Net revenues for fiscal 1998 were $203,270,000, nearly triple the net revenues of $70,450,000 for fiscal 1997. Pro forma net income for fiscal 1998 was $49,933,000 or $0.45 per share diluted compared to a net loss of $425,000 or $0.00 per share diluted in fiscal 1997. Pro forma fiscal 1998 results exclude the amortization of intangible assets, the second quarter one-time charge of $15,000,000 for in-process research and development purchased in the acquisition of Viaweb Inc., and the fourth quarter one-time charges relating to the Yoyodyne and HyperParallel acquisitions. Including the amortization of intangibles and one-time charges, fiscal 1998 net income was $25,588,000 or $0.23 per share diluted. Pro forma fiscal 1997 results exclude one-time charges of $25,095,000. Including these one-time charges, the fiscal 1997 net loss was $25,520,000 or $0.29 per share diluted. In light of the SEC's recent interpretation of the accounting for acquired in-process technology, during the fourth quarter of 1998, Yahoo! reviewed the accounting treatment used in connection with its acquisition of in-process technologies. As a result and with the SEC's concurrence, Yahoo! has reduced the second quarter of 1998 in-process research and development one-time charge from $44,100,000 to $15,000,000 and adjusted the amortization of related intangible assets for the second and third quarters of 1998.

In separate announcements today, Yahoo! said its Board of Directors has approved a 2-for-1 common stock split and that the company has expanded executive roles. Tim Koogle, Yahoo!'s president and chief executive officer, has been appointed chairman and chief executive officer. Jeff Mallett has been named president in addition to his current role as chief operating officer of the company and has joined the Board of Directors.

During the month of December 1998, traffic on the Yahoo!® global network of properties grew to an average of 167 million page views per day, compared to an average of 144 million page views per day in September 1998. Yahoo! Japan's traffic, which is included in the above page view totals, increased to more than 13 million page views per day during the month of December 1998 from approximately 11 million in September 1998. A page view is defined as one electronic page of information displayed in response to a user request.

Yahoo! today also announced that its registration base reached more than 35 million unique registrations during the fourth quarter, representing the number of registrations for Yahoo!'s registered member services. Yahoo! currently provides more than a dozen registered services for its members, including Yahoo! Shopping, Yahoo! Auctions, Yahoo! Clubs, Yahoo! Address Book, Yahoo! Calendar, Yahoo! Mail, My Yahoo!, stock portfolios and travel reservations and ticketing.

Yahoo!'s reach continues to grow across its network. The Yahoo! network of properties is ranked No. 1 in reach among work users (49.6 percent) and is second only to AOL Web sites in home reach (43.7 percent). In combined work/home reach, Yahoo! is ranked No. 3 behind AOL Web sites and Microsoft Web sites (Media Metrix, November 1998).

"1998 was another landmark year for Yahoo!. We consistently and carefully managed the business, executed our original plan, and invested in growing the company while increasing profits each quarter," said Tim Koogle, chairman and CEO of Yahoo!. "Our performance exceeded expectations and is the result of relentless expansion of value-added choices and services we offer users, advertisers and merchants. While giving users the best experience available on the Web, we delivered a uniquely powerful platform on which advertisers and merchants can build their online businesses. We look forward to continuing to maintain and strengthen our leadership position in the coming year."

Merchant and Advertiser Services

During the fourth quarter, Yahoo! expanded its leading direct marketing services through its acquisition of Yoyodyne Entertainment, Inc., a leader in Internet permission-based, direct marketing. Yoyodyne's direct marketing services are now available as a component of Yahoo!'s extensive suite of advertising and merchant services, enabling Yahoo! to offer its clients even greater options.

During the fourth quarter, Yahoo! extended its presence in online commerce. The company unveiled a major new online shopping service, Yahoo! Shopping (http://shopping.yahoo.com), that leverages Yahoo!'s acquisition of Viaweb to provide a complete service for merchants to reach Yahoo!'s millions of unique users. Online shoppers purchased a wide array of products from more than 3,400 participating Yahoo! Store merchants during the holiday season. In addition, Digital Chef, Genesis Direct, and Value America joined Yahoo!'s premier merchant program to provide users easy access to purchase gourmet food and kitchenware, sports merchandise, and consumer electronics throughout relevant areas of the Yahoo! network.

Distribution

In addition to ongoing distribution including Compaq, Gateway, Microsoft's MSN and WebTV, Yahoo! recently secured global distribution on Hewlett-Packard Pavilion PCs, featuring a co-branded HP My Yahoo! start page accessible directly from the keyboard and the desktop. Yahoo! also entered a global distribution agreement with IBM. The new IBM Aptiva PCs connect users to both Yahoo!'s Web directory (http://www.yahoo.com) and a co-branded My Yahoo! personalized start page (http://my.yahoo.com). Yahoo! and British Telecommunications plc (BT) launched Yahoo! Click, a new service combining Internet access from BT with the navigational and aggregation expertise of Yahoo! UK & Ireland (http://www.yahoo.co.uk) for Web users in the United Kingdom. In addition, Yahoo! announced plans to give wireless access to Yahoo! People Search (http://people.yahoo.com) for users of the Palm VII™ organizer from Palm Computing. The company expects to begin testing this service for Palm VII organizer users in the first half of 1999.

Network Programming and Services

During the quarter, Yahoo! expanded its Web programming for users. The company added audio content to Yahoo! News (http://dailynews.yahoo.com) through a relationship with National Public Radio. Leveraging its extensive nationwide classifieds listings (http://classifieds.yahoo.com), Yahoo! launched Yahoo! Employment (http://employment.yahoo.com), a guide to researching and finding career information on the Web. Yahoo! Sports (http://sports.yahoo.com) and Fox Sports Online teamed to offer fans Coverage of the World Series (http://foxsports.yahoo.com), a site hosted on Yahoo! Sports offering comprehensive information on the 1998 World Series. Also in the sports arena, Yahoo! launched Yahoo! Ski and Snow (http://snow.yahoo.com), providing snow conditions, sports equipment, resort and travel information, and access to relevant chats.

Community and Communication Services

During the fourth quarter, Yahoo! launched Yahoo! Address Book (http://address.yahoo.com), an online contact manager enabling users to access and use their address book from any Internet-connected computer. The company also introduced a beta version of TrueSync for Yahoo!, allowing users of Yahoo! Calendar (http://calendar.yahoo.com), Yahoo! Address Book and Yahoo! To Do List to access their information from computers and devices including Microsoft Outlook and 3Com Palm products. Yahoo! offers its registered members a complete suite of communications and community tools, including Yahoo! Mail, Yahoo! Pager, Yahoo! Chat, Yahoo! Message Boards, Yahoo! Clubs, Yahoo! Calendar, Yahoo! Address Book and Yahoo! To Do List.

International Services

During the fourth quarter, Yahoo! launched Yahoo! Spain (http://www.yahoo.es), the newest addition to Yahoo!'s network of 15 world properties. Openfind's Chinese language search engine was integrated into the Yahoo! Chinese (http://gbchinese.yahoo.com and http://chinese.yahoo.com) Web directory and navigational guide. Yahoo! Chinese has quickly become one of the most popular navigational Web guides for Chinese language Web sites.

About Yahoo!

Yahoo! Inc. is a global Internet media company that offers a branded network of comprehensive information, communication and shopping services to millions of users daily. As the first online navigational guide to the Web, www.yahoo.com is a 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's global Web network includes 15 world properties. Yahoo! has offices in Europe, the Asia Pacific and Canada, 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, and the company's dependence on advertising revenues and on third parties for technology, content and distribution. 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, 1997 and Quarterly Report on Form 10-Q for the period ended Sept. 30, 1998, including (without limitation) under the captions, "Management's Discussion and Analysis of Financial Condition and Results of Operations," "Risk Factors," "Competition," and "Proprietary Rights," 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.

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