Yahoo 2005 Annual Report Download

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Table of contents

  • Page 1

  • Page 2

  • Page 3
    ..., video, image and local search; enhanced Yahoo! HotJobs with an Internet job search engine; and introduced Yahoo! Desktop Search, enabling users to quickly locate files, emails, archived instant messages, contacts and more. Strong Financial Results Our leadership and influence in the online world...

  • Page 4
    ... integrated and personalized experience on mobile devices, PC-enabled televisions and the PC desktop, making it easy for users to access multiple Yahoo! services including IM, Mail, Search, Photos, Address Book, and content including news, sports, finance and games. Yahoo! now has relationships with...

  • Page 5
    ... investment in Alibaba, combining our search and communications assets with their market-leading commerce businesses, under the management of a talented local team. Our partnership with Alibaba will further strengthen Yahoo!'s position as a preeminent online destination in Asia, a region where Yahoo...

  • Page 6
    ... in several California locations, including a partnership with University of California, Berkeley, as well as in New York, Spain and Chile. Yahoo! Research conducts industry-leading research in a range of areas including search, communications, media, mobility, data and advertising with the...

  • Page 7
    ... Yes As of June 30, 2005, the aggregate market value of voting stock held by non-affiliates of the Registrant, based upon the closing sales price for the Registrant's common stock, as reported in the NASDAQ National Market System was $43,726,484,063. Shares of common stock held by each officer and...

  • Page 8
    ...Relationships and Related Transactions ...Principal Accounting Fees and Services...100 100 100 100 100 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities...Selected Financial Data ...Management's Discussion and Analysis of Financial Condition...

  • Page 9
    ...global user relationships and the social community created enable us to leverage our offered forms of online advertising as well as premium services for users. We also focus on extending our marketing platform and access to Internet users beyond the Yahoo! Properties through our distribution network...

  • Page 10
    ...States and internationally. • Entered into an interoperability agreement with Microsoft Corporation to connect users of Yahoo! Messenger and MSN Messenger. Since inception we have made a number of strategic acquisitions including business combinations, asset acquisitions and investments. We expect...

  • Page 11
    ...; and Communications and Connected Life. Search Our Search offerings are often the starting point for users navigating the Internet and searching for information, whether from their computer or mobile device. Our vision is to enable users to find, use, share and expand all human knowledge, and...

  • Page 12
    ... introduced in 2005. My Web is a "personal search engine" that extends users' existing Yahoo! Search experience by providing a simple way to save, recall and share online information with friends and colleagues. Our social search assets were further enhanced in 2005 by the acquisitions of Flickr and...

  • Page 13
    ... maps with zooming, real time traffic conditions and incident reports, together with integrated driving directions. In 2005, we launched an enhanced version of Yahoo! Maps with an improved user interface, which provides users an interactive look and feel with new features such as multi-point driving...

  • Page 14
    ... users to research, price and compare cars online. Information and services available free of charge to our users include vehicle pricing, specification and option information, used car listings, expert reviews, user reviews and ratings, car comparisons, financing calculators, and new car quotes...

  • Page 15
    ... of financial resources that range from investment and company information to personal finance management tools. Yahoo! Finance offers free financial tools to help users manage their personal finances as well as data, news and information for making informed investment decisions. In 2005, we added...

  • Page 16
    ...can build personalized music libraries, transfer tracks to portable devices, purchase permanent downloads, access commercial-free Internet radio stations, and uniquely share and discover music with friends through Yahoo! Messenger. Subscribers benefit from personalized music recommendations based on...

  • Page 17
    ...mail, video or mobile messaging. In 2005, we launched the next generation version of IM, which provides free PC-to-PC calling, photo sharing and enhanced tools to expand online communities. In addition, in 2005 we signed an agreement with Microsoft Corporation ("Microsoft") to globally connect users...

  • Page 18
    ... a number of new services including a downloadable Yahoo! Mail for Mobile application, enhancements to Yahoo! Search on Mobile and text messaging search. We generate revenue through a combination of premium subscriptions for Yahoo! services, fees from carriers for services that drive data usage...

  • Page 19
    ... sales of marketing services to small and medium-size businesses. Our online channel is fulfilled by a self-service program that enables advertisers to place targeted text based links to their websites on the Yahoo! Properties as well as on our affiliates' websites. Our direct advertising sales team...

  • Page 20
    ... research to address fundamental problems facing users, such as: making their search for information on the Internet easier and more efficient; bringing them tools to help solve their problems; finding new and better ways for them to connect and communicate with family and friends; and guiding...

  • Page 21
    ..."Risk Factors" of this Annual Report on Form 10-K. AVAILABLE INFORMATION Our website is located at http://www.yahoo.com. Our investor relations website is located at http://yhoo.client.shareholder.com/. We make available free of charge on our investor relations website under "SEC Filings" our Annual...

  • Page 22
    ...a direct billing relationship with a greater number of their users through Internet access and other services than we have with our users through our premium services. This relationship may permit these competitors to be more effective than us in targeting services and advertisements to the specific...

  • Page 23
    ... our relationships with advertisers to small and medium size businesses; • attracting advertisers to our user base; • increasing demand for our marketing services by advertisers, users and businesses, including prices paid by advertisers, the number of searches performed by users and the rate at...

  • Page 24
    ...and businesses that conduct searches and access our search marketing listings comes from a limited number of sources in certain markets. In addition to the Yahoo! Properties, sources for users are members of our affiliate network, including portals, browsers and other affiliates. Our agreements with...

  • Page 25
    ... our online properties. We license much of the content on our online properties, such as news items, stock quotes, weather reports, maps and audio and video content from third parties. We have been providing increasing amounts of audio and video content to our users, and we believe that users will...

  • Page 26
    ... to our success. In addition, as new methods for accessing the Internet become available, including through alternative devices, we may need to enter into amended content agreements with existing third-party content providers to cover the new devices. Also, to the extent that Yahoo! develops content...

  • Page 27
    ... often possess a significant number of patents. Further, many of these companies and other parties are actively developing or purchasing search, indexing, electronic commerce and other Internet-related technologies, as well as a variety of online business models and methods. We believe that these...

  • Page 28
    ... our policies or applicable requirements related to the collection, use, sharing or security of personal information or other privacy-related matters could result in a loss of user confidence in us and ultimately in a loss of users, partners or advertisers, which could adversely affect our business...

  • Page 29
    ...States and internationally. As a result, we must expand and adapt our operational infrastructure and increase the number of our personnel in certain areas. Our business relies on our data systems, billing systems for our fee based and other services, and other operational and financial reporting and...

  • Page 30
    ... considerable resources to provide a variety of premium services, which may not prove to be successful in generating significant revenue for us. We offer fee-based enhancements to many of our free services, including e-mail, personals, finance, games, music and sports. The development cycles...

  • Page 31
    ... number of alternative device users to our online services, we may fail to capture a sufficient share of an increasingly important portion of the market for online services and may fail to attract both advertisers and premium service subscribers. We plan to expand operations in international...

  • Page 32
    ... the agreement and any amounts received may not be adequate to cover our liabilities. It is also possible that, if any information provided directly by us contains errors or is otherwise negligently provided to users, third parties could make claims against us. For example, we offer web-based e-mail...

  • Page 33
    ..., information and user engagement. If the Internet proves unable to meet the new threats and increased demands placed upon it, our business plans, user and advertiser relationships, site traffic and revenues could be adversely affected. New technologies could block our advertisements or our search...

  • Page 34
    ... our business plan. In addition to our relationships with Internet access providers, to increase traffic for our offerings and make them more available and attractive to advertisers and users, we have certain distribution agreements and informal relationships with operators of online networks and...

  • Page 35
    ... value of our amortizable intangible assets may not be recoverable include a decline in stock price and market capitalization, and slower growth rates in our industry. We may be required to record a significant charge to earnings in our consolidated financial statements during the period in which...

  • Page 36
    ... in which we have an equity investment, including Yahoo! Japan and Alibaba; the stock price of companies in which we have an equity investment, including Yahoo! Japan; and news reports relating to trends in our markets or general economic conditions. In addition, the stock market in general, and the...

  • Page 37
    ... of trademarks, copyrights, trade secrets and other intellectual property rights, claims related to employment matters, and a variety of claims, including claims alleging defamation or invasion of privacy, arising in connection with our e-mail, message boards, auction sites, shopping services and...

  • Page 38
    ... our business practices. Either of these could have a material adverse effect on our financial position, results of operations or cash flows. Item 4. Submission of Matters to a Vote of Security Holders No matters were submitted to a vote of security holders during the fourth quarter of 2005. 32

  • Page 39
    ... sales of our common stock during the fourth quarter of 2005. Issuer Purchases of Equity Securities Stock repurchase activity during the three months ended December 31, 2005 was as follows: Total Number of Shares Purchased as Part of a Publicly Announced Program Approximate Dollar Value of Shares...

  • Page 40
    ... or $0.22 per diluted share. Our net income for 2005 included gains related to sales of an investment of $580 million, net of tax; a gain related to the divestiture of Yahoo! China in connection with the Alibaba transaction of $205 million, net of tax; and a tax benefit of $248 million related to...

  • Page 41
    ... services or fees. Our offerings to users and businesses currently fall into four categories - Search; Marketplace; Information and Entertainment; and Communications and Connected Life. The majority of our offerings are available globally in more than 15 languages. We manage and measure our business...

  • Page 42
    ... are booked through Yahoo! Travel. Fees Revenue. Fees revenue consists of revenues generated from a variety of consumer and business feebased services, including Internet broadband services, premium mail, music and personals offerings, as well as services for small businesses. We recognize fees...

  • Page 43
    .... Cash used in investing activities in 2005 included our cash consideration for acquisitions, including the strategic investment in Alibaba, offset by proceeds from sales of marketable equity securities. Cash used in financing activities in 2005 reflected our net cash used for direct stock...

  • Page 44
    ... driving higher advertising revenue across all of the Yahoo! Properties. We experienced an increase in our user base and activity levels on the Yahoo! Properties, which resulted in a higher volume of search queries, page views, and click-throughs. We believe our increased user audience attracted new...

  • Page 45
    ... from new Internet broadband users in the year. Our fee-based services include Internet broadband services, sports, music, personals, and premium mail offerings, as well as our services for small businesses. Average monthly revenue per paying user has remained consistent at approximately $4 in 2005...

  • Page 46
    ... developed technology and patents. Traffic Acquisition Costs ("TAC"). TAC consists of payments made to affiliates that have integrated our search offerings into their websites and payments made to companies that direct consumer and business traffic to the Yahoo! Properties. We enter into agreements...

  • Page 47
    ... services on Yahoo! Properties including music, sports, and games. The increase in depreciation expense and data center costs primarily resulted from the depreciation of additional information technology assets and data center costs required to manage our increasing user base, traffic, and new...

  • Page 48
    ... value of Yahoo! stock options issued and assumed in connection with business combinations and other equity-based awards that we issued. This expense is generally being amortized using the accelerated amortization method in accordance with Financial Accounting Standards Board ("FASB") Interpretation...

  • Page 49
    ...471 Our stock compensation expense in absolute dollars will increase significantly in 2006 compared to 2005. We currently expect that the stock compensation expense associated with the adoption of Statement of Financial Accounting Standards ("SFAS") No. 123R, ("SFAS 123R"), "Share-Based Payment" on...

  • Page 50
    ... in Yahoo! Japan. On October 23, 2005, we acquired approximately 46 percent of the outstanding common stock of Alibaba, or approximately 40 percent on a fully diluted basis. We account for this investment using the equity method of accounting. Following the acquisition date, we will record our share...

  • Page 51
    ...had no minority interest liability as of December 31, 2005. See Note 3 - "Acquisitions" and Note 17 - "Subsequent Events" in the consolidated financial statements for additional information. Business Segment Results We manage our business geographically. Our primary areas of measurement and decision...

  • Page 52
    ..., operating expenses and net income will increase for our International segment if the United States dollar weakens against foreign currencies. Using the average foreign currency exchange rates from 2004, our international revenues for 2005 would have been lower than we reported by approximately...

  • Page 53
    ... the outstanding common stock of Alibaba, an e-commerce company based in China in exchange for $1.0 billion in cash and the contribution of Yahoo! China; and • November 2005 - Purchase of the remaining outstanding shares of Yahoo! Europe and Yahoo! Korea for a total purchase price of $501 million...

  • Page 54
    ... have been primarily for purchases of information technology assets to support our expanding offerings, our increased number of users and our international growth. Our net cash consideration for acquisitions in 2005 included approximately $1.0 billion for our investment in Alibaba, $500 million for...

  • Page 55
    ... as our employee numbers and the weighted average exercise prices of our options have risen in each successive year. During 2005, we used $388 million in the direct repurchase of 11.7 million shares of our common stock at an average price of $33.20 per share. There were no comparable transactions in...

  • Page 56
    ... matures in April 2008, unless converted into Yahoo! common stock at a conversion price of $20.50 per share, subject to adjustment upon the occurrence of certain events. See Note 9 - "Long-Term Debt" in the consolidated financial statements for additional information related to the long-term debt...

  • Page 57
    ... obligations in our consolidated financial statements. On April 21, 2003, Overture completed its purchase of the Web Search unit of Fast Search and Transfer ASA, a Norway based developer of search and real-time filtering technologies, for $70 million in cash, plus a contingent earn-out payment...

  • Page 58
    ..."Goodwill" in the consolidated financial statements for additional information. Based on our 2005 impairment test, there would have to be a significant unfavorable change to our assumptions used in such calculations for an impairment to exist. We amortize other intangible assets over their estimated...

  • Page 59
    ... an equity investment, current economic and market conditions, the operating performance of the companies including current earnings trends and undiscounted cash flows, quoted stock prices of comparable public companies, and other company specific information including recent financing rounds. The...

  • Page 60
    ...the Notes but do not impact our financial position, cash flows or results of operations. As of December 31, 2005 and 2004, the fair value of the Notes was approximately $1.4 billion based on quoted market prices. Foreign Currency Risk. International revenues accounted for approximately 30 percent of...

  • Page 61
    ... exposed to foreign exchange rate fluctuations as we convert the financial statements of our foreign subsidiaries into United States dollars in consolidation. If there is a change in foreign currency exchange rates, the conversion of the foreign subsidiaries' financial statements into United States...

  • Page 62
    ...other schedules are omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or Notes thereto...Supplementary Financial Data: Selected Quarterly Financial Data (unaudited) for the two years ended December 31, 2005...98 97 57 59 60 61 63 64...

  • Page 63
    ... of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Yahoo! Inc.: We have completed integrated audits of Yahoo! Inc.'s 2005 and 2004 consolidated financial statements and of its internal control over financial reporting as of December 31, 2005 and an audit...

  • Page 64
    ... regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements...

  • Page 65
    Consolidated Statements of Operations YAHOO! INC. (in thousands, except per share amounts) Years Ended December 31, 2004 2005 2003 Revenues Cost of revenues Gross profit Operating expenses: Sales and marketing Product development General and administrative Stock compensation expense (1) ...

  • Page 66
    Consolidated Balance Sheets YAHOO! INC. (in thousands, except par values) December 31, 2004 2005 ASSETS Current assets: Cash and cash equivalents Marketable debt securities Marketable equity securities Accounts receivable, net of allowance of $34,215 and $41,857, respectively Prepaid expenses and ...

  • Page 67
    ... Purchases of marketable debt securities Proceeds from sales and maturities of marketable debt securities Acquisitions, net of cash acquired Proceeds from sales of marketable equity securities Other investing activities, net Net cash used in investing activities CASH FLOWS FROM FINANCING ACTIVITIES...

  • Page 68
    ... 31, 2004 in connection with acquisitions. See Note 3 - "Acquisitions" for additional information. During the year ended December 31, 2005, the Company contributed its China based businesses ("Yahoo China") as partial consideration for its investment in Alibaba.com Corporation ("Alibaba"). See Note...

  • Page 69
    ..., and 2005, respectively Net change in unrealized gains (losses) on available-for-sale securities, net of tax Foreign currency translation adjustment Other comprehensive income (loss) Comprehensive income Common stock Balance, beginning of year Common stock and restricted stock issued Repurchases...

  • Page 70
    ... To users, Yahoo! provides its owned and operated online properties and services (the "Yahoo! Properties"). To businesses, Yahoo! provides a range of tools and marketing solutions designed to enable businesses to reach the Yahoo! community of users. Stock Split. On April 7, 2004, the Yahoo! Board of...

  • Page 71
    ... are booked through Yahoo! Travel. Fees revenue consists of revenues generated from a variety of consumer and business fee-based services, including Internet broadband services, premium mail, music and personals offerings as well as services for small businesses. The Company recognizes fees revenue...

  • Page 72
    ... payment covers. Agreements based on a percentage of revenue, number of paid introductions, number of searches, or other metrics are expensed based on the volume of the underlying activity or revenue multiplied by the agreedupon price or rate. Internal Use Software and Website Development Costs. The...

  • Page 73
    ... determined based on quoted market prices as of the valuation date. In computing realized gains and losses on available-for-sale securities, the Company determines cost based on amounts paid, including direct costs such as commissions, to acquire the security using the specific identification method...

  • Page 74
    ... fair value of the asset. Foreign Currency. The functional currency of the Company's international subsidiaries is generally the local currency. The financial statements of these subsidiaries are translated into United States dollars using period-end rates of exchange for assets and liabilities and...

  • Page 75
    ... and Other Variable Stock Option or Award Plans." Upon adoption of SFAS 123R, the Company will continue to amortize stock compensation expense related to options granted on or before December 31, 2005 using the accelerated method. For options and other equity-based awards granted after December...

  • Page 76
    ... the Company's zero coupon senior convertible notes (using the if-converted method). For 2003, 2004, and 2005, approximately 87 million, 50 million and 55 million options to purchase common stock, respectively, were excluded from the calculation, as the exercise prices were greater than the average...

  • Page 77
    ... of the purchase price to the assets acquired and liabilities assumed based on the fair values was as follows (in thousands): Cash acquired Other tangible assets acquired Amortizable intangible assets: Customer and advertiser related relationships Developed technology and patents Goodwill Total...

  • Page 78
    ...): Cash acquired Other tangible assets acquired Amortizable intangible assets: Customer, affiliate and advertiser related relationships Developed technology and patents Trade name, trademark and domain name Goodwill Total assets acquired Liabilities assumed Deferred stock-based compensation Total...

  • Page 79
    ... (in thousands): Cash acquired Other tangible assets acquired Amortizable intangible assets: Customer and advertiser related relationships Developed technology and patents Trade name, trademark and domain name Goodwill Total assets acquired Liabilities assumed Deferred stock-based compensation Total...

  • Page 80
    ... assumed based on the fair values was as follows (in thousands): Cash acquired Other tangible assets acquired Amortizable intangible assets: Customer, affiliate and advertiser related relationships Developed technology and patents Trade name, trademark and domain name Goodwill Total assets acquired...

  • Page 81
    ...of the purchase price to the assets acquired and liabilities assumed based on the fair values was as follows (in thousands): Net tangible assets acquired Amortizable intangible assets: Customer contracts and related relationships Developed technology and patents Trade name, trademark and domain name...

  • Page 82
    ... Investment in Alibaba. On October 23, 2005, the Company acquired approximately 46 percent of the outstanding common stock of Alibaba, which represents approximately 40 percent on a fully diluted basis, in exchange for $1.0 billion in cash, the contribution of the Company's China based businesses...

  • Page 83
    .... Yahoo! Japan was formed to establish and manage a local version of Yahoo! in Japan. The Company also has commercial arrangements with Yahoo! Japan, consisting of services, including algorithmic search services and sponsored search services and the related traffic acquisition costs and license fees...

  • Page 84
    .... The investment in Yahoo! Japan is being accounted for using the equity method. The fair value of the Company's approximate 34 percent ownership in Yahoo! Japan, based on the quoted stock price, was approximately $15 billion as of December 31, 2005. Prior to and during 2001, Yahoo! Japan acquired...

  • Page 85
    ... 31, 2005. The intangible assets are all amortizable and have original estimated useful lives as follows: • Customer, affiliate and advertiser related relationships - two to seven years; • Developed technology and patents - two to five years; and • Trademark, trade name and domain name - four...

  • Page 86
    ... additional information related to the gain on the divestiture of Yahoo! China for the year ended December 31, 2005. (2) Investment gains (losses), net include realized investment gains, realized investment losses, and impairment charges related to declines in values of publicly traded securities...

  • Page 87
    ... of the following (in thousands): 2004 2005 Accrued content, connection, traffic acquisition and other costs Deferred income taxes (Note 10) Accrued compensation and related expenses Accrued taxes payable Accrued professional service expenses Accrued sales and marketing related expenses Accrued...

  • Page 88
    ... can sell or continue to hold the securities at par. These securities are classified in the table below based on their legal stated maturity dates. As of December 31, 2005, the Company did not hold any auction rate securities. Available-for-sale securities included in Cash and cash equivalents...

  • Page 89
    ... balance sheets in longterm other assets. As of December 31, 2005, $8 million of the transaction fees remained to be amortized. The Notes were issued at par and bear no interest. The Notes are convertible into Yahoo! common stock at a conversion price of $20.50 per share, which would result in the...

  • Page 90
    ... be convertible into shares of Yahoo! common stock in subsequent fiscal quarters, if any, with respect to which the market price condition for convertibility is met. As of December 31, 2005, the fair value of the Notes was approximately $1.4 billion based on quoted market prices. The shares issuable...

  • Page 91
    ...between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. The components of deferred income tax assets and liabilities are as follows (in thousands): December 31, 2004 2005 Deferred income tax assets: Net operating loss and...

  • Page 92
    ... purchased from SOFTBANK at an average price of $4.84 per share. During the three months ended March 31, 2005, the Company repurchased an additional 4.9 million shares in the open market, at an average price of $33.60 per share, for total consideration of $165 million. This stock repurchase program...

  • Page 93
    ...their annual compensation to the 401(k) Plan. The Company matches employee contributions at a rate of 25 percent. Employee contributions are fully vested, whereas vesting in matching Company contributions occurs at a rate of 33 percent per year of employment. During 2003, 2004, and 2005, the Company...

  • Page 94
    ...a four-year period based on continued employment and vest either monthly, quarterly, semi-annually, or annually. The termination date of the 1995 Stock Plan is May 2013. During the year, the 1995 Stock Plan was amended to increase the number of shares of common stock available for award grants by 80...

  • Page 95
    ... per share. Shares available for future issuance under the Purchase Plan as of December 31, 2005 totaled approximately 15 million shares. Stock-Based Compensation. The Company measures compensation expense for its stock-based employee compensation plans using the intrinsic value method. The Company...

  • Page 96
    stock compensation expense relates to the amortization of the intrinsic value of Yahoo! stock options issued and assumed in connection with business combinations and other equity-based awards issued by the Company. This expense is generally being amortized using the accelerated amortization method ...

  • Page 97
    ...purchase the leased office space if the lessor sells the building. • In 2005, the Company entered into two ten year lease agreements for data centers...for a defined number of years at the then fair market rental rate or at a slight discount to the fair market rental rate; (b) purchase of the ...

  • Page 98
    ... of business, including claims of alleged infringement of trademarks, copyrights and other intellectual property rights, and a variety of claims, including claims alleging defamation or invasion of privacy, arising in connection with its e-mail, message boards, auction sites, shopping services, and...

  • Page 99
    ... the case vigorously. The Company does not believe, based on current knowledge, that any of the foregoing legal proceedings or claims are likely to have a material adverse effect on its financial position, results of operations or cash flows. However, the Company may incur substantial expenses in...

  • Page 100
    ... held by the Company to purchase Google shares that were received in connection with a June 2000 services agreement. In August 2004, Google issued 2.7 million shares of Class A common stock in settlement of the two disputes. The Company agreed to dismiss the 361 patent lawsuits and granted to Google...

  • Page 101
    ... to individual countries according to the international online property that generated the revenue. No single foreign country accounted for more than 10 percent of revenues in 2003, 2004, and 2005. The following table presents revenues for groups of similar services (in thousands): 2003 Years Ended...

  • Page 102
    ... Company contributed its Australian Internet business, Yahoo! Australia and New Zealand, and Seven contributed its online assets, television and magazine content, an option to purchase its 33 percent ownership interest in mobile solutions provider m.Net Corporation Ltd, and cash of AUD $10 million...

  • Page 103
    ...) 31,961 34,215 41,857 Balance at End of Year Charged (Credited) to Expenses Charged (Credited) to Other Accounts (1) Deferred income tax asset Valuation allowance 2003 2004 2005 (1) $ 1,560,075 1,659,551 1,353,748 $ 8,516 $ 90,960 $ 1,659,551 (40,612) (265,191) 1,353,748 16,342 137,758 1,507...

  • Page 104
    ... $0.39 per diluted share, respectively related to sales of an investment. The net income for the quarter ended December 31, 2005 includes a gain, net of tax, of $205 million or $0.15 per basic share and $0.14 per diluted share with respect to the divestiture of Yahoo! China and a tax benefit of $248...

  • Page 105
    ... in conditions, or that the degree of compliance with the policies or procedures may deteriorate. The Company's independent registered public accounting firm has audited management's assessment of the effectiveness of the Company's internal control over financial reporting as of December 31, 2005 as...

  • Page 106
    ...the SEC within 120 days after the end of the fiscal year ended December 31, 2005. Item 14. Principal Accounting Fees and Services The information required by this item is incorporated by reference to Yahoo!'s Proxy Statement for its 2006 Annual Meeting of Stockholders to be filed with the SEC within...

  • Page 107
    ... as Exhibit 2.4 to the October 27, 2005 Form 8-K and incorporated herein by reference.) Shareholders Agreement, dated as of October 24, 2005, by and among Alibaba.com Corporation, Yahoo! Inc., SOFTBANK CORP., the Management Members, and the other shareholders named therein (filed as Exhibit 2.5 to...

  • Page 108
    ... and Restated 1996 Employee Stock Purchase Plan and Form of subscription agreement. Yahoo! Inc. Amended and Restated 1996 Directors' Stock Option Plan, as amended (Filed as Annex B to the 2005 Proxy Statement and incorporated herein by reference) and Form of option agreement thereunder (Filed as...

  • Page 109
    ... No. 2 to Yahoo! Japan License Agreement dated January 31, 2005 by and between the Registrant and Yahoo! Japan Corporation (Filed as Exhibit 10.30 to the December 31, 2004 10-K and incorporated herein by reference.) List of Subsidiaries Consent of Independent Registered Public Accounting Firm Power...

  • Page 110
    ...substitution, for him/her in any and all capacities, to sign any amendments to this Report on Form 10-K and to file the same, with Exhibits thereto and other documents in connection therewith with the Securities and Exchange Commission, hereby ratifying and confirming all that each of said attorneys...

  • Page 111
    Signature Title Date /s/ ROBERT KOTICK Robert Kotick /s/ EDWARD KOZEL Edward Kozel /s/ GARY WILSON Gary Wilson /s/ JERRY YANG Jerry Yang Director Director Director Director March 3, 2006 March 3, 2006 March 3, 2006 March 3, 2006 105

  • Page 112
    ... respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods...

  • Page 113
    ... respect to the period covered by this report; Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods...

  • Page 114
    ...Financial Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 In connection with the Annual Report on Form 10-K of Yahoo! (the "Company") for the year ended December 31, 2005 as filed with the Securities and Exchange Commission on the date...

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    ... Companies Jerry Yang Chief Yahoo and Director David Filo Eric Hippeau Managing Partner of Softbank Capital Partners Chief Yahoo Susan Decker Vyomesh Joshi Executive Vice President, Imaging and Printing Group Hewlett Packard Executive Vice President, Finance and Administration and Chief Financial...

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    ...Vice President, Human Resources Chief People Yahoo Phu Hoang Senior Vice President, Platform and Product Engineering Gideon Yu Senior Vice President, Finance and Treasurer David Karnstedt Senior Vice President, General Manager, Direct Business Qi Lu Senior Vice President, Search and Monetization...

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    Corporate Headquarters 701 First Avenue Sunnyvale, CA 94089 Independent Registered Public Accounting Firm PricewaterhouseCoopers LLP San Jose, California Other U.S. Operations New York, NY Burbank, CA Santa Monica, CA Hillsboro, OR Transfer Agent Computershare Trust Company, N.A. P.O. Box 43078 ...

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    www.yahoo.com 002CS-10583