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Yahoo: Cost Cuts

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Analysis By:

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SAI Research

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YAHOO!Mar-05Jun-05Sep-05Dec-05Mar-06Jun-06Sep-06Dec-06Mar-07Jun-07Sep-07A

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REVENUES

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United States818,726869,517922,8601,056,4061,097,1341,070,1341,054,0481,144,7021,100,7571,118,5141,194,911

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International148,946383,480407,069444,594470,017505,720526,274557,746571,093579,406572,595

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Revenues$967,672$1,252,997$1,329,929$1,501,000$1,567,151$1,575,854$1,580,322$1,702,448$1,671,850$1,697,920$1,767,506

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US Y/Y Growth34%23%14%8%0%5%13%

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International Y/Y Growth216%32%29%25%22%15%9%

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OPERATING INCOME

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United States270,415291,244306,031351,849335,269340,598365,550410,239341,518362,337338,423

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International74,64777,19679,091106,86599,663116,260108,188130,150118,517111,292127,886

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Operating Income$345,062$368,440$385,122$458,714$434,932$456,858$473,738$540,389$460,035$473,629$466,309

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US Operating Margin33%33%33%33%31%32%35%36%31%32%28%

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International Operating Margin50%20%19%24%21%23%21%23%21%19%22%

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Overall Operating Margin#DIV/0!#DIV/0!#DIV/0!#DIV/0!28%29%30%32%28%28%26%

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NECESSARY COST CUTSPro Forma

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United States270,415291,244306,031351,849338,42360,000

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International74,64777,19679,091106,865127,8860

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Pro Forma Operating Income$345,062$368,440$385,122$458,714$466,309$526,309

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US Operating Margin100%100%100%100%28%

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International Operating Margin100%100%100%100%22%

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Overall Operating Margin#DIV/0!#DIV/0!#DIV/0!#DIV/0!26%30%

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ANNUALIZED COST CUTS

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Annualized Cost Cuts$240,000

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% People50%

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Total People Cost$120,000

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Average All-In Salary/Benefits$100,000

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Total Headcount Reduction1,200

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Published By:

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SAI Research

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Blue = Assumptions

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Red = Estimates