim it ed t o, t h ose d iscu ssed b elow , an d t h e
risk s d iscu ssed u n d er t h e cap t ion “Risk Fact ors” in t h e Com p an y ’s A n n u al Rep ort on Form 10-K for t h e y ear
ended Decem ber 31, 1997 (a cop y of w h ich is av ailab le at w w w .sec.gov or u p on req u est from t h e Com p an y ).
Overvie w
Yahoo! In c. (t h e “Com p a n y”) is a g lob a l Internet media company that offe rs a n e t w ork of brande d World
Wid e We b (t h e “We b ”) p rog ra m m in g t h a t s e rve s m illion s of u s e rs d a ily. As t h e firs t on lin e navigational
guide to the We b , w w w .y ahoo.com is t h e s in g le la rg e s t g u id e in t e rms of traffic, advert is in g , h ou s e hold
and business user reach, and is one of the m os t re cog n ize d b ra n d s a s s ocia t e d w it h t h e In t e rn e t . Ya h oo!
Inc. provides targeted Internet resource s a n d com m u n ica t ion s s e rvice s for a b roa d ra n g e of a u d ie n ce s ,
based on demographic, key-subject and ge og ra p h ic in t e re s t s . Th e Com p a n y w a s in corp ora t e d in
Ca lifornia on March 5, 1995 and commenced operations on that da t e . In Au g u s t 1995, t h e Com p a n y com -
menced selling advertisements on its We b p a g e s a n d re cog n ize d it s in it ia l re ve n u e s. In April 1996, the
Com p a ny completed its initial public offering.
The Company’s re ve n u e s a re d e rive d p rin cip a lly from t h e s a le of b a n n e r a d ve rtisements on s h ort-term
contracts. The Company’s s t a n d a rd ra t e s for a d ve rtising cu rre n t ly ra n g e from a p p roxim a t e ly $0.02 p e r
impression for general rotation to approximate ly $0.08 p e r im p re s s ion for h ig h ly t a rg e t e d a u d ie n ce s a n d
propert ie s . To d a t e , t h e d u ra t ion of t h e Com p a n y’s a d ve rtising com m it m e n t s h a s ra n g e d from on e w e e k t o
tw o ye a rs . Du rin g 1997, t h e Com p a n y a lso began selling a combination of sponsorship and banne r a d ve rtis-
ing contracts. In general, these sponsorship adve rtising contracts ha ve lon g e r t e rm s t h a n s t a n d a rd b a n n e r
advert is in g con t ra ct s (ra nging from three months to tw o ye a rs) and also involve more integration w ith
Yahoo! s e rvice s, such as the placement of buttons w hich provide users w ith d ire ct links to the advert is e r’s
We b s it e . Ad ve rtising re ve n u e s on b ot h b a n n e r a n d s p on s ors h ip con t ra ct s a re re cog n ize d ra t a b ly ove r the
period in w hich t h e a d ve rt is e m e n t is d is p la ye d, provided that no significant Company obligations remain and
collection of the resulting receivable is proba b le . Com p a n y ob lig a t ion s t yp ica lly in clu d e g u a ra n t e e s of m in i-
mum number of “impressions,” or times that an adve rtisement a p p e a rs in p a g e s vie w e d b y u s e rs of t h e
Com p a ny’s on lin e p rop e rties. To t h e e xt e n t m in im u m g u a ra n t e e d im p re s s ion s a re not met, the Company
defers recognition of the corresponding revenue s u n t il t h e re m a in in g g u a ra n t e e d im p re s s ion le ve ls a re
achieved. The Company also earns a d d it ion a l re ve n u e on s p on s ors h ip con t ra ct s for fe e s re la t in g t o t h e
design, coordination, and integration of the customer’s content and links into Yahoo! online propert ie s. These
fees are recognized as re ve n u e on ce t h e re la t e d a ct ivit ie s h a ve b e e n p e rform e d a n d t h e cu s t om e r’s We b lin ks
are available on Yahoo! online properties. A number of the Company’s a g re e m e n t s p rovid e t h a t Ya h oo!
receive revenues from ele ct ron ic com m e rce t ra n s a ct ion s . Th e s e re ve n u e s a re re cog n ize d b y t h e Com p a n y
upon notification from the advertiser of revenues earne d b y Yahoo! and, to da t e , h a ve n ot b e e n s ig n ifica n t .
an a ly sis finan c ia l c o ndition
and results of operations
m an ag e m en t ’s d is c u s s io n a n d
of
Not e: Th e s elected fin a ncia l d ata for the thre e ye ars end ed De ce mbe r 31, 1997 has b e en re sta ted to re flect
the a cq u isit ion of Fou r11 Corp ora tion w h ich w a s accou nt e d for a s a p oolin g of in terest s.
(1) Pro forma n et in come a nd d ilute d net in com e per s ha re exclu de t he e ffect s of ot her non-recurrin g
cos ts of $21,245,000 re la te d t o t he Ya hoo! Ma rke tpla ce re structurin g incurre d d urin g the q u arte r
end ed J une 30, 1997 a nd $3,850,000 in cu rre d in con nect ion w it h the a cq uisit ion of Fou r11 Corp ora tion
durin g t he q uarte r e nd e d De ce mbe r 31, 1997.
Ye ar e n de d De ce mbe r 31,
1997 1996 1995
State men ts of Ope ration s Data:
Net revenues $ 67,411,000 $ 19,697,000 $ 1,410,000
Gross profit 58,039,000 16,381,000 1,212,000
Sales and marketing expense s 43,930,000 15,106,000 815,000
Prod u ct d e velopment expenses 11,138,000 5,150,000 303,000
General and administrative e xp e n s e s 6,472,000 4,878,000 972,000
Other - non-recurring costs 25,095,000 ––
Net loss (22,887,000) (4,285,000) (799,000)
Basic and diluted net loss per share $ (0.53) $ (0.11) $ (0.03)
Shares used in computing basic and diluted
net loss per share 43,583,000 39,256,000 27,307,000
Pro form a net income (unaudited) (1) $ 2,208,000
Pro form a diluted net income
per share (unaudited) (1) $ 0.04
Decemb er 31,
1997 1996 1995
Balan ce She e ts Data:
Ca sh, cash equivalents, and short and long-term
investments in marketable securitie s $ 107,012,000 $ 103,984,000 $ 5,927,000
Workin g ca p it a l 83,733,000 91,449,000 5,841,000
Tot a l a s s e t s 141,884,000 112,968,000 7,037,000
Shareholders’ e q u it y $ 117,712,000 $ 104,205,000 $ 6,105,000