.

MSN-Yahoo Division (Pro Forma)Mar-05Jun-05Sep-05Dec-05Mar-06Jun-06Sep-06Dec-06Mar-07Jun-07Sep-07Dec-07

.

Analysis By:

.

Silicon Alley Insider

.

.

YAHOOMar-05Jun-05Sep-05Dec-05Mar-06Jun-06Sep-06Dec-06Mar-07Jun-07Sep-07Dec-07EFY 2005CY 2006CY 2007CY 2008ECY 2009E

.

Revenues$1,173,742$1,252,997$1,329,929$1,501,000$1,567,055$1,575,854$1,580,322$1,702,448$1,671,850$1,697,920$1,767,506$1,831,998$5,257,668$6,425,679$6,969,274$8,000,000$9,000,000

.

Y/Y Change33.51%25.77%18.83%13.42%6.69%7.75%11.84%7.61%22.22%8.46%14.79%12.50%

.

Operating Income$247,363$261,357$270,057$328,948$0$0$0$0$0$0$0$0$0$940,966$695,413$711,989$806,000

.

Margin21.07%20.86%20.31%21.92%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%14.64%9.98%9.00%9.00%

.

.

MICROSOFT ONLINE (MSN)Mar-05Jun-05Sep-05Dec-05Mar-06Jun-06Sep-06Dec-06Mar-07Jun-07Sep-07Dec-07EFY 2005CY 2006CY 2007CY 2008ECY 2009E

.

Revenues$1,173,742$1,252,997$1,329,929$1,501,000$1,567,055$1,575,854$1,580,322$1,702,448$1,671,850$1,697,920$1,767,506$1,831,998$5,257,668$2,303,000$2,845,000$3,414,000$4,096,800

.

Y/Y Change33.51%25.77%18.83%13.42%6.69%7.75%11.84%7.61%23.53%20.00%20.00%

.

Operating Income$247,363$261,357$270,057$328,948$0$0$0$0$0$0$0$0$0-$431,000-$948,000-$500,000-$250,000

.

Margin21.07%20.86%20.31%21.92%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%-18.71%-33.32%-14.65%-6.10%

.

.

.

MSN-YAHOO (Pre-Cost Synergy)Mar-05Jun-05Sep-05Dec-05Mar-06Jun-06Sep-06Dec-06Mar-07Jun-07Sep-07Dec-07EFY 2005CY 2006CY 2007CY 2008ECY 2009E

.

Revenues$1,173,742$1,252,997$1,329,929$1,501,000$1,567,055$1,575,854$1,580,322$1,702,448$1,671,850$1,697,920$1,767,506$1,831,998$5,257,668$8,728,679$9,814,274$11,414,000$13,096,800

.

Y/Y Change33.51%25.77%18.83%13.42%6.69%7.75%11.84%7.61%12.44%16.30%14.74%

.

Operating Income$247,363$261,357$270,057$328,948$0$0$0$0$0$0$0$0$0$509,966-$252,587$211,989$556,000

.

Margin21.07%20.86%20.31%21.92%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%5.84%-2.57%1.86%4.25%

.

.

.

EXPECTED COST SYNERGY$1,000,000

.

MSN-HOO (Pro-Forma, After Cost Cuts)Mar-05Jun-05Sep-05Dec-05Mar-06Jun-06Sep-06Dec-06Mar-07Jun-07Sep-07Dec-07EFY 2005CY 2006CY 2007CY 2008ECY 2009E

.

Revenues$1,173,742$1,252,997$1,329,929$1,501,000$1,567,055$1,575,854$1,580,322$1,702,448$1,671,850$1,697,920$1,767,506$1,831,998$5,257,668$8,728,679$9,814,274$11,414,000$13,096,800

.

Y/Y Change33.51%25.77%18.83%13.42%6.69%7.75%11.84%7.61%12.44%16.30%14.74%

.

Operating Income$247,363$261,357$270,057$328,948$0$0$0$0$0$0$0$0$0$509,966-$252,587$211,989$1,556,000

.

Margin21.07%20.86%20.31%21.92%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%0.00%5.84%-2.57%1.86%11.88%